The Coming Unemployment Tsunami

People who are interested in the stock market will be familiar with technical analysis of stock charts, the reason this analysis works is the stochastic element in the stock charts-the results of the interaction between a large number of actors-the reason the analysis ultimately fails is that stock indices are not stochastic processes.

Leaving aside the question of why the technical analysis works or fails let us apply such analysis to a different kind of a chart, we examine the chart of employment-population ratio for the US for the last sixty years.

Reviewing the Review - Supplement

Here are more graphs that I have been extracting from BP’s Statistical Review of World Energy 2007 (available as an MS Excel workbook on the Internet at: http://www.bp.com/statisticalreview).

Graph 10: This graph shows oil production in different parts of the world, which has experienced significant decline. It plots total US production (thousands of barrels per day-right side) and the total production of Australia, UK and Norway (thousands of barrels per day-left side) from 1965 to 2006.

Reviewing the Review

Reading BP’s Statistical Review of World Energy 2007 (available as an MS Excel workbook on the Internet at: http://www.bp.com/statisticalreview), I was forced to convert the raw data into graphs to make any sense of them; this post contains these graphs.The graphs are presented without any conclusions or arguments, just an explanation of the data.

Graph 1: First we start with the price of oil. Two prices are plotted ($-left side) one for nominal price and the other inflation-adjusted price from 1861 to 2006.

The Humility of Uncle Scrooge

Fed up with uncle Scrooge’s smugness Donald Duck decides to take his uncle and show him real wealth, so he takes him to the biggest ranch in Texas. The ranch owner starts showing them the almost Herculean dimensions of his ranch, really silly stuff, to the astonishment of Donald Duck and the indifference of uncle Scrooge who says nothing but only take notes. At the end they are shown a very small exit door, in contrast to the big entrance, where people who entered with a big head exit with a humbled disposition.

At this point Donald Duck expects his old uncle to exit humiliated at the great wealth just witnessed, instead he congratulates the rancher on his success and demands payment for the loan that the rancher took to buy the magnificent ranch; humbled by this revelation Donald exits from the small door.

The Butterfly in a Graph

The so-called ‘butterfly effect’ is a very important scientific concept that the general public should be aware of, unfortunately it has been popularised using the obligatory oversimplified mental image of a butterfly causing a storm, etc.

Those kinds of oversimplifications-that has been popular since Sputnik made the headlines-are favoured by the journalists who copy them from Wikipedia without really understanding them and paste them into their articles to add some padding and give the appearance of understanding where there is none. If one does not understand the concept beforehand he will not be helped by these mental images that simplify too much and inform too little.

But the concept remains important and has to be convoyed to those who wouldn’t understand the mathematical definition, so what is the alternative to the oversimplified mental image? How about a simple image?

Re-Examining Bigger, Faster and More Part 2

[Note: this piece was written some time ago and the numbers are those of 2006]

Some people blame the high oil prices on China and India, how true is that accusation?
First let’s take a look at the size of the three biggest countries in the world:

Re-Examining Bigger, Faster and More Part 1

[Note: this piece was written some time ago and the numbers are those of 2006]

Some people claim that China is the second biggest economy of the world, they give this list as a proof:
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29
so: USA=$12,277,583M  & China=$9,412,361M
    USA= number 1     & China= number 2

But this list is not real numbers, it’s made with statistical mumbo-jumbo which very few people in the world understand (always a bad sign); you can try for yourself at this article:
http://en.wikipedia.org/wiki/Purchasing_power_parity

The real numbers come from this list