October 31, 2006 | Graham

Framing the market



Nicholas Stern has produced a report Interesting to see the paranoid left fawning over a former head economist of the World Bank. The report attempts to take an economic view of the global warming theory and comes to the conclusion that we need to radically change our ways to avert disaster.
I haven’t read the whole report, but it appears to have a number of problems. One of these is how it frames the risks. Let us assume for a moment that the predictions it makes for increases in global temperature are correct. Are these increases a real problem?
Stern says yes. He says that food production will decrease in vulnerable areas, sea levels will rise and species diversity will diminish and diseases will flourish. The result will be famine, fire, pestilence and flood. So, the world we enjoy now is the best of all possible worlds, but is the neo-panglossianism accurate, or is it bounded by its own limits?
Ask an economist a question, and the usefulness of the answer you get will probably be dictated by how you phrased the question. The two graphs below suggest that the four horsemen of the fiery environmental apocalypse may be preferential to the Dantian hell that could await us otherwise. Warm trumps cold.
Both graphs are courtesy of Professor Bob Carter of JCU. The first shows temperature variations over the last 450,000 years. Anything not in orange is to be avoided. Let’s not forget that at the depths of the last ice-age sea levels were 125 metres lower than now and crop yields were dramatically lower because there was ice everywhere. Stern hasn’t calculated the economic cost of this, but it’s well in excess of his $9 trillion figure for unabated carbon dioxide.
Glacial_inter-glacial.JPG
Now, you might legitimately interject that this is pretty long-term stuff, and discounted cashflows show that anything that happens more than 50 years in the future really doesn’t matter much (which raises the issue – what discount rate was Stern using?).
Bob’s helpfully provided me with another shorter-term graph. Contra the now-discredited hockeystick, this shows that we are in the cooler end of the last 5000 years and that perhaps we ought to be more worried about another “Little Ice Age”. Again, Stern hasn’t calculated the economic loss from a little ice age, but let’s just say that it might be considerable, and at least equal to a 2 degree warming.
Inter-glacial_fluctuations.jpg
So, how would you frame the odds? Fancy a carbon-prolonged indian summer, or bring on winter?
And that’s only if you accept the Stern hypothesis that carbon dioxide is a significant climate forcing agent. More on that another time.



Posted by Graham at 8:02 pm | Comments (11) |
Filed under: Environment

October 29, 2006 | Graham

Wayne Swan a casualty in the CO2 wars?



The Greenhouse debate seems to have swung firmly in the favour of the global warming alarmists, even as the science, and the IPCC reports, are tending in the other direction, and as happens when the public relations hacks really get their teeth into something, truth is replaced by half-truth and then plain hyperbole.
The master of political hyperbole is Wayne Swan, but his latest prouncement is the most hyper I’ve seen yet.
Not only is Wayne pitching for a carbon free future – what sort of a life form does he really think he is – but he’s predicting that if we don’t do something about carbon dioxide now we will all asphyxiate.
Talking yesterday on AM about a preview briefing he had received on the “Stern Report” he said:
“…going carbon-clean is the only growth strategy for the future, and the only way we can maintain prosperity in the world”
and then more alarmingly:
“Well the Chinas and the Indias will come in if we put in place the incentives. They recognise that they have to reduce carbon emissions in their economy if they want their people to breathe and if they want to maintain a prosperous economy into the future.”
More chance of them asphyxiating by putting their collective heads into brown-paper bags, which is what Swan should do with his, than from cabon dioxide emissions.
Apart from his ignorance of the facts, this statement also illustrates Swan’s poor grasp of mathematics, surely a flaw in a would-be Treasurer. How could have made this statement after prattling on earlier in the interview about CO2 in parts per million? At 550 ppm, the level Swan was predicting in 50 years time, we’re talking carbon levels less than a percent, and plenty of oxygen for all!
Full marks to ABC journalist Gillian Bradford for getting these remarkable statements out of Swan. She’s one of the few journalists who appears to be across her brief on this issue.



Posted by Graham at 7:12 am | Comments (8) |
Filed under: Environment

October 28, 2006 | Ronda Jambe

Ecumenical environmentalism



Like many Aussies, I have struggled to balance my revulsion for extreme Islam’s repression of women with an open-minded acceptance of different values. That balance tilts over when I fear for my own life style, given that in this country, women driving, voting and wearing short sleeved shirts is still legal. Hilaly’s comments crossed that line, as have the several religious motivated rape cases.
But now a new movement looks (at last) like it could bridge the gap between cultures. Einstein sought a unified theory to explain everything, but he failed. Now ecumenical environmentalism might bring together the key concerns of our time – global warming and terrorist threats. And it reflects true Aussie values.
It starts from a simple observation – our biggest problems need a simpler, holistic approach. And now that research in the US has revealed fat people are burning 3.8 billion litres of petrol per year more than in 1960, directly as a result of their superfluous weight, the road ahead has become clearer.
We can address these impacts and any religious discrimination against women quite simply: all obese people should wear black body bags, the kind that cover from head to foot. These will apply to anyone, of any age, sex, or religious persuasion, who exceeds the body mass reading of 24. There you have it, a solution in a number.
An added bonus is that they would protect from skin cancer, but their main benefit is in providing an elegant way around religious conflicts while helping to save the planet.
When you consider the impact that obesity has on petrol consumption, and then add in the cost of fabric consumed, packaging used, and general over-consumption beyond the requirements of height and age, obestiy is clearly a sizable contributor to global warming.
The ecumenical side is just a stroke of genius. That requires a little explanation. So here comes the digression….
As a fly on the wall of my times, my first reaction to the Sheik’s comments was along the lines of ‘if the shit is left in the open, the flies will have a feast’, but I then I thought about it.
The sheik is telling us that women are the meat, and men are the cats. The cat will always go where it shouldn’t, as soon as your back is turned, and take what it wants. Cats are, by the nature of their species, predatory, opportunist, utlerly without guilt and absolutely ruthless in gaining their end. They seem to have sex indiscriminately, at least the toms. Once I saw (the sight will never leave me) a large male cat fucking a dead cat in the gutter.
Unlike dogs, cats are not capable of being properly trained or made to comply with the requirements of polite society. However, they are at least naturally clean, something that dogs (and perhaps some men) cannot lay claim to. I recall the ‘pissing walls’ in Egypt, where men would line up in plain view to relieve themselves. The sight (and memory of the stench) will also never leave me.
So one must conclude that like cats and meat, men and women must be kept contained, or at least moderated, if peace is to be maintained, rather than a sexual free for all. Personally, I am of the Bonobo school of socio-sexual persuasion, with a general motto of ‘do it as widely as possible, as often as possible.’ But not in public, please, as in my middle age I do not like to be reminded that young people are getting more than me.
But what form is restraint is least unpleasant, or most efficient? Restraining the cat is one option, hiding the meat is another. Here the analogy breaks down, because meat on a plate can’t get up and really seduce anyone, unless you’re really hungry, or have crashed in the mountains with no food and only your fellow cats for company. Women however can and do seduce. What’s more, they often like it. Just like the cats, or rather men.
And here I must confess that I adore both cats and men.
As I grow ungracefully old, one of the achievements I am most proud of is that, no matter how gorgeous their hair or beard, I have never leapt upon a man opportunistically and raped him. It has not been easy, I assure you, as the sight of a man’s uncovered head (even the baldies, if that’s a comfort to anyone) can stir my lust. But, as is common to my gender, I have controlled myself. (Even when I was a teacher, I only ever had sex with tertiary students, well within the age of consent. And only when they asked me, I hasten to add.)
And in terms of dressing inappropriately, well the bare-chested look is about as provocative as you can get. I practically have to take sedatives when I go to a public beach. For their own protection, in case as I progress towards senility I forget my manners, men should cover up.
But the conclusion is clear: men will have to be locked up if women are to be treated as the ‘jewels’ that Hilaly’s daughter claims he values so much. Only then can women fulfill their sacred roles as mothers, workers, and community backbones, not to mention managing the shopping, cooking, school liaison, etc. Since most families can’t afford for the man to stay home (with his black bag on his head), electronic bracelets could become the norm when the cats are on the prowl.
A curfew might also be useful. They could be community-monitored parole for any men who lay claim to being able to control themselves when allowed out among women. From my long ago experience living in the Middle East, this was possible. The men who grabbed my crotch under the blue waters of the Mediterranean, or who followed me home and inside, only to see my husband cooking dinner, were a minority. The Italian men were nearly as bad, but Australians have been less of a hassle. (The older I get, the better behaved the men seem to be, funny about that).
All up, I applaud the Sheik for bringing to our attention the need to constrain men. Maybe in time they will evolve to the point where they can be allowed out a little each day, and perhaps even trained to control themselves, as most women and their enlightened male partners seem to manage.
end digression…
In the meantime, ecumenical enviornmentalism offers us an alternative. It recognises the flaw in the sad Muslim reasoning that only men are predators with sexual desires. It recognises that women, too, enjoy and seek sexual pleasure. So by unifying environmental concerns with a universal approach to two very serious issues: climate warming and Islamic cultural differences, it gives us all a breather.
All the fat people cover up, (please, I don’t want to look at you). By wearing black bags, they are simultaneously a) muting the distinction between sexes and b) muting the distinctions between religions and c) making it clear that the earth needs less consumption from all of us.
Some smart economist (perhaps the wonderful Australia Institute can leap in here) might do the calculations of how much consumption, food, etc would be saved if all the obese people just had one (or a spare for laundry days) black bag that would cover everything. Until, of course, they were no longer obese.
Women (and men) could feel safe, no longer targetted by hoons because they are not Muslims. No one would easily know, because the differences would be blurred. There would be so many people floating around in black head to toe bags that rapists would be afraid of either targetting their own or worse, discovering a burly man under the robes, a la Crocodile Dundee. And the environment would benefit from a full-on approach to lower levels of consumption. Most black baggers would prefer to stay home, rather than be identified incorrectly as.. well, you get the picture.
And then the rest of us could get on with another contribution to diminish global warming: more active sex, more often, with as many different members of as many religions as possible. Sounds good to me.



Posted by Ronda Jambe at 3:18 pm | Comments Off on Ecumenical environmentalism |
Filed under: Religion

October 27, 2006 | Graham

Hijab hysteria



You can’t strip a man of citizenship because he thinks that some women “ask for it”. Whatever the merits of Sheik Hilali’s comments, the response by some of his detractors, like Sunshine Coast MP Peter Slipper, is no better. You can’t on the one hand condemn Hilaly for being uncivilised, and then on the other exhibit the same tendencies in yourself. Australia is a civilised country because you’re allowed to offend people here, and because stupidity isn’t abolished by law.
In fact, in a rather odd way, it’s quintessentially Australian to say that some women “ask for it”. It’s certainly a sentiment that you’ll find in pretty much any public bar in the country. So it would be a new twist to attempt to deport someone not for being “un-Australian” but for being “too Australian”.
Not that many Australians now think that women ought to cover their heads, but it’s not so long since it was a majority position, which lingered into the 60s. I remember Saturday afternoons driving past the Catholic church at Tugun and watching all the girls, with names like Donna, Brigitte, Mary and Bernadette, walking out of 6:00 o’clock mass with their heads covered by black mantillas. On Sundays at Coolangatta Methodist self-respecting matrons all wore hats in church. I don’t remember hearing any sermons about women wearing provocative clothing, but I do remember vague rumours of them, and the church schools were all very severe on hemline length.
What is most reprehensible in the case of Taj din al Hilaly is not so much what he said – although that was pretty bad – it’s that it is the latest in a long list of statements he has made which he and the Islamic community have tried to cover-up. The latest was when he praised the 9/11 attacks as “God’s work” when opening a mosque in Lebanon. This was explained away as a translation error. That’s the excuse being made in this case.
It is a measure of the intractability of the Islamic issue that Hilaly can not only hold a position of importance, but apparently be very popular in his own area. According to this article in The Australian he gets all his restaurant meals for free as a mark of respect.
Hilaly holding an unpopular set of views is one issue, but the community covering up for him is another one, and much more dangerous. It makes me both alert and alarmed.



Posted by Graham at 8:51 am | Comments (5) |
Filed under: Australian Politics

October 26, 2006 | Graham

Catholic school and teachers union flunk education test



A book in a Catholic school library which labels Robert Menzies a tyrant in the company of Pol Pot and Saddam Hussein ought to be withdrawn – see report of incident here.
I’m no friend of George Brandis’s (although I have been), but my old school debating colleague is right on the money when he wants “100 Greatest Tyrants” taken from the library. Rubbish like that has no place in any school.
What is most striking about this is not that State Premier Beattie labelled Brandis a “drama queen” for his stand – the decay of state education systems and a lack of dedication to academic rigour under largely Labor governments is the major reason why private school enrolments are booming, so what else would you expect him to say?
Nor is it the reflex action of the teachers union to defend the book – the defence of teachers by teachers unions against any type of oversight is the greatest bar to teaching being regarded as a real profession.
No, it is the fact that the principal of a private school – one of the supposed refuges from debased public school teaching – should defend the book. Principal Bernard Durie says the school isn’t “into censorship in a big way yet”, but the basis of education is selection. Presumably this is a school which also files the Bible under Science alongside creationist text books. And if it doesn’t then Bernard Durie has some serious self-examination to do.
But not everything goes the government’s way on this issue – Brandis’s discovery was probably a by-product of him searching for the Maoist tomes that Julie Bishop asserts exist in the bowels of school curricula. They are as yet as elusive as WMD in a Babylonian desert.



Posted by Graham at 10:06 am | Comments (3) |
Filed under: Education

October 19, 2006 | Graham

Telstra sale strategy unethical



Just as with T2 the federal government is requiring investors to borrow money to get into the stock. Not only is it mandatory but they are targetting the bulk of the sale at small shareholders, and then allowing salesmen to use the gearing to disingenuously claim that the investment will yield a 14% dividend in the first year. This article has most of the elements in it, apart from a fair-dinkum analysis of the terms of the sale – http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2006-10-11T075159Z_01_SYD37881_RTRIDST_0_TELECOMS-AUSTRALIA-TELSTRA.XML.
Don’t get me wrong: Telstra ought to be sold-off, but on terms that are straight up and down.
The way the basics of the government deal work are that you pay $2.00 now and an additional unspecified amount, but probably somewhere around $1.50, in 18 months time. This is what is called vendor finance. You owe the government the balance, and just like any other loan it has to be paid. It is a leveraged investment, and it is not appropriate for the small investor market.
The fact that you are geared around 62.5% means that the return on your deposit is artificially inflated and you are disproportionately exposed to pricing risk. As most institutional investors will be short of the stock, the price risk is minimal because they will be buyers after the float, but it is there, and a small movement in price could easily wipe-out the super dividend.
Unlike T2 this sale is being made at the bottom end of the market for Telstra stock, for which investors can thank Sol Trujillo, so there is unlikely to be the same amount of grief. Indeed, I bet some share salesmen are spruiking the benefits to T2 shareholders on the mathematically dubious basis of “averaging down”, which is somehow supposed to make the first loss palatable.
However, a proper analysis of this proposition might well conclude that if you want to boost your returns from the sector and recover your first loss, you would be better-off putting your money into another Telco – the Reuters article has a side panel with some interesting ratios which show the Telstra P/E as being lower than the average for the sector, but growth in earnings also being lower.
Of course, in other government sell-offs, the release of the dead hand of government has allowed the company to take risks and prosper – CSL being the classic example. In this case that probably won’t happen. Without a reduced interest in propping up the share price, the government will be most likely to lean on Telstra to squeeze service prices. Not a situation likely to lead to sales growth picking up.
For me the most stunning thing about this Telstra sale is that while there was a queue of critics before the terms were announced, just about everyone has hunkered down to back the establishment line. Doesn’t say much for finance journalism in the country.



Posted by Graham at 11:18 pm | Comments (4) |
Filed under: Australian Politics

October 10, 2006 | Graham

International nuclear disarmament must be the long-term response to Korea



I’m not a dove or a peacenik, but you have to wonder how much the massive nuclear armaments still held by the US and Russia play into the decision of paranoid states like North Korea and Iran to develop nuclear weapons. If the US and Russia didn’t have their arsenals, or were genuinely in the process of dismantling them, their moral argument would be so much stronger.
The extent of their arsenals (according to this article Russia was estimated to have 22,000 nuclear warheads in 2001, and the US twice as many), make just a few more seem derisory, even if they are owned by a rogue state.
And the existence of these weapons caches weakens the US case against these countries allowing for an easy “moral equivalency” argument along the lines of “How come you are the only ones allowed to have weapons?”
The moral argument is even further complicated by recent US moves to develop tactical nuclear weapons “including ‘mini-nukes’, ‘bunker-busters’ and neutron bombs designed to destroy chemical or biological agents”.
The campaign against nuclear weapons has been aided considerably by their demonisation, yet the proposed US developments make them seem pretty tame and domestic, substituting them for routine jobs currently performed by TNT and RDX.
It’s hard to see anything constraining North Korean nuclear ambitions in the short term, certainly not more sanctions. So the important perspective is the long-term and ensuring that whatever weapons they acquire never get used.
Part of the recipe to doing this will be the balance of terror – so there is a role for US and Russian strategic nuclear arsenals.
Another part has to be accelerated disarmament programs and abandonment of programs to expand the uses for nuclear. This should have the effect of making atomic weapons less attractive as a status symbol for dictators wanting to distract the attention of domestic audiences from other problems, in a way that exacerbating them by applying sanctions won’t.



Posted by Graham at 8:46 am | Comments (10) |