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Financial Markets and Economy

There’s no denying the effect that fees have on investments. While the difference between a fee of 0.5% and 0.25% looks tiny on paper, apply it to an index fund over a quarter-century or more of investing and let the effects of compounding work on it and you can easily see a worker winding up with tens of thousands of dollars less on account at retirement.

So it’s easy to see how and why the case protects workers and retirement savers.

The potential problems from the ruling are much harder to see, but they’re just beneath the surface now and likely to surface as the effects of the ruling play out.

7 Lies Investors Tell Themselves (Market Watch)

After six years of rising U.S. stock prices, investors are no doubt richer. But they may be thinking a little less clearly.

“In a bull market, there’s a tendency for investors to think they’re brilliant,” says Brad Barber, a finance professor at the University of California, Davis, and an expert in behavioral finance. Indeed, as share prices climb, investors’ confidence grows and they start making all kinds of dubious claims.

Here are seven comments you have probably heard from friends—and that may have escaped your own lips.

Here’s your complete preview of this week’s big economic events (Business Insider)

It’s a short week in America as everyone takes Monday off to celebrate Memorial Day and enjoy some barbecue with their friends and family.

Surely, they’ll also be talking about the economy. But what’ll be the topic of discussion? Signs of wage growthLow gas pricesThe all-time-high stock market?

db bianco corrections sell-offs

Two Ways Successful Private Equity Funds Stand Out Early On (Value Walk)

It’s difficult to analyze private equity fund performance in the first few years of its life cycle because net cash flows are generally still negative – fund managers are in the process of acquiring and bolstering private companies. But a study of more than 300 US buyout funds found that there are two early indicators of whether a fund will ultimately land in the top or bottom quartile of PE fund performance: early distributions and a shallow J-curve.

PE cumulative distributions private equity

ECB President Mario DraghiCentral Bankers Want Governments to Lend a Hand (Bloomberg)

Three of the world’s top central bankers used the stage of a monetary policy conference to defend their strategies and call on governments to do more to boost growth.

Haruhiko Kuroda, governor of the Bank of Japan, reiterated on Saturday that the effects of monetary easing are working through the economy and price trends are improving. Mario Draghi, president of the European Central Bank, urged governments to step up structural reforms. And Stanley Fischer, vice chairman of the Federal Reserve, defended stimulating the U.S. economy to counter low inflation.

Economic data to carry more heft as earnings dry up (Market Watch)

First-quarter earnings reports are winding down, and most companies appear to have dodged the dreaded year-over-year decline. That should free investors to refocus their concerns on broader economic data in the week ahead.

Federal Reserve Chair Janet YellenU.S. Stocks End 2015’s Slowest Week Near Records on Fed Comments (Bloomberg)

No volume? No volatility? No problem.

U.S. stocks churned higher in the slowest week of trading since New Year’s and the tightest range for equities in six months, as comments from the Federal Reserve boosted speculation interest rates won’t rise too soon or too quickly to snuff out economic growth.

How the American economic story changed in just a few weeks (Business Insider)

All of a sudden, the first quarter was gone.

On April 2, just a few days after the first quarter officially ended — but still about a month before we’d get our first read on economic growth to start the year — the Atlanta Fed’s GDPNow tracker indicated that the economy did not grow at all to start the year.

fredgraph (13)

Hedge Fund Manager Jim ChanosOil Becoming ‘Mundane Return-on-Capital’ Business to Chanos (Bloomberg)

“Having to do things like drill in the Arctic” and “deal with Mr. Putin” are some of the reasons hedge fund manager Jim Chanos said he’s “really negative” on integrated oil companies.

“They’re replacing $20 oil with $80 oil, that’s the problem,” Chanos said in an interview on “Wall Street Week” posted on the TV show’s website Sunday. “What were really high return-on-capital businesses are becoming more mundane return-on-capital businesses.”

Pound Strength Endures as BOE Helps Shift Focus Toward Economy (Bloomberg)

As the pound continued strengthening versus most of its major peers in the aftermath of the U.K. election, the Bank of England has helped shift investors’ focus to economic data.

Stocks and Trading

Screen Shot 2015 05 22 at 5.27.09 PMEverything you need to know about the hottest stock on the market (Business Insider)

Shake Shack’s performance has been stunning.

The casual fast food chain closed up 3.3% at $92.86 per share on Friday. That was the sixth straight day of gains, and the longest such streak since its January 30 public market debut.

China Stocks Surge, Europe/US Purge, & Portuguese Bonds Are Crashing (Zero Hedge)

Between escalating Grexit concerns and Podemos ‘victory’ in Spain, European bond and stock markets shuddered somewhat today. EURUSD continues to close lower – back below 1.1000. All major bourses across Europe are in the red with Greece and Spain worst (ASE -3%) but the most notable shift is a collapse in Poruguese bonds.

Nigerian Stocks Retreat Fifth Day as Fuel Crisis Hits Companies (Bloomberg)

Nigerian stocks retreated for a fifth day, with the declines seen continuing as Africa’s biggest oil producer faces a fuel shortage that’s crippling the economy and causing companies to cut back operations.

Traders work at their screens at the stock exchange in Frankfurt January 23, 2015. REUTERS/Pawel KopczynskiEurope stocks stumble, dollar lifted by U.S rate view (Reuters)

European shares fell in thin trade on Monday while the dollar powered ahead after U.S. Federal Reserve Chair Janet Yellen indicated that the central bank was poised to raise interest rates this year.

Investor concerns about Greece’s debt problems and a poor regional and local election result by Spain’s ruling People’s Party also weighed on the euro and European shares.

Technology

Apple’s iOS 9 Could Herald A New Future For Older iPhones And iPads (Tech Crunch)

Apple’s next-generation operating systems, for both mobile devices and PCs, are reportedly going to have a strong focus on zapping bugs and improving stability, reports 9to5Mac. We’d heard this about iOS before, but it appears this will be a smoothing year (but with new features, too). The more interesting news, however, is that Apple is also said to be working on improving iOS support for older devices – including ones that aren’t even necessarily on sale anymore.

Health and Life Sciences

Should placebos be used in randomized controlled trials of surgical interventions? (Science Based Medicine)

Alone of all the regular contributors to this blog, I am a surgeon. Specifically, I’m a surgical oncologist specializing in breast cancer surgery, which makes me one of those hyper-specialized docs that are sometimes mocked as not being “real” doctors. Of course, the road to my current practice and research focus was long and involved quite a few years doing general surgery; so it is not as though I am unfamiliar with a wide variety of surgical procedures. Heck, I’m sure I could do an old-fashioned appendectomy, bowel resection, or cholecystectomy if I had to. Just don’t ask me to use the da Vinci robot or, with the exception of the case of a cholecystectomy, a laparoscope, although, given the popularity of robotic surgery, I sometimes joke that I really, really need to figure out how to do breast surgery with the robot. After all, if plastic surgeons are using it for breast reconstruction, surely the cancer surgeon should get in on the action.

Life on the Home Planet

Holy Shit! Almonds Require a Ton of Bees (Mother Jones)

Growing 80 percent of the globe’s almonds in California doesn’t just require massive amounts of water. It also takes a whole bunch of honeybees for pollination—roughly two hives’ worth for every acre of almonds trees, around 1.7 million hives altogether. That’s at least 80 percent of all available commercial hives in the United States, Gene Brandi, a California beekeeper who serves as vice president of the American Beekeeping Federation, recently told NPR.

Anti-Immigrant Sheriff Wants Public To Help Him Pay To Defend His Racial Profiling Policies (Think Progress)

An anti-immigrant Arizona sheriff is asking the public to help with his legal fees while he waits for a decision on a contempt of court hearing about his department’s systemic racial profiling of suspected undocumented immigrants. In an email to supporters last week, Maricopa County Sheriff Joe Arpaio wrote that he doesn’t have the “personal wealth” to pay for a lawyer and felt “targeted” by pro-immigration reform advocacy groups that are suing him to stop his acts of racial bias against Latinos.

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