Friday, September 30, 2005

Excessive Spending - Wasting Fuel - 5th Verse

Okay, I'm just a wild environmentalist who spends my winters tracking whales along the coast of Antarctica, but I still believe that we should have more nuclear power plants and less waste. Well, the second part of that statement is true.

Minnesota Public Radio reports that some of those crazy Minnesotans agree with me about the tremendous amount of fuel being wasted because those responsible for traffic management, specifically signal progression, are doing a lousy job. In fact, one of those Minnesotans happens to be one of those responsible.

Hey, I know those Minnesotans and Minnesota Public Radio people are all left-wing extremists. But if Greenpeace co-founder, Patrick Moore, can agree with me about Nuclear power plants, I can agree with MPR about the primary cause of wasting fuel: chaotically timed traffic signals.

Okay, if you don't think my word or that of MPR is good enough, will you accept Voice of America?

Thursday, September 29, 2005

Human Nature

It is human nature to insist on an answer when the answer is beyond our ken.

Click on the picture for a better view. Thanks to Wiley at Non Sequitur

Excessive Spending - Not Wasting Fuel

After dropping off a load of furniture and clothes to the Salvation Army in Livonia, I decided to return on the surface roads. Heading north on Farmington Road from Plymouth Road, I managed to travel to the north end of Livonia at the posted speed in noontime traffic without being delayed by poorly timed traffic signals. There were a few "jackrabbits" who raced from one light to the next and managed to stay roughly even with me by the end of the trip despite their unnecessary and self-inflicted stops.

If Livonia can get it right on its secondary surface routes, why can't other communities do it on major arteries? Perhaps they haven't tried hard enough? Perhaps they haven't tried?

Anyway, thanks for saving me some time and money, Livonia. Any chance you have a traffic engineer you can loan out to the rest of the metro area?

Wednesday, September 28, 2005

Excessive Spending - Tax Cuts, Spending, or Spending Cuts

A few days ago I wrote about the growing propensity of our government to throw money at every problem. Sure, money is an important aspect of making sure the nation runs well and providing aid to the needy during disasters. But it seems that the federal government is seen as an open bank vault... withdrawals welcome... repayment not necessary.

Well, even though it's not supposed to work like that, both political parties are pretty good at operating in that fashion. While large corporations are forced to be as efficient as possible to continue operating (except for the process of default called bankruptcy), the federal government simply issues more notes payable. At some point, the lenders will get their due or we will all be in trouble. More and more, the lenders are not fellow Americans buying savings bonds or treasury notes, but our overseas competitors. The same people who are benefitting from our job losses and dismantling of our manufacturing capabilities are the ones who can decide when our country goes into an economic tailspin. Now is not the time. First they have to build their own and other markets. Then we are fair game.

So what to do? My son an I have slight differing opinions. We both acknowledge spending is out of control by whomever is in power at the federal level. He believes the only solution is to raise taxes. I told him I thought we should cut half of the federal programs through either consolidation or outright elimination.

Tax more. Okay, since we are not investing in manufacturing and our research is increasingly being "outsourced", why have tax breaks for stock investments? Sounds too much like the wealthy getting a free pass. Certainly there are no middle class people investing in the stock market anymore. While we are at it, eliminate all of those tax deferred saving plans. They may not be all that great in the long run. Throw on a national consumption tax, too. Wasn't there a disease call "consumption"? Well then, lets tax health services. Then we can build more nice parks for the homeless in case we can't build federal housing fast enough..

Spend more. Hey, we are doing that already.

Spend less. That's just not fair. Someone else got theirs and I want mine! Should somebody evaluate all of the federal programs and determine which of the 1,000 or so should continue? Is someone challenging what is happening:

Demanding that programs prove results in order to earn financial support, however obvious and sensible, marks a dramatic departure from past practice. No one has asked about the extent to which Elderly Housing Grants help the one million very low-income elderly households with severe housing needs. Is $4.8 billion in federal foster care funding preventing the maltreatment and abuse of children by providing stable temporary homes? Have federal efforts to reduce air pollution been successful? These programs seek to accomplish important goals but fail to provide evidence that they are successful in serving the citizens for whom they are intended.

Even programs known to be failing continue to get support. For example, the Safe and Drug Free Schools Program, which a 2001 RAND study determined to be fundamentally flawed, has only grown larger and more expensive. The current system discourages accountability, with no participant incentives to take responsibility, much less risks, to produce improvements in results.

Just maybe the government watchdog. Let's see what happens once they identify those pet projects of the influential senators that control the purse strings.

By the way, do read the report at the link above. You'll find an interesting coincidence between my off-the-cuff response of cutting half of the programs and what the OMB has to say.

Monday, September 26, 2005

Environmental Extremism - Joining the Nuclear (Power Plant) Club

Today's edition of The Detroit News had an editorial espousing significant increases in nuclear power plants. Congratulations.

For further articles about the need and advantages of nuclear power plants, read the following:

Environmental Extremism - It's a step...

Environmental Extremism - If only I had a brain

Environmental Extremism - Global Warming

Environmental Extremism - Energy Policy

Environmental Extremism - Spencer Abraham

Environmental Extremism - Another look at nuclear energy

Environmental Extremism: Limitless Energy Beneath Our Feet

Environmental Extremism: The French Are Correct

Environmental Extremism: Fear... Not!

Well, Detroit News, better late than never.

Sunday, September 25, 2005

Excessive Spending - If You Don't Have It; Flaunt It

Alan Greenspan apparently told the French (why them?) that U.S. deficit spending is out of control.

Okay, a couple of hurricanes, an overseas war, individual and corporate bankruptcies increasing, manufacturing jobs going overseas, energy costs soaring... and Alan complains about a little government debt.

Why should we worry? ...payers.... Oh, yeah. There is a bill at the end of the tunnel. But, hey, our credit is good, isn't it? Besides, the Chinese are using all of those excess dollars that they have to fund that debt, so we don't have to worry, right? Right??? ...debt ...service.... Oh, yeah.

Okay, the government is spending like there is no tomorrow. Hmmm, maybe it knows something we don't?

Friday, September 23, 2005

Flexibility or Breakage - Force of Habit Prevails

My wife and I were watching the evacuation of Galveston and Houston on television last night and one particular scene struck me as most peculiar. With the magic of a DVR, I backed up the broadcast a few seconds and paused it for my wife to ponder a little longer. "Notice anything wrong?" I asked. She responded, "Yes, there's nobody on the other side of the road."

Here were 4 or more lanes of freeway traffic at a complete standstill on one side of the road while the other side of the road was empty. Nobody... the mayors, the local police, the state police, the governor, the 7-11 guy... nobody seemed aware of the possibility that you could actually go the "wrong" way on a freeway in an emergency. Oh, sure, it would have taken some coordination at the entrances to funnel traffic in properly, and it would have taken coordination down the road a bit to disperse all of that "wrong way" traffic. But literally nobody appeared to consider that instead of endangering thousands of people in a gridlock situation, twice as much traffic could have been accommodated by being a little flexible... breaking the force of habit.

If the ability to form creative solutions is a mark of intelligence, there appeared to be an abundance of dullards running the show in Texas. Sorry, that's a bit harsh. After all, who would have thought that there was a possibility of hundreds of thousands of people that might have to be evacuated from a coastal area because of a hurricane? So it's unreasonable to think that anyone should have been able to foresee traffic gridlock, vehicles running out of gas, people being trapped in high heat and no facilities to help.


Wednesday, September 21, 2005

Excessive Spending - A BandAid on a Gunshot Wound

From the Miami Herald:

Posted on Tue, Sep. 06, 2005
House vote would let governor eliminate sales tax from gasoline


Associated Press

LANSING, Mich. - The Michigan House voted Tuesday to allow the governor to lift the 6 percent state sales tax on gasoline and diesel fuel during a fuel emergency.

The bill, passed unanimously, would allow the governor to issue an executive order eliminating the sales tax on gasoline for a specific time. Without the sales tax, a motorist with a 15-gallon gas tank could save about $2.70 on each fill-up if gas was running about $3 a gallon.
Let's see, here's the math:
  • 15 gallons @ $3.00 per gallon is $45.00
  • eliminate the sales tax and save $2.70
  • eliminate the poor signal progression and make that 15-gallon purchase a 12 gallon purchase for the same distance travelled and save $9.00
Okay, let's not solve the problem; let's cut tax revenue for schools.

Gosh, and I thought our government didn't understand.

Tuesday, September 20, 2005

Excessive Spending - Wasting Fuel - 4th Verse

Bragging about your accomplishments may not always be the best practice.

The next time you are caught in a long sequence of poorly timed lights along a main road in Oakland County, you can thank this company who takes great pride in what they have accomplished.

Ironically, one of their boasts struck a real chord with me when I read it today:

  • Provide timing charts required by the agencies with traffic signal maintenance responsibilities, namely RCOC, Pontiac, Royal Oak and Ferndale.
  • Provide a detailed network signal progression plan with optimized traffic signal operations for at least three periods for over 300 intersections.
  • Conduct a follow-up critique of the network and recommend adjustments to the system as required.
  • Provide a smoother commute with better synchronization of red lights.
Why was is so ironic? Because a few days ago, prior to reading these boasts, I sent the heads of this company a communication which included the following under the heading of "What's Lacking":
  • central authority - travel from one city/town to another and signal progression is uncoordinated or arbitrarily different; e.g., Van Dyke traveling from Warren to Royal Oak;
  • central strategy - a variety of approaches in a variety of situations leave drivers hopelessly confused about why lights on a main artery turn red for a light at an intersection where there is no possible cross traffic (e.g. South Ave in Pontiac between MLK Blvd and Centerpoint Pkwy in the evening when all of the GM facilities are closed). Some cities have systems that turn such intersections to flashing yellow, while others have the intersections stay green for the main route and change only when traffic arrives from the side street, while others ignore the problem entirely (Pontiac).
Well, now. It seems that either the advice that was given was really, really faulty... or the cities of Pontiac and Royal Oak simply don't know how to follow truly great instructions. Regardless, the traffic management for South Blvd in Pontiac and Van Dyke in Royal Oak deserve an F.

And those are just two of so, so many examples... so many....

Now it may be that Van Dyke in Royal Oak or South Blvd in Pontiac were not part of the sequencing done by this company. That would be a strange oversight, but possible. If so, they really should go back and take a look at these avenues. And maybe they'll get a chance to take a look at U.S. 24 -- Telegraph Road.

Monday, September 19, 2005

Excessive Spending - Wasting Fuel - 3rd Verse

For those state, county and township officials who best understand pictures with very few words, here is the fuel wasting example I cited earlier:

(Saturday morning light to moderate traffic)

Since this is the main north-south route for many miles, it would SEEM that -- if nothing else could be fixed -- that this route could be timed for smooth traffic flow. This could be done by a competent 9th grade math student... okay, maybe 10th grade after seeing the MEAP scores. But remember... this is only one example of many hundreds available.

It's a shame that millions of dollars are spent on studies, computer systems, highly paid consultants and more studies. But officials seem more interested in STUDYING traffic problems and then ADDING MORE SIGNALS TO FURTHER IMPEDE TRAFFIC rather than to do a decent job regulating traffic flow for greater efficiency. Meanwhile, you and I pay about $0.35 per gallon in state taxes on gasoline while nothing gets done to improve the efficiency of traffic flow... and that leads to buying more fuel with $0.35 per gallon taxes to waste on inefficient roads ... as well as a lot of our time. JUST WHERE ARE THOSE TAXES GOING?


p.s. Saturday: 10:30 p.m. on southbound Telegraph from Square Lake Road - traveling at posted speed...

  • at Hickory Grove Road (1st signal) - light turns red approaching intersection
  • at Long Lake Road (2nd signal) - light turns red approaching intersection
After that... forget it... watch the signals ahead and adjust speed accordingly... and let's just say that no one who got through subsequent signals (the majority of vehicles) was near the posted speed.

So let's add another issue with poor signal progression: SAFETY

Sunday, September 18, 2005

Ethnic Divisiveness - Myth of Muslim Solidarity

The IRA (Iraqi Republican Army aka al-Qaeda aka Charles Manson & Associates) have officially "declared war" on Shi'ite Muslims.

That reminds me a lot of the "other IRA" that has had an ongoing war against certain Protestant Christians.

It's A L L__A B O U T__P O W E R; it's not about religion. Repeat that 72 times.

Now listen carefully so that you can hear the voices of protest amongst the Muslims worldwide to this anti-Islamic display. You have to listen very carefully. Very, very carefully. Shhhh....

Okay, repeat that another 72 times.

Saturday, September 17, 2005

Excessive Litigation - All or Nothing?

We seem to be moving toward a nation of exterme positions. Where's the middle ground. I don't mean the "compromise" (or compromised) position. I mean the point of balance... the point where all interests are served reasonably... the point where license and prohibition are excluded so that a reasonable accomodation can be achieved.

The following letter appeared in the Detroit Free Press:

Drug victims have no recourse in Michigan

I want to thank the 12 Americans from Texas who, with no financial stake in the outcome of the Vioxx case, determined that corporate profit at any cost is unacceptable.

Dozens of documents -- internal memos, e-mails and opinion pieces by scientists and officers -- showed Vioxx increased heart risks. Jurors witnessed statements and conduct by Merck officials that showed that -- despite problems -- Merck tried to rush federal approval of Vioxx just to beat a competitor.

In letters to doctors, Merck seriously understated the heart risks to patients taking Vioxx and told drug salesmen to play "Dodge ball" when doctors voiced concern.

In Michigan, Merck will never face a jury. The Michigan Legislature handed the drug industry a "get out of jail free" card that will allow it to keep every nickel of blood money profit from drugs that injure and kill citizens in our state.

Despite misleading claims from advocates for immunity like Lawrence Mann ("Drug lawsuits demand one national rule," Aug. 31), there is no exception to the drug industry's immunity from responsibility in Michigan. The U. S. Supreme Court has declared that Michigan victims of Vioxx and other deadly drugs cannot bring such claims, and the U.S. Court of Appeals for the Sixth Circuit has held that the drug industry's immunity is absolute. In Michigan -- unlike any other state -- there is no exception, there is no recovery and there is no justice.

Jesse M. Reiter
Michigan Trial Lawyers Association
Bloomfield Hills

What did the 12 Texans do?
In August 2005, Merck & Co. lost its first Vioxx trial in a Texas state court after the jury found that Vioxx was responsible for the death of Robert Ernst, and awarded his widow a verdict of $253 million.
What is the Michigan situation?

Compensatory Damages


No limit

Non-Economic: Limited in medical liability actions
  • Total noneconomic damages recoverable by all plaintiffs against all defendants in a medical liability action are limited to $280,000, adjusted annually for inflation, except in cases where the plaintiff is hemiplegic, paraplegic, or quadriplegic due to an injury to the brain or spinal cord, or where the plaintiff has permanently impaired cognitive capacity, or the plaintiff has had a permanent loss of or damage to a reproductive organ, then noneconomic damages shall not exceed $500,000.

Mich. Comp. Laws § 600.1483.

Punitive Damages

Allowed: Not permitted*

  • *Michigan permits “exemplary” damages as compensation for mental suffering consisting of a sense of insult, indignity, humiliation, or injury to feelings, but does not permit punitive damages for purposes of punishment.

Yamaha Motor Corp. v. Tri-City Motors, 429 N.W.2d 871 (Mich. Ct. App. 1988).

It seems the difference between Texas and Michigan is just under $253 million. The question is: where is the point of balance? Is it an arbitrary limit or "the sky's the limit"? The problem is that the process of deciding the range of damages is not very apparent.

Friday, September 16, 2005

Excessive Spending - Inflationary Contraction

  • Housing sales stalling in some areas (inventory trend increasing)
  • Factory orders stalling in some areas
  • Energy costs increasing rapidly (you don't need a link for gasoline costs, but here is one and another for your other energy needs)
  • Interest rates to continue rising Fed officials have said rates are still too low for an economy facing only a temporary setback from the storm.
Does anyone else see an ominous economic pattern appearing?

  • Northwest and Delta Airlines files for bankruptcy
  • Ford plans to import at least 50% of its parts requirements ... that's really good for U.S. suppliers, eh?
Let's resequence these observations:
  • U.S. moving from a producing nation to a consuming nation
  • Non-entreprenurial workers (salaried) getting sqeezed by jobs moving overseas through little or no increase in incomes and companies going out of business or sourcing product elsewhere, while the cost of living is going up quickly
  • The Federal government's response is to fight inflation by raising interest rates which will make it increasingly difficult for those on fixed or no incomes to obtain necessities (you may not have to drive, but you probably will have to heat and cook... until you can't afford to live in a house... which fewer and fewer people can afford to buy from you)

Thursday, September 15, 2005

Google Earth

  1. Go to
  2. Download and install Google Earth (unless you have an old PC or a Mac)
  3. Spend hours with this most fascinating software (this could make geography fun)

Who's to Blame - Conservatives or Liberals?

According to an article in The New Republic, the answer is a resounding "Yes."

Okay, that's it. Read the article.

Wednesday, September 14, 2005

Random Thoughts

Bush accepts responsibility for Federal government failures after Hurricane Katrina.

Now just what does that mean? Major changes coming? Resignation? "I've said it so now we can move on to another subject?"

Let's face it: government at all levels tends to focus on the daily and mundane. The extraordinary is relegated to some "plan" that few, if any, understand or can implement with any efficiency or effectiveness. It's human nature to have some concern about really bad things that could happen, but not really do anything about it.

Okay, then, how may of you have a whole house intruder alarm system and fire suppression system? Thought so.
From the Detroit Free Press: "In the six weeks since the August primary narrowed the field to Mayor Kwame Kilpatrick and former deputy mayor Freman Hendrix, blogs and a pointed e-mail have attacked Hendrix, trying to convince Detroiters he's not black enough to be their mayor."
Not Black enough? Okay, now you begin to understand why you get the kind of government you get. I never recalled hearing the good folks of Grand Forks, ND talk about a mayoral candidate as not being Norwegian enough. Hey, L. Brooks Patterson isn't White enough. What do you mean that our government can't handle emergencies properly? How could that be?
Iraq is still an issue, but our attention has been diverted. My nephew faces a second tour there next winter as part of a Marine reserve unit scheduled to return. A lot of families are sacrificing much in the effort to counter some very sinister people.

Michigan continues to be pummeled by economic forces: high unemployment, high cost of fuel, projected increases of 50-70% for heating (after pretty hefty increases last year), double-digit increases in tuition costs, home sales grinding to a halt.
Is this a case of Michigan lagging the recovery or leading the bust?

Tuesday, September 13, 2005

Excessive Spending - Wasting Fuel - 2nd Verse

One reader challenge my accounts of the problems around signal light progression on Telegraph Road, a main surface road in the Detroit area.

He wanted to know if I was speeding or simply being "tripped up" by other drivers creating backups.

The answer is that I have driven that road countless times attempting to maintain the posted speed of 50 mph. In some sections, the progression is timed for about 45 mph, in others it has to be closer to 60 mph, while specifically between 12 Mile and 13 Mile Roads on Saturday (no real traffic) the 2 intermediate lights will stop you just before you reach them if you are the first driver traveling at the posted speed (I think they are timed for 25 mph progress in a 50 mph zone).

No, dear readers, it is just the chaotic mismanagement of signals from township to city to village that is the problem.

I think some high school students could probably work out the progression so that traffic under normal conditions (peak conditions will kill most roads) flows smoothly. Or it is just that those Intel 286 chips controlling the signals can't keep up with the data processing requirements.

Sunday, September 11, 2005

Excessive Spending - Wasting Fuel

I've told my wife that I don't mind spending money; I hate wasting money. Why buy so much food at once that it spoils before it can be eaten? Just take some cash and throw it in the trash and save the fuel needed to drive to and from the grocery store.

I hate it when other people force me to waste money. I wrote about wasting fuel recently: Excessive Spending - The Cost of Inefficiency. Today, I wrote the following to The Detroit News:

Sunday's article about gas (Sunday, September 11, 2005 - High gas prices: gouging or not?) prices really misses the point. It is not simply supply nor demand, but rather waste that is a key factor in the cost of our personal transportation. More than a month ago, I wrote a letter to MDOT's chairman, Gloria Jeff, concerning the poor signal progression along one of Detroit's busiest arteries, Telegraph Road, and the associated waste in gasoline and time resulting from exceptionally bad signal progression. Neither Ms. Jeff, nor any representative of MDOT, has seen fit to respond.

The situation on Telegraph road is one of countless examples of how local, county and state traffic engineering departments are completely failing drivers in metropolitan Detroit. Think not? Consider the difference between EPA mileage estimates for highway and city driving. Why the difference? Because the EPA recognizes the waste associated with stop and start driving versus constant speed driving, which is not a function of vehicle speed. By properly timing signal light progression, millions of gallons of gasoline can be saved weekly in just the Detroit area.

The State of Michigan has enjoyed a 50% increase in revenues from gasoline sales taxes this year, yet has spent a paltry few million dollars to improve traffic flow. So the citizens of Michigan now pay twice for the failure of state, county and local traffic management to do their job; once at the pump and once again on the road.
The State of Michigan charges almost 20 cents per gallon of gasoline as a flat tax plus 6% sales tax on the price per gallon. This is an incentive for the state to promote fuel inefficiency! Am I the only one who gets really PO'd about this situation?

If not, feel free to write to MDOT or your own state's department of transportation:
Gloria J. Jeff, Director
Michigan Department of Transportation
State Transportation Building
425 W. Ottawa St.
P.O. Box 30050
Lansing, MI 48909

Tuesday, September 06, 2005

Environmental Extremism - Un-Natural Disasters

We think of nature in human terms: naturally occurring weather or geological extremes are disasters. But in purely physical terms, they are simply occurrences that change the conditions on this planet, either short-term or long-term. Since change is continually occurring, the scope of change is basically all that we concern ourselves with.

Let's put things into perspective regarding the latest hurricane. No doubt, it was devastating in human terms. The affected area is about the size of Great Britain. Indeed, if that had happened to the British Isles, the country would be crippled. This hurricane will cost thousands of lives and billions of dollars. FEMA is being criticized for its response. Well, that's easy to do. But let's look at some other possibilities.

  • 9.5 earthquake hits San Francisco and triggers subsequent earthquakes up and down the coast. Several million lives lost and hundreds of billions of dollars in property damage. San Francisco and Los Angeles fall into chaos. City officials blame (fill in the blank).
  • Freak storm hits from Wisconsin to Massechusetts creating a coating of ice 6-10" thick destroying millions of homes and businesses, shutting down utilities and destroying the electric distribution grid and gasoline storage facilities. 8 states are without power or heat and millions are homeless. Chaos affects major cities from Chicago to Boston.
  • The Yellowstone Basin erupts on schedule (actually a little late). Western and Midwestern states are covered in 3-10 feet of volcanic ash and the air is poisonous. There are no actual accounts of damage; there will be no accounts for months.
  • A small asteroid strikes the Atlantic Ocean between Virginia and Northern Africa. 300' waves traveling at 700 mph strike the coasts of the U.S., Europe, Africa and South America. All remaining manufacturing is moved to China.
The big question in all of these scenarios is: who gets blamed?

Monday, September 05, 2005

Excessive Spending? - No... this is GIVING

Now is an opportunity to act on your concern for those in the U.S. who have been harmed by the hurricane Katrina.

The American Red Cross provides a significant presence during disasters such as this one. You can donate online quite easily. Some companies will match what their employees give. Check it out. It's simple and you can help someone for the price of a few rounds of golf. I won't miss those rounds that much.

There are other worthy charities. We also prefer The Salvation Army. But that's just a personal preference. We have a truckload of goods to take to their donation center. They will convert those goods into cash to help people.

Just because you can't be there to help, you can still help. We get morally bloated about helping other nations, as in "It's our duty as Americans to blah, blah, blah."

It's time to help our own.

Sunday, September 04, 2005

Excessive Spending - Killing the Golden Goose

Let's hope that $3.30/gallon regular gasoline is an indication of a "bubble" that will burst. The economy is already beginning to tighten its collective belt and people are "just saying no" to travel. Airlines and the tourist industry are getting hurt. Now hurricane Katrina has thrown another wrench into the gears. Will oil prices fall back?

Some, such as Irwin Kellner

Output from the Organization of Petroleum Exporting Countries alone exceeds 30 million barrels per day, and is still rising.

Why, then, are crude oil prices going up? Speculation, that's why.

Lured by rising prices, speculators have been pouring tons of money into the spot and futures markets, betting that prices will go even higher. They're forgetting one thing: the law of supply and demand.

The higher oil prices go, the more likely it is they'll fall. Either demand will drop off or new supplies will come onstream.

This could well result in speculators leaving the oil market as quickly as they came in, thus driving prices down even more.

Dr. Irwin Kellner is chief economist for MarketWatch. He also is the Weller professor of economics at Hofstra University and chief economist for North Fork Bank.

and David Nassar,
As crude retraces on each report that hinders higher prices, we begin to sense the market better suggesting the fear premium priced into oil is "priced to perfection" -- meaning that in the absence of sensational news, oil's correction seems ever closer.

Certainly unfortunate and substantial news could move prices higher, but fear is factored into the market and this leaves room for the oil bears to step in.

Editor's note: David Nassar is chairman and chief executive of

think so.

Let's hope they are right or it could be a very long economic winter.


Thanks, Stephan,

Saturday, September 03, 2005

Environmental Extremism - Category 5

This is the first new entry I've made in a week. It was time to observe what went on regarding the hurricane that struck the Gulf Coast. So here are the observations:

What went right:

  • The National Weather Service accurately predicted the course of the hurricane many days in advance
  • As the hurricane became more violent, people were told to evacuate the coastal areas, including all of New Orleans
  • Most areas hit by the hurricane are beginning the rebuilding process
  • The entire nation is rallying to help those in the damaged areas with supplies and money
What went wrong:
  • New Orleans
Yup, that's it in a nutshell. Oh, I don't just mean that New Orleans was virtually destroyed. That's just the aftermath. Also the chaos afterward is a result of what went wrong... before the hurricane actually struck the city.
  • Settling on a flood basin
  • Building levees that were inadequate to withstand one-in-a-century storms
  • A local government with no emergency plans, including evacuation of the poor, infirm, or hospitalized.
  • A state with no emergency plans
  • A federal government with no emergency plans
  • House representatives and senators unwilling to set aside their pork projects for needed improvements to the levees
  • Local officials unwilling or unable to lead local resources
  • State officials unwilling or unable to lead state resources... including the state national guard under control of the governor
  • Federal officials slow to react to the situation
What's going wrong now:
  • Finger pointing by "leaders"
  • Finger pointing by the press
What's going right now:
  • Army and Navy units have been deployed and are bringing the situation under control and actually helping people.
So what's the conclusion:
  • In a catastrophic situation, politicians and the press are virtually useless
  • When something really needs to be done, bring in the military
  • It's all President Bush's fault because he didn't sign the Kyoto Accord and that let excess CO2 expand too fast and cause a category 5 hurricane
Okay, the last one really doesn't count unless you are JFK, Jr.

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There is always an easy solution to every human problem—neat, plausible, and wrong.
Henry Louis Mencken (1880–1956)
“The Divine Afflatus,” A Mencken Chrestomathy, chapter 25, p. 443 (1949)
... and one could add "not all human problems really are."
It was beautiful and simple, as truly great swindles are.
- O. Henry
... The Government is on course for an embarrassing showdown with the European Union, business groups and environmental charities after refusing to guarantee that billions of pounds of revenue it stands to earn from carbon-permit trading will be spent on combating climate change.
The Independent (UK)

Tracking Interest Rates

Tracking Interest Rates


SEARCH BLOG: FEDERAL RESERVE for full versions... or use the Blog Archive pulldown menu.

February 3, 2006
Go back to 1999-2000 and see what the Fed did. They are following the same pattern for 2005-06. If it ain't broke, the Fed will fix it... and good!
August 29, 2006 The Federal Reserve always acts on old information... and is the only cause of U.S. recessions.
December 5, 2006 Last spring I wrote about what I saw to be a sharp downturn in the economy in the "rustbelt" states, particularly Michigan.
March 28, 2007
The Federal Reserve sees no need to cut interest rates in the light of adverse recent economic data, Ben Bernanke said on Wednesday.
The Fed chairman said ”to date, the incoming data have supported the view that the current stance of policy is likely to foster sustainable economic growth and a gradual ebbing in core inflation”.

July 21, 2007 My guess is that if there is an interest rate change, a cut is more likely than an increase. The key variables to be watching at this point are real estate prices and the inventory of unsold homes.
August 11, 2007 I suspect that within 6 months the Federal Reserve will be forced to lower interest rates before housing becomes a black hole.
September 11, 2007 It only means that the overall process has flaws guaranteeing it will be slow in responding to changes in the economy... and tend to over-react as a result.
September 18, 2007 I think a 4% rate is really what is needed to turn the economy back on the right course. The rate may not get there, but more cuts will be needed with employment rates down and foreclosure rates up.
October 25, 2007 How long will it be before I will be able to write: "The Federal Reserve lowered its lending rate to 4% in response to the collapse of the U.S. housing market and massive numbers of foreclosures that threaten the banking and mortgage sectors."
"Should the elevated turbulence persist, it would increase the possibility of further tightening in financial conditions for households and businesses," he said.

"Uncertainties about the economic outlook are unusually high right now," he said. "These uncertainties require flexible and pragmatic policymaking -- nimble is the adjective I used a few weeks ago."

December 11, 2007 Somehow the Fed misses the obvious.
[Image from:]
December 13, 2007 [from The Christian Science Monitor]
"The odds of a recession are now above 50 percent," says Mark Zandi, chief economist at Moody's "We are right on the edge of a recession in part because of the Fed's reluctance to reduce interest rates more aggressively." [see my comments of September 11]
January 7, 2008 The real problem now is that consumers can't rescue the economy and manufacturing, which is already weakening, will continue to weaken. We've gutted the forces that could avoid a downturn. The question is not whether there will be a recession, but can it be dampened sufficiently so that it is very short.
January 11, 2008 This is death by a thousand cuts.
January 13, 2008 [N.Y. Times]
“The question is not whether we will have a recession, but how deep and prolonged it will be,” said David Rosenberg, the chief North American economist at Merrill Lynch. “Even if the Fed’s moves are going to work, it will not show up until the later part of 2008 or 2009.
January 17, 2008 A few days ago, Anna Schwartz, nonagenarian economist, implicated the Federal Reserve as the cause of the present lending crisis [from the Telegraph - UK]:
The high priestess of US monetarism - a revered figure at the Fed - says the central bank is itself the chief cause of the credit bubble, and now seems stunned as the consequences of its own actions engulf the financial system. "The new group at the Fed is not equal to the problem that faces it," she says, daring to utter a thought that fellow critics mostly utter sotto voce.
January 22, 2008 The cut has become infected and a limb is in danger. Ben Bernanke is panicking and the Fed has its emergency triage team cutting rates... this time by 3/4%. ...

What should the Federal Reserve do now? Step back... and don't be so anxious to raise rates at the first sign of economic improvement.
Individuals and businesses need stability in their financial cost structures so that they can plan effectively and keep their ships afloat. Wildly fluctuating rates... regardless of what the absolute levels are... create problems. Either too much spending or too much fear. It's just not that difficult to comprehend. Why has it been so difficult for the Fed?

About Me

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Michigan, United States
Air Force (SAC) captain 1968-72. Retired after 35 years of business and logistical planning, including running a small business. Two sons with advanced degrees; one with a business and pre-law degree. Beautiful wife who has put up with me for 4 decades. Education: B.A. (Sociology major; minors in philosopy, English literature, and German) M.S. Operations Management (like a mixture of an MBA with logistical planning)