Submitted by Scott Murray, on 08/27/2014

8-28-2014 2-31-57 AM ETF Spotlight

Recent settlements that major banks have made with the United States government have generated more headlines for the performance of bank stocks than cheers for finally owning up to their guilt and receiving just punishment for their crimes. The reason for this may be rooted in the possibility that they may never actually pay the homeowners who were the real victims in the pooling of fraudulent mortgages.

Several news sources are starting to examine what the major banks are actually doing to help those victimized during the property bubble. And what is being discovered is discouraging to say the least, yet a boon for banking sector stocks which are breaking out after Bank of America’s $17 billion settlement. First, let’s take a quick look at the XLF, the ETF representing the majority of major U.S. banks:

8-28-2014 2-13-27 AM XLF

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Clearly the market loved that this major settlement was out of the way, even though it means a huge loss on Bank of America’s income statement. But if one looks at how JP Morgan has handled its settlement with the government, you have to wonder if it really will result in a big loss.

It has been almost a year since JP Morgan agreed to pay $6 billion of their settlement to help homeowners. How is that working out?

Submitted by James Stafford, on 08/25/2014

The Kardashians and Climate Change: Interview with Judith Curry

Climate change continues to drive energy policy, despite the fact that there is no way to reconcile eradicating energy poverty in much of the world with reducing carbon dioxide emissions. This is one of the many conundrums of the climate change debate—a debate that has been taken over by social media and propaganda, while scientists struggle to get back into the game and engage the public.

Judith Curry is an American climatologist and former chair of the School of Earth and Atmospheric Sciences at the Georgia Institute of Technology, as well as the co-author of over 140 scientific papers. Her prolific writings offer a rational view of the climate change debate. You can find more of Judith's work at her blog:

In an exclusive interview with, Curry discusses:

- The Koch-funded climate denial machine
- Why the public is losing trust in scientists
- How alarmist propaganda has skewed the climate debate
- How climate change has contributed to a new literary genre
- The social media impact and the 'Kardashian Factor'
- Climate and the 'clash of values'
- Global warming or global cooling?
- The Polar Vortex and 'global warming'
- Extreme weather hysteria - Why climate change should not drive energy policy

Interview by James Stafford of You've talked a lot about the role of communication and PR in the climate change debate. Where do scientists fail in this respect?

Judith Curry: Climate science communication hasn't been very effective in my opinion. The dominant paradigm seems to be that a science knowledge deficit of the public and policy makers exists, which is exacerbated by the Koch-funded climate denial machine. This knowledge deficit then results in the public failing to act with the urgency that is urged by climate scientists.

This strategy hasn't worked for a lot of reasons. The chief one that concerns me as a scientist is that strident advocacy and alarmism is causing the public to lose trust in scientists.

OP: What is the balance between engagement with the public on this issue and propaganda?

Judith Curry: There are two growing trends in climate science communications – engagement and propaganda. Engagement involves listening and recognizes that communication is a two-way street. It involves collaboration between scientists, the public and policy makers, and recognizes that the public and policy makers don't want to be told what to do by scientists. The other trend has been propaganda. The failure of the traditional model of climate science communication has resulted in more exaggeration and alarmism, appeals to authority, appeals to fear, appeals to prejudice, demonizing those that disagree, name-calling, oversimplification, etc.

There is a burgeoning field of social science research related to science communications. Hopefully this will spur more engagement and less propaganda.

OP: You've also talked about the climate change debate creating a new literary genre. How is this 'Cli-Fi' phenomenon contributing to the intellectual level of the public debate and where do you see this going?

Judith Curry: I am very intrigued by Cli-Fi as a way to illuminate complex aspects of the climate debate. There are several sub-genres emerging in Cli-Fi – the dominant one seems to be dystopian (e.g. scorched earth). I am personally very interested in novels that involve climate scientists dealing with dilemmas, and also in how different cultures relate to nature and the climate. I think that Cli-Fi is a rich vein to be tapped for fictional writing.

OP: How would you describe the current intellectual level of the climate change debate?

Judith Curry: Well, the climate change debate seems to be diversifying, as sociologists, philosophers, engineers and scientists from other fields enter the fray. There is a growing realization that the UNFCCC/IPCC has oversimplified both the problem and its solution. The wicked climate problem is growing increasingly wicked, as more and more dimensions come into play. The diversification helps with the confirmation bias and 'groupthink' problem.

Hopefully this diversification will lead to greater understanding and policies that are more robust to the deep uncertainties surrounding the climate change problem.

OP: You've also talked about the "Kardashian Factor" ... Can you expand on this?

Judith Curry: The Kardashian Factor relates to a scientist's impact in social media. There is a growing disconnect between scientists who impact within the ivory tower, as measured by publications and citations, versus those scientists that are tweeting and blogging. While some of the smartest people on the planet are university professors, most of them simply don't matter in today's great debates. The use of the term 'Kardashian Factor' is designed to marginalize social media impact as shallow popularity.

Social media is changing the world, and academia hasn't quite figured out what to do about it. On issues relevant to public debate, social media is rivaling published academic research in its impact. Social media is leveling the playing feed and democratizing science. The skills required to be successful in social media include good writing/communication skills and the abilities to synthesize, integrate, and provide context. Those who are most successful at social media also have a sense of humor and can connect to broader cultural issues – they also develop a trustworthy persona. These are non-trivial skills, and they are general traits of people that have impact.

Submitted by on 08/19/2014

ETF Watch Header

August 10, 2014 - August 16, 2014

ETF Watch is a weekly roundup of ETF launches, filings and closures.

In this issue:

bullet ETF Watch

First Trust rolls out multi-strategy, multi-manager ETF

bullet ETF Watch

Van Eck plans EM corporate bond fund

bullet ETF Watch

ALPS closes 4 ETFs tracking Goldman Sachs indexes

Submitted by Robert Bensh, on 08/19/2014

8-19-2014 12-01-44 PM ukraine

Ukraine's Next Crisis? Economic Disaster

Ukraine's next crisis will be a devastatingly economic one, as violent conflict destroys critical infrastructure in the east and brings key industry to a halt, furthering weakening the energy sector by crippling coal-based electricity production.

The Ukrainian military's showdown with separatists in the industrial east has forced coal mines to severely cut production or close down entirely. This has led to an electricity crisis that can only be staunched by cutting domestic production along with exports to Europe, Crimea, and Belarus -- or worse, getting more imports from Russia.

In the coal centers of Ukraine's industrial east—Luhansk and Donetsk—fighting has forced the full closure of an estimated 50 percent of coal mines, while overall coal production has fallen 22 percent over the same period last year.

Key industry sources say they will potentially run out of coal in less than three weeks.

For Ukraine, the second largest producer of coal in Europe, this will have a devastating impact on the energy sector, which is in a state of emergency, unable to get coal to thermal power plants that provide some 40 percent of the entire country's electricity.

In the wider energy picture, the halt of coal production sets Ukraine back a decade. The plan was to rely more on coal in order to reduce dependence on Russian natural gas.

But the new reality has insiders wondering how Ukraine will produce more of its own natural gas...

Submitted by on 08/06/2014

ETF Watch Header

July 27, 2014 - August 2, 2014

ETF Watch is a weekly roundup of ETF launches, filings and closures.

In this issue:

bullet ETF Watch

The Capital Group files for nontransparent active ETFs

bullet ETF Watch

Direxion debuts "iBillionaire" fund

bullet ETF Watch

AdvisorShares rolls out active Athena High Dividend ETF

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