The Big Picture

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• Is Modern Life Making Us Dumber?
• Wealth On A Plane
• 10 Thursday PM Reads
• FRBNY Prez William Dudley on QE, Mandates
• Percentage of SPX Stocks Over 200 Day Moving Average
• 10 Thursday AM Reads
• Opteka Ultra Thin Solar Powered High Capacity = $25
• Look Out Below, Japanese Black Thursday Edition
• Bullard: Monetary Policy Options in a Low Policy Rate Environment

Is Modern Life Making Us Dumber? Posted: 23 May 2013 10:30 PM PDT Forget "Peak Oil" and "Peak Credit" … Are We On the Downslope of "Peak Intelligence"?   Scientists say that we have much smaller brains than our ancestors had 20,000 years ago … and we might have gotten stupider since agriculture became widespread. Indeed, Huffington Post reports that we've probably gotten dumber than even our Victorian ancestors: A provocative new study suggests human intelligence is on the decline. In fact, it indicates that Westerners have lost 14 I.Q. points on average since the Victorian Era. ****** As for Dr. te Nijenhuis and colleagues, they analyzed the results of 14 intelligence studies conducted between 1884 to 2004, including one by Sir Francis Galton, an English anthropologist and a cousin of Charles Darwin. Each study gauged participants' so-called visual reaction times — how long it took them to press a button in response to seeing a stimulus. Reaction time reflects a person's mental processing speed, and so is considered an indication of general intelligence. *** In the late 19th Century, visual reaction times averaged around 194 milliseconds, the analysis showed. In 2004 that time had grown to 275 milliseconds. Even though the machine gauging reaction time in the late 19th Century was less sophisticated than that used in recent years, Dr. te Nijenhuis told The Huffington Post that the old data is directly comparable to modern data. Other research has suggested an apparent rise in I.Q. scores since the 1940s, a phenomenon known as the Flynn Effect. But Dr. te Nijenhuis suggested the Flynn Effect reflects the influence of environmental factors — such as better education, hygiene and nutrition — and may mask the true decline in genetically inherited intelligence in the Western world. This new research was published in the April 13 issue of Intelligence. There are several theories for why we are getting dumber, including the following (the first 2 come from the HuffPost article): (1) Dr. Jan te Nijenhuis points to the fact that women of high intelligence tend to have fewer children than do women of lower intelligence. This negative association between I.Q. and fertility has been demonstrated time and again in research over the last century. (2) "The reduction in human intelligence … would have begun at the time that genetic selection became more relaxed," Dr. Gerald Crabtree, professor of pathology and developmental biology at Stanford University, told The Huffington Post in an email. "I projected this occurred as our ancestors began to live in more supportive high density societies (cities) and had access to a steady supply of food. Both of these might have resulted from the invention of agriculture, which occurred about 5,000 to 12,000 years ago." (3)  Humans evolved to eat a lot of Omega 3s: Wild game animals have much higher levels of essential Omega 3 fatty acids than domesticated animals. Indeed, leading nutritionists say that humans evolved to consume a lot of Omega 3 fatty acids in the wild game and fish which they ate (more), and that a low Omega 3 diet is a very new trend within the last 100 years or so. In other words, while omega 3s have just now been discovered by modern science, we evolved to get a lot of omega 3s … and if we just eat a modern, fast food diet without getting enough omega 3s, it can cause all sorts of health problems. So something just discovered by science can be a central fuel which our bodies evolved to use. Omega 3s – in turn – boosts intelligence and help prevent cognitive decline. (4)  Exercise boosts intelligence … and our ancestors got a lot more exercise than we do! In addition, high levels of cortisol – the chemical released by the body when one is under continuous, unrelenting stress – and poverty can physically impair the brain and people's ability to learn. On the other hand, relaxing activities like meditation and prayer have been shown to increase brain mass and connectivity in certain areas of the brain. Hunter-gatherers had more leisure time – and a more playful attitude – than we do today. (5) Toxic chemicals in the environment can reduce intelligence.  Examples include flame retardant, lead (found in many lipsticks), certain pesticides (and see this and this), and fluoride.

Wealth On A Plane Posted: 23 May 2013 05:30 PM PDT Jess Bachman Did you know that the 400 richest people in America are wealthier than the bottom 60%? The 1%, you say? More like the 1% of the 1% of the 1% — and you can fit them all on one 747 commercial jet. This video has the details

10 Thursday PM Reads Posted: 23 May 2013 01:30 PM PDT My thunderstorm afternoon train reading: • The Uncertainty of Risk (n+1) see also Adaptation (The Reformed Broker) • Jonathan Miller: Home Supply Limited by Americans Lacking Equity to Sell (Bloomberg) • Greenspan’s Market Persists (Alhambra Investment Partners) and How Much of a Dove Is Bernanke, Really? (Businessweek) • Oil Manipulation Inquiry Shows EU's Hammer After Libor (Bloomberg) • The Mirage that is Financial Literacy (money&markets) • How Nations Tried to Keep Striving Migrants In (Echoes) • Nocera: Tim Cook’s reality distortion field (NYT) see also Tim Cook's improbable victory in D.C. (Reuters) • Is This Big Tea Party Group Really an Innocent Victim of the IRS? (MoJo) • X-BOX: Steve Jobs' Dream Device Has Arrived (Slate) • 10 Novels That Are More Action-Packed Than Most Summer Movies (io9) Whatcha reading?   America’s Corporation-Tax Receipts Falter Even as Company Profits Soar Source: Economist

FRBNY Prez William Dudley on QE, Mandates Posted: 23 May 2013 11:00 AM PDT Your lunchtime viewing: Dudley Discusses Taper Decision, Mandates, Yellen

Percentage of SPX Stocks Over 200 Day Moving Average Posted: 23 May 2013 08:30 AM PDT Renaissance Macro Research, May 14, 2013   Jeff deGraaf, technician extraordinaire (formerly of Lehman now at Renaissance Macro Research) makes an interesting observation about the heavily overbought markets. Last week, the S&P500 had ~93% of all stocks trading over their 200 day moving average. Normally, this degree of overbought should lead to a correction. As you can see in the inset box, it sometimes does. However, if you are looking out a year, we see that over the past 3 instances, markets have been higher. The takeaway is that you should determine if you are a trader or an investor before thinking about whether to lighten up or add on dips. Different timelines and holding periods should consider different responses to the volatility. Note you can get see the updated version of this measure at various places online (Index Indicators, StockCharts, Decision Point. You can read more about this measure here.

10 Thursday AM Reads Posted: 23 May 2013 06:49 AM PDT My morning reads: • Japan's mini crash: Blame China(FT Alphaville) see also Dumb money returns to Japan (ft.com) • Extreme Fear (Joe Fahmy) • Bernanke to Congress: I'm Not the Problem. You Are. (The Fiscal Times) see also Wonkbook: Bernanke lashes Congress (Wonkblog) • Why Investors Fail (Motley Fool) • Dudley Says Decision on Taper Will Require 3-4 Months (Bloomberg) • Investing in Gold: Does It Stack Up? (Knowledge at Wharton) • Teens are tired of Facebook ‘drama,’ find refuge on Twitter and elsewhere, says Pew (The Verge) see also Teens, Social Media, and Privacy (Pew Internet) • Six Facts Lost in the IRS Scandal (ProPublica) • Putting Apple in an Xbox (WSJ) see also The race to a "smart" television is over. Xbox won (pandodaily) • Inside Google’s Secret Lab (Businessweek) What are you reading?   Japanese Stocks Fall 7.3% Overnight Source: WSJ

Opteka Ultra Thin Solar Powered High Capacity = $25 Posted: 23 May 2013 05:30 AM PDT Source: Amazon   BP-SC4000 I just ordered this — regularly $100, on sale for $25. Looks pretty cool.

Look Out Below, Japanese Black Thursday Edition Posted: 23 May 2013 04:00 AM PDT click for updated futures     US futures are down following yesterday’s intra-day reversal after the FOMC minutes were released. Nikkei is down 7.3%. Japan's Topix index tumbled the most since the aftermath of the March 2011 tsunami and nuclear disaster. This follows a 50% rally in the Japanese market on Abenomics. Hong Kong Hang Seng Index is down 2.54%. Major European indices are off 2-3%. EuroStoxx down 2.3%; FTSE100 off 1.9%. Deutsche Borse got whacked for 2.7%, wqhile the CAC40 is hit for 2.3%. Josh has more details here; World market updates here.

Bullard: Monetary Policy Options in a Low Policy Rate Environment Posted: 23 May 2013 03:00 AM PDT

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