Thought of the Day

Schadenfreude will be the word of the moment for the right if Hillary Clinton goes into the Democratic Convention claiming the popular vote with Obama holding the delegate lead.  The EPA might have to regulate all of the resultant smug that will descend upon Denver.

Roadside economics

One could also call this anecdotal economics, but I've noticed that the number of automobiles, boats, snowmobiles, four wheelers, trailers, etc., that are being sold on the sides of highways has grown significantly this year. That tells me a couple of things. One, people are trying to clear themselves of these assets in order to pay debts or because they are looking to buy new toys. If it is the former, and I suspect that it is, the used market for these items is going to tumble, which is going to draw more potential consumers away from manufacturers. Because of this, the anecdotal economist says that there are plenty more ripples to be felt from this economic slow down yet.

Of course, if it is the latter, I'm just plain wrong.

Oil's Speculation Problem

This is a a pretty good article.  I recommend reading the whole thing, but here's the gist of it.

A boom in speculation and trading by investment banks and hedge funds has put our energy markets on steroids. Contract volume in the futures markets has risen by a third in just the last year. Oil closed at a record high of $125.96 a barrel  on the New York Mercantile Exchange on Friday. That's double the price two years ago, a difference clearly caused by market manipulation.

 

This isn't complicated finance. The way traders push up prices is surprisingly simple. They buy in European futures markets, which don't have the limits that U.S. markets do. That drives up U.S. prices where they may already have positions. It's a move to think about next time one of these exchange chiefs talks about all of the benefits of "market globalization."

 

None of it would matter except that these markets are supposed to be driven by supply and demand. China and other rapidly growing countries may be using more, or will use more resources, but the reality is that demand and supply haven't changed enough to warrant the price of oil doubling in less than three years.

 

Here's what has changed: the proliferation of energy trading desks on Wall Street and at hedge funds. There are more than 9,000 hedge funds with $1.5 trillion under management, according to the Federal Reserve. Hedge funds, which almost exclusively use short-term strategies, do nearly 55% of derivatives trading, the kind used in energy futures, according to a study last year by Greenwich Associates.

That's a recipe for a bubble.  The problem is, the bubble won't burst until/unless the money finds a better place to go.

Do they really need to be this exact?

Yes, this will be a nitpick.  The story:

Heavy rains and another potentially powerful storm headed toward Myanmar's cyclone-devastated delta on Wednesday. The U.N. warned that inadequate relief efforts could lead to a second wave of deaths among the estimated 2 million survivors.

The International Red Cross said in a new estimate that the death toll already may be between 68,833 and 127,990.

If you are going to be quoting a range of death numbers like that, do you really have to be exact at the upper and lower limits?  Considering the real number could be any one of 59,157 possibilities, would even numbers have just sufficed?  Or are these exact numbers in a guesstimate designed to personalize this for people in some way?

Watch for the Tale of Two Interpretations

First, the story:

President George W. Bush said on Tuesday he quit playing golf in 2003 out of respect for the families of Americans killed in the war in Iraq.

"I don't want some mom whose son may have recently died to see the Commander-in-Chief playing golf," Bush said in an interview with Yahoo and Politico.com.

"I feel I owe it to the families to be as -- to be in solidarity as best as I can with them. And I think playing golf during a war just sends the wrong signal," he said.

I'm in line with interpretation number one, which is that the guy was empathetic and understood how it could be perceived by the families.

Interpretation two will be the one that grabs hold until his post presidency numbers rebound a bit. It is also the one that will rage around the left. That interpretation will be that this president was so shallow as to think that giving up golf was enough. Of course, that isn't what he said, but putting words into the mouth of this communicationally challenged President has become a cottage industry, so why should that change now?

Suspension of new supplies to the Strategic Petroleum Reserve

Pointless.

The House of Representatives on Tuesday followed the Senate in rejecting the Bush administration's policy of adding oil to the country's Strategic Petroleum Reserve while fuel prices are high.

The House passed legislation that would suspend crude deliveries to the U.S. emergency oil stockpile while the price of oil was above $75 a barrel, a move the White House has opposed. Oil traded at a record near $126 a barrel on Tuesday.

Much of the oil placed into the reserve come in lieu of royalty payments from the oil companies, so it isn't an out of pocket expense for the United States. Additionally, the suspension will have absolutely no affect on the price of oil. I can't say I'm outraged by the suspension, but I am sick of congress make pointless gestures because it is politically easy to do. There are much better ways they can address our energy issues, but they require standing up to irrational environmentalists, something they are loathe to even think about.

Stud

A man's man. What more can I say?

An Omaha man struggling to breathe used a steak knife to perform an at-home tracheotomy. Steve Wilder said he thought he was going to die when he awoke one night last week and couldn't breath.

Wilder said he didn't call 911 because he didn't think help would arrive in time. So, the 55-year-old says, he got a steak knife from the kitchen and made a small hole in his throat, allowing air to gush in.

Wow.

9/11, The TV Archive

I've written about the archiving of web sites a couple of times now. Here's an interesting twist on the concept. The Internet Archive allows you to watch the TV coverage on September 11, 2001, as it happened. Television and radio is generally well archived by the stations, but the public does not have access to it. Things like this open our history to more and more people, and I look forward to seeing this kind of archiving expanded upon.