"The Best Damn Thing"
Let me hear you say hey hey hey
Alright
Now let me hear you say hey hey ho
I hate it when a guy doesn't get the door
even though I told him yesterday and the day before
I hate it when a guy doesn't get the tab
And I have to pull my money out and that looks bad
Where are the hopes, where are the dreams
My Cinderella story scene
When do you think they'll finally see
[Chorus:]
That you're not not not gonna get any better
You won't won't won't you won't get rid of me never
Like it or not, even though she's a lot like me
We're not the same
And yeah yeah yeah I'm a lot to handle
You don't know trouble, I'm a hell of a scandal
Me, I'm a scene, I'm a drama queen
I'm the best damn thing that your eyes have ever seen
Alright, alright
Yeah
I hate it when a guy doesn't understand
Why a certain time of month I don't wanna hold his hand
I hate it when they go out, and we stay in
And they come home smelling like their ex girlfriends
I found my hopes, I found my dreams
My Cinderella story scene
Now everybody's gonna see
[Chorus]
Give me an A (always give me what I want)
Give me a V (be very very good to me)
R (are you gonna treat me right)
I (I can put up a fight)
Give me an L (let me hear you scream loud)
One, two, three, four
Where are the hopes, where are the dreams
My Cinderella story scene
When do you think they'll finally see
[Chorus]
Let me hear you say hey hey hey
Alright
Now let me hear you say hey hey ho
Hey hey hey
Hey hey hey
Hey hey hey
I'm the best damn thing that your eyes have ever seen
Sunday, June 22, 2008
Monday, June 16, 2008
Quest for oil
Quest for Oil:
Where to Look
Is the Question
Drill on New Lands
Or Existing Fields?
Fueled by Gas Price
By STEPHEN POWER and BEN CASSELMAN
June 16, 2008; Page A4
The oil industry is turning up the heat on Congress to open up more federal land to oil and natural-gas drilling, arguing that will do more to cut energy prices than new taxes on industry profits. But environmentalists and Congressional Democrats opposed to that tack are firing back with a new challenge: Drill what you have.
For years, political and environmental obstacles have limited the oil industry's access to large swaths of U.S. territory, most notably the Arctic National Wildlife Refuge in northern Alaska.
Democrats have tended to support restrictions on access to sensitive lands and focused on other ways to drive down prices: reining in speculators; punishing the OPEC oil cartel; and funding research on alternative-energy sources, possibly via a windfall-profits tax on oil companies.
Industry backers, including many Republicans, say the answer to high prices is increased supply and that the way to do that is to drill in areas now off-limits.
Now, voter anger over soaring gasoline prices is shoving this perennial dispute to the top of Washington's energy agenda. On the New York Mercantile Exchange, benchmark crude for July delivery fell $1.88 Friday to settle at $134.86, near its all-time high. Last Monday, the average retail price for a gallon of regular unleaded was $4.039, according to the Energy Information Administration.
A recent Gallup poll shows 57% of Americans support opening up new territories to drilling, while a Wall Street Journal-NBC News poll conducted this month shows 59% of Americans saying Congress should take the lead on responding to high gas prices.
Although high prices are giving the oil industry a new opportunity to make its case for greater access to domestic petroleum, the industry's allies in the Democratic-controlled Congress have so far had little success. Last week, a House panel voted against lifting a decades-old ban on drilling in the outer continental shelf.
Complicating matters, Sen. John McCain of Arizona, the presumptive Republican presidential nominee, has broken with many members of his party, including President Bush, in saying he would oppose drilling in the Arctic National Wildlife Refuge. He has indicated he would defer to the wishes of coastal states on drilling in the outer continental shelf.
Democrats are looking to shift the terms of the debate by arguing it is possible to increase domestic oil production without opening up new lands. The government, they point out, has leased some 91.5 million acres of land and waters for drilling, but federal data show only about a quarter of that is producing oil and gas. Moreover, the portion is shrinking; about 27% of the onshore acres were producing oil and gas in 2007, down from an average of 30.5% in production over the preceding decade.
The industry and its backers say such arguments reflect a fundamental misunderstanding of the oil industry. Companies don't know how much oil is under the lands they lease, so they buy up large swaths in the hope that a fraction will work out. Much of the area that isn't producing, they say, doesn't have oil or gas in commercially viable quantities.
Moreover, bringing a new field into production can require years of mapping, testing, drilling and construction -- during which time the land would show up in statistics as being "not in production," even as companies spend millions or even billions of dollars to bring it online.
"I guarantee you, anybody who's got a commercial discovery today in the United States has got it under development. They'd be silly not to at these prices," Exxon Mobil Corp. Chief Executive Rex Tillerson said in an interview.
Such explanations aren't winning over skeptical Democrats on Capitol Hill. "Why should we expect oil-and-gas companies to rush into new areas to begin production when they are sitting on literally millions and millions of acres of existing leases without doing any production on those?" Sen. Jeff Bingaman, a New Mexico Democrat who is chairman of the Senate Committee on Energy and Natural Resources, said in a speech last month.
Mr. Bingaman added in an interview, "If there have been a lot of leases let that are not produceable, that's information we need to have to determine whether we should renew those leases. There's no reason to renew leases if they're not produceable."
Some lawmakers are mulling ways to change the industry's incentives. Wall Street increasingly values oil companies -- especially the smaller ones that dominate onshore U.S. production -- based on their reserves, not just their production. That gives companies an incentive to snap up land even if they won't be able to drill it for years.
On Thursday, House Democrats introduced legislation that seeks to compel energy companies to either produce or give up the federal onshore and offshore leases they are holding, by barring them from obtaining any more leases unless they can demonstrate that they are producing oil and gas, or are "diligently developing" the leases they hold.
Currently, companies must give up nonproducing leases after a set period of time -- usually five or 10 years -- but they can often get extensions, and there is no limit on the number of leases a company can hold at a given time.
The bill is modeled on a 1976 law that attempted to discourage speculation on federal coal as a result of the energy crises of the 1970s.
"If they're bidding on these leases, we're assuming they're bidding on them because they believe there's a high-percentage likelihood that there is oil there. And if they don't, then they should not have bid on them," says Rep. Edward Markey, a Massachusetts Democrat who is chairman of the House Select Committee on Energy Independence and Global Warming.
Red Cavaney, president of the American Petroleum Institute, a trade group, called Mr. Markey's remarks, "naive."
"They call the first step in the oil business 'exploration.' If every bit of land had oil and gas, you wouldn't need to explore," he said.
High prices have driven new interest in fields that weren't economical when oil was selling for less than $60 a barrel three years ago. If prices stay high, Mr. Cavaney said, the percentage of leased land in production will rise.
Even if the lands are opened to drilling, however, most experts don't expect immediate relief from high prices. The more-accessible reserves off the coasts of California and Florida would take several years to bring into production, and the remote Arctic refuge would take a decade or more. Even once those fields did come online, their impact on prices would likely be limited. The largest field in the Arctic National Wildlife Refuge is believed to contain about 1.4 billion barrels of oil -- roughly half what Saudi Arabia exports in a single year.
As oil prices have hit records, proponents of drilling in new areas have increased pressure on Congress. A group led by the former House Speaker Newt Gingrich said Wednesday that its "Drill Here, Drill Now, Pay Less" petition drive had netted half a million signatures.
Industry supporters say they can't be sure how much oil exists in areas they haven't explored. But they say there are good reasons to think large reserves exist in areas now closed to drilling. Closed areas in the Gulf of Mexico and off the coast of California, for example, abut areas that have been drilled successfully for years.
The industry also complains that efforts to produce on leased land are sometimes slowed by environmental groups. In the West Tavaputs field in Northeastern Utah, Denver-based Bill Barrett Corp. is producing natural gas on only 30% of the more than 40,000 acres of federal land it owns the rights to there. The company says its progress has been stymied by legal challenges from environmental groups.
Steve Bloch, an attorney for the Southern Utah Wilderness Alliance, says his group and others have been trying to slow drilling in the area but they have often been unsuccessful. State-wide, he adds, his group has objected to only a small fraction of drilling-permit applications.
Where to Look
Is the Question
Drill on New Lands
Or Existing Fields?
Fueled by Gas Price
By STEPHEN POWER and BEN CASSELMAN
June 16, 2008; Page A4
The oil industry is turning up the heat on Congress to open up more federal land to oil and natural-gas drilling, arguing that will do more to cut energy prices than new taxes on industry profits. But environmentalists and Congressional Democrats opposed to that tack are firing back with a new challenge: Drill what you have.
For years, political and environmental obstacles have limited the oil industry's access to large swaths of U.S. territory, most notably the Arctic National Wildlife Refuge in northern Alaska.
Democrats have tended to support restrictions on access to sensitive lands and focused on other ways to drive down prices: reining in speculators; punishing the OPEC oil cartel; and funding research on alternative-energy sources, possibly via a windfall-profits tax on oil companies.
Industry backers, including many Republicans, say the answer to high prices is increased supply and that the way to do that is to drill in areas now off-limits.
Now, voter anger over soaring gasoline prices is shoving this perennial dispute to the top of Washington's energy agenda. On the New York Mercantile Exchange, benchmark crude for July delivery fell $1.88 Friday to settle at $134.86, near its all-time high. Last Monday, the average retail price for a gallon of regular unleaded was $4.039, according to the Energy Information Administration.
A recent Gallup poll shows 57% of Americans support opening up new territories to drilling, while a Wall Street Journal-NBC News poll conducted this month shows 59% of Americans saying Congress should take the lead on responding to high gas prices.
Although high prices are giving the oil industry a new opportunity to make its case for greater access to domestic petroleum, the industry's allies in the Democratic-controlled Congress have so far had little success. Last week, a House panel voted against lifting a decades-old ban on drilling in the outer continental shelf.
Complicating matters, Sen. John McCain of Arizona, the presumptive Republican presidential nominee, has broken with many members of his party, including President Bush, in saying he would oppose drilling in the Arctic National Wildlife Refuge. He has indicated he would defer to the wishes of coastal states on drilling in the outer continental shelf.
Democrats are looking to shift the terms of the debate by arguing it is possible to increase domestic oil production without opening up new lands. The government, they point out, has leased some 91.5 million acres of land and waters for drilling, but federal data show only about a quarter of that is producing oil and gas. Moreover, the portion is shrinking; about 27% of the onshore acres were producing oil and gas in 2007, down from an average of 30.5% in production over the preceding decade.
The industry and its backers say such arguments reflect a fundamental misunderstanding of the oil industry. Companies don't know how much oil is under the lands they lease, so they buy up large swaths in the hope that a fraction will work out. Much of the area that isn't producing, they say, doesn't have oil or gas in commercially viable quantities.
Moreover, bringing a new field into production can require years of mapping, testing, drilling and construction -- during which time the land would show up in statistics as being "not in production," even as companies spend millions or even billions of dollars to bring it online.
"I guarantee you, anybody who's got a commercial discovery today in the United States has got it under development. They'd be silly not to at these prices," Exxon Mobil Corp. Chief Executive Rex Tillerson said in an interview.
Such explanations aren't winning over skeptical Democrats on Capitol Hill. "Why should we expect oil-and-gas companies to rush into new areas to begin production when they are sitting on literally millions and millions of acres of existing leases without doing any production on those?" Sen. Jeff Bingaman, a New Mexico Democrat who is chairman of the Senate Committee on Energy and Natural Resources, said in a speech last month.
Mr. Bingaman added in an interview, "If there have been a lot of leases let that are not produceable, that's information we need to have to determine whether we should renew those leases. There's no reason to renew leases if they're not produceable."
Some lawmakers are mulling ways to change the industry's incentives. Wall Street increasingly values oil companies -- especially the smaller ones that dominate onshore U.S. production -- based on their reserves, not just their production. That gives companies an incentive to snap up land even if they won't be able to drill it for years.
On Thursday, House Democrats introduced legislation that seeks to compel energy companies to either produce or give up the federal onshore and offshore leases they are holding, by barring them from obtaining any more leases unless they can demonstrate that they are producing oil and gas, or are "diligently developing" the leases they hold.
Currently, companies must give up nonproducing leases after a set period of time -- usually five or 10 years -- but they can often get extensions, and there is no limit on the number of leases a company can hold at a given time.
The bill is modeled on a 1976 law that attempted to discourage speculation on federal coal as a result of the energy crises of the 1970s.
"If they're bidding on these leases, we're assuming they're bidding on them because they believe there's a high-percentage likelihood that there is oil there. And if they don't, then they should not have bid on them," says Rep. Edward Markey, a Massachusetts Democrat who is chairman of the House Select Committee on Energy Independence and Global Warming.
Red Cavaney, president of the American Petroleum Institute, a trade group, called Mr. Markey's remarks, "naive."
"They call the first step in the oil business 'exploration.' If every bit of land had oil and gas, you wouldn't need to explore," he said.
High prices have driven new interest in fields that weren't economical when oil was selling for less than $60 a barrel three years ago. If prices stay high, Mr. Cavaney said, the percentage of leased land in production will rise.
Even if the lands are opened to drilling, however, most experts don't expect immediate relief from high prices. The more-accessible reserves off the coasts of California and Florida would take several years to bring into production, and the remote Arctic refuge would take a decade or more. Even once those fields did come online, their impact on prices would likely be limited. The largest field in the Arctic National Wildlife Refuge is believed to contain about 1.4 billion barrels of oil -- roughly half what Saudi Arabia exports in a single year.
As oil prices have hit records, proponents of drilling in new areas have increased pressure on Congress. A group led by the former House Speaker Newt Gingrich said Wednesday that its "Drill Here, Drill Now, Pay Less" petition drive had netted half a million signatures.
Industry supporters say they can't be sure how much oil exists in areas they haven't explored. But they say there are good reasons to think large reserves exist in areas now closed to drilling. Closed areas in the Gulf of Mexico and off the coast of California, for example, abut areas that have been drilled successfully for years.
The industry also complains that efforts to produce on leased land are sometimes slowed by environmental groups. In the West Tavaputs field in Northeastern Utah, Denver-based Bill Barrett Corp. is producing natural gas on only 30% of the more than 40,000 acres of federal land it owns the rights to there. The company says its progress has been stymied by legal challenges from environmental groups.
Steve Bloch, an attorney for the Southern Utah Wilderness Alliance, says his group and others have been trying to slow drilling in the area but they have often been unsuccessful. State-wide, he adds, his group has objected to only a small fraction of drilling-permit applications.
Monday, June 02, 2008
China Stockmarket
Disclosure in China
Stepping backwards
May 29th 2008 | HONG KONG
From The Economist print edition
Worries about transparency undermine markets in China and Hong Kong
ESTABLISHING credibility has been a hard slog for China's equity markets. All three, Shanghai, Shenzhen, and Hong Kong, are to varying degrees known for government intervention and a clubby opacity. As the profitability and scale of Chinese companies have grown and their shares have rocketed, plenty of effort has gone into making the markets work more efficiently. But there is an awfully long way to go, and Hong Kong and the mainland show worrying signs of backsliding.
In Shenzhen plans are afoot to create a new exchange for smaller companies with briefer operating histories. The model is America's NASDAQ, a market that has had tremendous success funding innovative start-ups from around the world, including start-ups based in China.
Good luck. NASDAQ's success rests on an approach that is antithetical to China's. Capital-hungry companies deluge potential investors with information in an effort to create demand for their shares. The government is there to ensure that the information is accurate. However, in China disclosure remains wretched, the result of a censored press, poorly enforced laws and a history of conflating information with propaganda. Regulators tightly control which companies can go public and when shares can be sold, based on perceptions of what is good for the overall market. (For instance, the Chinese government has reportedly stepped in to cap the amount that two state-owned banks can bid for Wing Lung Bank, a listed Hong Kong lender.) Nothing about the new Chinese market will change this state of affairs, except that the companies permitted to list will have even less information to disclose than those on the existing small-company bourse already operating in Shenzhen.
Hong Kong's stock exchange has thrived in recent years on the premise that it is a well governed alternative to Shenzhen and Shanghai. But even here disturbing signs have emerged. May 15th saw the resignation of David Webb, a writer and former investment banker known for his independent views as a member of the exchange's board of directors. Mr Webb resigned, citing policy decisions made “through the back door” by government officials and the exchange's unwillingness to provide critical information.
Mr Webb's criticisms about all manner of abuses inflicted upon investors, from layers of transaction fees to ignored proxy votes, made him something of a hero to Hong Kong's numerous punters. He also gained a huge, if less voluble, fan base within big global financial institutions.
In the fracas after his departure, it emerged that the exchange and Hong Kong's government were having quiet discussions about creating a new set of listings, known as a “professional board”, with fewer disclosure requirements. The Hong Kong exchange already demands less frequent disclosure than other big Asian markets. Even so, more opacity is thought to appeal to the tycoons in charge of Hong Kong's sprawling business empires, because they would like a way to transfer profits between operations without having to reveal the details to minority shareholders.
Going up against the establishment in Hong Kong is not easy. In April Mr Webb backed another candidate with heavyweight financial credentials for a seat on the exchange's board but the government put its voting muscle behind a candidate who had only recently headed the audit committee of a firm that collapsed. The hope is that China's mainland bourses are dragged up to the level of Hong Kong; the fear, that all slither down.
Stepping backwards
May 29th 2008 | HONG KONG
From The Economist print edition
Worries about transparency undermine markets in China and Hong Kong
ESTABLISHING credibility has been a hard slog for China's equity markets. All three, Shanghai, Shenzhen, and Hong Kong, are to varying degrees known for government intervention and a clubby opacity. As the profitability and scale of Chinese companies have grown and their shares have rocketed, plenty of effort has gone into making the markets work more efficiently. But there is an awfully long way to go, and Hong Kong and the mainland show worrying signs of backsliding.
In Shenzhen plans are afoot to create a new exchange for smaller companies with briefer operating histories. The model is America's NASDAQ, a market that has had tremendous success funding innovative start-ups from around the world, including start-ups based in China.
Good luck. NASDAQ's success rests on an approach that is antithetical to China's. Capital-hungry companies deluge potential investors with information in an effort to create demand for their shares. The government is there to ensure that the information is accurate. However, in China disclosure remains wretched, the result of a censored press, poorly enforced laws and a history of conflating information with propaganda. Regulators tightly control which companies can go public and when shares can be sold, based on perceptions of what is good for the overall market. (For instance, the Chinese government has reportedly stepped in to cap the amount that two state-owned banks can bid for Wing Lung Bank, a listed Hong Kong lender.) Nothing about the new Chinese market will change this state of affairs, except that the companies permitted to list will have even less information to disclose than those on the existing small-company bourse already operating in Shenzhen.
Hong Kong's stock exchange has thrived in recent years on the premise that it is a well governed alternative to Shenzhen and Shanghai. But even here disturbing signs have emerged. May 15th saw the resignation of David Webb, a writer and former investment banker known for his independent views as a member of the exchange's board of directors. Mr Webb resigned, citing policy decisions made “through the back door” by government officials and the exchange's unwillingness to provide critical information.
Mr Webb's criticisms about all manner of abuses inflicted upon investors, from layers of transaction fees to ignored proxy votes, made him something of a hero to Hong Kong's numerous punters. He also gained a huge, if less voluble, fan base within big global financial institutions.
In the fracas after his departure, it emerged that the exchange and Hong Kong's government were having quiet discussions about creating a new set of listings, known as a “professional board”, with fewer disclosure requirements. The Hong Kong exchange already demands less frequent disclosure than other big Asian markets. Even so, more opacity is thought to appeal to the tycoons in charge of Hong Kong's sprawling business empires, because they would like a way to transfer profits between operations without having to reveal the details to minority shareholders.
Going up against the establishment in Hong Kong is not easy. In April Mr Webb backed another candidate with heavyweight financial credentials for a seat on the exchange's board but the government put its voting muscle behind a candidate who had only recently headed the audit committee of a firm that collapsed. The hope is that China's mainland bourses are dragged up to the level of Hong Kong; the fear, that all slither down.
Friday, May 30, 2008
Dark Blue Jeans
My mission today was to get a pair of dark blue jeans. Really dark ones, almost Navy Blue. And why do I need a pair of blue jeans? Well the story starts like this:
For the longest time I had 4 pairs of jeans which I bought in US/Canada. All of them are regular blue levi's and I got them dirt cheap, US$50 bucks or less a piece. One pair remained the color that it was, cos I haven't really used it. Those were my work jeans for Concrete canoe, and came with epoxy stains. They were baggy so I could climb up and down without overstretching. Other than that pair, all 3 remaining pairs kinda lost their color after repeated washings. And yes, I do mean lost their color as in they were so used that their blue has almost become white. Apparently it is not the fashion in town to be walking around with blue jeans that are practically almost white in color! Everyone's been commenting about why I buy such weird light color jeans. To which I respond, "no they are worn out, isn't worn out the in thing for jeans?" And I get an "oh". Well worn out jeans are in, but only if they are worn out and patchy, not evenly worn out ya know? Like those dark ones with white patch in the middle where they are stretched. Anyway, dark jeans are in and I have a semi-dark G2000 Blu and a recently bought black Levi's (which cost a bomb), so its time for a pair in the "dark blue" range.
First stop: Espirit. Espirit jeans don't come cheap, so why Espirit? Cos I got Espirit card! Espirit card is the coolest clothing card ever, cos you get discounts on top of whatever discounts are currently available. And most of the time I'm looking for something, they have it. So I walked in and lo and behold they only have one design for dark blue jeans, perfect! Size 32 but I'm swimming in it, these guys need to get their sizes right, I'm a 33 yet I cant get into 32. Anyway they didn't have any smaller size, so...
Well I was wearing G2000 Blu when I went out today. So next stop was G2000 Blu. Guess what? They don't sell jeans there anymore!!! :(
Alright, by now I was kinda flustered that I can't seem to get my jeans. Next up, my favorite shop Fox. But I only get tops at Fox, never tried their bottoms and its not like they have many of them. Design was good, but not my tried and tested and I'm picky on pants. So perhaps try Giordano first.
Giordano only has sizes 32 and 34, they don't have odd sizes. Fox too. For some reason people don't like 33's so I need to slim down. Giordano's 32 was so so tight I couldn't even slip into it, ouch! But their 34 was so big I couldn't put a belt around it! Whoa! That was a really huge disparity in sizes, I think they need to do some quality control here, that 32 was so not 32. My waist is 33 but I can wear 32, just a little tight, not so tight!!! Sigh...
So it was back to Fox. A little skeptical, but their 32 is just nice, fit right in. Heheh, so I bought it. What's most important though: their size is right. I can't imagine what factories in China these other guys get their goods from. A 32/33 is a 32/33, you can measure it with a measuring tape, how can I be swimming in or not able to pull up a size 32 pants?
For the longest time I had 4 pairs of jeans which I bought in US/Canada. All of them are regular blue levi's and I got them dirt cheap, US$50 bucks or less a piece. One pair remained the color that it was, cos I haven't really used it. Those were my work jeans for Concrete canoe, and came with epoxy stains. They were baggy so I could climb up and down without overstretching. Other than that pair, all 3 remaining pairs kinda lost their color after repeated washings. And yes, I do mean lost their color as in they were so used that their blue has almost become white. Apparently it is not the fashion in town to be walking around with blue jeans that are practically almost white in color! Everyone's been commenting about why I buy such weird light color jeans. To which I respond, "no they are worn out, isn't worn out the in thing for jeans?" And I get an "oh". Well worn out jeans are in, but only if they are worn out and patchy, not evenly worn out ya know? Like those dark ones with white patch in the middle where they are stretched. Anyway, dark jeans are in and I have a semi-dark G2000 Blu and a recently bought black Levi's (which cost a bomb), so its time for a pair in the "dark blue" range.
First stop: Espirit. Espirit jeans don't come cheap, so why Espirit? Cos I got Espirit card! Espirit card is the coolest clothing card ever, cos you get discounts on top of whatever discounts are currently available. And most of the time I'm looking for something, they have it. So I walked in and lo and behold they only have one design for dark blue jeans, perfect! Size 32 but I'm swimming in it, these guys need to get their sizes right, I'm a 33 yet I cant get into 32. Anyway they didn't have any smaller size, so...
Well I was wearing G2000 Blu when I went out today. So next stop was G2000 Blu. Guess what? They don't sell jeans there anymore!!! :(
Alright, by now I was kinda flustered that I can't seem to get my jeans. Next up, my favorite shop Fox. But I only get tops at Fox, never tried their bottoms and its not like they have many of them. Design was good, but not my tried and tested and I'm picky on pants. So perhaps try Giordano first.
Giordano only has sizes 32 and 34, they don't have odd sizes. Fox too. For some reason people don't like 33's so I need to slim down. Giordano's 32 was so so tight I couldn't even slip into it, ouch! But their 34 was so big I couldn't put a belt around it! Whoa! That was a really huge disparity in sizes, I think they need to do some quality control here, that 32 was so not 32. My waist is 33 but I can wear 32, just a little tight, not so tight!!! Sigh...
So it was back to Fox. A little skeptical, but their 32 is just nice, fit right in. Heheh, so I bought it. What's most important though: their size is right. I can't imagine what factories in China these other guys get their goods from. A 32/33 is a 32/33, you can measure it with a measuring tape, how can I be swimming in or not able to pull up a size 32 pants?
Monday, May 26, 2008
Moneyness
Today's blog entry has nothing to do with options despite the title "Moneyness". I actually want to talk about money, and the word moneyness sounds cool, so I thought the title was apt. Don't worry I'm not about to rattle off about the Black-Scholes-Merton model or the greeks (delta, vega, theta, rho). Hey I know my greeks okay, don't mess around with me!
Anyway, people often say money is not important. It's not the most important thing and neither does it rank anywhere up there. As someone who could do with a lot more money right now, I take offense at that. How often have you known people from your school days who are socially inept, totally no street smarts, psychological freak, probably can't ever do anything successfully; yet because they have a lot of money they are actually getting along much better than you ever would? Yeah that's right, even the part about being totally out of place in this society, be it arrogant, uncivilised, poor grooming what have you, but they seem to get along with the world just fine, perhaps even better than you and me.
Just think about the guy without streetsmarts but with a lot of money who needs to get married. The rest of us would be hella stressed with the rings, wedding preparations, which HDB flat to ballot for, what to bargain the car dealer for, how to make sure the contractor is not cheating you on renovation. Hell you gotta be pretty streetsmart to survive all that and make your whole wedding process spectacular right? Well, if you have money, just buy the biggest rock (ring), get an expensive wedding planner, pick whichever condo in Bukit timah, and forget the car dealer, you can afford those rims without any free gift or loan anyway. Oh and contractor? Well you can just hire an interior designer to kick ass for you. That solves the problem.
How about in a social setting? Surely one will not hang out with total jackasses just because they are rich? Time and time again I'm proven wrong. Some total idiots who don't know how to say the right things at the right time, offend everybody, dress inappropriately (say singlet and shorts at a church wedding!!!), still get to be overwhelmingly popular and snag all the babes as well. And those girls are actually there to stay, not just down for a one-night stand (what are they thinking?).
Sure money is not everything, wasn't that Maslow's hierachy of needs or some shit that said that? Well I've actually looked at the real table (of sorts) by this Maslow guy. It says that money is not everything ONCE YOU HAVE IT!!!! Human beings firstly need food and shelter. And once they got that they need money, materialistic goods etc. Only when they reach the top of the food chain then they clamour the well being of others and want to love others as much as they want to gratify themselves. Well, I'm not even halfway there yet, so I think I need the money before I can even think about saving the world....
Perhaps that's why people who have thoughts about politics, economics, society, etc dun really gain popularity as easily as some rich nutheads. Okay correction, my point was you don't even need to be "rich". You just need enough money to show off. Perhaps these people have $0 left in their bank account after all their shenanigans, but who cares? They can ride on the coattails of their admirers.
But then again perhaps this is mostly just Asian society and its nuances. I would like to think that in more developed countries people who have great minds and great thinkings are equally or more admired than those who flaunt their wealth. Indeed, Bill Gates is admired more for his vision than his money, so is Steve Jobs.
Moral of the story? If you want to be successful and popular in Asia its much easier to do so by having a lot more money than the average middle-income Joe than any other way. That way you can be a total jackass and still be loved, embraced and get all the cute girls.....
Anyway, people often say money is not important. It's not the most important thing and neither does it rank anywhere up there. As someone who could do with a lot more money right now, I take offense at that. How often have you known people from your school days who are socially inept, totally no street smarts, psychological freak, probably can't ever do anything successfully; yet because they have a lot of money they are actually getting along much better than you ever would? Yeah that's right, even the part about being totally out of place in this society, be it arrogant, uncivilised, poor grooming what have you, but they seem to get along with the world just fine, perhaps even better than you and me.
Just think about the guy without streetsmarts but with a lot of money who needs to get married. The rest of us would be hella stressed with the rings, wedding preparations, which HDB flat to ballot for, what to bargain the car dealer for, how to make sure the contractor is not cheating you on renovation. Hell you gotta be pretty streetsmart to survive all that and make your whole wedding process spectacular right? Well, if you have money, just buy the biggest rock (ring), get an expensive wedding planner, pick whichever condo in Bukit timah, and forget the car dealer, you can afford those rims without any free gift or loan anyway. Oh and contractor? Well you can just hire an interior designer to kick ass for you. That solves the problem.
How about in a social setting? Surely one will not hang out with total jackasses just because they are rich? Time and time again I'm proven wrong. Some total idiots who don't know how to say the right things at the right time, offend everybody, dress inappropriately (say singlet and shorts at a church wedding!!!), still get to be overwhelmingly popular and snag all the babes as well. And those girls are actually there to stay, not just down for a one-night stand (what are they thinking?).
Sure money is not everything, wasn't that Maslow's hierachy of needs or some shit that said that? Well I've actually looked at the real table (of sorts) by this Maslow guy. It says that money is not everything ONCE YOU HAVE IT!!!! Human beings firstly need food and shelter. And once they got that they need money, materialistic goods etc. Only when they reach the top of the food chain then they clamour the well being of others and want to love others as much as they want to gratify themselves. Well, I'm not even halfway there yet, so I think I need the money before I can even think about saving the world....
Perhaps that's why people who have thoughts about politics, economics, society, etc dun really gain popularity as easily as some rich nutheads. Okay correction, my point was you don't even need to be "rich". You just need enough money to show off. Perhaps these people have $0 left in their bank account after all their shenanigans, but who cares? They can ride on the coattails of their admirers.
But then again perhaps this is mostly just Asian society and its nuances. I would like to think that in more developed countries people who have great minds and great thinkings are equally or more admired than those who flaunt their wealth. Indeed, Bill Gates is admired more for his vision than his money, so is Steve Jobs.
Moral of the story? If you want to be successful and popular in Asia its much easier to do so by having a lot more money than the average middle-income Joe than any other way. That way you can be a total jackass and still be loved, embraced and get all the cute girls.....
Tuesday, May 20, 2008
doctors and trading
When I started working with futures trading systems in high school, I noticed something rather odd: A very high percentage of our customers were doctors and dentists. At the time, I believed that doctors and dentists were attracted to trading because they had good incomes and could afford to risk money in futures markets. Looking back on it, I can see that was only a partial answer. I now believe that the real reason doctors and dentists are drawn in disproportionate numbers to commodities trading is that they have a lot of confidence in their intelligence and ability to translated their success in their work to success in another industry -- perhaps too much confidence in this particular instance...
... At the same time, many doctors and dentists expect to be successful traders immediately. Trading appears to be so simple that they believe that this should be possible. However, I found that a large percentage of them were not successful as traders because they did not have realistic expectations. Success in one sphere of business does not guarantee success in trading.
... At the same time, many doctors and dentists expect to be successful traders immediately. Trading appears to be so simple that they believe that this should be possible. However, I found that a large percentage of them were not successful as traders because they did not have realistic expectations. Success in one sphere of business does not guarantee success in trading.
Monday, May 19, 2008
Way of the Turtle
Some quotes from the book I'm reading. Looks like my style is "counter-trend". ;)
We're going to raise traders just like they raise turtles in Singapore.
The trend is your friend until the end when it bends.
High risk, high reward, it takes balls of steel to play this game.
Human emotion is both the source of opportunity in trading and the greatest challenge. Master it and you will succeed. Ignore it at your peril.
Trade with an edge, manage risk, be consistent, and keep it simple.
Good trading is not about being right, it's about trading right.
We're going to raise traders just like they raise turtles in Singapore.
The trend is your friend until the end when it bends.
High risk, high reward, it takes balls of steel to play this game.
Human emotion is both the source of opportunity in trading and the greatest challenge. Master it and you will succeed. Ignore it at your peril.
Trade with an edge, manage risk, be consistent, and keep it simple.
Good trading is not about being right, it's about trading right.
Sunday, May 18, 2008
Will Singapore become like cancun?
Travel and tourism
Asia, beware Benidorm
May 15th 2008
From The Economist print edition
Booming tourism in emerging economies promises huge benefits. But not if it copies the mistakes of mature markets
WHEN low-cost air travel was taking off in Europe in the early 1990s, the German and the British ambassadors to Greece used to call each other at the end of each week during the summer, to compare notes on the bad behaviour of the visitors from their countries. No clear winner emerged. Sunburnt Brits and Germans would both get blind drunk, lose their money and passports, wind up in a fight at a beach bar and end the night in one of the Greek islands' police cells.
Tourism in Europe's Mediterranean countries is a big business, but it is not loved. It is blamed for polluting the landscape, spoiling the beaches and corrupting the locals' morals. This is partly the countries' own doing. In the 1960s the governments of Spain, Portugal, Italy and Greece encouraged the building of hotels and other tourist infrastructure, which seemed the fastest way to catch up with the wealthier north. During the 40 years of breakneck development that followed, vast stretches of the Spanish coast were concreted over, transforming the Costa del Sol into the Costa del Concrete and attracting hordes of tourists in search of sun, sea and sand. Some Greek islands have come to resemble a Hellenic Hong Kong, with high-rise hotels and traffic jams.
Some people in tourism made good money, but in recent years even they have started to notice how the ugliness and the noise is keeping visitors away. The government in Madrid grew so concerned that it bought tracts of seaside land itself, to stop developers from getting their hands on it.
The package and the bill
As tourism is about to explode in the developing world, governments should heed such lessons. During the next two decades the growth of tourism in emerging economies will be two or three times that of the developed world (see article). That is something to celebrate. Mass travel is a path to development and one of the fruits of increasing wealth—travel for experience, for food and culture, and for sheer pleasure. Yet it also contains the danger that development will destroy the very thing people have come to enjoy.
Emerging economies are suspicious about the developed world telling them to act responsibly. Why shouldn't they exploit their natural resources? A pristine hard-to-reach beach with a small exclusive hotel may be just what rich Westerners want; local fishermen would prefer new schools for their children. But with tourism, it is not so clear that rapid development really is in the locals' economic interest. If their government trashes their natural habitat, it is like an investment manager who pays you big dividends out of your capital. The money is good for a while, but you lose in the long term.
Take care of your capital
That is worth remembering because the lesson from tourism in the West is that nobody keeps an eye on the capital. The bay, the ancient site, the coral reef and the fresh water have no single owner to protect them. The hotelier who raises a 1,000-room monstrosity will pay for the bricks and mortar, but not for scarring the view or wrecking an historic monument.
The question planners in these new markets should ask themselves is where they want tourism in their country to be in 20 years. At the moment tourists from emerging markets have their own tastes. Russians like two weeks on a sunny beach, wild parties and lots of retail therapy. The Chinese prefer urban travel to sea and sand. People from the Gulf states travel in big families and require halal food. Yet, with the progress of economic prosperity they will probably become more like Europeans and Americans, who want scenery, a decent environment and a smattering of history and culture. If you destroy your heritage and scenery, you will come to regret it.
From Mexico comes a cautionary tale. The country's Caribbean coast was once a natural paradise. Then data were fed into a government computer program. It digested the statistics and spat out the name of a potential touristic gold mine: a spit of sand called Cancún. Today Cancún has nearly 24,000 hotel rooms, roughly 4m visitors a year and an average of 190 flights daily. Mass tourism needs mass development, but don't pave paradise to put up a parking lot.
Asia, beware Benidorm
May 15th 2008
From The Economist print edition
Booming tourism in emerging economies promises huge benefits. But not if it copies the mistakes of mature markets
WHEN low-cost air travel was taking off in Europe in the early 1990s, the German and the British ambassadors to Greece used to call each other at the end of each week during the summer, to compare notes on the bad behaviour of the visitors from their countries. No clear winner emerged. Sunburnt Brits and Germans would both get blind drunk, lose their money and passports, wind up in a fight at a beach bar and end the night in one of the Greek islands' police cells.
Tourism in Europe's Mediterranean countries is a big business, but it is not loved. It is blamed for polluting the landscape, spoiling the beaches and corrupting the locals' morals. This is partly the countries' own doing. In the 1960s the governments of Spain, Portugal, Italy and Greece encouraged the building of hotels and other tourist infrastructure, which seemed the fastest way to catch up with the wealthier north. During the 40 years of breakneck development that followed, vast stretches of the Spanish coast were concreted over, transforming the Costa del Sol into the Costa del Concrete and attracting hordes of tourists in search of sun, sea and sand. Some Greek islands have come to resemble a Hellenic Hong Kong, with high-rise hotels and traffic jams.
Some people in tourism made good money, but in recent years even they have started to notice how the ugliness and the noise is keeping visitors away. The government in Madrid grew so concerned that it bought tracts of seaside land itself, to stop developers from getting their hands on it.
The package and the bill
As tourism is about to explode in the developing world, governments should heed such lessons. During the next two decades the growth of tourism in emerging economies will be two or three times that of the developed world (see article). That is something to celebrate. Mass travel is a path to development and one of the fruits of increasing wealth—travel for experience, for food and culture, and for sheer pleasure. Yet it also contains the danger that development will destroy the very thing people have come to enjoy.
Emerging economies are suspicious about the developed world telling them to act responsibly. Why shouldn't they exploit their natural resources? A pristine hard-to-reach beach with a small exclusive hotel may be just what rich Westerners want; local fishermen would prefer new schools for their children. But with tourism, it is not so clear that rapid development really is in the locals' economic interest. If their government trashes their natural habitat, it is like an investment manager who pays you big dividends out of your capital. The money is good for a while, but you lose in the long term.
Take care of your capital
That is worth remembering because the lesson from tourism in the West is that nobody keeps an eye on the capital. The bay, the ancient site, the coral reef and the fresh water have no single owner to protect them. The hotelier who raises a 1,000-room monstrosity will pay for the bricks and mortar, but not for scarring the view or wrecking an historic monument.
The question planners in these new markets should ask themselves is where they want tourism in their country to be in 20 years. At the moment tourists from emerging markets have their own tastes. Russians like two weeks on a sunny beach, wild parties and lots of retail therapy. The Chinese prefer urban travel to sea and sand. People from the Gulf states travel in big families and require halal food. Yet, with the progress of economic prosperity they will probably become more like Europeans and Americans, who want scenery, a decent environment and a smattering of history and culture. If you destroy your heritage and scenery, you will come to regret it.
From Mexico comes a cautionary tale. The country's Caribbean coast was once a natural paradise. Then data were fed into a government computer program. It digested the statistics and spat out the name of a potential touristic gold mine: a spit of sand called Cancún. Today Cancún has nearly 24,000 hotel rooms, roughly 4m visitors a year and an average of 190 flights daily. Mass tourism needs mass development, but don't pave paradise to put up a parking lot.
Saturday, May 17, 2008
Golf exercises
Getting Fit for the Links
Golf-Specific Exercises Can Pay Off --
If You Stick With Them
May 17, 2008; Page W5
A lot of golfers I know follow Mark Twain's regimen for physical fitness: "Every time I feel the urge to exercise, I lie down until it goes away."
Still, it's hard not to wonder what a little more application on the physical front could do for one's golf game, given the way golf magazines and TV commentators rhapsodize about the maniacal workouts of players such as Tiger Woods and Vijay Singh. I have nothing against exercise. In fact, I enjoy a heart-thumping 30 minutes on the elliptical trainer whenever I can find time for the gym. Ditto for the pumped-up feeling in my arms and legs after a weight workout.
But there's a difference between this type of general exercise and the golf-specific drills prescribed in articles and on videos. Golf routines usually have you assume some kind of awkward position -- standing on one leg or prone like a wounded bug on your back with feet and arms waving in the air. Then they call for repeatedly moving an isolated body part or an obscure muscle -- such as the gluteus medius -- in an unnatural way.
These exercises, in my experience, are amazingly tedious. Sometimes when you finish, you don't even feel tired; there's instead a fatigue in the microfibers of the muscles, which isn't the same as that good old satisfying "burn." You have to take it on faith the effort is worthwhile.
The most authoritative source for golf fitness advice is the Titleist Performance Institute, a supergym and golf-practice center in Oceanside, Calif. For $10,000, you can go there and get a physical workup by doctors, physical therapists, nutritionists and swing instructors, plus a new set of custom-fitted Titleist clubs. Titleist's Tour pros spend a lot of time at TPI.
Or you can log on to its Web site, mytpi.com (free after registration), and develop your own fitness program. The site goes deep with articles explaining the biomechanics of golf and provides sample workout regimes geared to different goals, such as power, balance or flexibility. Short video clips demonstrate each exercise.
The experts at TPI know their stuff, and the workouts they prescribe can help your golf game -- if diligently pursued. That's a big if.
Take, for example, Tour pro Rory Sabbatini, whose case study is posted on the site in such detail it feels like an invasion of privacy. Between February 2007, when he started working with trainer Jeff Banaszak, and February 2008, Mr. Sabbatini improved his internal hip rotation, which is key in creating a stable golf swing, from 25 to 60 degrees on one side and from 27 to 62 degrees on the other. He made dramatic progress in other measures and, more importantly, eliminated the lower left back pain that had been preventing him from practicing as much as he needed to. His world rankings during that period climbed from 42nd to eighth.
Mr. Sabbatini's progress didn't come easily. Mr. Banaszak, who runs a company called Back9Fitness, traveled to nearly every event where Mr. Sabbatini competed. Early each week he would give Mr. Sabbatini an hour of stretches and deep-tissue massage. He'd spend another 30 minutes working on Mr. Sabbatini's shoulders, trunks and hips before each round and put him through another session afterward. In addition, he supervised two or three strength workouts a week, and gave Mr. Sabbatini daily drills to do on his own. He even whipped up protein breakfast shakes for Mr. Sabbatini and prepared nutritious snacks to eat during rounds.
And that was just maintenance work. On Mr. Sabbatini's off weeks, Mr. Banaszak ordered more intense routines.
For everyday golfers, such commitment would be absurd. "Most golfers don't want anything to do with the gym, to be honest," Mr. Banaszak said. That's why he has decided to focus his business on Tour players rather than on the much larger consumer market.
But even a milder commitment to fitness can help. For those serious about improving their physical capabilities, Mr. Banaszak advises seeking out a well-trained physical therapist for an overall assessment. (The TPI Web site has links to trainers certified in its methods.) This kind of exam can identify any particular concerns, such as limited mobility or muscular imbalance, and therapists can recommend an appropriate conditioning program. After a few sessions, players can perform the exercises alone, but Mr. Banaszak recommends follow-up sessions every two to three months.
"Knowing how to adjust the intensity and when to progress is the part that you really can't do on your own," he said.
And if that's too much trouble? Dave Phillips, a TPI co-founder, said casual players can see dramatic improvements in their swing with as little as five minutes of work a day, provided it is the right kind.
Increasing internal hip rotation by just five degrees, for example, can lead to a significantly better turn behind the ball, which can increase distance and take pressure off the lower back. "Most back injuries from golf are caused because the hips aren't able to turn enough," he said, "causing the lower back to have to jump in and do a job it's not designed to."
A simple exercise to improve hip mobility is called the windshield wiper. When lying on your back, raise your knees and put your fists between them. Then, with calves parallel to the floor, push your feet out as wide as possible, hold briefly and repeat many times.
For most golfers, the two other prime areas to work are the gluteal muscles that run up the back of the upper legs and the core muscles of the lower torso. Mr. Phillips calls these the King and Queen. Both sets of muscles, he said, help the golfer brace against rotational forces during the swing and hold the body at proper angles.
The bedrock golf exercise, he said, is the deep squat, done with arms extended, holding a golf club over your head. "It involves all the most important golf muscles, both in the lower body and in the shoulders," he said. Nearly all Tour players can squat at least to where their thighs are parallel to the floor, he said, but only about 30% of American adults can.
"Those are the ones I'd work on: the King, the Queen, the hips and the deep squat," said Mr. Phillips. "Take five minutes a day while you're watching television. You'll be amazed at how your swing will improve."
Golf-Specific Exercises Can Pay Off --
If You Stick With Them
May 17, 2008; Page W5
A lot of golfers I know follow Mark Twain's regimen for physical fitness: "Every time I feel the urge to exercise, I lie down until it goes away."
Still, it's hard not to wonder what a little more application on the physical front could do for one's golf game, given the way golf magazines and TV commentators rhapsodize about the maniacal workouts of players such as Tiger Woods and Vijay Singh. I have nothing against exercise. In fact, I enjoy a heart-thumping 30 minutes on the elliptical trainer whenever I can find time for the gym. Ditto for the pumped-up feeling in my arms and legs after a weight workout.
But there's a difference between this type of general exercise and the golf-specific drills prescribed in articles and on videos. Golf routines usually have you assume some kind of awkward position -- standing on one leg or prone like a wounded bug on your back with feet and arms waving in the air. Then they call for repeatedly moving an isolated body part or an obscure muscle -- such as the gluteus medius -- in an unnatural way.
These exercises, in my experience, are amazingly tedious. Sometimes when you finish, you don't even feel tired; there's instead a fatigue in the microfibers of the muscles, which isn't the same as that good old satisfying "burn." You have to take it on faith the effort is worthwhile.
The most authoritative source for golf fitness advice is the Titleist Performance Institute, a supergym and golf-practice center in Oceanside, Calif. For $10,000, you can go there and get a physical workup by doctors, physical therapists, nutritionists and swing instructors, plus a new set of custom-fitted Titleist clubs. Titleist's Tour pros spend a lot of time at TPI.
Or you can log on to its Web site, mytpi.com (free after registration), and develop your own fitness program. The site goes deep with articles explaining the biomechanics of golf and provides sample workout regimes geared to different goals, such as power, balance or flexibility. Short video clips demonstrate each exercise.
The experts at TPI know their stuff, and the workouts they prescribe can help your golf game -- if diligently pursued. That's a big if.
Take, for example, Tour pro Rory Sabbatini, whose case study is posted on the site in such detail it feels like an invasion of privacy. Between February 2007, when he started working with trainer Jeff Banaszak, and February 2008, Mr. Sabbatini improved his internal hip rotation, which is key in creating a stable golf swing, from 25 to 60 degrees on one side and from 27 to 62 degrees on the other. He made dramatic progress in other measures and, more importantly, eliminated the lower left back pain that had been preventing him from practicing as much as he needed to. His world rankings during that period climbed from 42nd to eighth.
Mr. Sabbatini's progress didn't come easily. Mr. Banaszak, who runs a company called Back9Fitness, traveled to nearly every event where Mr. Sabbatini competed. Early each week he would give Mr. Sabbatini an hour of stretches and deep-tissue massage. He'd spend another 30 minutes working on Mr. Sabbatini's shoulders, trunks and hips before each round and put him through another session afterward. In addition, he supervised two or three strength workouts a week, and gave Mr. Sabbatini daily drills to do on his own. He even whipped up protein breakfast shakes for Mr. Sabbatini and prepared nutritious snacks to eat during rounds.
And that was just maintenance work. On Mr. Sabbatini's off weeks, Mr. Banaszak ordered more intense routines.
For everyday golfers, such commitment would be absurd. "Most golfers don't want anything to do with the gym, to be honest," Mr. Banaszak said. That's why he has decided to focus his business on Tour players rather than on the much larger consumer market.
But even a milder commitment to fitness can help. For those serious about improving their physical capabilities, Mr. Banaszak advises seeking out a well-trained physical therapist for an overall assessment. (The TPI Web site has links to trainers certified in its methods.) This kind of exam can identify any particular concerns, such as limited mobility or muscular imbalance, and therapists can recommend an appropriate conditioning program. After a few sessions, players can perform the exercises alone, but Mr. Banaszak recommends follow-up sessions every two to three months.
"Knowing how to adjust the intensity and when to progress is the part that you really can't do on your own," he said.
And if that's too much trouble? Dave Phillips, a TPI co-founder, said casual players can see dramatic improvements in their swing with as little as five minutes of work a day, provided it is the right kind.
Increasing internal hip rotation by just five degrees, for example, can lead to a significantly better turn behind the ball, which can increase distance and take pressure off the lower back. "Most back injuries from golf are caused because the hips aren't able to turn enough," he said, "causing the lower back to have to jump in and do a job it's not designed to."
A simple exercise to improve hip mobility is called the windshield wiper. When lying on your back, raise your knees and put your fists between them. Then, with calves parallel to the floor, push your feet out as wide as possible, hold briefly and repeat many times.
For most golfers, the two other prime areas to work are the gluteal muscles that run up the back of the upper legs and the core muscles of the lower torso. Mr. Phillips calls these the King and Queen. Both sets of muscles, he said, help the golfer brace against rotational forces during the swing and hold the body at proper angles.
The bedrock golf exercise, he said, is the deep squat, done with arms extended, holding a golf club over your head. "It involves all the most important golf muscles, both in the lower body and in the shoulders," he said. Nearly all Tour players can squat at least to where their thighs are parallel to the floor, he said, but only about 30% of American adults can.
"Those are the ones I'd work on: the King, the Queen, the hips and the deep squat," said Mr. Phillips. "Take five minutes a day while you're watching television. You'll be amazed at how your swing will improve."
Wednesday, May 14, 2008
Bulls and bears
I've been feeling really sleepy and tired lately. Just need to endure a couple more weeks, hope I don't fall sick!
I've been having 2 coffees a day, not counting the numerous teas, but tea doesn't really have an effect, so it doesn't count. I need to cut down to one coffee a day, I think coffee is not doing much good for me.... I'm not a big fan of stimulants.
The market is not moving upward very much, though I'm still very bullish on P52. If that works out it would be the one good thing that happened this year haha!
I really need more exercise to keep me in shape. But it seems like I'm almost down with the flu, so I shouldn't get out and run. This combination of lack of exercise and sickness is not good.
In other news, I've learned how to do the sliding backward stop (skating)! Heheh, I haven't skated in months but just decided to be more daring last sunday and it worked out alright ;). Now I just need to master the forward crossover....
I've been having 2 coffees a day, not counting the numerous teas, but tea doesn't really have an effect, so it doesn't count. I need to cut down to one coffee a day, I think coffee is not doing much good for me.... I'm not a big fan of stimulants.
The market is not moving upward very much, though I'm still very bullish on P52. If that works out it would be the one good thing that happened this year haha!
I really need more exercise to keep me in shape. But it seems like I'm almost down with the flu, so I shouldn't get out and run. This combination of lack of exercise and sickness is not good.
In other news, I've learned how to do the sliding backward stop (skating)! Heheh, I haven't skated in months but just decided to be more daring last sunday and it worked out alright ;). Now I just need to master the forward crossover....
Saturday, May 10, 2008
Oil
Russia's oil industry
Trouble in the pipeline
May 8th 2008
From The Economist print edition
Despite booming demand and record prices, Russia's oil industry faces problems
WHEN the price of oil reached another record on May 6th, of over $122 a barrel, analysts pointed to attacks on pipelines in Nigeria and turmoil in Iraq as the immediate causes. Even small disruptions to supplies from such places can cause the price to jump, since only Saudi Arabia has the capacity to replace the lost production, and it does not seem inclined to do so. But to understand how supplies became so scarce in the first place, one must look at the state of the oil industry in Russia, the world's second-biggest producer.
Over the past seven years, according to Citibank, Russia accounted for 80% of the growth in oil production outside the Organisation of the Petroleum Exporting Countries. The increase in its output in the early part of the decade matched the growth in demand from China and India almost barrel for barrel. Yet in April, production fell for the fourth month in a row. It is now over 2% below the peak of 9.9m barrels a day (b/d) reached in October last year. Before that, the growth in Russia's output had been slowing steadily, suggesting that the drop is not a blip. Leonid Fedun, a vice-president of Lukoil, a local oil firm, says Russia's production will never top 10m b/d. The discovery that Russia can no longer be relied upon to cater to the world's ever-increasing appetite for oil is naturally helping to propel prices to record levels.
Oil and gas have been the foundation of the regime of Vladimir Putin, Russia's outgoing president, and are also a preoccupation of his successor, Dmitry Medvedev, who was chairman of Gazprom, the state-controlled gas giant. The flow of petrodollars has created a sense of stability, masked economic woes and given Russia more clout on the world stage. Yet the malaise afflicting its most important industry is almost entirely man-made. “Geologically, there is no problem,” says Anisa Redman, an analyst at HSBC, a bank.
In principle, Russia's bonanza could continue for years: it has the world's seventh-biggest oil reserves, at 80 billion barrels, according to BP, a British oil firm. And oilmen reckon there are 100 billion more barrels to find—“the biggest exploration prize in the world”, in the words of Robert Dudley, the boss of TNK-BP, BP's Russian joint venture. But Russia has regulated the industry so poorly that production is falling despite the soaring oil price.
“Tax is the major impediment,” says Ms Redman. The government levies an export duty of 65% at prices over $25 a barrel. Add to that various corporate, payroll and production taxes, oilmen complain, and the state creams off as much as 92% of profits. Executives at TNK-BP have argued that rising costs across the oil industry will make many investments in Russia unprofitable unless the tax regime is changed. As it is, TNK-BP accounts for a fifth of BP's production, but only a tenth of its profits.
The government does offer tax breaks on production from older fields. So oil firms, naturally, have been concentrating on squeezing as much oil as they can out of those. Until recently, that was an obvious priority anyway, since fields that had fallen into ruin after the collapse of the Soviet Union in the early 1990s could be revived relatively easily and cheaply. By mapping existing fields more precisely, installing new pumps and injecting water and chemicals into wells to maintain pressure, private oil firms were able to raise Russia's production from 6m b/d to almost 10m b/d, mainly from western Siberia. In 2003 alone, output jumped by 12%.
But this strategy is now yielding diminishing returns. Mr Fedun says the western Siberian fields have reached their natural limit. To keep production at today's levels requires ever more investment. To get Russia's output growing again, firms must make huge investments to develop new fields in remote provinces such as eastern Siberia and the Sakhalin region.
There has been some growth in these areas, mainly thanks to the less heavily taxed projects, called “production-sharing agreements”, that the government offered briefly in the late 1990s but has since curtailed. Strip out the production from these projects, and Russia's output has been in fitful decline since August 2006, according to analysts at Citibank. Worse, the output from these projects declined last month too. The government's ill concealed expropriation of various prize assets over the past few years has only added to the reluctance to embark upon big new projects.
Lukoil, for example, is investing $10 billion a year, but roughly 30% of that goes into gas production, which is now more lucrative than oil, given rising domestic prices for gas and lower taxation, says Mr Fedun. It has also been investing in refining, since the export tax on petrol and diesel is lower than that on crude oil. It is still projecting 4% annual growth in its output over the next 15 years, but the figure would be much higher if the government eased the tax burden, says Mr Fedun. Rosneft, the state-controlled oil champion, took on so much debt buying the plum divisions of Yukos, a private firm bankrupted by the Kremlin's zealous tax collectors, that it has little leeway for expensive new projects. Other firms are hoarding their profits and waiting for the tax regime to change.
The government did provide some $4.5 billion in tax breaks last year. But this, the oil companies argue, is barely enough to keep production stable. In his inaugural speech to the Duma as prime minister on May 8th, Mr Putin said that taxes on the industry must be reduced. However, new fields can take a decade to develop. The Kremlin has also failed to hand out exploration rights in the Arctic—the region oilmen consider most promising. And it says that in future the foreign firms with the expertise to tap offshore fields beneath frozen seas will be limited to minority shareholdings in big projects. “Oil production will be whatever the government decides it to be,” says Mr Fedun.
Meanwhile, Russia today is more dependent on oil and gas than it has ever been, argues Chris Weafer, a long-time Russia watcher and chief strategist at Uralsib, a bank. The share of oil and gas in Russia's gross domestic product has more than doubled since 1999 and now stands at above 30%, according to the Institute of Economic Analysis, a think-tank. Oil and gas account for 50% of Russian budget revenues and 65% of its exports. Yet the government has put at risk the goose that lays these golden eggs.
Trouble in the pipeline
May 8th 2008
From The Economist print edition
Despite booming demand and record prices, Russia's oil industry faces problems
WHEN the price of oil reached another record on May 6th, of over $122 a barrel, analysts pointed to attacks on pipelines in Nigeria and turmoil in Iraq as the immediate causes. Even small disruptions to supplies from such places can cause the price to jump, since only Saudi Arabia has the capacity to replace the lost production, and it does not seem inclined to do so. But to understand how supplies became so scarce in the first place, one must look at the state of the oil industry in Russia, the world's second-biggest producer.
Over the past seven years, according to Citibank, Russia accounted for 80% of the growth in oil production outside the Organisation of the Petroleum Exporting Countries. The increase in its output in the early part of the decade matched the growth in demand from China and India almost barrel for barrel. Yet in April, production fell for the fourth month in a row. It is now over 2% below the peak of 9.9m barrels a day (b/d) reached in October last year. Before that, the growth in Russia's output had been slowing steadily, suggesting that the drop is not a blip. Leonid Fedun, a vice-president of Lukoil, a local oil firm, says Russia's production will never top 10m b/d. The discovery that Russia can no longer be relied upon to cater to the world's ever-increasing appetite for oil is naturally helping to propel prices to record levels.
Oil and gas have been the foundation of the regime of Vladimir Putin, Russia's outgoing president, and are also a preoccupation of his successor, Dmitry Medvedev, who was chairman of Gazprom, the state-controlled gas giant. The flow of petrodollars has created a sense of stability, masked economic woes and given Russia more clout on the world stage. Yet the malaise afflicting its most important industry is almost entirely man-made. “Geologically, there is no problem,” says Anisa Redman, an analyst at HSBC, a bank.
In principle, Russia's bonanza could continue for years: it has the world's seventh-biggest oil reserves, at 80 billion barrels, according to BP, a British oil firm. And oilmen reckon there are 100 billion more barrels to find—“the biggest exploration prize in the world”, in the words of Robert Dudley, the boss of TNK-BP, BP's Russian joint venture. But Russia has regulated the industry so poorly that production is falling despite the soaring oil price.
“Tax is the major impediment,” says Ms Redman. The government levies an export duty of 65% at prices over $25 a barrel. Add to that various corporate, payroll and production taxes, oilmen complain, and the state creams off as much as 92% of profits. Executives at TNK-BP have argued that rising costs across the oil industry will make many investments in Russia unprofitable unless the tax regime is changed. As it is, TNK-BP accounts for a fifth of BP's production, but only a tenth of its profits.
The government does offer tax breaks on production from older fields. So oil firms, naturally, have been concentrating on squeezing as much oil as they can out of those. Until recently, that was an obvious priority anyway, since fields that had fallen into ruin after the collapse of the Soviet Union in the early 1990s could be revived relatively easily and cheaply. By mapping existing fields more precisely, installing new pumps and injecting water and chemicals into wells to maintain pressure, private oil firms were able to raise Russia's production from 6m b/d to almost 10m b/d, mainly from western Siberia. In 2003 alone, output jumped by 12%.
But this strategy is now yielding diminishing returns. Mr Fedun says the western Siberian fields have reached their natural limit. To keep production at today's levels requires ever more investment. To get Russia's output growing again, firms must make huge investments to develop new fields in remote provinces such as eastern Siberia and the Sakhalin region.
There has been some growth in these areas, mainly thanks to the less heavily taxed projects, called “production-sharing agreements”, that the government offered briefly in the late 1990s but has since curtailed. Strip out the production from these projects, and Russia's output has been in fitful decline since August 2006, according to analysts at Citibank. Worse, the output from these projects declined last month too. The government's ill concealed expropriation of various prize assets over the past few years has only added to the reluctance to embark upon big new projects.
Lukoil, for example, is investing $10 billion a year, but roughly 30% of that goes into gas production, which is now more lucrative than oil, given rising domestic prices for gas and lower taxation, says Mr Fedun. It has also been investing in refining, since the export tax on petrol and diesel is lower than that on crude oil. It is still projecting 4% annual growth in its output over the next 15 years, but the figure would be much higher if the government eased the tax burden, says Mr Fedun. Rosneft, the state-controlled oil champion, took on so much debt buying the plum divisions of Yukos, a private firm bankrupted by the Kremlin's zealous tax collectors, that it has little leeway for expensive new projects. Other firms are hoarding their profits and waiting for the tax regime to change.
The government did provide some $4.5 billion in tax breaks last year. But this, the oil companies argue, is barely enough to keep production stable. In his inaugural speech to the Duma as prime minister on May 8th, Mr Putin said that taxes on the industry must be reduced. However, new fields can take a decade to develop. The Kremlin has also failed to hand out exploration rights in the Arctic—the region oilmen consider most promising. And it says that in future the foreign firms with the expertise to tap offshore fields beneath frozen seas will be limited to minority shareholdings in big projects. “Oil production will be whatever the government decides it to be,” says Mr Fedun.
Meanwhile, Russia today is more dependent on oil and gas than it has ever been, argues Chris Weafer, a long-time Russia watcher and chief strategist at Uralsib, a bank. The share of oil and gas in Russia's gross domestic product has more than doubled since 1999 and now stands at above 30%, according to the Institute of Economic Analysis, a think-tank. Oil and gas account for 50% of Russian budget revenues and 65% of its exports. Yet the government has put at risk the goose that lays these golden eggs.
Long Ball
GOLF JOURNAL
By JOHN PAUL NEWPORT
The Drive to Drive
Putting? Bah. Why Everyone Digs the Long Ball
May 10, 2008;
The advice from instructors is universal: To lower your scores, work on your short game. Two-thirds of all shots, they point out, inarguably, are from 100 yards and in. That's the scoring zone. Driving is important, yes, but only as a means of placing the ball safely into play and setting up your approach shots. Straining to boom extra-long drives is counterproductive, they say, if it's coupled with a falloff in accuracy. Those long 46-inch-plus shafts that come standard in modern drivers are two inches too long for most players; the extra length may generate more clubhead speed, and thus distance, but with an unacceptable loss of control.
All of this is true. True, true, true.
On the other hand, the heck with it. There's nothing in golf -- and very little in life generally -- as deeply thrilling as knocking the bejeebers out of a golf ball and watching it soar away, gravity-free, as things normally soar only in dreams.
To look at drives merely as a means of putting your ball in the fairway is like looking at food merely as a means of getting nutrition. Maybe that works for you if you're a strict ascetic, or a Tour player trying to earn a living. But most golfers live for the long ball. Who wouldn't happily exchange an arching 300-yard beauty off the tee, even if it leads to a double bogey, for a 210-yard squibbler leading to a par? Not many, I suspect, except perhaps reluctantly on the final hole of a big-money match.
We love big drives for at least a couple of reasons. The first is the sheer intoxicating pleasure of catching one pure. Even for someone whose long drive is only 200 yards, if that's 50 yards longer than normal, it's a kick. The power seems to come from nowhere. When all the levers of the swing fire in rare perfect sequence, the ball explodes off the clubface and seems to hang in the air forever. For most of us that sensation, when we first experienced it, marks the moment golf got us in its stranglehold.
And there's no question this feeling excites women as much as men. Jim McMahon, an instructor at the range I often go to north of New York City, said that more than one of his female students, when she first connected with a clean, perfect drive, used terms to describe it that, shall we say, made him blush.
We also love monster drives because, however courteously administered, they are violent, aggressive acts, and there's always satisfaction in that. To smash a drive with all your might is to dish some serious hurt. Watching John Daly wind up and crush ball after ball over the practice-range fence may not be the catharsis that some people find in watching a wrecking ball take down a building, but it's close. It's primal and awesome. And it makes us even happier when we're the one delivering the blow successfully and not John Daly.
For men in particular, and some women, there's also the silverback-ape appeal of hitting a tee ball farther than anybody else. Women tend to bond, I'm told, around sharing experiences and finding common ground, whereas for men the subtext of any encounter is usually determining relative status. On the golf course, high status accrues to the long hitter. The low handicapper also enjoys status, but frequently his skills are the function of a country-club upbringing, or wonkish practice regimes, which impose a discount. The long hitter's aura is animal and immutable, more like that of the former college athlete. A guy may now be a CEO or a brain surgeon, but if he played linebacker at Notre Dame, that's still going to be the first thing most guys think about him.
Golfers hell-bent on learning to hit the ball deep spend lots of time at the driving range, usually ignoring the golden rule of golf practice (that nonsense above about focusing on the short game). It can get pretty ugly: beefy guys lunging at the ball, all muscle and no timing; kids with helicopter backswings and out-their-socks finishes; the majority who, despite flailing and grunting for all they are worth, squander power by swinging mainly with their arms and finishing on their back foot instead of on the front. But everyone connects every once in a while, soaking up the Pavlovian reinforcement they need to carry on. It's a noble, comic battle.
I've had a chance over the years to talk to several long-hitting Tour pros about their skills. None of them claim any special technique. Most said simply that they were always able to hit the ball longer than their peers. "It's just a gift," said 2005 U.S. Open champion Michael Campbell.
That said, they all agree that the one non-negotiable key to distance is hitting the ball square in the center of the clubface, and that to accomplish that consistently they try to feel as if they are swinging at less than full speed. Mr. Campbell uses 80% of full tilt as his goal, and others are in the same range. When the time comes for an extra-long poke on a given hole, their swing thought is often to s-l-o-w d-o-w-n, especially during the transition between backswing and forward swing.
This is the kind of analysis that most of us don't want to hear. It's too sensible and thus hopeless. Arnold Palmer's standard advice to young golfers is more appealing: "Hit it hard," he says. This strikes me as just right, so that's what I'm going with.
By JOHN PAUL NEWPORT
The Drive to Drive
Putting? Bah. Why Everyone Digs the Long Ball
May 10, 2008;
The advice from instructors is universal: To lower your scores, work on your short game. Two-thirds of all shots, they point out, inarguably, are from 100 yards and in. That's the scoring zone. Driving is important, yes, but only as a means of placing the ball safely into play and setting up your approach shots. Straining to boom extra-long drives is counterproductive, they say, if it's coupled with a falloff in accuracy. Those long 46-inch-plus shafts that come standard in modern drivers are two inches too long for most players; the extra length may generate more clubhead speed, and thus distance, but with an unacceptable loss of control.
All of this is true. True, true, true.
On the other hand, the heck with it. There's nothing in golf -- and very little in life generally -- as deeply thrilling as knocking the bejeebers out of a golf ball and watching it soar away, gravity-free, as things normally soar only in dreams.
To look at drives merely as a means of putting your ball in the fairway is like looking at food merely as a means of getting nutrition. Maybe that works for you if you're a strict ascetic, or a Tour player trying to earn a living. But most golfers live for the long ball. Who wouldn't happily exchange an arching 300-yard beauty off the tee, even if it leads to a double bogey, for a 210-yard squibbler leading to a par? Not many, I suspect, except perhaps reluctantly on the final hole of a big-money match.
We love big drives for at least a couple of reasons. The first is the sheer intoxicating pleasure of catching one pure. Even for someone whose long drive is only 200 yards, if that's 50 yards longer than normal, it's a kick. The power seems to come from nowhere. When all the levers of the swing fire in rare perfect sequence, the ball explodes off the clubface and seems to hang in the air forever. For most of us that sensation, when we first experienced it, marks the moment golf got us in its stranglehold.
And there's no question this feeling excites women as much as men. Jim McMahon, an instructor at the range I often go to north of New York City, said that more than one of his female students, when she first connected with a clean, perfect drive, used terms to describe it that, shall we say, made him blush.
We also love monster drives because, however courteously administered, they are violent, aggressive acts, and there's always satisfaction in that. To smash a drive with all your might is to dish some serious hurt. Watching John Daly wind up and crush ball after ball over the practice-range fence may not be the catharsis that some people find in watching a wrecking ball take down a building, but it's close. It's primal and awesome. And it makes us even happier when we're the one delivering the blow successfully and not John Daly.
For men in particular, and some women, there's also the silverback-ape appeal of hitting a tee ball farther than anybody else. Women tend to bond, I'm told, around sharing experiences and finding common ground, whereas for men the subtext of any encounter is usually determining relative status. On the golf course, high status accrues to the long hitter. The low handicapper also enjoys status, but frequently his skills are the function of a country-club upbringing, or wonkish practice regimes, which impose a discount. The long hitter's aura is animal and immutable, more like that of the former college athlete. A guy may now be a CEO or a brain surgeon, but if he played linebacker at Notre Dame, that's still going to be the first thing most guys think about him.
Golfers hell-bent on learning to hit the ball deep spend lots of time at the driving range, usually ignoring the golden rule of golf practice (that nonsense above about focusing on the short game). It can get pretty ugly: beefy guys lunging at the ball, all muscle and no timing; kids with helicopter backswings and out-their-socks finishes; the majority who, despite flailing and grunting for all they are worth, squander power by swinging mainly with their arms and finishing on their back foot instead of on the front. But everyone connects every once in a while, soaking up the Pavlovian reinforcement they need to carry on. It's a noble, comic battle.
I've had a chance over the years to talk to several long-hitting Tour pros about their skills. None of them claim any special technique. Most said simply that they were always able to hit the ball longer than their peers. "It's just a gift," said 2005 U.S. Open champion Michael Campbell.
That said, they all agree that the one non-negotiable key to distance is hitting the ball square in the center of the clubface, and that to accomplish that consistently they try to feel as if they are swinging at less than full speed. Mr. Campbell uses 80% of full tilt as his goal, and others are in the same range. When the time comes for an extra-long poke on a given hole, their swing thought is often to s-l-o-w d-o-w-n, especially during the transition between backswing and forward swing.
This is the kind of analysis that most of us don't want to hear. It's too sensible and thus hopeless. Arnold Palmer's standard advice to young golfers is more appealing: "Hit it hard," he says. This strikes me as just right, so that's what I'm going with.
Saturday, May 03, 2008
Dubious economic data from China
Economics focus
An aberrant abacus
May 1st 2008
From The Economist print edition
Coming to terms with China's untrustworthy economic numbers
AS CHINA'S importance in the global economy increases, investors are paying more attention to its economic numbers. Yet the country's official statistics are notoriously ropy. Some commentators accuse China's government of overstating GDP growth for political reasons, others complain that the official inflation rate is fraudulently low. So which data can you trust?
One reason to be suspicious of GDP figures is that China is always one of the first countries to report them, usually only two weeks after the end of each quarter. Most developed economies take between four and six weeks to produce them.
Amazingly, most economists reckon that China has understated its growth in recent years. The country's National Bureau of Statistics (NBS) has recently revised China's GDP growth up by half a percentage point for both 2006 and 2007, to 11.6% and 11.9% respectively, thanks to stronger growth in services, which government statisticians find harder to count than industry. Yet even these revised numbers may be conservative.
Chinese provinces independently report GDP, and a weighted average of their figures consistently gives higher rates of output and growth than those reported by the central government (see chart). True, local officials have an incentive to inflate growth numbers because promotion depends upon economic performance; however, experience suggests that number crunchers in local government are more accurate than Beijing's. For instance, the figures first published for 2004 showed that the sum of the provincial GDPs was 19% bigger than the reported national figure. Lo and behold, in 2005, after a national economic census picked up more services, the NBS revised its GDP up by 17%; it also lifted the annual growth rate over the previous decade.
Stephen Green, an economist at Standard Chartered, calculates that in 2007 the combined output of the provinces was 10% more than that reported by Beijing. Their average growth rate of 13.1% was also still 1.2 percentage points higher than the revised national growth rate, although the gap has narrowed from almost three points in 2005. Perhaps, suggests Mr Green, central NBS folk have decided that they should trust their local counterparts more. But just as local officials have an incentive to inflate numbers, so Beijing has had reason recently to understate them: it wants to slow the red-hot economy. China's true GDP growth may therefore be higher still—which may appear to add to fears of overheating.
Distrust of GDP has led many China-watchers to track alternative monthly measures of growth. Jonathan Anderson at UBS uses one based on production (eg, industry, electricity and construction) and another based on expenditure (retail sales, fixed investment and net exports). Neither gauge shows the same sharp acceleration since 2004-05 as does GDP. One explanation is that the reported jump in GDP growth may be an attempt to correct previously understated growth figures; if so, this could ease overheating concerns.
The government also smoothes quarterly GDP growth; other less politically sensitive indicators, such as industrial production, are much more volatile. For instance, despite severe snow storms and weaker net exports, first-quarter GDP growth slowed by less than expected and by much less than did industrial production. The government may well have made the figures look stronger to avoid criticism of its tighter credit policy.
What does—and does not—add up
The right-hand chart ranks the reliability of other Chinese statistics, based on an analysis by Goldman Sachs. The closely watched figures for fixed-asset investment are among the least reliable. They include purchases of land, which only reflect changes in ownership, not an increase in capacity or value added. Rising land prices in recent years have therefore led to a big overstatement of the level and the growth of investment. In contrast, consumer spending is almost certainly much higher and growing faster than official figures suggest. Retail sales are often used as a proxy for private consumption, but they exclude services, the fastest-growing slice of households' budgets.
China's true inflation rate is probably higher than the consumer-price index (CPI) reports. One problem is that the CPI appears to be based on the prices of state-provided health, transport and education while ignoring their increasingly important private counterparts. Data for 36 cities collected by the National Development and Reform Commission show that inflation for medical care and education has been running at 5-10% since 2001, well above the 1-2% reported in the CPI. However, even if the official measure understates inflation, the changes in it may still be a fair gauge over time. Goldman Sachs therefore ranks it relatively high in terms of reliability.
Foreign trade is perhaps the most accurate economic indicator. Critics accuse China of fiddling its trade figures, because the value of its exports as measured by the importing country is always much bigger than what the Chinese report. This discrepancy reflects the fact that China's bilateral trade figures exclude goods shipped to Hong Kong before being re-exported. But this should not affect total export figures and detailed Hong Kong data are available to adjust bilateral trade flows.
The prize for the dodgiest figures goes to the labour market. The quarterly urban unemployment rate is meaningless because it excludes workers laid off by state-owned firms as well as large numbers of migrant workers, who normally live in urban areas but are not registered. Wage figures are also lousy. There has recently been much concern about the faster pace of increase in average urban earnings. But this series does not cover private firms, which are where most jobs have been created in recent years.
Now that China is such an engine of global growth, it urgently needs to improve its economic data. Only a madman would drive a juggernaut at full speed with a faulty speedometer, a cracked rear-view mirror and a misty windscreen.
An aberrant abacus
May 1st 2008
From The Economist print edition
Coming to terms with China's untrustworthy economic numbers
AS CHINA'S importance in the global economy increases, investors are paying more attention to its economic numbers. Yet the country's official statistics are notoriously ropy. Some commentators accuse China's government of overstating GDP growth for political reasons, others complain that the official inflation rate is fraudulently low. So which data can you trust?
One reason to be suspicious of GDP figures is that China is always one of the first countries to report them, usually only two weeks after the end of each quarter. Most developed economies take between four and six weeks to produce them.
Amazingly, most economists reckon that China has understated its growth in recent years. The country's National Bureau of Statistics (NBS) has recently revised China's GDP growth up by half a percentage point for both 2006 and 2007, to 11.6% and 11.9% respectively, thanks to stronger growth in services, which government statisticians find harder to count than industry. Yet even these revised numbers may be conservative.
Chinese provinces independently report GDP, and a weighted average of their figures consistently gives higher rates of output and growth than those reported by the central government (see chart). True, local officials have an incentive to inflate growth numbers because promotion depends upon economic performance; however, experience suggests that number crunchers in local government are more accurate than Beijing's. For instance, the figures first published for 2004 showed that the sum of the provincial GDPs was 19% bigger than the reported national figure. Lo and behold, in 2005, after a national economic census picked up more services, the NBS revised its GDP up by 17%; it also lifted the annual growth rate over the previous decade.
Stephen Green, an economist at Standard Chartered, calculates that in 2007 the combined output of the provinces was 10% more than that reported by Beijing. Their average growth rate of 13.1% was also still 1.2 percentage points higher than the revised national growth rate, although the gap has narrowed from almost three points in 2005. Perhaps, suggests Mr Green, central NBS folk have decided that they should trust their local counterparts more. But just as local officials have an incentive to inflate numbers, so Beijing has had reason recently to understate them: it wants to slow the red-hot economy. China's true GDP growth may therefore be higher still—which may appear to add to fears of overheating.
Distrust of GDP has led many China-watchers to track alternative monthly measures of growth. Jonathan Anderson at UBS uses one based on production (eg, industry, electricity and construction) and another based on expenditure (retail sales, fixed investment and net exports). Neither gauge shows the same sharp acceleration since 2004-05 as does GDP. One explanation is that the reported jump in GDP growth may be an attempt to correct previously understated growth figures; if so, this could ease overheating concerns.
The government also smoothes quarterly GDP growth; other less politically sensitive indicators, such as industrial production, are much more volatile. For instance, despite severe snow storms and weaker net exports, first-quarter GDP growth slowed by less than expected and by much less than did industrial production. The government may well have made the figures look stronger to avoid criticism of its tighter credit policy.
What does—and does not—add up
The right-hand chart ranks the reliability of other Chinese statistics, based on an analysis by Goldman Sachs. The closely watched figures for fixed-asset investment are among the least reliable. They include purchases of land, which only reflect changes in ownership, not an increase in capacity or value added. Rising land prices in recent years have therefore led to a big overstatement of the level and the growth of investment. In contrast, consumer spending is almost certainly much higher and growing faster than official figures suggest. Retail sales are often used as a proxy for private consumption, but they exclude services, the fastest-growing slice of households' budgets.
China's true inflation rate is probably higher than the consumer-price index (CPI) reports. One problem is that the CPI appears to be based on the prices of state-provided health, transport and education while ignoring their increasingly important private counterparts. Data for 36 cities collected by the National Development and Reform Commission show that inflation for medical care and education has been running at 5-10% since 2001, well above the 1-2% reported in the CPI. However, even if the official measure understates inflation, the changes in it may still be a fair gauge over time. Goldman Sachs therefore ranks it relatively high in terms of reliability.
Foreign trade is perhaps the most accurate economic indicator. Critics accuse China of fiddling its trade figures, because the value of its exports as measured by the importing country is always much bigger than what the Chinese report. This discrepancy reflects the fact that China's bilateral trade figures exclude goods shipped to Hong Kong before being re-exported. But this should not affect total export figures and detailed Hong Kong data are available to adjust bilateral trade flows.
The prize for the dodgiest figures goes to the labour market. The quarterly urban unemployment rate is meaningless because it excludes workers laid off by state-owned firms as well as large numbers of migrant workers, who normally live in urban areas but are not registered. Wage figures are also lousy. There has recently been much concern about the faster pace of increase in average urban earnings. But this series does not cover private firms, which are where most jobs have been created in recent years.
Now that China is such an engine of global growth, it urgently needs to improve its economic data. Only a madman would drive a juggernaut at full speed with a faulty speedometer, a cracked rear-view mirror and a misty windscreen.
Cool!
Innovation
Home invention
May 1st 2008 | SAN FRANCISCO
From The Economist print edition
An increasing number of tinkerers are building their own gadgets
THE standard sort of science fair can be a little bit stuffy. Precocious youngsters with a taste for laboratory notebooks spend years building experiments to compete for college scholarships. But what happens if you open the doors to a wider audience and add a bit of fun?
Such an event might look like the Maker Faire, a two-day festival which opens in San Mateo, California, on May 3rd. Like its more serious counterparts, it is a gathering of geeks, but with the addition of do-it-yourself enthusiasts, back-yard scientists, garage tinkerers, artists and crafts people. This year their eclectic projects will include fire-breathing robots, wearable computers, self-replicating three-dimensional printers (whatever they are) and giant motorised cupcakes. And everyone will be encouraged to get their hands dirty building their own electric circuits, creating their own fashion goods and launching their own rockets.
This is the third year for the Maker Faire. Last year, more than 40,000 people turned up and a further 20,000 attended a second event held for the first time that year in Austin, Texas.
The idea of playing around with technology in such a way might appear quirky, even superfluous. But nowadays it often drives innovation, says Tim O'Reilly, founder of O'Reilly Media, a publishing company whose Make and Craft magazines sponsor the event. Mr O'Reilly is something of a technology guru himself and is widely credited with coining the term Web 2.0 to capture the trend towards greater creativity, information sharing and collaboration among internet users.
Naturally, this all goes down well in California, where Steve Jobs and Steve Wozniak began the personal-computer revolution in a garage, and Sergey Brin and Larry Page dreamed up Google's algorithms while in graduate school. But the idea is spreading. Mr O'Reilly points to several trends responsible for the rising popularity of do-it-yourself innovation. First, computers, sensors and other bits are cheaper than ever. This means high-tech gadgets soon become disposable. So they are often plundered to build new things. An obsolete digital camera can, for instance, be attached to a kite for aerial photography; or with few more things and the innards of a satellite-navigation system become a small unmanned aerial vehicle.
The second trend is that the internet is enabling people from all over the world to share information about their projects. Websites like Instructables.com and wikiHow.com have become popular virtual meeting places for inventors and others. They embrace the idea that you should freely share technological ideas—an approach known as “open source”. This began in computer software but is now going on with all sorts of technologies.
Addie Wagenknecht's project is typical. At the fair she is showing a multi-touch table which works like a computer screen. The device has some of the same features as a table-top device called Surface which is produced by Microsoft. But whereas that costs some $10,000, Ms Wagenknecht's version can be built with only $500 of bits (including a kit that she sells). And it has the potential to do much more, she says. Since both the hardware and the software are open-source, anyone can change things to suit their purpose, which like most things at the fair is bound to encourage even more innovation.
Home invention
May 1st 2008 | SAN FRANCISCO
From The Economist print edition
An increasing number of tinkerers are building their own gadgets
THE standard sort of science fair can be a little bit stuffy. Precocious youngsters with a taste for laboratory notebooks spend years building experiments to compete for college scholarships. But what happens if you open the doors to a wider audience and add a bit of fun?
Such an event might look like the Maker Faire, a two-day festival which opens in San Mateo, California, on May 3rd. Like its more serious counterparts, it is a gathering of geeks, but with the addition of do-it-yourself enthusiasts, back-yard scientists, garage tinkerers, artists and crafts people. This year their eclectic projects will include fire-breathing robots, wearable computers, self-replicating three-dimensional printers (whatever they are) and giant motorised cupcakes. And everyone will be encouraged to get their hands dirty building their own electric circuits, creating their own fashion goods and launching their own rockets.
This is the third year for the Maker Faire. Last year, more than 40,000 people turned up and a further 20,000 attended a second event held for the first time that year in Austin, Texas.
The idea of playing around with technology in such a way might appear quirky, even superfluous. But nowadays it often drives innovation, says Tim O'Reilly, founder of O'Reilly Media, a publishing company whose Make and Craft magazines sponsor the event. Mr O'Reilly is something of a technology guru himself and is widely credited with coining the term Web 2.0 to capture the trend towards greater creativity, information sharing and collaboration among internet users.
Naturally, this all goes down well in California, where Steve Jobs and Steve Wozniak began the personal-computer revolution in a garage, and Sergey Brin and Larry Page dreamed up Google's algorithms while in graduate school. But the idea is spreading. Mr O'Reilly points to several trends responsible for the rising popularity of do-it-yourself innovation. First, computers, sensors and other bits are cheaper than ever. This means high-tech gadgets soon become disposable. So they are often plundered to build new things. An obsolete digital camera can, for instance, be attached to a kite for aerial photography; or with few more things and the innards of a satellite-navigation system become a small unmanned aerial vehicle.
The second trend is that the internet is enabling people from all over the world to share information about their projects. Websites like Instructables.com and wikiHow.com have become popular virtual meeting places for inventors and others. They embrace the idea that you should freely share technological ideas—an approach known as “open source”. This began in computer software but is now going on with all sorts of technologies.
Addie Wagenknecht's project is typical. At the fair she is showing a multi-touch table which works like a computer screen. The device has some of the same features as a table-top device called Surface which is produced by Microsoft. But whereas that costs some $10,000, Ms Wagenknecht's version can be built with only $500 of bits (including a kit that she sells). And it has the potential to do much more, she says. Since both the hardware and the software are open-source, anyone can change things to suit their purpose, which like most things at the fair is bound to encourage even more innovation.
More on electric cars, interesting...
Canada
Not on our roads
May 1st 2008 | MONTREAL
From The Economist print edition
Bureaucrats against electric cars, and progress
IN THESE times of high petrol prices and worries about climate change, you might think that any country would be proud to enjoy a lead in manufacturing electric cars. Not Canada, it seems. Two Canadian companies, ZENN Motor Company and Dynasty Electric Car, make small electric cars designed for city use; a third, which will use new battery technology developed by Exxon Mobil, plans to launch a model later this year.
But almost all these “low-speed vehicles” (or LSVs) are exported to the United States because Canada refuses to allow their use on public roads. Transport Canada, the regulatory agency, questions their safety. It doubts they would stand up in a collision with a delivery truck or a sport utility vehicle. Officials say they crash-tested one which didn't fare well, though they refuse to release the data. The agency wants LSVs confined to “controlled areas”, such as university campuses, military bases, parks and Canada's few gated communities. Its advice has carried weight with the provinces, which make the rules of the road.
It is true that the cars are made from lightweight metals and plastics. But the manufacturers allege political bias: Stephen Harper's conservative government has much support in oil-rich Alberta. Backed by thousands of would-be buyers, they are campaigning to reverse the agency's decision. “It's a ludicrous regulatory situation. All you can point to is oil and the big guys and think there's a conspiracy somewhere,” says Danny Epp of Dynasty.
Mr Epp reckons that his car should be allowed on urban streets with speed limits of around 50kph (30mph) or less. But Dynasty recently gave up the battle. In March it announced that it is being bought by a Pakistani firm, which will move production to Karachi and export to the United States from there.
ZENN—that stands for zero emission, no noise—promises to fight on. Ian Clifford, its boss, points out that there has not been a single death related to LSVs in the United States, where 44 states allow them and some 45,000 such cars are in use. And gas-guzzlers imperil public safety by polluting the air, he notes. But Mr Clifford is not expecting change soon. He claims that his campaign against Transport Canada has made him enemies. “Two senior, entrenched bureaucrats have told me personally that if it is the last thing they do, they'll keep LSVs off the road in Canada,” he says.
Not on our roads
May 1st 2008 | MONTREAL
From The Economist print edition
Bureaucrats against electric cars, and progress
IN THESE times of high petrol prices and worries about climate change, you might think that any country would be proud to enjoy a lead in manufacturing electric cars. Not Canada, it seems. Two Canadian companies, ZENN Motor Company and Dynasty Electric Car, make small electric cars designed for city use; a third, which will use new battery technology developed by Exxon Mobil, plans to launch a model later this year.
But almost all these “low-speed vehicles” (or LSVs) are exported to the United States because Canada refuses to allow their use on public roads. Transport Canada, the regulatory agency, questions their safety. It doubts they would stand up in a collision with a delivery truck or a sport utility vehicle. Officials say they crash-tested one which didn't fare well, though they refuse to release the data. The agency wants LSVs confined to “controlled areas”, such as university campuses, military bases, parks and Canada's few gated communities. Its advice has carried weight with the provinces, which make the rules of the road.
It is true that the cars are made from lightweight metals and plastics. But the manufacturers allege political bias: Stephen Harper's conservative government has much support in oil-rich Alberta. Backed by thousands of would-be buyers, they are campaigning to reverse the agency's decision. “It's a ludicrous regulatory situation. All you can point to is oil and the big guys and think there's a conspiracy somewhere,” says Danny Epp of Dynasty.
Mr Epp reckons that his car should be allowed on urban streets with speed limits of around 50kph (30mph) or less. But Dynasty recently gave up the battle. In March it announced that it is being bought by a Pakistani firm, which will move production to Karachi and export to the United States from there.
ZENN—that stands for zero emission, no noise—promises to fight on. Ian Clifford, its boss, points out that there has not been a single death related to LSVs in the United States, where 44 states allow them and some 45,000 such cars are in use. And gas-guzzlers imperil public safety by polluting the air, he notes. But Mr Clifford is not expecting change soon. He claims that his campaign against Transport Canada has made him enemies. “Two senior, entrenched bureaucrats have told me personally that if it is the last thing they do, they'll keep LSVs off the road in Canada,” he says.
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