Wednesday, September 15, 2010
Tuesday, September 14, 2010
above: Dave is a tiny black dot on Northover with the massive Royal Group behind
Saturday, September 11, 2010
I thought a separate post on this would end a lengthy exchange in the comment section of an earlier post. The media and others are trying to convince me that I have much to fear over an increase in temperature. Lets see what the facts say.
Wednesday, September 08, 2010
Another summer contract came and went this year. Very early on, I dropped my camera in a river and so I only have a few pictures.
Another odd event involved a jet ranger helicopter we were using to fly the crew. I was
There's always a few amazing wildlife encounters among the hundreds of encounters during the summer. This summer I had a close look at a white grizzly bear. It walked right past me with caution but not fear. I flanked it for a little while making noise as I didn't want it to walk into the next block which had our crew working in it. Very stunning creature and quite rare. I really regretted losing my camera the week before! All together I saw a dozen different Grizzlies this summer which seems like quite a few. I was chatting with someone in town about seeing so many grizzlies, they asked how I knew they were different bears? I said they all looked as
Thursday, August 26, 2010
I can barely keep this blog up it seems but better late than never I guess! This spring I got the opportunity to work for Terra Erosion Control up in Syncrude's oil sands operations. After listening to so many talking heads discuss the pros and cons of the oil sands, it was pretty cool to not just see the whole place, but to be part of the operations. As usual with the work I tend to do, it's satisfying to be part of the "mending" end of things.
Sunday, May 16, 2010
These piles are just the worm castings. What was once table scraps is now very productive (and odorless) topsoil. We even had enough to share with some gardening friends from Calgary.
After scooping into piles, the worms scurry to the bottom of each pile where they can be easily collected and returned to their box.
As I'm off to the woods this weekend for a few months, I'll have to wait till I return to put the soil to use but I'm anxious to see how productive it is.
Wednesday, May 12, 2010
Ranchers in southern Alberta's Cardston County are in emergency mode after a barrage of spring snowstorms killed hundreds of cattle.
Losses are mounting as melting snow reveals calves that succumbed to the winter-like weather of the past couple of weeks, said Reeve Cam Francis.
The county declared itself a "disaster area" earlier this week, Francis said, noting that some ranchers lost more than 100 calvesRead more: http://www.calgaryherald.com/Snowstorms+kill+hundreds+cattle+Cardston+County+declares+emergency/3016251/story.html#ixzz0nmhdfSvM
Monday, May 10, 2010
To see recent malinvestment on a grand scale one only needs to look at the US housing market. Low interest rates for a decade caused a speculative housing boom. Currently there are 20 million empty units in the US! Thats enough vacancy to house Canada! That is the face of malinvestment! It's true that people produced those houses and got paid for their work but now, that capital is just locked up, unavailable and useless. It should be obvious that with that kind of surplus, housing prices must go down. Unfortunately, the government is trying to not let this happen by giving huge tax incentives and reduced interest rates to buy houses. This keeps prices artificially high. It's like a boat filling with water and the government is paying people to get more water in the boat! Given that the vacancy rate is still increasing, that several million houses will be foreclosed on this year, and Fannie will be closing the trough of free money, house prices can be assured to plummet. Anyone who used to build houses will have to find employment doing something else.
The jobs picture in the US is quite funny also. It was reported that some 200,000 jobs were recently created but unemployment rose to 9.9 percent from 9.7 percent. This number bears so little resemblance to actual unemployment it's hard to fathom why it is ever mentioned at all. It's as though temperatures were reported always half their true value! The real number is closer to 22 percent if you bother to include people who don't have a job. For economic stats without the statist political spin see shadowstats. It was started by a finance guy who needed real data for pricing models he built for corporations.
It's ironic that during the recession, minimum wage has risen nearly 40% over the last 3 years. So at a time when wage adjustment is absolutely necessary for economic recovery, the lowest wages are being artificially pushed in the opposite direction. It's difficult to find ways for Main Street to lower prices when wages are rising! Most people who work minimum wage are the young, usually in their first job. It should not surprise anyone then that this is the group with the highest unemployment currently. Disincentives to introductory-type jobs would seem under the circumstances to be exactly the opposite of what is needed.
Government mandates low interest rates and fuels bubbles and then place every obstacle to possible recovery in the way of the economic engine. Then it tries to convince people they are fixing the economy. Terrible.
It occurred to me this week how gullible most stock traders seem to be these days. Today it was announced that the Eurozone had put together nearly a trillion dollars to stabilize the Euro. Of this, 570 billion "comes from" the member nations, 75 billion from the European Central Bank and 300 billion from the IMF. Translation: a trillion dollars got made up.
This is a Ponzi scheme in it's simplest form. Borrowed money must come from savings which are derived from production. Without this saved production, one is forced to print more money if one wishes to spend it. Thats exactly where this money comes from. One fiat currency bails out another. Eventually the music stops and everyone scrambles for a chair. If I were American, I would be in disbelief that my own country, which is totally insolvent, is in any position to prop up a currency with no value. And yet, this news was enough to rally markets? I'm not sure how much of Canadian tax money ended up in this package, but if it's anything, it's too much.
Wednesday, May 05, 2010
Will Greece, Spain and Portugal prove to the world that "Austrian economics" explains economic crashes and that Keynesian policies causes them? Greece, rather than merely levy taxes on its citizens, issued bonds which are bought by European banks and then used as collateral to secure loans at the EU central bank. In this way, Greece gets to distribute currency dilution throughout Europe. It also gets to live beyond its means. No one seems to notice that the same mechanics are working within the US. Curiously, measures to control such practices were in place but ignored. All member countries agreed on deficit to GDP restrictions but these were then summarily ignored by everyone. Sadly, these problems can be soon expected with other fiat currencies controlled by clueless Keynesian central banks. I suspect this will be blamed on someone's "greed" and then Keynesianism can go on it's merry way destroying capital and currency. In the short term, the US dollar gets a lift as capital flies out of Europe. It's hard to know how much Euro panic is already priced in, but I would expect gold to do well this year as markets lose this year's gains.
I heard on the radio the other day someone lamenting that if we leave Afghanistan before "the job is done" our soldiers will have died for nothing. I wondered why giving Canadians a meaningful death was one of our mission parameters. Talk about mission creep!
SEC is investigating Goldman Sachs. Seems like early campaign hi jinx. If you bought a car without looking at it and then complained that it was a dud, you wouldn't get much sympathy let alone a court date. The fact that the seller was going to sell it to the scrapyard hardly relieves you of due diligence. As always, if you don't see that the market is a series of voluntary actions, you are doomed to never understand anything.
Arizona passes new law that formalizes how every poor Latino living near the border already gets treated. I'm not a fan of armed men demanding to see my identification, but outrage seems late to the party. Only a few citizens actually enjoyed the rights that are now being trampled. Frankly, I can don't see much difference in the erosion of liberty after this bill.
Glad to see the Canadian government resisting the urge to appear to be doing something lately. Flaherty seems deaf to the cries of the populist bank regulation cries. As unbelievable as it may seem, there have been calls to tax banking products to create a future bailout fund. It's hard for me to put into words how backwards a plan like this is. Many people research MP3 players more thoroughly than their banks and certainly more than their RRSPs. Why the apathy? Because their money is safe because the government insures it. What incentive is there to pull your money from your bank because they have risky practices? The availability of bailout money eventually makes it necessary to bailout a bank! It's kind of a moot point anyway since interest rates are so low that saving is non existent. Since there is no incentive to save, savings are replaced by speculations like the stock market and real estate. Which get over inflated and adjust sharply causing huge losses and the cycle goes on and on. Unfortunately, suppressed interest rates are popular with voters and thus we have institutionalized economic instability.
"Hide the Decline" climate alarmist Mann is being investigated by the Virginia attorney general. Since Mann's work was paid for by the state, the AG is looking at whether any of his actions violate those contracts. It should be an interesting test case that will at least shine a light on the level of professionalism applied to tax payer money. The Va University investigation was a joke, as was the UK parliament inquiry on the climategate emails. Unlike the other investigations to date, this investigation promises to have some testimony by experts with opinions different from the accused.
Monday, March 01, 2010
While Dr. Phil Jones prattles on about withholding code and data being “standard practice” The Royal Society of Chemistry has made a statement to the Parliamentary inquiry saying they as an organization support open data sharing. They now join the Institute of Physics in making a strong statement on the practices of UEA/CRU.
“…the benefits of scientific data being made available and thus open to scrutiny outweigh the perceived risks. To this end, scientific information should be made available on request as outlined in the Freedom of Information Act.”
Dr. Jones position of “standard practice” isn’t looking good. Not good at all.
Here’s the statement published on the UK parliament website:
Memorandum submitted by the Royal Society of Chemistry (CRU 42)
· It is essential that the public and all non-specialists remain truly confident in the scientific method to provide a sound scientific evidence-base on which strong decisions can be made. Correspondingly, it is in the interest of scientists and the public that society as a whole has an understanding and an appreciation of science.
· Access to reliable, up-to-date information is vital to advancing research and enabling the discovery or development of solutions to global issues. Sharing information is especially important in multi-disciplinary research, where progress is very much dependent on willing and effective communication between different speciality areas.
· The RSC firmly believes that the benefits of scientific data being made available and thus open to scrutiny outweigh the perceived risks. To this end, scientific information should be made available on request as outlined in the Freedom of Information Act.
1. The Royal Society of Chemistry (RSC) welcomes the opportunity to submit formal written evidence to the consultation on the disclosure of climate change data from the climatic research unit at the University of East Anglia.
2. The RSC is the UK Professional Body for chemical scientists and an international Learned Society for advancing the chemical sciences. Supported by a network of over 46,000 members worldwide and an internationally acclaimed publishing business, our activities span education and training, conferences and science policy, and the promotion of the chemical sciences to the public.
3. The document has been written from the perspective of the Royal Society of Chemistry. It is noteworthy that the University of East Anglia is a member of the RSC Partnership Scheme, however this in no way constitutes a conflict of interest. The RSC’s Royal Charter obliges it “to serve the public interest” by acting in an independent advisory capacity, and we would therefore be very happy for this submission to be put into the public domain.
· What are the implications of the disclosures for the integrity of scientific research?
4. The apparent resistance of researchers from the Climatic Research Unit (CRU) at the University of East Anglia (UEA) to disclose research data has been widely portrayed as an indication of a lack of integrity in scientific research. The true nature of science dictates that research is transparent and robust enough to survive scrutiny. A lack of willingness to disseminate scientific information may infer that the scientific results or methods used are not robust enough to face scrutiny, even if this conjecture is not well-founded. This has far-reaching consequences for the reputation of science as a whole, with the ability to undermine the public’s confidence in science.
5. It is essential that the public and all non-specialists remain truly confident in the scientific method to provide a sound scientific evidence-base on which strong decisions can be made. Correspondingly, it is in the interest of scientists and the public that society as a whole has an understanding and an appreciation of science. The RSC strongly supports the dissemination of chemical knowledge to foster and encourage the growth and application of the chemical sciences, as stated in its Royal Charter. This includes the dissemination of scientific knowledge as a means to advance public understanding and the learning of science.
6. The dissemination of scientific information is central to progressing scientific developments, as it is based on a sound knowledge of preceding research. Access to reliable, up-to-date information is vital to advancing research and enabling the discovery or development of solutions to global issues. Sharing information is especially important in multi-disciplinary research, where progress is very much dependent on willing and effective communication between different speciality areas.
7. It is also imperative that scientific information is made available to the wider community for scrutiny: the validity and essence of research relies upon its ability to stand up to review. In fact, advances in science frequently occur when the prevailing view is challenged by informed scepticism, this is fundamental to the scientific method and should be encouraged, even if controversial. The RSC firmly believes that the benefits of scientific data being made available and thus open to scrutiny outweigh the perceived risks. To this end, scientific information should be made available on request as outlined in the Freedom of Information Act. Furthermore, research needs to be presented in an accurate and reliable manner in the correct context in order to optimise this process. It may also be necessary to incorporate an independent auditing system into peer review with the ability to demand access to raw data sets to ensure best practices are being adhered to.
8. With the increased use of electronic media, access to information is widespread for scientists and the public alike. While this is a great benefit to society, the quality and validity of information available raises complex problems as valid scientific information and general opinion are presented side by side. The inability to decipher which information is legitimate, results in confusion, misinterpretation and may lead to mistrust of ’science’. There needs to be a clearer understanding in the public domain of what constitutes a reliable source, including an appreciation for the process that is used for disseminating research and the advantages of peer review.
9. The peer review system is central to the credibility of science: its purpose to prevent the dissemination of unwarranted claims and unacceptable interpretations. Formally published scientific research is subject to this authoritative process whereby a community of qualified, impartial experts examine the information and possess the ability to prevent publication. Authors generally protect their data until it has been peer-reviewed and published in a formal publication due to the competitive nature of research.
10. The issue of misinformation in the public domain must also be tackled. Just as the scientific community must be open with regard to their evidence base, those who disagree must also provide a clear and verifiable backing for their argument, if they wish their opinions to be given weight. When disagreements occur, the validity of the analysis must be established before credence can be given to any opinion. Increased understanding of the process of scientific research, firstly in the government, but also within the media and general public, is vital in order to foster a more open sharing of information.
11. Support from the scientific community is needed to provide context and to explain the process by which conclusions are reached. Encouraging scientists to openly engage with the public can only be achieved if researchers are given the necessary backing in the face of any unfounded arguments against their work. This support must come from the highest levels, sending out a strong message on the importance of scientific methodology and research and promoting open sharing of information between scientists and the wider community.
· Are the terms of reference and scope of the Independent Review announced on 3 December 2009 by UEA adequate?
12. The terms of reference and scope of the independent review are adequate, although some wider reaching aspects must also be examined. The effect on other researchers working in this area such as independent researchers, as well as those collaborating with CRU, should be explored. The impact of this incident on the public perception of the CRU and UEA as a whole should also be considered as a measuring stick for the implications of such actions in the public domain. The manner in which the findings from the items set out are interpreted and applied will determine their value.
13. As has been set out in the review, it is necessary to investigate the email exchanges which were discovered along with other relevant CRU information to establish whether data have been manipulated or suppressed. This is, not only needed in order to identify any unacceptable behaviour, but also to verify the results which have been published. This is vital in clarifying the severity of the acts carried out by those scientists at the CRU involved, i.e. whether it was a misguided protection of their work or a malicious misrepresentation of data.
14. The review of practices surrounding CRU’s use of peer review and dissemination of data should be used to shed light on how these comply with established best scientific practice. Any failings in this area should be examined in the context of the research methods used and any deviations should be assigned either to the individual researchers or to inadequate updating of the best practice to suit research in the digital age. This will beget more valuable information on the motivation and the reasoning behind the conduct of researchers at CRU.
15. Research institutions should review established protocols regarding the management of, and access to, research data to ensure that they remain up to date and clear. This process must be developed in collaboration with researchers so that its importance can be understood. The current practices in CRU and UEA must be examined to ensure the unit and the institution fulfil public regulations and that they offer support to researchers to ensure compliance.
16. The review of the security issues surrounding the release of information is an important internal issue for CRU and UEA. Furthermore, the RSC supports investigations into the highly irregular manner in which information was obtained from the researchers.
· How independent are the other two international data sets?
17. From the information available, the RSC cannot comment on this issue.
Royal Society of Chemistry
Monday, February 08, 2010
The other day my recollections of my terrible skill coalesced into a wonderful metaphor for malinvestment. When I was struggling with Austrian economic theory, I found myself on a forum arguing about what malinvestment was. At the time, I imagined all investments contributed to the economy so the notion of the ills of cheap credit eluded me. As it turns out, picking schoolyard teams is a perfect metaphor.
Start with a random group of kids whose ability falls on a curve. The more kids you pick for the team, the skill level lowers in each addition kid. If a teacher mandates that the entire class is going to play, even people like me will find themselves on a team even though they wouldn't get picked if the teams were smaller. What is the result? I strike out at a crucial time and lose the game.
In the free market, the credit supply is like the number of players on each team. With less credit (high interest rates,) only the most profitable investments can be undertaken. With more credit (low interest rates,) less profitable investments are possible. But this is like including the lousy players on the team by increasing the team size.
In this metaphor, the teacher is the central banks. In the absence of the teachers, those like me who were awful in baseball, would have pursued some other goal to the mutual benefit of both me and the baseball team I didn't play on. Those playing baseball would have loved to determine for themselves whether each additional player was a benefit or a hazard, but of course it's just a game. The teacher has decided unilaterally that everyone will benefit by being on the team, even though many don't want to play at all.
Lowering the interest rate and stimulating the economy is like a teacher telling the team captains they must increase the size of their team and pick the lousy players. Meanwhile, on another part of the schoolyard, the soccer team is deprived of players, or a new made-up game never gets created at all.
The only way to fix a baseball team with rotten players on it is to get them off the team, not add more marginal players. The only way to "fix" the economy is to let wages and prices adjust themselves, not maintain recession conditions with cheap credit that encourages the marginal investments that created the problem.
Sunday, February 07, 2010
Next day, Suz and I walked up to the Canmore Nordic Center where they were holding a World Cup cross-country ski race. It's the last big race before the Olympics, so everyone was there and in peak form. I was awestruck at the speed! Both men and women were skiing up massive hills not much slower than I would bicycle down! Canmore residents were well represented in the races and local girl Sara Renner put on an amazing display of determination to place 3rd. The crowd, which lined the entire course, nearly exploded while watching her attack over the last 1km straightaway seen in the picture. It's a real privilege to witness up close such rarefied talent, determination, strength, endurance and execution. Here's a short vid I took to get an appreciation of how fast these guys can climb.
After the races were over, we hiked back down to town for some winter carnival events. Main street was blocked off and a ton of snow was dumped. I can't tell you how satisfying it is to see people skiing down main street instead of driving! One of the more civilized sights I've seen.
Once you've ditched the cars and left the snow on the street, there's really only one thing left to do-
grudge match dog sled racing!
The best race of the day had to be a couple that was getting married down the street who put their carefully orchestrated wedding on hold, and appeared impromptu in full wedding regalia. The groom raced the bride with her wedding dress blowing furiously in the wake!
As dusk approached we settled down with a coffee and watched ice sculptors carving. The end of a great weekend.
Friday, January 29, 2010
Early reports suggested that while parliament is investigating CRU's actions, they might not be prosecuted due to a 6 month statute of limitations. As with most mainstream media reports regarding these issues, this one was also incorrect. That time limit only applied to the Information Commissioner's Office, a parliamentary board. The Crown Prosecution Service will likely be bringing charges of fraud against the CRU and they have no such restrictions. The penalties carry a maximum jail time of ten years.
For a legal explanation of what constitutes fraud in the UK and the ample evidence in the CRU case for prosecution see here.
Tuesday, January 26, 2010
Language alters the way people think about things and economics is not immune from this. We are so used to valuing things in terms of money, it's very easy to confuse wealth with money. Money is how wealth is measured but wealth comes from labour capital and resources. When money is confused with wealth through common speech, many other confusions follow.
Jobs are created from the pursuit of profit making activities. The wealth generated from that activity pays the wages in money. The money acts as a convenient substitute for the wealth that was created. When government tries to create employment, they must confiscate and redistribute the wealth that others generate. The benefits and ripple effects of the new job are computed after the money changes hands. The ripple effects and multiplier effects work just as well if you start before the money changed hands.
For example, assume that under the stimulus bill, a man qualifies for capital to produce solar panels. The product is easily seen as a good thing, but let us look at the means for producing it. What is not seen or counted by CNN is what could have been produced if the wealth had stayed in the hands of the person that created it. We see the solar panel created, we don't see the box spring mattress that could have been produced but wasn't. They contribute the same to the economy but stimulus supporters are making the claim that one is fixing the economy!
We are being told that 5-1+1>5. The reason this slight of hand is missed is because people don't equate the money government spends, with the wealth that money represents.
When you follow the logic of the stimulus plans using wealth instead of money, the slight of hand is obvious! In a pure barter economy, no one would be hoodwinked into thinking that if I give some of my carrots to Bill, we'll eventually all be better off. Bill can pay me with my own carrot, but I'm already down a carrot! Unless everyone produces more, you can't conjure stuff out of thin air. You can redistribute it but you can't create more. Our language has divorced the concept of money from wealth.
The other curious thing to me is why a project is valued by how many jobs it creates. If the number of jobs was valuable, why not use government money to build a bridge with the constraints that no power tools or heavy equipment be used. That way a bridge would be built by 5000 employees rather than 500! The logic of job creation runs opposite to the benefits of productivity. Productivity and improved methods of doing everything are the reason that we enjoy a standard of living that allows us to cure disease and live comfortable lives.
Monday, January 25, 2010
The OP asks why quarterly projections determine stock values when it's so limiting and not reflective of how a company behaves. They claim that only short term gains are required to keep "Wall St. happy."
It's hard enough to inform myself without taking it upon myself to inform others, but on this occasion, I couldn't resist and explain what price is. Strangely enough, 21 people disagreed with my explanation. Their disagreement represents a class of errors in economic thinking revolving around confused identities.
Referring to the original post, the author says rather nonchalantly that a company reduces it's bottom line causing it's stock price to go up regardless of the long term consequences. The confusion here is that in order to sell a stock and make the short term profit claimed, someone else must buy it! I emphasize this because people often only think of one side of the coin. The person who buys the stock must be looking at some point in the future and estimate that the stock will be worth even more than he paid. Who would make this purchase unless they thought that the company would be worth something in the future? Who would buy the stock without studying it's future? Without a buyer, there is no seller.
Because every stock sold is also a stock bought by someone else, the price represents the sum of every opinion of the stock. Some investors exclusively use price and volume histories to make speculative decisions. The price is a proxy for what everyone knows regardless of what you know. For example, if investor A has inside knowledge or insight about a stock, he bids higher or lower to be sure he gets more or gets rid of his shares, that drives price up or down alternatively. Investor B doesn't need to know specifically what investor A knows, because that knowledge got embedded in the new price. Price reflects all knowledge and opinion, hunches and guesses.
What is seen is the profits made by the seller.
What is not seen is the investment made by the buyer who decides the business will be worth more in the future.
By not thinking about the unseen, people misunderstand how markets work. It should not surprise anyone that governments can so easily buy votes with stimulus bribes when few people understand the basics of price. Without understanding the basics of how markets work, they can not see how governments have been destroying markets while claiming that the markets themselves have failed.
Thursday, January 21, 2010
What I observed when the torch relay passed through Canmore was none of these things. I saw world champion athletes and rec athletes mixing together on the street. I saw wide-eyed children and emotional grandparents straining to see the flame. I saw torch bearers laughing and yelling to cheering friends and family waiting on the route. The torch made its way downtown where a regular party was going on. Natives from the nearby reserve were dressed in full regalia, torch bearers mingled in the throng getting their pictures taken with just about everyone, sled dogs were patiently being mauled by toddlers, local musicians played over a loudspeaker and everyone had a wonderful time. Some Japanese tourists were beaming from ear to ear when we gave them our flag to hold when they got their picture taken with one of the torches.
As much as corporate and state interests try to hijack the Olympics, they will always just be a caboose to the experiences of real people. It's true, Coke and RBC had giant floats blasting music and handing out promotional material preceding the torch runners (after all they paid for the torch run!) But everyone's experience consisted of connecting to something else. No one lining the streets thought that Coke was the event. They were too busy being proud of their friends, family and neighbors. The event was all about people, and no corporate agenda took that away from anyone.
Sunday, January 17, 2010
Earlier, I got some technical instruction which improved my skiing dramatically. That being said, it was the most difficult skiing I've done. As with many things, one of the hardest parts was the initial commitment to go over the edge which was every bit as steep as it looks. Waiting for me at the bottom was the gift of accomplishment which on this day was super-sized. The other gift, I just today received- hobbling around quite stiff from hiking in deep snow added to that was the descent which used more leg muscles than I normally use in a month!
Friday, January 15, 2010
Date Released: Thursday, January 14, 2010
Climate researchers have discovered that NASA researchers improperly manipulated data in order to claim 2005 as “THE WARMEST YEAR ON RECORD.” KUSI-TV meteorologist, Weather Channel founder, and iconic weatherman John Coleman will present these findings in a one-hour special airing on KUSI-TV on Jan.14 at 9 p.m. A related report will be made available on the Internet at 6 p.m. EST on January 14th at www.kusi.com.
In a new report, computer expert E. Michael Smith and Certified Consulting Meteorologist Joseph D’Aleo discovered extensive manipulation of the temperature data by the U.S. Government’s two primary climate centers: the National Climate Data Center (NCDC) in Ashville, North Carolina and the NASA Goddard Institute for Space Studies (GISS) at Columbia University in New York City. Smith and D’Aleo accuse these centers of manipulating temperature data to give the appearance of warmer temperatures than actually occurred by trimming the number and location of weather observation stations. The report is available online at http://icecap.us/images/uploads/NOAAroleinclimategate.pdf.
The report reveals that there were no actual temperatures left in the computer database when NASA/NCDC proclaimed 2005 as “THE WARMEST YEAR ON RECORD.” The NCDC deleted actual temperatures at thousands of locations throughout the world as it changed to a system of global grid points, each of which is determined by averaging the temperatures of two or more adjacent weather observation stations. So the NCDC grid map contains only averaged, not real temperatures, giving rise to significant doubt that the result is a valid representation of Earth temperatures.
The number of actual weather observation points used as a starting point for world average temperatures was reduced from about 6,000 in the 1970s to about 1,000 now. “That leaves much of the world unaccounted for,” says D’Aleo.
The NCDC data are regularly used by the National Weather Service to declare a given month or year as setting a record for warmth. Such pronouncements are typically made in support of the global warming alarmism agenda. Researchers who support the UN’s Intergovernmental Panel on Climate Change (IPCC) also regularly use the NASA/NCDC data, including researchers associated with the Climate Research Unit at the University of East Anglia that is now at the center of the “Climategate” controversy.
This problem is only the tip of the iceberg with NCDC data. “For one thing, it is clear that comparing data from previous years, when the final figure was produced by averaging a large number of temperatures, with those of later years, produced from a small temperature base and the grid method, is like comparing apples and oranges,” says Smith. “When the differences between the warmest year in history and the tenth warmest year is less than three quarters of a degree, it becomes silly to rely on such comparisons,” added D’Aleo who asserts that the data manipulation is “scientific travesty” that was committed by activist scientists to advance the global warming agenda.
Smith and D’Aleo are both interviewed as part of a report on this study on the television special, “Global Warming: The Other Side” seen at 9 PM on January 14th on KUSI-TV, channel 9/51, San Diego, California. That program can now be viewed via computer at the website http://www.kusi.com/. The detailed report is available at http://icecap.us/images/uploads/NOAAroleinclimategate.pdf.
Wednesday, January 13, 2010
Here are some predictions last year from Christina Romer and Jered Bernstein, Chairs of Economic Advisers for President Obama. The relevant part is the prediction that the stimulus will create 3 million jobs with a total 138 million jobs. Their claim is that without the stimulus, there will be 8.8 percent unemployment and only 134 million jobs. All these benefits for only 800 billion dollars.
So, what happened?
It's true that these are predictions for later this year, but so far unemployment is worse with the stimulus than was predicted without! It was claimed without stimulus unemployment would be 8.8% (it's now 10% after stimulus or 17% depending on how you measure it.) Either the economic advisers are incompetent and have no business spending hundreds of billions of borrowed dollars, or the economic theories they employ are completely wrong.
The Keynesian theory behind all this stimulus is that a dollar spent by the government is multiplied through the economy depending on what it gets spent on. A dollar that gets spent building a road goes into a contractors pocket who then spends that money on groceries etc. This is said to stimulate demand causing employment to rise. The increased demand provides work that more than makes up for the costs of the stimulus by reducing the length of economic downturns and those returning workers are paying taxes sooner than they would have otherwise. So says the dominant economic thinking with plenty of fancy math to back it up.
What has become clear to me this year is this just makes no sense.
How the Economy Got This Way
Over the last ten years, the value of the dollar was diluted through unsustainable low interest rates. It was intended to stimulate the economy after the bursting of the tech bubble and the consumer demand crash after 9/11, remember Bush telling people to go out and spend? The Federal Reserve flooded the market with easy credit and money flowed into real estate and the markets. Bidding wars for property and assets continued for almost ten years but the value of these assets were not due to increasing wealth but money supply. The artificially rising assets were being leveraged by banks loaning out the appreciation on assets that were not payed for. Demand was a function of credit.
Peter Schiff tells a great story about renting a beautiful condo during the housing bubble. He goes next door to look at a dingy townhouse for sale. After fees, taxes and mortgage, he would be paying the same as renting his current place. He asked the real estate agent who would buy it since you could rent next door and get way more for less money? The agent said that the townhouse will be worth more next year while Schiff won't have gained any equity in his rental. Schiff questioned in disbelieve why anyone would pay even more next year for a place that isn't nicer than one you could rent next door! The real eastate agent should have said that Ponzi schemes are only bad if you get in at the end!
This story illustrates the disconnect between real estate demand (prices) and the wealth needed to trade for it (it was credit driving prices-not wealth.) When we moved to Calgary a few years ago, I could barely believe that 150,000 dollar houses were being sold for 400, 000 dollars. During the hot economy in Calgary it was easy to imagine that price was a function of demand. Hidden from view was the expansion of credit fueling the larger economy, driving up commodities and the demand for goods being bought not with savings but with credit against rising asset prices. A vicious circle sponsored by the Federal Reserve.
As it turns out, what I witnessed was the Austrian School explanation of the business cycle. The Austrian School explains that inflation occurs due to deflating money by printing it or creating more of it through fractional reserve banking. This increase in money creates the business cycles and bubbles that eventually burst.
Investments are like fruit, the lowest ones get picked first (the ones that have the best return.) The more money that becomes available to invest, the more difficult fruit gets picked (the poorer those returns become.) Artificially low interest rates and surplus money and credit cause malinvestment (the fruit that no one is picking because you need a ladder.) In the end, if you give people money to buy fruit, fruit prices rise and a valuable ladder was not used somewhere else.
The Austrian school is better explained by more lucid and elegant thinkers than I. The vonMises Institute offers many elegant and simple primers.
Multipliers are not Immune from Opportunity Cost or Inflation
I've come to realize economies are like any other natural system, you can't cheat them. You can try to stay up for a while drinking coffee but eventually, you fall asleep. You can't artificially create wealth out of thin air by taxing and borrowing money, then spending it. Any multiplier effects are offset by the opportunity costs of taxpayers keeping more money themselves. In a downturn, people are more likely to save money which is where future capital comes from. Multiplier effects are also condemned because they create artificial demand which diverts resources away from profitable, wealth-generating projects. This diversion has real costs that greatly offset any multiplier effects. If stimulus projects were economically feasible, the market would be investing in it. They are by definition malinvestments! Meanwhile, the creation of this stimulus money devalues savings through inflation (America's next financial meltdown that nobody saw coming.) This massive devaluation effects people who worked hard and didn't invest in speculative housing or derivatives, whose only crime was to save money! This inflation is not seen yet because prices are falling relative to the Fed attempt fight falling asset prices though the creation of money. Also, the Fed is currently paying banks to hold even greater of their reserves in the Fed Reserve system. The only way they can pay banks not to lend money is to issue more money which forces the Fed to force the banks to deposit even more money with the Fed in a never ending borrow from Peter to pay Paul situation!
Apart from witnessing the Austrian explanation first hand, so much of macro economics makes more sense through the Austrian lens. In the stimulus bill mentioned earlier, Keynesians are left to make ad hoc explanations of why injecting billions of dollars into an inflated economy isn't making things better. They say that things would be worse without it or it will take more time or that there wasn't enough stimulus! Now I understand that the last ten years prosperity was based on an economy inflated by the creation of money not just the addition of capital to labour and resources. The solution is not to add more inflation. The solution is to let the malinvestments fail, let real estate devalue to a new equilibrium price, let people pay down debt rather than consume. Adding more money just delays the necessary price adjustments, creates inflation, and diverts resources. The rising unemployment demonstrate the error of trying to re-inflate the economy.
At best, the results have been incompetence, mis-allocation, savings devaluation, inflation, and the squandering of scarce resources. At worst is opportunism, graft, theft, collusion, fraud, dishonesty, and lies.
Wednesday, January 06, 2010
It was not because the military of this nation or any other fought halfway around the world for whatever reasons that were given. It was not because of any new policy created in the Parliament. It was not because of anything in the Charter of Rights and Freedoms.
It was because we moved.
In Calgary, walking at night was confined to certain areas. The doors in the car had to be locked, same with the door to our apartment. Crossing the street was done with the first thought to the carelessness of drivers. Noise dominated every aspect of life. Whatever right to privacy is owed to me on paper was made irrelevant by having any real sense of privacy trampled by the crushing ado of living in a big city.
In Canmore, we have the freedom to walk anywhere and at any time without fear. Our right to private property is not some intellectual state-guaranteed idea, but a real thing put to the test every day. I now leave my bicycle unlocked on the deck because it's my bicycle, not because the law says it is. Tomorrow, it will still be there. In Calgary, like any other city, my so-called right to private property is really a farce in practice. What good are these rights that we credit the State with providing, if they exist only on paper? In light of seeing what really influences my effective rights, I find it distasteful to hear people speak of our troops fighting for our rights or freedoms or our country.
The sad truth is that their sacrifices are not heroic but tragically meaningless.