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  • Archive for December, 2009

    Texas Energy Buyout

    Posted by Carl from Chicago on 19th December 2009 (All posts by )

    One of the long-time major public utilities was known as TXU and was based out of Dallas, Texas. TXU was a large utility and expanded to include overseas assets; after the energy bust in the early 2000s TXU shed their overseas assets and participated in the deregulation schemes for the state of Texas.

    A bit of background is that utilities are pretty much regulated on a state-by-state basis. In addition, Texas (with the exception of El Paso, which is really almost more a part of New Mexico; I used to consult there) is on their own transmission grid known as ERCOT, that has its own voltage different from the rest of the country, meaning that power in Texas can’t generally cross state lines. This means that you can’t bring power into Texas that isn’t generated in Texas and you can’t sell Texas power outside of state lines. The subtle side effect is that, for power at least, Texas is like a “whole separate country” – if there is a surplus of generation in the state, rates stay low – but if they are short on generating capacity – prices will soar. Surplus or deficit power in neighboring states can’t help or harm Texas.

    Here is an instant tip for you – any deal done in 2007, at the height of the bubble, is generally in trouble. The 2007 mortgage “vintage” is the stinkiest year, and the same type of damage spilled over to the deal arena. Generally if you are looking at a 2007 deal, when equity values were at their highest and “easy money” for debt was readily available (meaning that you could “leverage up” higher), those are the deals with the characteristics likeliest to make them go South.

    So now that we have gone through a bit of background on the unique nature of the Texas electricity market, and gone through the general background of deals that were executed in 2007, now we move on to the current status of TXU, which became “Energy Futures Holdings” when a leveraged buy out of equity owners occurred during that year for $45 billion, led by KKR, Texas Pacific Group, and Goldman Sachs (see brief wikipedia article).

    Energy Futures Holdings incurred a large debt taking a utility public. Historically utilities have had substantial and steady free cash flow. Thus the plan typically is to leverage up with debt (which is cheaper than equity, because you can deduct interest on debt), cut expenses, and keep the cash flow. For a utility with large capital expenditures (investments), another obvious way to increase your cash flows is to pare back on new investments of items like power plants, transmission lines, and distribution networks.

    The debt of Energy Future Holdings is trading at a substantial discount to “face” value, which is 100 cents on the dollar. For this bond issue (each one is valued differently, because they have different terms, maturities and rights, although they generally move in sync along with the overall enterprise’s health) the bonds were trading at 70 cents on the dollar for the 2017 maturity.

    One item that is eye-popping is that this bond returns a coupon of 10.875%, almost 11% a year! The current treasury (risk free) rate today for bonds with a 7 year maturity (to be in synh with the 2017 bonds) is 2.74%, per this government bond yield table. Thus these bonds pay (10.875 – 2.74) = 8.131% HIGHER than the “risk free” rate, for a period of 7 years. Thus if risk was equivalent (which it clearly is NOT), then this bond would be trading for far above 100 cents on the dollar, maybe something like 150 (I will leave it up to Andrew from Aurora, the new guy on the blog, to figure it out if he feels like it).

    So for a bond to be trading at 70 cents on the dollar with a high coupon rate basically means that investors are bracing for a serious fall. A quick look at their financials shows why (even though they are private and have no equity investors, they have debt investors with publicly traded debt so they still file SEC filings and have quarterly conference calls). EFH has huge amounts of debt coming due in 2014, and it currently doesn’t appear that they are generating enough cash to pay down this debt. To be fair, when deals like this were done at the height of the “easy money” boom, you not only had models showing growing cash flows, but you also figured that you could easily re-finance and push out the maturity of debt as it comes due. In general, those days are mostly over unless you have a heavy equity component (a lot of your own money at stake) or a sterling balance sheet.

    Read the rest of this entry »

    Posted in Energy & Power Generation | 5 Comments »

    Computers and Health Care

    Posted by David Foster on 19th December 2009 (All posts by )

    In recent years, there’s been a lot of talk about computing technology as a potential enabler of major cost reductions and quality improvements for healthcare.

    A recent study by the Harvard Medical School suggests that results with hospital computer systems so far are disappointing, to put it mildly.

    Posted in Health Care, Management, Tech | 4 Comments »

    Alpacas

    Posted by Carl from Chicago on 18th December 2009 (All posts by )



    I thought a little bit of Alpaca fun would brighten everybody’s Friday a bit. I saw them a couple of months ago in Galena outside of the “Galena Log Cabin Gateway“. Funny I thought they were Llamas (went packing with them once) but turns out they are Alpacas.

    Cross posted at LITGM

    Posted in Humor | 6 Comments »

    “I love teaching lecture courses, but then, when I was a student, I loved taking lecture courses.”

    Posted by onparkstreet on 18th December 2009 (All posts by )

    I love teaching lecture courses, but then, when I was a student, I loved taking lecture courses. I was a sucker for lectures from my first day of college, because I was already infatuated with the beauty of words, and a good lecture is nothing if not an art form. Efficient communication it may be, but a lecture can no more be reduced to the delivery of information than a Ferrari can be reduced to fuel injection. A lecture aims at imparting not just what is true but what is beautiful.

    ….

    But, when it comes to craft and polish, seminars cannot compete with lectures. Nor can they compete with the challenge of keeping an audience’s attention. Meet them halfway, and today’s students will turn off their iPhones and pay attention.Minding the Campus (via Arts and Letters Daily)

    I agree: a well-delivered lecture is a beautiful thing. It’s still a useful tool for disseminating information. Old-fashioned person that I am (and, quite frankly, as a ham that loves to perform) I don’t understand the beating the form takes in educational circles. So faddish, sometimes.

    Update: I should have been more clear in my original post. I don’t think lectures superior to seminars, or labs, or on-line courses, or whatever. My introduction to medical school pedagogy – which is very, very recent – has confused me, a bit. Lectures seem a reasonable way to teach groups of students in certain circumstances. I don’t understand the need to make everything everywhere the same because of the latest paper. I am, however, new to the area and may be misunderstanding an awful lot. Pile on in comments if you think that I am!

    Posted in Academia | 7 Comments »

    Shoes of the Chicagoboyz, Continued…

    Posted by Dan from Madison on 17th December 2009 (All posts by )

    practical work footwear
    Updated:
    even more practical and fashionable work footwear

    Posted in Humor, Photos | 4 Comments »

    New! – Shoes of the Chicagoboyz

    Posted by Jonathan on 17th December 2009 (All posts by )

    incredible beauty

    Dead Sexy: A prominent Chicagoboy shows some foot at a society function.

    (A previous Chicagoboyz fashion update is here.)

    Posted in Humor, Photos | 10 Comments »

    Scientific Scandals Past

    Posted by TM Lutas on 15th December 2009 (All posts by )

    Sometimes forgotten lessons will get refound. Writing up a comment on the breast cancer guidelines brouhaha, I dredged up what turned out to be an inappropriate analogy, but one that is useful elsewhere.

    Remember LynxGate? The allegation at the time (early 2000s) was that forest service employees falsely added lynx hairs to collection samples in order to get habitat declared protected when it should not have been. After investigation, a more complicated story emerged, one of false consensus, unauthorized controls/faked samples, and a general finding that there was no conspiracy.

    The 1998 Weaver survey, at the time considered reliable but since discredited, showed a much more extensive lynx habitat than the federal three year survey was detecting. Independently, a couple of government employees decided to submit control samples of lynx hair, one obvious, the other less so, without going through the normal process of creating such controls that would ensure that their data would not get mixed in with the rest of the survey results. The intention, as reported to the investigators, was to ensure that lynx was not getting misidentified as domestic cats (feral domestic cats do live in the woods sometimes).

    The lesson that a false consensus can make scientists skip certain safeguard protocols got buried as the right found itself embarrassed and the left uninterested in any sort of blood sport against people on its side.

    Fast forward to today’s Climategate. From the Harry Read Me. we find, about 40% of the way in:

    If an update station matches a ‘master’ station by WMO code, but the data is unpalatably
    inconsistent, the operator is given three choices:

    [BEGIN QUOTE]
    You have failed a match despite the WMO codes matching.
    This must be resolved!! Please choose one:

    1. Match them after all.
    2. Leave the existing station alone, and discard the update.
    3. Give existing station a false code, and make the update the new WMO station.

    Enter 1,2 or 3:
    [END QUOTE]

    You can’t imagine what this has cost me – to actually allow the operator to assign false
    WMO codes!! But what else is there in such situations? Especially when dealing with a ‘Master’
    database of dubious provenance (which, er, they all are and always will be).

    False codes will be obtained by multiplying the legitimate code (5 digits) by 100, then adding
    1 at a time until a number is found with no matches in the database. THIS IS NOT PERFECT but as
    there is no central repository for WMO codes – especially made-up ones – we’ll have to chance
    duplicating one that’s present in one of the other databases. In any case, anyone comparing WMO
    codes between databases – something I’ve studiously avoided doing except for tmin/tmax where I
    had to – will be treating the false codes with suspicion anyway. Hopefully.

    One of the things that happened in Lynxgate was that the “obvious” control being sent in was not so obvious to the lab which had in other contexts seen plenty of legitimate samples be that sloppy. They treated it as legitimate data.

    So what happens if somebody randomly decides to give the CRU unit at the UAE a bit of control data with not so unusual but falsely high values? In 2 out of the 3 choices the control will be included with the rest of the data. In option 3, a false station would be added to the list of WMO stations and used going forward. This is part of the process of good databases going bad and bad ones not being corrected that Harry famously complained about just a little bit later in the same file.

    Somebody will, if they haven’t already, claim that nobody would ever just submit false data, that this can all be explained away by climate station central offices not keeping up with new stations in the field. And that would sound plausible, unless you’ve forgotten that obscure scandal that wasn’t, Lynxgate where they did just that based on the mistaken conclusions of a soon to be discredited study.

    But this isn’t the only past scandal that is illustrative of the large potential problems facing CRU. Pulling in Briffa’s suspect Yamal chronology you have an additional difficulty. It seems that some data points are more equal than others in the climate game. Any unusually influential data points now have to also get traced back to an actual station, something that hasn’t been done on any of them.

    And how good are those actual stations? Anthony Watts’ experiment over at surfacestations.org is pointing to the answer “not very”. If you look at a global map of stations it’s amazing how many of the stations are in the USA. Watts’ survey of all USHCN stations is 82% complete and only 10% of stations have an NOAA error rating of less than 1C.

    So without any conspiracy we seem to be betting trillions on science that does not adequately coordinate to prevent control data from entering real data sets, has practices in the discipline that are inadequate to guard against undue weight, and is taking large chunks of its data from weather stations whose error bars far exceed the global warming signal we’re all supposed to be worried about.

    At this point a finding of “no conspiracy” would not reassure me. It should not reassure us at all.

    Posted in Science | 3 Comments »

    Wait, what?

    Posted by onparkstreet on 14th December 2009 (All posts by )

    The Obama administration and congressional Democrats long ago gave up any pretense of working to rationally reform American health care. The exercise now underway in the Senate is a mad dash to get to 60 votes, and nothing more. That’s why some Democratic senators who had no idea exactly what is in the “breakthrough deal” announced by majority leader Harry Reid last week immediately hailed it as a milestone. They’re for anything that creates a sense of “momentum” and “inevitability.” – The Weekly Standard

    I’ve given up trying to understand what is going on with the Health Care Bills. The complexity is a feature not a bug for some….

    Update: As the commenters remind me, rightly, the sausage-making is never pleasant to watch. I guess I’m expressing frustration. I am trying to be a good citizen and doctor. I just don’t understand the stuff even as I try. Ugh.

    Another Update: Commenter Marty writes, “All the talk about mandated coverage, community rating, Medicare buy-in, ‘is it a tax?’ and all the rest is just the topic du jour as the Dems try to glue wings on this dead bird and then pretend it can fly.” (I edited, for clarity, the first update above).

    Posted in Health Care | 6 Comments »

    Quote of the Day

    Posted by Lexington Green on 14th December 2009 (All posts by )

    The financial crisis killed small entrepreneurs as surely as Joseph Stalin killed the kulaks, and the roots of the economy are dead and dry.

    Spengler Fisks the labor statistics.

    (You know things are really bad when the “good” news is that banks are adding clerical staff to process all the mortgage foreclosures.)

    Posted in Economics & Finance, Entrepreneurship, Quotations | 6 Comments »

    Holiday Shopping in Chicago

    Posted by Carl from Chicago on 13th December 2009 (All posts by )

    I recently braved the crowds which were surprisingly large for a recession on Saturday and went shopping for Christmas gifts. A few photos from my travels in downtown Chicago.

    Upper left – an Agent Provocateur bag left in the trash. Someone probably purchased something for their girl and then realized that bringing the bag home is a dead giveaway. Or this is really saying “here is a gift which ostensibly is for you but is actually for me.”
    Read the rest of this entry »

    Posted in Chicagoania, Humor | 12 Comments »

    Love and the Government

    Posted by Ginny on 12th December 2009 (All posts by )

    Linguists define the pulls and pushes on our identity: Biology & nature (man is a symbol-making, language using animal), society & nurture (we speak the language that surrounds us), and, finally, our separate and individual selves. We express our own vision, our own interpretation of life in our unique sentences. The unique nature of our choices is what contemporary tests for plagiarism reset on – the series of words we choose from our flexible language are not likely to be repeated in another document on Google or Turnitin. But biology is important. I don’t come from demonstrative people. The family jokes that I avoid hugs, touching, commitment. But that isn’t because I don’t think part of love’s impetus and expression is physical. Instinctive, it is biology, defined by culture; of course, it is also expressed in the unique ways of our clan, of ourselves. Read the rest of this entry »

    Posted in Academia, Human Behavior, Personal Narrative | 7 Comments »

    Innovation and Social Structure

    Posted by David Foster on 12th December 2009 (All posts by )

    Currently reading Turning Points in Western Technology (D S Cardwell, 1972.) The author observes that during the late 1700s and early 1800s, the state of French science and mathematics was very advanced–more so than that in Britain–and asks the question: Why was industrial development in Britain so much more successful than that in France?
    Read the rest of this entry »

    Posted in Book Notes, Britain, Business, Civil Society, Political Philosophy, Tech | 20 Comments »

    Bias Confirmed

    Posted by James R. Rummel on 11th December 2009 (All posts by )

    Megan McArdle, an AGW true believer, seems to think that most of the problems highlighted by Climategate are due to confirmation bias. That is where the experts tend to accept data that is in line with what they expect, while assuming that anything which goes against the prevailing theory must just be faulty in some way.

    I’d agree with her except for the way the people involved in the scandal went against the law to delete emails, hatched plans to punish other scientists whose work showed different results, and even worked to discredit scientific journals which dared to publish contrary research.

    That sort of willing participation in unethical and illegal behavior doesn’t fit any definition of “confirmation bias” I’ve ever come across. Crooks, liars, cheats and con artists act like that, not respectable scientists who simply put a bit more weight on one side of the scale.

    It is certainly true that the history of science is rife with examples of confirmation bias. But, while debate and disagreement might become heated, it is rare to come across a case where one side of the issue actively schemes to silence their opponents through purposely causing them some form of harm.

    In this instance, I suppose the AGW dissenters should be grateful that only their careers were damaged.

    UPDATE
    The Belmont Club has a post that is worth your time.

    Posted in Crime and Punishment, Science | 12 Comments »

    Afghanistan: 1897

    Posted by Lexington Green on 10th December 2009 (All posts by )

    … a continual state of feud and strife prevails throughout the land. Tribe wars with tribe. The people of one valley fight with those of the next. To the quarrels of communities are added the combats of individuals. Khan assails khan, each supported by his retainers. Every tribesman has a blood feud with his neighbor. Every man’s hand is against the other, and all against the stranger.
     
    Nor are these struggles conducted with the weapons which usually belong to the races of such development. To the ferocity of the Zulu are added the craft of the Redskin and the marksmanship of the Boer. The world is presented with that grim spectacle, “the strength of civilization without its mercy.” At a thousand yards the traveller falls wounded by the well-aimed bullet of a breech-loading rifle. His assailant, approaching, hacks him to death with the ferocity of a South-Sea Islander. The weapons of the nineteenth century are in the hands of the savages of the Stone Age.
     
    Every influence, every motive, that provokes the spirit of murder among men, impels these mountaineers to deeds of treachery and violence. The strong aboriginal propensity to kill, inherent in all human beings, has in these valleys been preserved in unexampled strength and vigour. That religion, which above all others was founded and propagated by the sword — the tenets and principles of which are instinct with incentives to slaughter and which in three continents has produced fighting breeds of men — stimulates a wild and merciless fanaticism. The love of plunder,always a characteristic of hill tribes, is fostered by the spectacle of opulence and luxury which, to their eyes, the cities and plains of the south display. A code of honour not less punctilious than that of old Spain, is supported by vendettas as implacable as those of Corsica.

    Winston Churchill, The Story of the Malakand Field Force: An Episode of Frontier War (1898)

    Posted in Afghanistan/Pakistan, Anglosphere, Book Notes, Britain, History, International Affairs, Military Affairs | 7 Comments »

    Is the Space Program Worth It?

    Posted by Dan from Madison on 10th December 2009 (All posts by )

    A few days ago on the way to work I was listening to Dirk Van’s show and he posed an interesting question to the listeners. Is the space program worth it?

    Most said that it was, for a variety of reasons. Some of them posed were national pride, research that is done, and there were others.

    I remember visiting the Kennedy Space Center several years ago. I loved the museums filled with the rockets and equipment used to explore space. I also was able to walk through the area where they were working on the International Space Station. I was with my father and he said to me “this has got to be a black hole of money here”. I couldn’t argue. I assume that NASA is run like any other government program, and is rife with waste.

    The benefits of the space program are many. So many of the things that we use every day that we take for granted have been either invented or improved due to the space program.

    But can’t we build a structure that can hold a perfect vacuum here on earth for a LOT cheaper and do the research there? Like for say, a billion dollars? For fiscal year -09, NASA’s budget was almost $18bb!

    Do we need the weightless part to get the good research done?

    Can’t private industry or individuals look for life on other planets?

    I would love to hear from some of our scientists who read the blog as well as others on this subject.

    Posted in Science, Space | 27 Comments »

    Worthwhile Analogy

    Posted by David Foster on 10th December 2009 (All posts by )

    Imagine that some of our Congresspeople–Barney Frank, Chris Dodd, Dennis Kucinich, and Robert Byrd, for example–formed a professional sports team. Baseball, basketball, football–take your pick.

    Would anyone invest money in such a team? Would anyone go to watch it, for any purposes other than mockery? I think the answer is pretty obvious.

    Well, the average Congressperson probably knows far more about sports than he knows about business. Almost certainly, he watches sports on TV…he may well have played himself in his younger days…whereas the typical Congressional knowledge of business is comparable to a baseball-watcher who doesn’t understand the difference between balls and strikes. Yet this Congress, with the encouragement of the Administration, is arrogating to itself the power to micromanage every business in the country in excruciating detail.
    Read the rest of this entry »

    Posted in Business, Economics & Finance, Political Philosophy, Politics, Sports | 2 Comments »

    “Lebanon’s legacy in Afghanistan”

    Posted by Jonathan on 10th December 2009 (All posts by )

    From a brilliant column by Caroline Glick:

    Then there is the message he sent the Afghans. Just as Barak and Olmert discouraged the Lebanese from cooperating with IDF operations against Hizbullah when they declared that the IDF would not remain in Lebanon, so by announcing a timeline for withdrawal at the same time he announced his force build-up, Obama told the Afghan people that they have no reason to collaborate with US and NATO forces on the ground.
     
    For Obama personally, this is a win-win situation. If McChrystal is able to make headway, Obama will take the credit. If not, Obama will blame McChrystal, and the Afghans, and NATO, and the Republicans, and George W. Bush for his failure. Then he will withdraw all US forces from the country, and watch as a disinterested observer as the Taliban retake control of Afghanistan – all to the rousing applause of his anti-war political base.
     
    On the other hand, for the American people and for the free world as a whole, this is a lose-lose situation. The sound and light show strategy Obama announced will enable al-Qaida and the Taliban to grow stronger as they wait out the American withdrawal. Likewise, just as Israel’s withdrawal from Lebanon emboldened the Palestinians to initiate their terror war in September 2000, so the US retreat from Afghanistan will embolden terror forces and their state sponsors the world over to attack US and Western targets.
     
    IN ISRAEL, the refusal of successive governments to fight our jihadist enemies to victory served to demoralize the public by making it believe that the IDF is incapable of truly protecting the country. The path that Obama has now embarked upon in Afghanistan will likely have the same impact on many Americans. This posture of weakness and helplessness will be sharply contrasted with the emboldened stance of America’s enemies.
     
    From the time the Netanyahu government took office in late March until its recent moves to cut a shockingly dangerous deal with Hamas and prohibit Jewish building in Judea and Samaria, there was a sense that Israel had turned a corner. The public rejected the Barak-Olmert legacy of defeat and elected Netanyahu to change the course of the country. Depressingly, today it is less apparent that Netanyahu has in fact abandoned their legacy of defeat.
     
    What is absolutely certain, however, is that until both Israel and the US change course and defeat our enemies, we will not be safe. Moreover, we must recognize the infuriating fact that even if both countries decide to defeat their enemies, their embrace of victory will come too late for the soldiers killed in futile and pointless battles and for civilians murdered in terror attacks that could have been prevented.

    This is worth reading in full.

    I fear that both the USA and Israel will pay a terrible price for the despair-inducing plague of bad leadership that afflicts both countries.

    Posted in Afghanistan/Pakistan, International Affairs, Israel, Middle East, National Security, Obama, Politics, USA, War and Peace | 3 Comments »

    Regina Spektor, Laughing With

    Posted by Lexington Green on 7th December 2009 (All posts by )

    Posted in Music, Video | 4 Comments »

    Journalists and Rocket Scientists

    Posted by David Foster on 7th December 2009 (All posts by )

    In 1920, Robert Goddard was conducting experiments with rockets. In an editorial, The New York Times sneered at Goddard’s work and particularly at the idea that a rocket could function in a vacuum:

    That Professor Goddard, with his ‘chair’ in Clark College and the countenancing of the Smithsonian Institution, does not know the relation of action to reaction, and of the need to have something better than a vacuum against which to react – to say that would be absurd. Of course he only seems to lack the knowledge ladled out daily in high schools.

    In 1969…the year of the Apollo moon mission…the NYT finally got around to issuing a correction for their 1920 mistake.

    What is noteworthy about the original editorial is not just the ignorance, but the arrogance and the outright nastiness. As the AstronauticsNow post points out, “The enlightened newspaper not only ridiculed the idea that rocket propulsion would work in vacuum but it questioned the integrity and professionalism of Goddard.” The post goes on to say that “The sensationalism and merciless attack by the New York Times and other newspapers left a profound impression on Robert Goddard who became secretive about his work (to detriment of development of rocketry in the United States)…”

    It appears that some of the attributes of the NYT which make it so untrustworthy and unlovable today are actually cultural characteristics of long standing.

    Worth keeping in mind when reading NYT analyses of Climategate.

    Posted in Media, Science | 26 Comments »

    Happy Isoroku Yamamoto Appreciation Day

    Posted by Shannon Love on 7th December 2009 (All posts by )

    America’s desultory participation in WWII began on December 2, 1941 when Imperial Japanese forces attacked the Dutch East Indies in order to seize vitally needed oil, tin and rubber resources. The Dutch could put up only a token resistance with five cruisers against Japanese battleships and aircraft carriers.

    Throughout the operation, the Japanese were scrupulous to avoid harming any British or American interest. Nevertheless, the British felt forced to defend the interest of the Dutch government in exile and declared war on Japan on December 28th 1941. There quickly followed the loss of the battleships Repulse and Prince of Wales and the fall of Singapore.

    FDR did not wish war with Japan because he was focused on the threat of Fascism in Europe. American public opinion remained stubbornly isolationist until February 14th 1942 when the American cruiser Indianapolis was torpedoed by an unknown submarine with substantial loss of life. Using the incident, FDR narrowly won a declaration of war against the Empire of Japan on March 7th 1942. Many have since argued that FDR hoped that Hitler might follow through on his Tripartite treaty obligation and declare war on the U.S but Hitler never rose to the bait.

    Read the rest of this entry »

    Posted in History | 31 Comments »

    Riddle Me This

    Posted by James R. Rummel on 7th December 2009 (All posts by )

    A few weeks before the Climategate scandal started to bounce around the blogs, I wrote an essay here about how the global warmists were acting just like every other doom-shrieking huckster from the past five decades. Since all of the others were wrong, terribly and horribly wrong, I said that I wasn’t too worried about any toasty catastrophe.

    That is why I haven’t been paying too much attention to the collapse of the latest doom-of-the-week. After all, it isn’t like I haven’t seen this tired process play itself out over and over again.

    But it is tough to avoid it altogether if you rely on blogs for your news. And there is a recurring theme that gives me pause.

    Most climate scientists that appear on news programs, or who write op-eds for the various news outlets, all say the same thing. This scandal might cast more than a decade of work done by the Climate Research Unit at the University of East Anglia into doubt, but it doesn’t invalidate research done by other scientists which support the idea that this planet is warming due to human action.

    Well, gee, why in the world doesn’t it invalidate their work as well?

    Didn’t the CRU boast the largest and most comprehensive collection of climate data in the entire world? Didn’t this massive collection of data inspire, if not directly influence, just about every other climate scientist’s work? Aren’t the people who authored the Emails which prove dirty tricks, data manipulation, and collusion to hide problems with their research the most prestigious and influential climate scientists in the world?

    So why in the world should anyone take any climate scientist’s word for their integrity, and soundness of their work? Isn’t the onus on them to prove that they aren’t crooks and liars, like the big guys were?

    This seems perfectly reasonable to me, but I may be missing something.

    Posted in Academia, Science | 16 Comments »

    Great Demos of All Time

    Posted by David Foster on 6th December 2009 (All posts by )

    Product demonstrations can sometimes be useful in convincing prospective customers that your product is a Good Thing, or in convincing prospective investors that your company represents a substantial opportunity. (Although many demos are so badly executed that they do more harm than good.)

    In business history, there are a few examples of demos that stand out for their dramatic nature and their impact. Here are the ones that come to mind:

    Read the rest of this entry »

    Posted in Business, History, Tech | 18 Comments »

    Rule By Decree in Russia on Gambling

    Posted by Carl from Chicago on 6th December 2009 (All posts by )

    From time to time Dan from Madison writes about gambling and the hypocrisy of the NFL in their actions on this topic. In particular, the NFL was upset about legal wagering on sports in Delaware, when today it pretty much is only officially legal in Nevada and a couple other states (also Oregon and Montana, per this article).

    Something strange happened in Russia this summer. Even though the economy was in a severe downturn and hundreds of thousands were employed in casinos throughout the country, the government (basically Putin) decreed that casinos were to be shut down on July 1, 2009. This article by the NY Times provides a good summary of the situation and its impact.

    The gambling industry says the ban will leave more than 400,000 people without work in Russia, at a time when it has been hard hit by the economic downturn: the World Bank predicts the economy will contract by 7.9 percent this year. The government has put the figure at 60,000 people, though industry analysts say that is absurdly low.
     
    After the law passed, federal officials and casino executives seemed certain that it would be watered down, which is apparently why neither the casinos nor the four regions did anything to prepare. “You know, in our country, the decisions are made by only one person,” said Samuil Binder, deputy executive director of the Russian Association for Gaming Business Development. He was referring to Mr. Putin.

    Read the rest of this entry »

    Posted in Business, Russia | 6 Comments »

    Do you ever feel like this?

    Posted by onparkstreet on 5th December 2009 (All posts by )

    Fellow, sometime-and-in-some-fashion, academics or others dabbling in paper writing?

    Dixon looked out of the window at the fields wheeling past, bright green after a wet April. It wasn’t the double-exposure effect of the last half-minute’s talk that had dumbfounded him, for such incidents formed the staple material of Welch colloquies; it was the prospect of reciting the title of the article he’d written. It was a perfect title, in that it crystallized the article’s niggling mindlessness, its funereal parade of yawn-enforcing facts, the pseudo-light it threw upon non-problems. Dixon had read, or begun to read, dozens like it, but his own seemed worse than most in its air of being convinced of its own usefulness and significance. ‘In considering this strangely neglected topic,’ it began. This what neglected topic? This strangely what topic? This strangely neglected what? His thinking all this without having defiled and set fire to the typescript only made him appear to himself as more of a hypocrite and fool. ‘Let’s see,’ he echoed Welch in a pretended effort of memory: ‘oh yes; The Economic Influence of the Developments in Shipbuilding Techniques, 1450 to 1485…’

    Lucky Jim, by Kingsley Amis.

    I never tire of this book – it’s one of my favorites – even as I pretty much dislike the main character and the object of his affection, the tepid and colorless Christine. What are your favorite campus, or academic, satires?

    Update: David Foster and Jim Bennett, in the comments section, both voice the same thought I had on re-reading the above excerpt: an article on the economic impact of shipbuilding techniques sounds pretty darn interesting, actually. I think the scene says something about the main character, Dixon, and his lack of interest in the very topics he is meant to research and study. In short, his heart’s not in it. Either that or Kingsley Amis had zero interest in economics and the title struck him as the most vapid imaginable. Anyone know?

    Posted in Academia, Book Notes | 18 Comments »

    Another Blow Against Nuclear Power in the US – History

    Posted by Carl from Chicago on 5th December 2009 (All posts by )


    For the last couple of years there has been talk of a “renaissance” in nuclear power in the United States. The government has issued some loan guarantees to various parties and the greens are starting to come around to nuclear power because of greenhouse emissions. While I am a supporter of nuclear power and of investing in generating capacity in general, from the moment that this false hope started I have been steadfast in maintaining that virtually no new nuclear plants will be built in the US in the near term, meaning the next 5 or so years.

    One other block against any sort of nuclear power investment is HISTORY. This article in today’s Wall Street Journal titled “Costs Cloud Texas Nuclear Plan” discusses the South Texas Project, a nuclear site in Texas that is owned today by municipal utilities in Austin and San Antonio, Texas and NRG, a public company that owns various generating assets around the USA.

    The South Texas Project (STP) has 2 nuclear units today. NRG applied for federal financing to build 2 additional nuclear units at the site, as part of this “renaissance” of nuclear power.

    The original STP project was subject to massive cost overruns. Per the article:

    “skittishness about the cost of nuclear energy is understandable. The first two units at STP were supposed to cost less than $1 billion but ended up costing more than $5 billion. With that memory seared into its memory, San Antonio officials have been sensitive to anything suggesting that they could, again, get blindsided by escalating costs”

    Note that the costs escalated by a FACTOR OF FIVE from the original estimate – $4B cost overrun in 1982 dollars translates into over $8B based on this “inflation calculator” I found on the web.

    Read the rest of this entry »

    Posted in Energy & Power Generation | 21 Comments »