Earlier I mentioned the Economist Style Guide advertisment that appealed to me. I found that The Economist has an online version of this Style Guide that you can access free.

Here's the link and below is one of the sections of the book.

Journalese and slang

Do not be too free with slang (eg, He really hit the big time in 1994). Slang, like metaphors, should be used only occasionally if it is to have effect. Avoid expressions used only by journalists, such as giving people the thumbs up, the thumbs down or the green light. Stay clear of gravy trains and salami tactics. Do not use the likes of. And avoid words and expressions that are ugly or overused, such as the bottom line, high profile, caring (as an adjective), carers, guesstimate (use guess), schizophrenic (unless the context is medical), crisis, key, major (unless something else nearby is minor), massive (as in massive inflation), meaningful, perceptions, prestigious and significant.

Politicians are often said to be highly visible, when conspicuous would be more appropriate. Regulations are sometimes said to be designed to create transparency, which presumably means openness. Governance usually means government. Elections described as too close to call are usually just close.

Try not to be predictable, especially predictably jocular. Spare your readers any mention of mandarins when writing about the civil service, of their lordships when discussing the House of Lords, and of comrades when analysing communist parties. Must all lawns be manicured? Are drug traffickers inevitably barons?

In general, try to make your writing fresh. It will seem stale if it reads like hackneyed journalese. One weakness of journalists, who on daily newspapers may plead that they have little time to search for the apposite word, is a love of the ready-made, seventh-hand phrase. Lazy journalists are always at home in oil-rich country A, ruled by ailing President B, the long-serving strongman, who is, according to the chattering classes, a wily political operator—hence the present uneasy peace—but, after his recent watershed (or landmark or sea-change) decision to arrest his prime minister (the honeymoon is over), will soon face a bloody uprising in the breakaway south. Similarly, lazy business journalists always enjoy describing the problems of troubled company C, a victim of the revolution in the gimbal-pin industry (change is always revolutionary in such industries), which, well-placed insiders predict, will be riven by a make-or-break strike unless one of the major players makes an 11th-hour (or last-ditch) intervention in a marathon negotiating session.

Prose such as this is freighted with codewords (respected is applied to someone the writer approves of, militant someone he disapproves of, prestigious something you won't have heard of). The story can usually start with the words, First the good news, inevitably to be followed in due course by Now the bad news. A quote will then be inserted, attributed to one (never an) industry analyst, and often the words If, and it's a big if... Towards the end, after an admission that the author has no idea what is going on, there is always room for One thing is certain, before rounding off the article with As one wag put it...

Perhaps even more wearying for the reader is the trendy journalist's fondness of vogue words and expressions. Some of these are deliberately chosen (bridges too far; empires striking back; kinder, gentler; F-words; flavours of the month; Generation X; hearts and minds;$64,000 questions; southern discomfort; back to the future; thirty-somethings; windows of opportunity; where's the beef?), usually from a film or television, or perhaps a politician. Others come into use less wittingly, often from social scientists. If you find yourself using any of the following words, you should stop and ask yourself whether (a) it is the best word for the job (b) you would have used it in the same context five or ten years ago, and if not why not:

address (questions can be answered, issues discussed, problems solved, difficulties dealt with)

care for and all caring expressions (how about look after?)

community (see above, under Unnecessary Words)

environment (in a writing environment you may want to make use of your Tipp-Ex, rubber or delete button)

famously (usually redundant, nearly always irritating)

focus (all the world's a stage, not a lens)

individual (fine in some contexts, but increasingly used as a longer synonym for man, woman or person)

overseas (increasingly used, and often wrongly, to mean abroad or foreign)

participate in (take part in—more words but fewer syllables)

partner (“Take your partners for the Gay Gordons!” by all means, but dancing together does not necessarily mean sleeping together—just as a sleeping partner is not necessarily a lover)

process (a word properly applied to the Arab-Israeli peace affair, because it was meant to be evolutionary, but now often used in place of talks)

relationship (relations can nearly always do the job)

resources (especially human resources, which may be personnel, staff or just people)

skills (these are turning up all over the place—in learning skills, thinking skills, teaching skills—instead of the ability to. He has the skills probably means He can)

supportive (helpful?)

target (if you are tempted to target your efforts, try to direct them instead)

transparency (openness?)

Such words are not wrong, but if you find yourself using them only because you hear others using them, not because they are the most appropriate ones in the context, you should avoid them. Overused words and off-the-shelf expressions make for stale prose.

The Economist was advertising its house Style Guide for writers. I found it immensely amusing because the ad mocked clichéd lingo prevalent in today's business world.

I hold The Economist in high regard and their new advertisement supports the reason.

The ad:









Here's the link to the site with the book if you're interested: The Economist Style Guide

The photo below is of the Korean Peninsula at night. This particular photo was taken earlier this week.

I had heard of this photo before from an interview with Donald Rumsfield. Apparently he keeps the picture under his desk to remind himself of the stark constrast between the two nations.

North Korea might now have The Bomb, but it doesn't have much electricity

Mr Rumsfeld showed the picture to illustrate how backward the northern regime really is - and how oppressed its people are. Without electricity there can be none of the appliances that make life easy and that we take for granted, he said.

"Except for my wife and family, that is my favourite photo," said Mr Rumsfeld.



"It says it all. There's the south, the same people as the north, the same resources north and south, and the big difference is in the south it's a free political system and a free economic system.

"The people in the north are starving, their growth is stunted. It's a shame, a tragedy."

An aide added: "This oppressive regime is too busy trying to make war to make life comfortable for its people."

Free articles from this week's edition of The Economist
Japan's assertive new prime minister | Virtual online worlds | Lula's record in Brazil | A bitter new debate about Iraq | Yahoo! | Why is the yen so weak? | Two new members join the EU club | China excises Shanghai's party chief | Oil in Iraqi Kurdistan | Wal-Mart in Britain | Venezuela's bid for a UN seat | Theoretical physics | An atlas of brain genetics | John Coltrane and Miles Davis | Ann Richards, governor of Texas


Business this week

Sep 28th 2006
From The Economist print edition

The spotlight stayed on Hewlett-Packard's boardroom spying scandal as Congress prepared to grill company officials about the affair. The big question is how much Mark Hurd, HP's chief executive, knew about the methods used in an investigation to uncover a company leak? Mr Hurd is now chairman too: he took over when Patricia Dunn stepped down on September 22nd, soon after Mr Hurd gave his first public account of the shenanigans. Ms Dunn had intended to step down next January. See article
An American federal judge ruled that a claim filed in 2004 against tobacco companies, alleging that they misleadingly marketed “light” cigarettes as comparatively safe, could proceed as a class-action lawsuit. With the potential to include tens of millions of smokers, it is thought to be the country's largest class-action suit yet. The share price of big tobacco firms fell sharply. See article
It emerged that Johnson & Johnson is seeking $5.5 billion in damages from Boston Scientific and Abbott Laboratories for breaching J&J's 2004 merger agreement with Guidant, a maker of medical devices. J&J eventually lost a protracted bidding war for Guidant to Boston earlier this year. Abbott was also involved in the deal.

Rick Wagoner and Carlos Ghosn held talks in Paris about the mooted alliance between General Motors, Renault and Nissan, Renault's affiliate. It was the chief executives' first meeting since the idea was floated by Kirk Kerkorian, an investor who owns almost 10% of GM, in June. Since then, speculation has increased that GM would rather concentrate on its own restructuring plans, but both sides agreed to continue exploring the “potential opportunities” of a deal and report in the middle of October.
PSA Peugeot Citröen announced cost-saving measures that include the loss of 10,000 jobs, or 7% of its European workforce. Europe's second-biggest carmaker is suffering from an erosion of its market position, attributed to the staleness of its models.
Aer Lingus priced its initial public offering towards the lower range of expectations, valuing the Irish state-owned carrier at euro1.13 billion ($1.4 billion) when it starts trading next week. The flotation is regarded as a gauge of investors' appetite for airline shares after recent security scares—Aer Lingus will be the first airline to make its debut on the London Stock Exchange since easyJet in 2000.
Jacob “Kobi” Alexander was arrested in Namibia, several weeks after he went on the run to escape charges in a stock-option scandal stemming from when he was chief executive of Comverse. American regulators are to ask for the extradition of Mr Alexander, whose flight initiated a global manhunt and numerous alleged sightings.
Andrew Fastow received a six-year prison sentence for the part he played in Enron's collapse. The energy-trading company's former chief financial officer had agreed to a ten-year term as part of a plea bargain, but the judge reduced this because of the “exceptional” help Mr Fastow had given to the prosecution.

Germany's E.ON raised its bid for Endesa by almost 40%, valuing a merger with the Spanish utility at around euro37 billion ($47 billion). E.ON acted after learning that Acciona, a Spanish construction group, had taken a 10% stake in Endesa, putting a further potential obstacle in the German company's path. Spain's government was criticised by the European Commission this week for its attempts to block the cross-border acquisition.
The battle for Endesa was not the only Spanish utility deal to excite investors. ACS, a Spanish building firm, bought a 6.3% stake, worth euro2.1 billion ($2.7 billion), in Iberdrola, the country's second-biggest power company. ACS also dampened speculation that it was trying to pursue a merger with Union Fenosa, a utility of which it is the controlling shareholder, and displace Endesa as Spain's biggest utility.
Consolidation among European drug companies continued apace as UCB reached an agreement to buy Schwarz Pharma for euro4.4 billion ($5.6 billion). The announcement came four days after Merck unveiled its acquisition plans for Serono, and Altana said it would sell its pharmaceutical business to Nycomed. See article
The price of oil briefly dipped below $60 a barrel for the first time since March. See article

American consumer confidence rebounded in September from August's sharp fall (the news was one element pushing the Dow Jones Industrial Average towards a new high). Cheaper petrol prices were said to be the main factor fuelling the optimism.

Rex tells it like it is. Oil companies don't set gas prices and it's simple supply and demand. If the price is fixed below equilibrium, then there will be a shortage of gas (hence long gas lines). This is BASIC economics. BASIC.

Government interference in the market always causes one of two phenomenon: over supply or shortages. Why? Supply and Demand set the price where the two meet, called equilibrium.

Exxon Mobil CEO: I Understand Gas Woes

CAPITOL HILL — Exxon Mobil ((XOM) chairman and CEO Rex Tillerson says oil companies do not get together and illegally manipulate oil prices.

He tells NBC's "Today" show that he understands gas prices are causing difficulties for people, but the alternative of no gas or long lines isn't attractive either.

Tillerson pointed out that the price of oil is set on the open commodities market and the price at the pump eventually reflects that.

Politicians and the public are looking for ways to deal with rising gas prices.

Republican Senator Kay Bailey Hutchison of Texas says the government must encourage alternate sources of energy besides oil. New Yorker Dominic Valente, the owner of a food distribution company, says he's passing on the costs to his customers, but adds they seem to understand.

Trucking companies are facing similar problems as they deliver their goods.

Steven Miloy has an opinion piece on Fox News about the role of the environmentalists in our era of high gasoline prices. I agree with him on everything, but he tends to suggest drilling will solve the woes, when really the issue is refinement. He does a wonderful job explaining the 'botique' of fuel blends that are required in different parts of the country.

'Green' Politicians Add to Gas Price Woes

Environmentalists helped pressure Congress in 1990 to require “reformulated” gasoline (RFG) supposedly to reduce the formation of ground-level ozone or smog. The RFG process requires use of additives such as ethanol or MTBE.

The RFG requirement raised the price of gasoline not only because of the cost of the additives but because different areas of the country require different blends of fuel to address different air quality circumstances. The 17 so-called “boutique” fuels used around the country make the national gasoline supply less fungible, which causes supply bottlenecks.

And for all this pain, there appears to be little gain from RFG. A 1999 report from the National Research Council reported that, “the net impact of RFG on ambient ozone concentrations...is a few percent. For this reason, it is difficult to quantify the specific contribution of the RFG program to the apparent downward trend in ozone.”

The final kick-in-the-teeth to consumers from the RFG program came last year when environmental groups like the Natural Resource Defense Council pressured Congress to not provide legal liability protection for MTBE makers, who will stop using the additive in gasoline on May 1. (MTBE from leaking underground storage tanks had been detected in groundwater around the country, raising the specter of lawsuits against MTBE manufacturers). Gas prices will soon jump again in many parts of the country as refiners try to avoid future MTBE-related legal liability by switching to the more expensive ethanol additive.

Like the Economist points out, there seems to be a lack of knowledge when it comes to Americans feeling as though they're being gouged at the pump. The simple fact of matter is that prices are high because of the factors of supply and demand. Simple economics explains this concept, unfortunately so many people skipped that class in highschool. Such a shame.

From the Economist: Premium pressure

The price of oil eased a little after touching $75 a barrel in trading late last week. Meanwhile, George Bush said he was suspending deposits to America's Strategic Petroleum Reserve until the autumn in an effort to boost oil supplies. The move (which will have a small effect on overall oil supply) comes amid growing political pressure in the United States over high petrol prices.

You can quibble for as long as you want about the economics of all this. You can point out that the price of petrol is fixed by global forces—from rising demand in India and China to political instability in Nigeria and, particularly, Iran—rather than devilish CEOs. You can point out that, so far, rising petrol prices have had remarkably little impact on the economy. The oil shocks of the 1970s sent inflation soaring and tipped the world economy into recession. Today the American economy is motoring along on a full tank, with low inflation, low unemployment and rising consumer confidence. You can point out that Americans don't know how lucky they are—a gallon of petrol costs $6.4 in Britain. You can even argue that it is their fault for driving gas-guzzling SUVs and living in McMansions miles from anywhere.

But you might as well hold your breath for all the difference it makes. No less than 69% of Americans think that the rise in petrol prices has already caused them either severe (23%) or moderate (46%) hardship. Nearly two-thirds think that the president has a lot of influence over the price of petrol. The result is that a presidency that has already been battered by Hurricane Katrina and bruised by the Iraq war is being bombarded by soaring petrol prices. Mr Bush's approval ratings are at an all-time low of 32%; economists are warning everyone that the price of petrol will rise higher as the summer driving season starts; and pundits are suggesting that Mr Bush may be a Republican Jimmy Carter, destroyed by Middle Eastern terrorists and rising oil prices. All he needs is a cardigan and a liking for the word “malaise”.

Subsidies will forever undercut the natural equilibrium of supply and demand. Often with a subsidy, demand overwhelms supply because there is less of a barrier to individuals to obtain the resource. This is a fundamental aspect of economics and is the way society works - regardless if you believe in capitalism or not.

It always amuses me when I encounter an egregious example of a government undermining their nations economy: Iran may ration gasoline as prices deplete budget

Iran, the world's second-largest holder of oil reserves, may ration gasoline to less than a gallon a day as early as September to curb imports as surging world prices bankrupt the government's price-subsidy program. The decision follows a parliamentary vote last month that cut the state's annual budget for gasoline imports for public and private use by 40 percent to $2.5 billion. The rationing won't apply to taxis and public transport vehicles, Deputy Oil Minister Mohammad Reza Nematzadeh told reporters Wednesday at an Abadan, Iran, briefing broadcast by state television

Gas Prices

As the price of a barrel of West Texas Intermediate crude oil (WTI) rises on the New York Mercantile Exchange, gasoline prices are pushed even higher. There is also a large disparity among various states as to the price of gasoline per gallon.

During this time of high gas prices, oil companies are posting record profit and oil services companies are obtaining more and more work. And then the mainstream media fuels resentment among Americans and politicians call for inquiries.

NONSENSE! Let's examine what exactly occurs here.

The price of crude varies depending on the type of crude: heavy, intermediate and light. There are also different terms for the amount of sulphur found in the crude oil, lending to terminology such as light, sweet (low sulphur content) crude. WTI is one of the most famous benchmarks for crude oil. It is also the most popular to refine as it is the easiest to do so (as it is light and sweet). There are, however, 161 other types of crude traded around the world. See EPA Crude Types and Department of Energy Crude Types for more information.

As WTI rises and falls, it is reported in the media rather than the other 161 crudes. This is because WTI (along with Brent) are the benchmarks for exchanges with which all other crudes are traded. So if WTI rises, then so will the others. So that explains the reported benchmarks in the media, but what about the price paid at the pump? Actual gasoline prices will rise and fall with the WTI and Brent benchmarks, but they are not paralleled. There is a disconnect between the purchase of a barrel of crude oil and the actual refinement of the crude into gasoline. This disconnect becomes magnified depending on several variables: online production capacity of refineries; local, state, and federal EPA regulations; and distribution methods.

Online production capacity can be affected by natural weather events and accidents. Katrina, for example, is still affecting refinement of crude. 7% of refining capability is still offline and this affects supply (of gasoline). The United States has also just issued its first permit to build a new refinery since 1976. That's THIRTY years with out a new refinery. The population of the United States alone has since doubled and the demand for gasoline is higher than ever, yet federal regulations, EPA guidelines and Not-In-My-Back-Yard (NIMBY) activists have curbed the ability to refine additional quantities of crude.

EPA regulations on the quality and content of chemicals in gasoline, as well as emissions (the two are certainly connected), also causes a price distortion across the country. It is much cheaper to purchase gasoline in Texas (where distribution is close and regulations are minimal) than in California, which has its own fuel grades. With limited refineries having to produce a multitude of different fuel grades for the nation, the price is going to be greatest where the demand for the specific grade is smallest. For example, Texas uses minimal federal regulations regarding the fuel grade, which is also used by the majority of the United States, therefore refiners are able to produce much more of this fuel for a greater part of the country. This makes the overall cost of fuel lower for a more general grade. California, on the other hand, has a specific fuel grade that requires a refiner to allocate a resources to produce the fuel just for California. So the price is significantly higher.



Much of the current round of high gas prices occurred due to distribution issues. New EPA guidelines regarding the amount of ethanol mixed with gasoline caused many filling stations to rush to meet the new regulations. Although there was plenty of supply of the new gasoline, distributing the new gasoline grades became the bottleneck. In parts of Texas and California there were filling stations that were resupplied in time and actually ran out of gasoline. This same phenomenon occurred during Hurricanes Katrina and Rita along the Gulf Coast when demand outstripped supply and infrastructure couldn't handle the amount of vehicles on the road. At that time it became impossible for gasoline trucks to reach filling stations.

Oil Companies

Oil companies are being investigated by a Senate panel for price gouging and tax payment. With record profits many people are upset that oil companies could make so much money.

Consider that the amount of investment into an oil field reaches billions of dollars. This includes renting the block to be drilled on from the U.S. Government, geological surveying of the block, engineering of the asset (rig) to produce the oil, pipelines to ship the oil back to the refineries, new drilling technologies to drill at record depths and all of the health, safety, security and environmental safeguards that have to be put in place.

The big oil companies spend several billion for one field alone and won't see their return for years after sanctioning a project. Consider that these companies generally have many projects ongoing at the same time in various regions of the world. Their risk is extremely great, particularly since many of the huge new Deepwater, record setting assets can't be insured because underwriters can't or won't insure them. If something were to happen to a two billion dollar asset, no one is coming to the rescue of the oil company to replace their loss.

Worldwide demand is up as a whole for oil as developing nations race to catch up to the West. As new technologies and fuel efficient vehicles, homes and appliances become available, the price of oil will fall (relative to inflation). When this happens the same record setting oil companies may again find themselves as they did in the Eighties: barely scratching a profit.

Be thankful that the oil companies can fund their own highly risky projects without loans from banks. They can use their own bankroll to do things that others wouldn't invest in. In the end we will get the gasoline that runs EVERYTHING in our nation, from delivery of groceries to supermarkets to driving to work or purchasing our goods from Wal-Mart. Oil reserves MUST be replaced so that we have oil for the future. The only way to do that is for the oil companies to spend heavily on new developments. These developments are record setting, never-been-done-before, cutting edge projects. The time, knowledge, expertise and equipment is often created specifically for these projects. That costs a lot of money. Billions of dollars.

Relief

If you want relief from high gas prices, write your congressman/woman. Tell them to repeal the federal gas tax. Tell them to ease restrictions on refineries and allow more to be built. Urge them to build or fund the building of mass transit systems for urban areas.

Of course, each of these have their own opportunity costs; as does every decision we make.

The Economist

Apparently the United States isn't as dependent on oil as we once were, although we're spending about a percentage more these days of our household income than we once were. Here's what The Economist has to say:

The high oil price is a result of old-fashioned demand and supply. China’s oil-hungry growth continues apace (the country lifted interest rates slightly on Thursday, in response) and America’s demand continues unabated. At the same time supplies are threatened by violence in Iraq, a row over nuclear ambitions in Iran, leftist nationalism in Latin America, instability in Nigeria and more. Many experts think $10-15 of the current price of oil is due to geopolitical worries. This week reports circulated that Hugo Chávez, the pugnacious left-wing president of Venezuela, is planning to raise taxes and royalties on foreign oil companies. This could be pushing his country closer to the outright nationalisation that some fear would hamper the effective exploitation of Venezuela’s 77 billion barrels of proven reserves, the largest outside the Middle East. Moreover, another leftist candidate is leading the race for the Mexican presidency, making some worry that Mexico’s nearly 15 billion barrels may end up similarly threatened. Yet the impact of high oil prices on America’s economy is not yet obvious. Though GDP growth fell to 1.7% in the fourth quarter of 2005, it still posted a respectable 3.5% for the year. The IMF’s latest World Economic Outlook projects a similar performance for 2006.

In the past three decades America’s economy has become much less dependent on oil. The country is consuming slightly more of it, but is doing so more efficiently. In 1980 America used a little over 17m barrels per day (bpd) to produce GDP worth $5.2 trillion (in 2000 dollars). By last year oil consumption reached 20.7m bpd, but GDP had more than doubled to $11.1 trillion. As for consumers, they are not especially dependent on petrol either. According to the Bureau of Economic Analysis, in 1970, Americans spent 3.4% of their consumer dollars on petrol and oil. By 1980 that rose to 5%. Yet in 2005, after a year of steadily appreciating oil prices, that number was 3.3%. Consumers are grumbling, however, because they remember happy days, as in 2002, when households spent a scant 2.2% of their income on fuel.

To summarize, politicians are on the prowl for a scape goat, Big Oil, production capacity is the bottle neck and there is plenty of oil to go around. The world is becoming more efficient with technologies, demand around the world is up, the race is on for alternative fuels, and Americans will have to get used to paying a bit more at the pump, at least for now. Just be glad we don't pay the ridiculous price many Europeans have to, because of government taxation.

Resources
Iran may ration gasoline as prices deplete budget
EPA Crude Types
Department of Energy Crude Types
The Economist

The National Review Online sees the Port Governance issue my way. That's nice to know!

Their article: Un-American

Islamophobia, not national security, is at the heart of the raging controversy on Capitol Hill over a United Arab Emirates-based company, Dubai Ports World, assuming ownership and management responsibilities at six major seaports in the United States. U.S. lawmakers might bristle at the thought of letting the UAE own and operate U.S. ports. After all, it was a citizen of the UAE, Marwan al Shehhi, who piloted United Airlines Flight 175 into the second World Trade Center tower, and it was through the banks of this country that the 9/11 attacks were partially financed. But their fiery rhetoric and threats of congressional action mask an increasingly patronizing racism fueled by illogical paranoia rooted in past events. Let's deal with what the UAE is now.

Simply put, the reaction to the Dubai deal is un-American.

My earlier post: NSO - Port Governance

General Motors General Motors has been in trouble for quite some time. Once the kings of the American car market, their share has dropped below 38%. The company is saturated with legacy pension costs, which it may offload to the government (i.e.. taxpayers), and it faces fierce competition from younger, healthier foreign companies.

Bankruptcy is looming for GM. There are apologists/excusionists who would like to see the government bail GM out, as has happened with the airline industry. This is a huge mistake.

Why is this a mistake? Because it is an unnatural intrusion into the free market system. Rather than creditors being able to divide up GM's assets to receive their own payment, the creditors are put on hold. Essentially GM gets to skip out on paying its debt. This can have huge implications for the creditor companies.

Next, unsaddled with debt, GM is now free to compete against companies that DO have to pay their debt. This is an unfair advantage.

Not having to pay creditors, though, will in no way improve GM's management structure or labor costs - which is the ROOT of the problem. It's sad to see so many workers laid off, but that's life.

For decades unions have surpassed their usefulness. There are many employees who are paid far more than their actual job is worth. We all want to get paid more, but that doesn't mean we are going to get it. Higher labor costs simply drive up the price of commodities, which in turn drives inflation, thusly increasing everyone's cost of living, then salaries go up and the cycle continues. Why the long run-on sentence? To demonstrate the effect unions, and ultimately GM has on the economy.

Economics teaches supply and demand. The principle of supply and demand is undermined with government intervention. Rather than having a natural equilibrium where supply meets demand, the government disrupts the model and forces disequilibrium. In effect either a shortage or an over-supply of goods.

If GM is going bankrupt, then so be it. Its employees, assets and market share will be taken over by the healthier companies out there. Trust me, it won't be the end of the world. They don't deserve bankruptcy protection.

My main beef is with the following article: The Tragedy of General Motors

(FORTUNE Magazine) - It is the instinctive wish of most American businesspeople, even those unlikely to be directly affected, that General Motors not go bankrupt. True, some people will say, "They had it coming to them." But the majority will be more practical, telling themselves that the company is so central to the economy, so sprawling in its commercial reach, that bankruptcy--"going into chapter," as restructuring folks say--is ominous almost beyond contemplation. And yet the evidence points, with increasing certitude, to bankruptcy. Rick Wagoner, GM's 53-year-old chairman and CEO, may say, as he did in a January interview with FORTUNE in his aerie of an office high above the Detroit River, "I know that things will turn around." But he cannot know that. He may not, deep down, even believe it himself.

Bankruptcy isn't going to occur next week. But down the road--say, past 2006 --its probability is high. That point of view seems supported by the opinions of the bond-rating agencies, which troubled companies must keep informed and which become virtual insiders in their understanding of a company's finances and operations. In recent months both Moody's and Standard & Poor's have made increasingly grim statements, bald in their talk of bankruptcy and laden with doubts that GM (Research) can turn around its reeling North American auto operations, now reduced to an embarrassing market share of 26%.

I am often at odds with Fortune's take on matters. The last time I was this dissatisfied with it's opinion I blogged about it here: NSO - Bankruptcy is a Strategy? HUH???

Other news regarding GM:

GM Plant in Okla. Closes

Moody's Cuts GM Further into Junk

GM to invest $545M in Michigan plants

In November, GM announced it planned to close 12 plants and facilities and trim 30,000 hourly jobs in North America as it cut capacity in an effort to stem ongoing automotive losses. Several of the locations being hit by closure plans are in Michigan.

GM lost $8.6 billion in 2005 and in January it announced it was cutting the company dividend 50 percent, as well as cutting pay for officers and board members and trimming medical and retirement benefits for salaried retirees.

GM's fate: A Hail Mary

Their is a stink in the air over the buyout of P&O of London by UAE based Dubai Ports World. The stink is in regards to P&O's management of six major U.S. ports. U.S. lawmakers and several firms, believe that U.S. security will be put at risk.

This seems to be a knee jerk reaction and is rather Arabphobic. The UAE is one of the most moderate Middle Eastern nations. This doesn't mean that their aren't risks, but what changes are really going to occur?

In most buyouts the same staff (at the lower echelons) stays in place, perhaps with new policies and procedures. The Department of Homeland Security and U.S. Coast Guard will still have oversight. Security risks will remain unchanged. After all, if terrorists want to smuggle something into the country in a container ship, what's to stop them? Having an executive running the company isn't going to mitigate the risk of a search from Immigrations and Customs Enforcement.

Bush is right to Veto any protectionist legislature.

Bush Says He Will Veto Any Bill to Stop UAE Port Deal

In a rare threat to use his veto power, President Bush said Tuesday he will stop any legislation that attempts to prevent the purchase by a United Arab Emirates-owned firm of the Peninsular and Oriental Steam Navigation Co., which runs six major U.S. ports.

Breaking a gaping silence from the administration in the debate about the purchase by Dubai Ports World of London-based P&O, Bush said the deal should go forward and won't jeopardize U.S. security.

Firm Sues Over UAE Port Plan

New Nigerian strife raises uncertainties There has been a lot of activity with Nigerian rebel groups kidnapping oil workers and sabotaging pipelines. What does this mean to you? An Increase in fuel prices.

The Movement for the Emancipation of the Niger Delta has kidnapped oil workers — most recently nine Willbros employees, including three Americans — sabotaged pipelines and hobbled the flow of crude from Africa's top exporting nation.

Nigeria Militants Won't Release Hostages

Nigeria oil unions rule out strikes over Delta attacks

Nigeria: Militants blow up another oil boat

Threat Watch - Nigeria's Oil War

The British Medical Journal published a study conducted in Melbourne, Australia regarding the coverage and subsequent loss of teaspoons in the work place.

Thanks to Didier for sending me the link.

Below is the study's abstract:

Objectives To determine the overall rate of loss of workplace teaspoons and whether attrition and displacement are correlated with the relative value of the teaspoons or type of tearoom.

Design Longitudinal cohort study.

Setting Research institute employing about 140 people.

Subjects 70 discreetly numbered teaspoons placed in tearooms around the institute and observed weekly over five months.

Main outcome measures Incidence of teaspoon loss per 100 teaspoon years and teaspoon half life.

Results 56 (80%) of the 70 teaspoons disappeared during the study. The half life of the teaspoons was 81 days. The half life of teaspoons in communal tearooms (42 days) was significantly shorter than for those in rooms associated with particular research groups (77 days). The rate of loss was not influenced by the teaspoons' value. The incidence of teaspoon loss over the period of observation was 360.62 per 100 teaspoon years. At this rate, an estimated 250 teaspoons would need to be purchased annually to maintain a practical institute-wide population of 70 teaspoons.

Conclusions The loss of workplace teaspoons was rapid, showing that their availability, and hence office culture in general, is constantly threatened.

Resources
BMJ Study

From the National Review:

empirical data bears out the fact that tax cuts (in this case the broad tax cuts of May 2003) can lead to increases in tax receipts.

The Laffer Curve as defined by the Economist

Legend has it that in November 1974 Arthur Laffer, a young economist, drew a curve on a napkin in a Washington bar, linking AVERAGE tax rates to total tax revenue. Initially, higher tax rates would increase revenue, but at some point further increases in tax rates would cause revenue to fall, for instance by discouraging people from working. The curve became an icon of supply-side ECONOMICS. Some economists said that it proved that most governments could raise more revenue by cutting tax rates, an argument that was often cited in the 1980s by the tax-cutting governments of Ronald Reagan and Margaret Thatcher. Other economists reckoned that most countries were still at a point on the curve at which raising tax rates would increase revenue. The lack of empirical evidence meant that nobody could really be sure where the United States and other countries were on the Laffer curve. However, after the Reagan administration cut tax rates revenue fell at first. American tax rates were already low compared with some countries, especially in continental Europe, and it remains possible that these countries are at a point on the Laffer curve where cutting tax rates would pay.

Resources
National Review Article
Economist
Economist.com Definition: Laffer Curve

The NY Times published an article by By STEPHEN J. DUBNER and STEVEN D. LEVITT titled The Economy of Desire.

These economists are amazing. They've published a book titled Freakonomics and maintain a blog. I highly recommend reading the article and checking out their site. Below is a quote from the article:

What is a price?

Unless you're an economist, you probably think of a price as simply the amount you pay for a given thing - the number of dollars you surrender for, let's say, Sunday brunch at your favorite neighborhood restaurant. But to an economist, price is a much broader concept. The 20 minutes you spend waiting for a table is part of the price. So, too, is any nutritional downside of the meal itself: a cheeseburger, as the economist Kevin Murphy has calculated, costs $2.50 more than a salad in long-term health implications. There are moral and social costs to tally as well - for instance, the look of scorn delivered by your vegan dining partner as you order the burger. While the restaurant's menu may list the price of the cheeseburger at $7.95, that is clearly just the beginning.

The most fundamental rule of economics is that a rise in price leads to less quantity demanded. This holds true for a restaurant meal, a real-estate deal, a college education or just about anything else you can think of. When the price of an item rises, you buy less of it (which is not to say, of course, that you want less of it).

But what about sex? Sex, that most irrational of human pursuits, couldn't possibly respond to rational price theory, could it?

Outside of a few obvious situations, we generally don't think about sex in terms of prices. Prostitution is one such situation; courtship is another: certain men seem to consider an expensive dinner a prudent investment in pursuit of a sexual dividend.

But how might price changes affect sexual behavior? And might those changes have something to tell us about the nature of sex itself?

If you're interested in reading the rest of the article, check out the resources below.

Resources
NY Times: The Economy of Desire
Freakonomics: What Price Sex?
B&N: Freakonomics
Freakonomics

Tuesdat night I was at Slick Willie's (Westheimer @ Dairy Ashford) with a couple of friends. All of the tables had a notice that read:

"Free* Pool Mondays" : *With Equal Purchase of food, beverage or merchandise"

So immediately we notice that there is a caveat attached to the word "Free." Generally it is safe to assume that the word "Free" associated with a footnote means that the word "Free" as used in the aforementioned reference is not used as defined in the dictionary. Rather the word is REDEFINED by the accompanied footnote. The word "Free" is used in place of a well thought out 'banner' word, demonstrating cunning deceit rather than a well intentioned promotional tool.

On with the analysis. I'm working on a blog post with Yeager that takes Slick's statement and applies real world numbers to a model. For example, at what cost (of food, beverage, and/or merchandise) per hour of pool (depending on number of persons and average consumption of food/beverage) will you really get the pool free? In our first pass at a model, we found that two people, who drink two beers at $3 a beer, for an hour whilst playing pool at a cost of $12 an hour, will indeed receive a free hour of pool because the pool and cost of beverages are equal (at $12 each). At what point, though will it be cheaper to just buy the pool and not try to outpace yourself with the food and beverage?

I'll let you know the analyses proceeds, but the point of this rant is that one LITTLE asterisks behind the word "free" spawned a conscious curiosity regarding the use of the word free and its application to this promotional marketing tool.

Oh, and the caveat contained a caveat: "Only at Participating Slick Willie's."

Resources
Slick Willie's
Map This Location

Can Reliant really save three to five million a year by outsourcing to Accenture? What are the initial costs to shift the jobs? What functions will Accenture take over? Someone's still doing the job, so how many Accenture employees will be dedicated to the Reliant account?

I know many of you enjoy managerialisms. I was naturally intrigued by the Houston Chronicle blog post, so I went to Accenture's site. This is what I read:

Distinctive capabilities are critical to lasting competitive advantage." -Outlook Journal

Riiiiiiiiiiiiight. So you have to do something to make money, huh? Or breathing is essential to life? I guess this is a 'power-quote'? I'm not familiar with the Outlook Journal, but now I feel obligated to investigate their organization. Perhaps another time.

Back to Accenture; this is how they describe themselves as a company:

Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilize the right people, skills, and technologies to help clients improve their performance.

Where to begin? First of all I'm glad an outsourcing firm collaborates with their clients!!! Imagine the pandamonium if Accenture snubbed the client and ignored their requests!

If they have the global deep expert resources, then who do they have to mobilize? Are they going to call up their reserves for deployment? I hope that doesn't leave other deep industries without their global resource expertise. Perhaps Accenture needs a BRAC (Base Realignment And Closure) audit?

They're "committed to delivering innovation"… That's like ABB's line about being "results driven". What's wrong with being a company that's not really committed to doing their job? "Acme is interested in delivering bricks, but we're not going to commit to anything just yet."

And high performance governments??? Maybe the UN should look into Accenture. The UN could use help committing themselves to delivering SOMETHING.

Then there's a quote in the corner of the page:

High performers outperform their competitors in organic growth.

WTF does that mean??? Isn't their "organic growth" intrinsic to their high performance?

There's even a link to learn "how the company remains committed to delivering innovation" in the company overiew. Yeaaaaaah.

Oh, and you should Google the Outlook Journal… Is the OJ an insert from the NYT, Forbes, Fortune or the WSJ? WTF? The top Google search result returns pages on Microsoft Outlook's Journal tool. Bizarre!

I've come back to my initial question: Can Reliant really save three to five million a year by outsourcing to Accenture?

Resources
Houston Chronicle blog post
Accenture
BRAC
Reliant
Search Result

Price Gouging in the Public Interest
by Doug Bandow
Doug Bandow is a Senior Fellow at the Cato Institute and a former Special Assistant to President Ronald Reagan.
Gasoline costs too much in almost everyone's opinion. President George W. Bush is urging Americans to drive less. Other politicians want government to push prices down.

Sen. Maria Cantwell, D-Wash., suggests giving the president the power to set retail gas prices. Sen. Byron L. Dorgan, D-N.D., complains that companies are "profiting in an extraordinary way at the expense of the American consumer" and has proposed a windfall profits tax.

Eight governors have requested a federal probe of gasoline pricing. Hawaii has imposed controls on wholesale prices. Other states might follow suit.

"We really need to step back and recognize that, like electricity, gasoline is too vital to the economy to be left in the hands of these corporations that have been gouging us," argues Doug Heller of the misnamed Foundation for Taxpayer and Consumer Rights in Los Angeles.

Price controls have been around as long as prices. And price controls have had disastrous effects for just as long.

Heller's argument makes no sense. After all, if ExxonMobil and Royal Dutch Shell could simply conspire to push up prices, they would have done so before now.

Gasoline prices have recently increased for a number of reasons. One is growing demand. The emergence of China and secondarily India as industrial powers is transforming the global market.

Another reason prices are high - and have spiked in response to the damage inflicted by Hurricanes Katrina and Rita - is pervasive regulation. Most important, it has become extraordinarily difficult to build oil refineries.

Both the number of refineries and their total capacity is lower today than in 1980. The last new refinery opened in 1976, even though gasoline consumption has jumped 25 percent since then.

Today, the U.S. must import 10 percent of its gasoline as well as 57 percent of its oil. Thus, even the temporary closure of several refineries by Hurricane Katrina and Hurricane Rita sharply inflated pump prices.

Environmental regulations, backed by activists who mix demonstrations and lawsuits, create delays and inflate costs.
One Arizona project begun a decade ago is still at least five years away from completion.

Over the last 10 years the industry has invested $47 billion to comply with new environmental controls rather than construct new capacity, according to the American Petroleum Institute. Compliance with sulfur standards alone cost about $20 billion.

Although the recent energy bill included provisions intended to spur refinery construction, it added a new ethanol mandate - a political payoff to agricultural interests - which will force expensive technical adaptations at refineries. Air pollution rules require different gasoline formulations for "nonattainment" areas, reducing economies of scale.

While consumers target gas stations with their ire, the bulk of recent price hikes have gone to refiners. In contrast, distributors, marketers, and retailers receive just a penny more than in 2004.

Even today, prices at the pump are constrained by local competition. If gas stations could charge as much as they desired, they would have been doing so already.

Government also pushes up prices through taxes, which average 42 cents a gallon nationally. In Hawaii, where the state government has imposed price controls, the combined state and federal tax is more than 50 cents.

High prices might be painful, but they are the most efficient way to distribute goods in short supply. Indeed, the industry attempts to spread gasoline as widely as possible. Wholesalers charge "over-allocation" fees to discourage any distributor from accumulating a disproportionate share of limited resources.

Quite simply: prices rise when supplies fall. That signals consumers to use less and sellers to supply more. Price controls short-circuit the adjustment process and intensify shortages.

That was the experience during the mid-1970s gas "crisis."

Citizens in the world's wealthiest country sat in gas lines because the federal government allocated supplies and restricted prices.

Only when newly inaugurated President Ronald Reagan lifted price controls did supplies jump and prices fall. Federal energy regulation was a public policy disaster that should never be repeated.

The United States also imposed a windfall profits tax between 1980 and 1987. Alas, the WPT discouraged companies from making potentially risky investments.

In 1990 the Congressional Research Service concluded: "The WPT reduced domestic oil production between 3 percent and 6 percent, and increased oil imports from between 8 percent and 16 percent." Replaying the old WPT would replay its effect, helping foreign producers and hurting domestic consumers.

As Hurricanes Katrina and Rita demonstrated, natural disasters can create severe economic dislocations. Adjustments almost always are difficult.

But government intervention always exacerbates the pain. If gasoline seems expensive today, just try turning the energy market over to government.

This article appeared on TownHall.com on October 24, 2005.


Resources

Game Theory as defined by Merriam-Webster’s Dictionary is

: the analysis of a situation involving conflicting interests (as in business or military strategy) in terms of gains and losses among opposing players

Below is an article regarding the Nobel Economics award to Game Theorists and the application of the theory in real situations. This article appeared in Fortune.

Is Game Theory Real? Ask Bill Belichick's Patriots.
It worked in the Cold War-and, of course, at the poker table.
By Geoffrey Colvin

If game theory sounds too rarefied to interest you, consider a small story about one of the discipline's geniuses, Thomas Schelling, who just received the Nobel Prize in economics for his work in the field. When a bunch of undergraduates (including yours truly) showed up on the first day of his course at Harvard some years ago, Schelling started describing how demanding the class would be. Students began drifting from the room. He went into deeper detail about the extreme rigor and hard work he required. More students bolted. Finally, with only a few of us left sweating and terrified in our seats, he told us to relax: The tough talk was a ruse to get the class down to manageable size and make sure it included only the most dedicated students.

As it turned out, he did make us work hard—and we all came through it thinking the subject was vitally important and the professor was terrific.

I was glad to see the prize go to Schelling, 84 (and to Israeli mathematician Robert Aumann, 75), because game theory is way more valuable than most people realize. It's the basis of the most fascinating and important social science research now being conducted, with the clearest real-world applications. But the discipline has a big PR problem: "Game" and "theory" are major turnoff words to the hard-headed, practical people who could benefit from it most. So let's call it something else: deep strategy. For that's what it is. And the principles Schelling worked on in helping manage America's successful 45-year nuclear standoff with the Soviets are shaping some of today's most important events.

For example, Schelling stressed the "rationality of irrationality." Translation: You can vastly strengthen your position in an interdependent situation by persuading the other side that you're slightly nuts. If a hitchhiker pulls a gun on you, you step on the gas, head for a telephone pole, and tell him to throw the gun away or you both die. In today's world, a rational Kim Jong Il would never threaten to use nuclear weapons against the U.S. or its allies, since we have 10,000 nukes and could quickly turn North Korea into a smoking hole. But he does threaten it, and since he's apparently loony, we treat him extremely carefully.

In the business realm, the airline mechanics' union threatened to drive United and later Northwest into the telephone pole (a favorite union bumper sticker: full pay to the last day). Trouble is, the union doesn't have a reputation for being crazy enough—it has accepted pay cuts in the past—so the strategy hasn't worked. The airlines have faced the union down. By contrast, I've always thought Ted Turner benefits from the perception that he's off his rocker. Lots of people think he's nuts, but he's just nuts enough to have made himself a billionaire.

The Nobel committee cited Schelling for showing, among other things, "that a party can strengthen its position by overtly worsening its own options." Famous example: The Russians' fictional doomsday machine in Dr. Strangelove, a movie on which director Stanley Kubrick consulted with Schelling. The machine was a series of nuclear bombs that would go off automatically, destroying the world, if Russia were attacked. The key concept is that once it was turned on, the machine was out of the Russians' control.

That's a familiar idea in business. Every negotiator loves to say, "Hey, that issue is out of my hands!" Canny labor leaders will sometimes arrange a vote of the membership to hem in the positions they can take in negotiations. Just as irrationality can be rational, weakness can be strength.

Besides game theory's world-historical and business significance, it's worth noting, especially at this time of year, that it actually does apply to games. A scholarly paper by Berkeley economist David Romer showed that NFL coaches punt too often on fourth down. Patriots coach Bill Belichick, the league's most successful coach in recent years, read the paper and later stunned fans by running on fourth and one—successfully—in the AFC championship game two years ago. In baseball, a study by an economist and a mathematician examined why American League batters get beaned more often than National Leaguers (short answer: The designated-hitter rule leaves pitchers less afraid of retaliation). As poker has exploded in popularity, some of the new champs have been computer-savvy game theoreticians.

So all hail the Nobel committee for reminding us of the power and pervasiveness of game theo—er, deep strategy. At long last, it's time to get past the name and appreciate the science behind it. As the committee recognized, this stuff works.

Resources:
Fortune:  Article
Wikipedia: Entry
Merriam-Webster’s Dictionary:  Definition

Resources

Tom Barnett, a strategist, sees game theory as a nuissance rather than a help. He feels strongly against game theorists receiving the Nobel prize for economics. Read his post.

Who is this guy? Here's an excerpt from his website:

Thomas P.M. Barnett is a strategic planner who has worked in national security affairs since the end of the Cold War and has operated his own consulting practice (Barnett Consulting) since 1998. Recently, Tom founded a consulting partnership with two other outstanding individuals called The New Rule Sets Project LLC. The consultancy was acquired by Enterra Solutions, LLC. in August of 2005, with Dr. Barnett as Senior Managing Director.

Resources:
Tom Barnett's blog: post

Resources

Bankruptcy should never be described as a ‘strategic alternative’.  Aside from the fact that the following quote is full of managerialisms, the notion that bankruptcy, or more importantly poor governance, is an accepted practice is absolutely appalling.

Wilbur Ross well remembers the days when bankruptcy meant death. “When I started doing this, when a company went bankrupt, everyone would hang their heads in shame,” he recalls of the late 1970s. Now, says Ross, whose W.L. Ross & Co. recently bought and restructured much of the U.S. steel industry and is now preparing a similar assault on auto parts, bankruptcy has “lost its pejorative connotation and is an openly discussed strategic alternative.”

The bankruptcy protection for the airlines needs to stop.  Major companies that can’t turn a profit shouldn’t be floated by insurance and the government.  We end up picking up the tab through inflated costs leveraged by bailouts and ‘protection.’  

What is ‘protection’ anyway?  It’s the legal method of keeping creditors at bay.  Neat, so now one company doesn’t have to pay another?  I know assets of insolvent companies are liquidated and many other steps are taken to pay back loans, but it’s quite lame to let poor management continue to run these companies.

Natural supply and demand should actually force the poor and incompetent out of the picture.  

Resources:
Fortune: Three Cheers for Bankruptcy  

Resources

Rita's damage to sites severe
Storm knocked out 63 platforms, hit onshore too
By DAVID IVANOVICH
Copyright 2005 Houston Chronicle Washington Bureau

WASHINGTON - Hurricane Rita inflicted substantially more damage to offshore oil and gas facilities in the Gulf of Mexico than Katrina, the Interior Department said Tuesday.

Making matters worse, damage to onshore support facilities could hobble Gulf production for months.

"We've never seen the kind of devastation to our Gulf oil and gas production that we've witnessed this year," Interior Secretary Gale Norton said.

Some 2,900 of the Gulf's 4,000 oil and gas production platforms were in the paths of the two hurricanes.

Rita destroyed 63 platforms — including capsizing Chevron's deep-water Typhoon facility — as well as one jackup drilling rig.

Katrina took out 46 platforms and four drilling rigs.

Aside from Typhoon, the destroyed platforms were mostly older, "end of life" facilities that produced only about 1.5 percent of the oil and a mere 0.7 percent of the natural gas in the Gulf.

"We anticipate that most of these will never be rebuilt," Norton said of the older platforms.

The two hurricanes also tore 19 drilling rigs from their moorings and set them adrift, in some cases causing serious damage. That was also a problem seen last year during Hurricane Ivan.

Regulators aren't quite sure why those moorings are not holding. Officials plan to hold a conference in Washington on Nov. 17 to examine that problem more fully.

Interior and Coast Guard inspectors now are trying to figure out if a wayward drilling rig collided with the four-year-old Typhoon platform and caused it to flip over.

'We don't know'
"When you look at all the platforms that were in the path of both hurricanes and their size and the damage they sustained, not one of them was capsized," noted Johnnie Burton, director of the U.S. Minerals Management Service. "This was a fairly sizable platform, and there is no reason to think that the wind was strong enough to capsize it.

"So we are looking at it. We are investigating. We don't know. Maybe it was the wind. But common sense tells us that something else may have happened."

Rammed by Max Smith?
Chevron officials say the Typhoon lost its own moorings and moved off its production site. An industry publication reported that Noble Corporation's Max Smith drilling rig was blown off location and rammed Typhoon.

Noble officials, in a prepared statement issued last week, called that report erroneous, saying the Max Smith passed about 2.5 miles to the south of Typhoon's "fixed" position.

Chevron officials are conducting their own probe.

"We don't know what happened to it," Chevron spokesman Mickey Driver said.

While offshore crews are busily trying to make repairs, production is recovering much more slowly after Rita than it had after Ivan and even Katrina.

Slow recovery
As of Tuesday afternoon, nearly 90 percent of the typically daily oil output and 72 percent of the natural gas production remained shut in, the MMS reported.

In part, that's because so many offshore workers were forced to evacuate and many were left homeless.

Shore bases that typically supply offshore facilities were ravaged by the storms. Pipelines must be carefully inspected to ensure they weren't damaged by the dragging anchors of wandering rigs.

And many of the onshore oil terminals and gas processing plants that otherwise would receive production from the Gulf were damaged.

Indeed, 21 gas processing plants are still out of commission, the Energy Department reported Tuesday. While many lack electricity or gas supplies, 11 of those facilities sustained damage from the storms.

Onshore damage
In fact, as much as 30 percent of the offshore production may be shut in because of damage to onshore facilities.

And many will remain shuttered for "several months," Norton said. Regulators were heartened that no wellheads appear to have leaked, although there were onshore oil spills, particularly from a ruptured tank at a Murphy Oil refinery that sent oil into a neighborhood, Norton said.

Officials believe this year's two hurricanes caused less damage to undersea pipelines than Ivan, which ripped up pipelines during a huge mudslide at the mouth of the Mississippi River.

Resources

The Governor of Montana wrote an op-ed piece in the New York Times today explaining his state’s abundant coal supply and why companies should produce synthetic fuel from that coal.

Apparently the biggest historical drawback to producing synfuel has been the cost: $35 a barrel.  That barrier came down last year.

The piece was interesting, although it must be considered that Montana has a third of all coal reserves in the U.S., so in a way the Governor was plugging his state’s natural resources.

It’ll be interesting to see if start ups go to Montana to produce synfuel.  The article argues it could lessen our dependency on foreign oil and ultimately drop the price of fuel.  I think only one or the other is possible.  If supply is increased then the price will drop.  However replacing foreign oil with synthetic will simply change where the supply is coming from, but not change the amount supplied to the U.S.

Resources:
NY Times Op-Ed Piece
Synfuel (widipedia)

Resources

The Dupuy Institute is a military think tank based in Washington D.C.  The scope of work Dupuy engages in is war forecasting.  Apparently they are deadly accurate.

This article appeared in The Economist Technology Quarterly.

Here’s an excerpt:

IN DECEMBER 1990, 35 days before the outbreak of the Gulf war, an unassuming retired colonel appeared before the Armed Services Committee of America's House of Representatives and made a startling prediction. The Pentagon's casualty projections—that 20,000 to 30,000 coalition soldiers would be killed in the first two weeks of combat against the Iraqi army—were, he declared, completely wrong. Casualties would, he said, still be less than 6,000 after a month of hostilities. Military officials had also projected that the war would take at least six months, including several months of fighting on the ground. That estimate was also wide of the mark, said the former colonel. The conflict would last less than two months, with the ground war taking just 10 to 14 days.

Operation Desert Storm began on January 17th with an aerial bombardment. President George Bush senior declared victory 43 days later. Fewer than 1,400 coalition troops had been killed or wounded, and the ground-war phase had lasted five days. The forecaster, a military historian called Trevor Dupuy, had been strikingly accurate. How had he managed to outperform the Pentagon itself in predicting the outcome of the conflict?

His secret weapon was a piece of software called the Tactical Numerical Deterministic Model, or TNDM, designed by the Dupuy Institute, an unusual military think-tank based near Washington, DC. It was the result of collaboration between computer programmers, mathematicians, weapons experts, military historians, retired generals and combat veterans. But was the result a fluke, or was the TNDM always so accurate?

Bosnia was its next big test. In November 1995, General Wesley Clark asked the Dupuy Institute to project casualty scenarios for NATO's impending peacekeeping mission, Operation Joint Endeavour. The resulting “Bosnia Casualty Estimate Study”, prepared using results from the TNDM, stated that there was a 50% chance that no more than 17 peacekeepers would be killed in the first year. A year later, six had died—and the Dupuy Institute's reputation had been established.

Resources

The Associated Press has a story this morning, which I read through the Houston Chronicle, acknowledging that news consumers have changed the way some surfers collect their information.

The story touches on news collecting sites that bring all the news to consumers through topics: services provided by topix and google.The story also covers RSS feeds.

I've enjoyed messing with RSS feeds ever since I've come across them.I even developed a news aggregator in MS Access, but it is only good as a desktop client.I'm still developing the web version, which must integrate with posting to my blog; but I digress.

RSS is really interesting and if you enjoy reading news from a wide variety of sources I suggest you look into the technology.

Resources

This is an article from the Economist.

I've included the beginning of the article below, but you must jump over to the economist's site to read it in its entirety:

Monkeys show the same “irrational” aversion to risks as humans

ECONOMISTS often like to speak of Homo economicus—rational economic man. In practice, human economic behaviour is not quite as rational as the relentless logic of theoretical economics suggests it ought to be. When buying things in a straight exchange of money for goods, people often respond to changes in price in exactly the way that theoretical economics predicts. But when faced with an exchange whose outcome is predictable only on average, most people prefer to avoid the risk of making a loss than to take the chance of making a gain in circumstances when the average expected outcome of the two actions would be the same.

Continue reading this article

Resources

The Supreme Court of the United States declared today that local governments are within their rights to seize PRIVATE property for non-public use... ie. to sell to private developers.

The AP reports.

ARE YOU SERIOUS??? The government can take PRIVATE land and give it to a developer??? I thought this was America?! The U.S. constitution provides that the government may take land with just compensation for PUBLIC USE ONLY!!!

Seriously, I am extremely outraged. The decision rendered today completely trumps the constitution and walks all over our rights as citizens.

Write your Representatives today.

Resources

An article in the Economist argues that regulators should review how telecoms and networks are treated… as in treat all equally, regardless of the type of infrastructure.

Over the past ten years the “Baby Bells” have been inching in on cable companies as the “Time Warners” and “Comcasts” have encroached on the telecoms.

As an example, the following are my options for broadband internet, television programming and telephone service:

Time Warner:
- Cable (television
- Road Runner (broadband internet)
- Digital phone (unlimited local and long distance)

SBC:
- Local calling
- Long distance calling
- Cingular cellular service
- SBC Yahoo DSL (broadband internet)
- Dish Network Satellite

Allegedly SBC is poised to sell “on-demand” television programming. It may be several years before such service is deployed, but it would certainly signal a shift in traditional services offered by the telecom.

Time Warner is itself in the market to provide cellular service to its cable customers, at least reported in this Consumer Affairs article.

The greatest winner of the war between telecoms is the consumers. As the giants battle we will see the prices for various services plummet. The telecoms infrastructure will grow, inefficiencies weeded out, and new features laid upon us.

Before we get ahead of ourselves, though, there should be a certain level of deregulation for the industries. There is a large example of technology and society moving far beyond an outdated law… as appears the case with the phone companies and cable providers. Two decades ago the two were considered completely separate companies, providing goods and services in two completely independent industries. Alas, today they are competitors using different types of network infrastructures, but both are trying to sell the same goods and services. It is with this recognition that deregulation of currents statutes be enacted, and then on a level playing field rules and laws enacted equally upon the competing giants.

Already in Texas the very idea of deregulating for competition is dead on arrival. The Texas Legislature had an opportunity to allow SBC a state franchise for selling television spots. As it stands now, SBC must negotiate a franchise with EACH city before it can broadcast in that market. Apparently this franchising can take up to 18 months. By providing a state franchise, the barriers to entry in this industry would have been greatly reduced.

Of course the Texas Cable & Telecommunications Association is happy that SBC did not get the state franchise it was seeking. But the irony is that bureaucratic nonsense could have been repealed by the Texas Legislature for both the cable and phone companies. Rather than passing a bill that gives SBC a pass from having to negotiate at the municipal level, it should have repealed the laws that require the cable companies to do so.

Perhaps I don’t appreciate the full complexity of the issue. What I do know is that relaxed regulation will spur competition, which will lead to lower prices and greater services provided to us… not to mention that it will further spur technology.

Either way I already have broadband cable internet and use Vonage VoIP for my home telephone service.


Additional resources:
Economist - article
Time Warner
SBC
Consumer Affairs article
Vonage
hearusnow.org on the SBC – ATT merger
pff.org - Video Choice (PDF)
CNET news - Telcos, cable companies face off over TV Franchises
Texas Cable & Telecommunications Association

Resources