Sunday, October 14, 2007

Are oil futures nonsensical? What happened to arbitrage?

I was wondering today what the futures market says about the price of oil. I was surprised by the result. NYMEX is the traditional place to trade ail futures; the price is roughly $74.60 for the next 8 years (I thought 84 months is the trading limit, so I don't know how they get 96 months)
NYMEX.com: Light Sweet Crude Oil: "Dec 2015 74.81"
I would personally be quite surprised if oil were selling for less than US $100 a barrel in 2015. That would require either a stunning rise in the relative value of the US dollar, the economic collapse of China and India or Europe, or a technology or social breakthrough capable of reducing world oil demand by about 30% prior to 2025. Either that, or we make amazing oil discoveries that push "peak oil" day beyond my personal life expectancy [1].

Or maybe the futures market is predicting we'll really take global warming seriously, and create one hell of a carbon tax.

So maybe it's possible, but it sure seems unlikely. It seems even more unlikely that we'll remain at $75 US a barrel in five years; all of the "radical impacts" I've listed are particularly unlikely in that time frame.

Whatever happened to arbitrage?

So, how do I take $25K or so from the family kitty and make a derivatives bet that crude oil is over $100 a barrel on or after 11/1/2012?

[1] Which, by the way, would imply civilizational collapse from extreme global warming scenarios.

PS. I suspect this may be relevant.

Update: I fixed some arithmetic errors.

The Good Americans and the meaning of silence - Frank Rich

Emily tells me Frank Rich is not reading Gordon's Notes. After all, I wrote "Torture and the end of the American Exception" only 10 days ago, and Rich was probably working on today's column before that.

Actually, I really don't think he's reading GN. It's simply synchronicity; the meme is in play. It's past time to stop blaming only Cheney and Bush, though they deserve historic shame (Thank you Mr. Carter).

The truth is, America's worst enemy is not Dick Cheney, Iran, what's left of al Qaeda, or Islamic fundamentalism -- it's the our own worst selves. We've failed the American Idea.

Here's Frank Rich. Emphases mine. The "Good Germans", it's important to know, were those who looked away, who chose to remain silent even before it was dangerous to speak.
The ‘Good Germans’ Among Us - New York Times - Frank Rich Oct 14, 2007

“BUSH lies” doesn’t cut it anymore. It’s time to confront the darker reality that we are lying to ourselves.

Ten days ago The Times unearthed yet another round of secret Department of Justice memos countenancing torture. President Bush gave his standard response: “This government does not torture people.” Of course, it all depends on what the meaning of “torture” is. The whole point of these memos is to repeatedly recalibrate the definition so Mr. Bush can keep pleading innocent.

By any legal standards except those rubber-stamped by Alberto Gonzales, we are practicing torture, and we have known we are doing so ever since photographic proof emerged from Abu Ghraib more than three years ago. As Andrew Sullivan, once a Bush cheerleader, observed last weekend in The Sunday Times of London, America’s “enhanced interrogation” techniques have a grotesque provenance: “Verschärfte Vernehmung”, enhanced or intensified interrogation, was the exact term innovated by the Gestapo to describe what became known as the ‘third degree.’ It left no marks. It included hypothermia, stress positions and long-time sleep deprivation.”...

... We can continue to blame the Bush administration for the horrors of Iraq — and should. Paul Bremer, our post-invasion viceroy and the recipient of a Presidential Medal of Freedom for his efforts, issued the order that allows contractors to elude Iraqi law, a folly second only to his disbanding of the Iraqi Army. But we must also examine our own responsibility for the hideous acts committed in our name in a war where we have now fought longer than we did in the one that put Verschärfte Vernehmung on the map.

I have always maintained that the American public was the least culpable of the players during the run-up to Iraq. The war was sold by a brilliant and fear-fueled White House propaganda campaign designed to stampede a nation still shellshocked by 9/11. Both Congress and the press — the powerful institutions that should have provided the checks, balances and due diligence of the administration’s case — failed to do their job. Had they done so, more Americans might have raised more objections. This perfect storm of democratic failure began at the top.

As the war has dragged on, it is hard to give Americans en masse a pass. We are too slow to notice, let alone protest, the calamities that have followed the original sin...

.. the administration also invited our passive complicity by requiring no shared sacrifice. A country that knows there’s no such thing as a free lunch was all too easily persuaded there could be a free war.

Instead of taxing us for Iraq, the White House bought us off with tax cuts. Instead of mobilizing the needed troops, it kept a draft off the table by quietly purchasing its auxiliary army of contractors to finesse the overstretched military’s holes. With the war’s entire weight falling on a small voluntary force, amounting to less than 1 percent of the population, the rest of us were free to look the other way at whatever went down in Iraq...

... Our moral trajectory over the Bush years could not be better dramatized than it was by a reunion of an elite group of two dozen World War II veterans in Washington this month. They were participants in a top-secret operation to interrogate some 4,000 Nazi prisoners of war. Until now, they have kept silent, but America’s recent record prompted them to talk to The Washington Post.

“We got more information out of a German general with a game of chess or Ping-Pong than they do today, with their torture,” said Henry Kolm, 90, an M.I.T. physicist whose interrogation of Rudolf Hess, Hitler’s deputy, took place over a chessboard. George Frenkel, 87, recalled that he “never laid hands on anyone” in his many interrogations, adding, “I’m proud to say I never compromised my humanity.”

Our humanity has been compromised by those who use Gestapo tactics in our war. The longer we stand idly by while they do so, the more we resemble those “good Germans” who professed ignorance of their own Gestapo. It’s up to us to wake up our somnambulant Congress to challenge administration policy every day. Let the war’s last supporters filibuster all night if they want to. There is nothing left to lose except whatever remains of our country’s good name.
Verschärfte Vernehmung is pronounced something like "VERR-SHAREFF-TA VARE-NA-MOONG. With practice it rolls off the tongue.

There's a rule of thumb in net culture that any reference to Naziism indicates poor thinking. It's not a bad heuristic, but it has its limits. The unique feature of Naziism was not its brutality, its cruelty, its racism, its rhetoric, or its genocides -- those are common in human history. The unique feature of Naziism was that it emerged in a democratic society with a free press and universal literacy.

Germany of the 1930s was an incredibly stressed society. Modern America is taking the Verschärfte Vernehmung road amidst unprecedented wealth, freedom, and communication. We're fat (really fat) and happy -- yet we've become "Good Americans" anyway.

I think the religious right should be very careful about asking God for justice. Mercy might be wiser.

What if Clinton had been elected to a third term?

Amidst a Nobel-inspired burst of Bush-mourning, comes some speculation about what would have happened if the 22nd amendment hadn't applied to Clinton I. He'd have defeated Bush of course...
Daring Fireball

... Nice little video celebrating the 22nd Amendment to the U.S. Constitution, but I don’t get their “it’s a good thing because Bush can’t be elected to another term” angle. If it weren’t for the 22nd Amendment, Bush never would have been elected in the first place, because Bill Clinton would have cruised to a third term...
But then, in this alternate reality, what would have happened next? I think there's at least an even chance that the Clinton team would have prevented 9/11. On the other hand, by the end of the Clinton administration the American right was reaching levels of rage not seen since the 1930s -- or perhaps the American Civil War. It's forgotten now, but we had a burgeoning right wing indigenous terrorist movement in the late 1990s. It continued for a while after Bush won, but it had lost its focus. It was returning to a baseline state when 9/11 diverted wingnut rage overseas.

If Clinton had returned for a third term, or even if the Supreme Court had done its constitutional duty and "elected" Gore, there's a good chance we'd now be dealing with a local terrorist movement as well as an international one.

The irony is excessive.

Saturday, October 13, 2007

High altitude exertion will damage your brain

John Hawks quotes R. Douglas Fields:
John Hawks Anthropology Weblog : 2007 09

.... The body is remarkably resilient--does the brain recover from these mountaineering wounds? To answer this important question, the researchers re-examined the same climbers three years after the expedition, with no other high-altitude climbing intervening. In all cases, the brain damage was still evident on the second brain scan.

Still, Aconcagua is one of the world's highest mountains -- in the top 100. Mont Blanc, in the Alps, is less extreme. With a summit at 4810 meters, it is climbed each year by thousands of mountaineers who probably do not expect injury to their 'second favorite organ,' to use Woody Allen's nomenclature for the brain. Yet the researchers found that of seven climbers reaching the summit of Mount Blanc, two returned with enlarged VR spaces.
Hawks notes: "the altitude of Mont Blanc is substantially lower than the Everest base camp at 5500 meters."

Better imaging technologies now show that high altitude exertion will cause significant irreversible brain damage in many people, very high altitude extertion will damage all brains.

Damn.

Something nice about Apple - better repair service

I wrote recently about Apple's longterm but worsening quality problems. In a similar vein Business Week notes increasing service issues, including worsening ratings from Consumer Reports. So I was pleased to hear something encouraging about their service ...
So how will Apple maintain that golden rep for customer service?:

....Another improvement: while Apple used to send broken Macs to repair depots, they know do more than 70% of repairs in in-store repair shops. Even more impressive, 50% of them are fixed and returned to the customer on the same day, and 75% are back home on the second day....
About a year ago I mentioned I didn't go to Apple for repairs because of the rotten reputation of their centralized and outsourced repair services. Instead I used a local Apple dealer (not an Apple store, though we have two of those). It's great to hear they've moved repairs back to the local stores.

Carter on Cheney ... and Bush

I'm surprised I missed this. It didn't seem to get much attention. It's worth remembering that Jimmy Carter made "human rights" a primary theme of his presidency. I suspect the human rights agreements he signed with the USSR, which were much mocked at the time, had a greater impact than most remember now. (emphases mine)
Jimmy Carter: U.S. tortures prisoners | Chron.com - Houston Chronicle Oct 10, 2007

WASHINGTON — The U.S. tortures prisoners in violation of international law, former President Jimmy Carter said Wednesday, adding that President Bush makes up his own definition of torture.

"Our country for the first time in my life time has abandoned the basic principle of human rights," Carter said on CNN. "We've said that the Geneva Conventions do not apply to those people in Abu Ghraib prison and Guantanamo, and we've said we can torture prisoners and deprive them of an accusation of a crime."...

... In an interview that aired Wednesday on BBC, Carter ripped Vice President Dick Cheney as "a militant who avoided any service of his own in the military."

Carter went on to say Cheney has been "a disaster for our country. I think he's been overly persuasive on President George Bush."...

In the CNN interview, the Democratic former president disparaged the field of Republican presidential candidates.

"They all seem to be outdoing each other in who wants to go to war first with Iran, who wants to keep Guantanamo open longer and expand its capacity — things of that kind," Carter said...
Thank you Jimmy Carter, you are a great American.

Carter, by the way, won the Nobel in 2002. I expect he'll be in the audience when Gore speaks, I hope he takes that opportunity to speak again.

How bad can a Business Week article be?

Daring Fireball rips apart a Business Week article on Universal's music distribution plan. It's a good dissection, but it begs the question -- what kind of a deal did BW get for playing the fool? They can't be this stupid by accident -- can they?

Google's storage model: fixed price, more service

I was a paying Google/Picasa Web Album customer [1] when Google introduced its integrated Gmail + Web Album storage model. That meant I started off with 10GB combined, based on the $20 or so I was paying for my photo store. I've used 4.5 GB, or what was almost 50% a day or two ago.

Today I'm back at 34%: "4.5 GB (34%) of 13 GB". Google has increased the storage pool by 33% for the same price. I've read that this will be their model going forward -- keep the price the same, but increase the store.

I like that model.

Curiously, back when I just used Gmail, I'd typically run at 30-35% of capacity. I was using storage up at the same rate that Google was adding it. Now, in the combined model, I'm back in the same range.

Things will change if Google ever introduces an S3 type online data store, or an online backup service. Then I'll need to buy a lot more storage. Given their current problems [1] I don't expect to see that before the middle of 2008.

[1] This was back when their Web Album iPhoto plug-in actually worked. Apple's iLife 2008 broke it two months ago, and Google has been unable or unwilling to fix it -- or even to let users know it doesn't work any more. This fits with my recent Google Apps experience. I don't need the recent 'Google to Facebook exodus' meme to tell me Google is struggling.

Friday, October 12, 2007

When Google fails and an expert succeeds

We were looking for a cheap corporate videoconferencing solution that would allow us to share whiteboard, and even projected screens, in regular lighting conditions.

We knew that Apple's discontinued iSight webcam was good enough, but it's, you know, discontinued. In any case, we don't have Macs at the office (yet). We knew from recent research and past experience that no other consumer grade webcam would work. We also knew that firewire based camcorders (digital video cameras) had been known to work with OS X iChat AV and on XP wiht help from 3rd party software, but I thought firewire camcorders were extinct. USB camcorders, for unclear reasons, don't seem to have the ability to act as a webcam on XP, though there's some software that claims to support them on OS X.

I spent some time on Google and Amazon looking for a firewire consumer camcorder, but all the pages I found were old, and many of those were in decline. None of the camcorders they mentioned are sold now. I searched on Canon's web site and on Amazon, but I couldn't find anything. Even now that I know the Canon ZR 850 has what I need, I still can't find that information on the Canon website.

So a colleague asked at the Roseville Minnesota National Camera office. An expert there thought we had two choices, but he recommended a hands-on test.

We tested onsite with my MacBook and we found both of the old-fashioned camcorders worked with iChat AV. Next we'll buy one and test in an XP box with a firewire card and some XP add-on software. If it works we'll buy a few cameras for the team. We'll pay a premium for the cameras, but it's just payment for help we got -- and its corporate money.

Which brings me to the moral of the story. Even in these days, there are some seemingly easy questions Google can't answer. This wasn't a question about cancer therapy, all we needed to learn was if there were any firewire consumer camcorders left on the market. That seemingly simple question required a human expert [1] to answer.

[1] I now realize I probably could have asked in Apple's iChat AV forum, but we were thinking XP, not Mac. Even then, of course, we'd be relying on a human expert.

Do children watch television any more?

For reasons that have everything to do with expediency, and nothing to do with virtue, our children don't watch television - broadcast or cable. They do watch a total of 3 DVDs a week, and some of them are commercial-free extracts of television shows. Even in that case, Loony Tunes and the Flintstones beat Jimmy Neutron.

That's not all that remarkable.

The remarkable thing is the kids don't complain. We've been doing this for ten years; when we started I assumed the complaints would rise with school and peer pressure.

Nothing happened. As far as I can tell, there's no peer pressure.

It occurred to me that maybe children don't watch television any more. This 2001 UK study suggests that was so even then ...
British children prefer Internet surfing to watching TV - study - (2001)

....A recent survey of UK families by the Family Assurance Group has revealed that surfing the Internet is now seven times more popular among British children than watching television. The survey also showed that some young Internet users spend up to 70 hours per week online...
Our children do complain about their miserly screen-time allotments, and they're starting to complain about the lack of any game console.

So, quietly, without my taking note of it, children's television watching seems to going the way of smoking [1]. I wonder if they'll ever get the habit, or if television as I've known it [2] is going to be largely gone within 15 years.

I find the way these things leave to be at least as noteworthy as the way they arrive ....

[1] We smelled a cigarette at a park the other day. Everyone looked around startled, but it seemed to have wafted in from far away.
[2] Ok, sort of known it. I can't actually watch TV. Even the "science" and "history" shows give me hives. Some of the commercials aren't bad though.

Security outsourcing: The US needs its mercenaries

American security operations have, it is alleged, been outsourced to a far greater degree than most people imagine. Hillhouse claims we can no longer perform even covert operations without our mercenaries.

She doesn't describe why everyone from the FBI to the CIA to the NSA to the Army has been privatizing core operations. Surely it can't be to save money -- Blackwater operatives make far more than their military counterparts.

I suspect it's all about bypassing federal rules and American law. There are many operations the FBI cannot perform, but it can always outsource these operations to the less constrained private sector.

It will take many years of non-GOP rule to make a dent in their colossal mess.

Phil Nugent: the mind of GWB

The Phil Nugent Experience: Living the Dream is a medium-length, articulate, occasionally humorous, rant on the nature and character of GWB. Keep at hand for next November, when the media will be writing fond farewells to a "statesman". It will be an essential anti-emetic.

You can't use a smartphone on an airplane -- even in "airplane mode"

Current FAA regulations say you can't use a smartphone on an airplane -- even if the phone portion of the unit is disabled:
Travel: ATA Tries To Have You Arrested For Using Your iPhone In "Airplane Mode" - Consumerist

...Well, as much as ATA's attendents were dicks about it, they were right Buried in the Contract of Carriage under Rule 190 (Baggage) on page 37 it reads: '...Cellular phones, cellular phone games and pager use is prohibited after door closing and should remain off in flight. This includes cell phones equipped with airplane mode function.'...
This was taken from the comments section about a man threatened with arrest for using his iPhone, in airplane mode, on an airplane.

So if you have a separate phone and a PDA, you can turn off the phone and use the PDA. If you have a smartphone though, you must turn off the phone and the PDA both.

Except that mostly flight attendants ignore the rule and treat a phone that's not be an ear as though it were a generic device.

Until the plane lands, at with point if you have a separate phone and a PDA, you can turn on the phone but you must turn off the PDA. If you have a smartphone though, you can use both.

Does anyone think we have a problem here?

Not to mention that whenever I open a laptop on a plane, it shows me every laptop with an open WiFi peer-to-peer port on the plane. (I then remember to turn off my WiFi.)

Sigh.

The future of the POB?

The coalition that ruled America from 2000 to 2006 is, the world prays, in its death throes. The increasingly shattered GOP is now better known as the POB ...
Grasping Reality with Both Hands: Brad DeLong's Semi-Daily Journal

... As one of my ex-Republican friends put it yesterday: the left-wing Democrats are the party of Jefferson and Roosevelt, the right-wing Democrats are the party of Lincoln and Eisenhower, and today's Republicans are the party of Bozo...
So where is the POB going? More importantly, how many Americans belong to the POB?

I think we'd do ok with two years of Democrat control of the Presidency and the Congress, but in the longer run I'd like a GOP, not POB, controlled Senate.

Assuming that Clinton takes the White House [1], who will reform the POB? I don't like Guiliani, but I have to admit the man has a certain stubborn quality that might make him an effective POB reformer.

[1] I'm an Edwards supporter myself, but I'd throw a victory party for Clinton or Obama too.

Thank you Mr. Gore

Gore and UN panel win Nobel prize.