Blah blah Israel-Palestine conflict.... Blah blah India-Pakistan tensions....
Brett Lee out for summer!? NNNooooooooo.......
Monday, December 29, 2008
Tuesday, December 23, 2008
Beware the technology/science/intelligence wish myth
Often in arguments about the future resolutions of apparently intractable problems, vague references to science or human intelligence to solve problems, or specific technological fixes are invoked that would neatly resolve said intractable problem.
Too many times the fix is chosen in a way that most closes the argument rather than being the most likely path that technology (or other aspects of humanity) will take in the resolving the problem or the opposite. Technology, science and intelligence are just as capable of enabling "problems" to be extended in time. What can be imagined to be solved by an improbable specific technology, could more likely be attacked by a sequence of more probable ones.
So when someone says that a space vehicle engine will be found that can take us directly from earth to Mars, or that peoples intelligence will be put to eradicating wars forever, or that we could live cheaply as brains in tanks, I would like a believable sequence of events or pathway that has a finite possibility.
Too many times the fix is chosen in a way that most closes the argument rather than being the most likely path that technology (or other aspects of humanity) will take in the resolving the problem or the opposite. Technology, science and intelligence are just as capable of enabling "problems" to be extended in time. What can be imagined to be solved by an improbable specific technology, could more likely be attacked by a sequence of more probable ones.
So when someone says that a space vehicle engine will be found that can take us directly from earth to Mars, or that peoples intelligence will be put to eradicating wars forever, or that we could live cheaply as brains in tanks, I would like a believable sequence of events or pathway that has a finite possibility.
Friday, December 19, 2008
Energy Positive Feedback
One of the "fundamentals" of oil prices (and other commodities) is the thought that the cost of extraction ought to be fixed or stable for a given geography, related to how difficult or involved the process. Changes in cost due to demand and supply is explained away to profit margin over fixed costs, costs of exploration and costs of increasing capacity etc.
The truth is, with such increasing automation of providing supplies, one of the larger marginal cost of energy supply is the cost of the energy used to provide that supply. Thus as the expectation of costs incease, prices will increase in a magnified way, as the feedback of energy costs increasing will increase the associated cost of extraction. There will be correlation between increases in one energy commodity and a range of other energy commodities and commodities that require a lot of energy to produce( eg. Aluminium, Iron), or that can produce alternative fuels (eg. silicon for solar panels, or sugar for ethanol etc.).
Similarly if expectations of prices start to decrease, and there was a considerable margin to start with, there can be a positive feedback which reduces the price and also the baseline cost of extraction as well through the correlated energy rich commodities. This snowballing downward will still leave some producers with profit margin, even if there would have been a considerable loss at those prices with input costs the way they were.
The truth is, with such increasing automation of providing supplies, one of the larger marginal cost of energy supply is the cost of the energy used to provide that supply. Thus as the expectation of costs incease, prices will increase in a magnified way, as the feedback of energy costs increasing will increase the associated cost of extraction. There will be correlation between increases in one energy commodity and a range of other energy commodities and commodities that require a lot of energy to produce( eg. Aluminium, Iron), or that can produce alternative fuels (eg. silicon for solar panels, or sugar for ethanol etc.).
Similarly if expectations of prices start to decrease, and there was a considerable margin to start with, there can be a positive feedback which reduces the price and also the baseline cost of extraction as well through the correlated energy rich commodities. This snowballing downward will still leave some producers with profit margin, even if there would have been a considerable loss at those prices with input costs the way they were.
Wednesday, December 17, 2008
Wednesday, December 10, 2008
News of the last 40 days
If one had forgone news for the past 40 days, would they have really missed much?
Not only did the flood last for 40 days and not only did Moshe Rabbeinu spend 40 days on Mt. Sinai, we fast on the 40th day of Omer for the sin of the 'miraglim'" (spies who were sent by Moshe to scout the land of Canaan and determine whether it could be cultivated and if the people who dwelled on it could be overcome and who returned and recounted that the Land was inhabited by "Giants", and that it was uncultivated).
The Rabbi goes on to talk about the number "40" and the Hebrew letter "mem", it's Gematric (every Hebrew letter has a numerical equivalent) equal. He says that the Flood gave hope to the continuation of life on the planet, that Moshe Rabbeinu's sojourn on Mt. Sinai gave hope to the People of Israel and the Nations of the world, that we fast on the 40th day of the count of the Omer but hope that the miraglim wanted to make tshuva (repentance)
Let's start with the oil price. Forty days ago, only a few brave economists would have predicted $25 per barrel oil. Now plenty are.
Terrorists struck a major blow in Mumbai somewhere through that time. That may affect our cricket for some time to come.
Jaipur, Dec. 12: At least 22 people have died and 37 others are undergoing treatment at the Sawai Man Singh (SMS) Hospital after consuming spurious country liquor in two villages near Shahpura in Jaipur district.
The (Aus) government has begun to implement its stimulus package of pumping money directly to families and pensioners. For some reason, they have encouraged us to spend it rather than save it. For me personally it repairs our balance sheet a bit, but won't really encourage immediate spending.
Nothing interesting has happened in the US.
Schicksalstag 9/11 19th anniversary passed by without a single mention in the media :(
I have discovered that blame in general and scapegoating in particular, are the most damaging human instincts which I am continuing a personal crusade against.
Marconomic take on the credit crunch
I like to separate what I see as the proximal cause of the Worlds economy's "phase shift", and what I believe to be the root causes. The proximal causes can be traced to the US financial system, and a virtuous cycle of money suddenly turning into a vicious one.
The root cause, in my opinion, is what I believe all long term cycles root causes are - demographic shift. Net world aged dependency ratios have been rising, and especially due to Chinese history, one child policy and uneven population pyramid - there has been a long, seemingly reliable accelerating increase in young workers compared to potential retirees. This rate of increase is rapidly unwinding, causing a rapid shift in herd financial priorities, from consumption to investment to retirement savings - right around the world.
In this implosion case there was also a detonator. The financial setup for the trigger was in fact the Olympic Games. For me, it was no coincidence that the commodities boom peaked just before the olympics. The opaqueness of Chinese stores and orders for the pre-Olympic stock-up meant that both for the volume and price they were willing to pay for these commodities, speculation couldn't tell the difference between short term demand and long term demand.
Not only did the flood last for 40 days and not only did Moshe Rabbeinu spend 40 days on Mt. Sinai, we fast on the 40th day of Omer for the sin of the 'miraglim'" (spies who were sent by Moshe to scout the land of Canaan and determine whether it could be cultivated and if the people who dwelled on it could be overcome and who returned and recounted that the Land was inhabited by "Giants", and that it was uncultivated).
The Rabbi goes on to talk about the number "40" and the Hebrew letter "mem", it's Gematric (every Hebrew letter has a numerical equivalent) equal. He says that the Flood gave hope to the continuation of life on the planet, that Moshe Rabbeinu's sojourn on Mt. Sinai gave hope to the People of Israel and the Nations of the world, that we fast on the 40th day of the count of the Omer but hope that the miraglim wanted to make tshuva (repentance)
Let's start with the oil price. Forty days ago, only a few brave economists would have predicted $25 per barrel oil. Now plenty are.
Terrorists struck a major blow in Mumbai somewhere through that time. That may affect our cricket for some time to come.
Jaipur, Dec. 12: At least 22 people have died and 37 others are undergoing treatment at the Sawai Man Singh (SMS) Hospital after consuming spurious country liquor in two villages near Shahpura in Jaipur district.
The (Aus) government has begun to implement its stimulus package of pumping money directly to families and pensioners. For some reason, they have encouraged us to spend it rather than save it. For me personally it repairs our balance sheet a bit, but won't really encourage immediate spending.
Nothing interesting has happened in the US.
Schicksalstag 9/11 19th anniversary passed by without a single mention in the media :(
I have discovered that blame in general and scapegoating in particular, are the most damaging human instincts which I am continuing a personal crusade against.
Marconomic take on the credit crunch
I like to separate what I see as the proximal cause of the Worlds economy's "phase shift", and what I believe to be the root causes. The proximal causes can be traced to the US financial system, and a virtuous cycle of money suddenly turning into a vicious one.
The root cause, in my opinion, is what I believe all long term cycles root causes are - demographic shift. Net world aged dependency ratios have been rising, and especially due to Chinese history, one child policy and uneven population pyramid - there has been a long, seemingly reliable accelerating increase in young workers compared to potential retirees. This rate of increase is rapidly unwinding, causing a rapid shift in herd financial priorities, from consumption to investment to retirement savings - right around the world.
In this implosion case there was also a detonator. The financial setup for the trigger was in fact the Olympic Games. For me, it was no coincidence that the commodities boom peaked just before the olympics. The opaqueness of Chinese stores and orders for the pre-Olympic stock-up meant that both for the volume and price they were willing to pay for these commodities, speculation couldn't tell the difference between short term demand and long term demand.
Friday, December 05, 2008
Predictions made on 17th October
Dr. Clam said...
To change the subject, I think we will see your 40$US barrels of oil next year. Shall we take bets on the minimum price and the day it is quoted?
17/10/08 10:35
Marco said...
OK :) October 29th 2010 - $25 US per barrell.
17/10/08 16:23
Dr. Clam said...
Gaack! You are gamer than me. $37.90 US, August 17th 2009. (West Texas Crude)
17/10/08 20:49
I think the $40 mark will be crashed through like paper.
To change the subject, I think we will see your 40$US barrels of oil next year. Shall we take bets on the minimum price and the day it is quoted?
17/10/08 10:35
Marco said...
OK :) October 29th 2010 - $25 US per barrell.
17/10/08 16:23
Dr. Clam said...
Gaack! You are gamer than me. $37.90 US, August 17th 2009. (West Texas Crude)
17/10/08 20:49
I think the $40 mark will be crashed through like paper.
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