Friday, April 30, 2010

Big Picture Economic Overview

A great post from The Big Picture blog by Barry Ritholtz on the economy as a whole.



I highlighted some sections that are worth noting as the year continues.

1. The Economy is recovering; The recession is over: Of that, we have no doubt, as the data is clear. The free fall of 2008-09 is over, and a gradual improvement is seen across the board. Industrial manufacturing, exports, autos, retail sales, durable goods, travel all confirm that the economy is “healing.”

2. But, the recovery is “Lumpy”: — Part of the reason some people doubt the recovery story is how unevenly distributed the improvements are. Geographically, much of the country is still soft. In retail, it is pent up demand plus luxury goods. In technology, it is mobile devices and consumer products. Financial firms are taking advantage of the steep yield curve and ZIRP to arbitrage profits, as opposed to actually lending. Profits are not evenly distributed either.

3. Government spending is only part of the story: In the midst of the crisis,  Credit froze, the consumer panicked, and business spending looked to be going extinct. Uncle Sam temporarily bridged the gap.

But the argument that government spending is the only game in town overstates the case. Private sector CapEx spending and hiring is improving (albeit slowly); Consumers have come out of their bunkers and are dining out, going to the movies, hitting the malls, and traveling.

We have not returned to the Home ATM days of 2004-07 — and probably won’t in our lifetimes — but the present environment is a massive improvement from the 2008-09 contraction.

4. Weak Improvement in Employment: The massive labor under-utilization is one of the two biggest drags on the economy (RE being the other). Near record low hours worked suggest that employers can simply increase hours rather than make new hires. Thus, I do not look for a V-shaped employment recovery — forget about 400-500k NFP data — anytime soon.

There are 15 million unemployed, and 8 million underemployed — it will take a long time for them to be re-absorbed into the economy. The 2001 recession took 47 months to return employment to pre-recession levels. This recession will likely take 65-75 months to achieve that goal — if not longer.

5. Real Estate (Commercial and Residential): We do not believe that residential real estate has found its natural price level yet. It remains over-valued. This is due to artificially low mortgage rates, foreclosure abatements and mortgage mod programs. We are probably 10-15% over valued, when measured by Median Sales price to median Income, Rent vs Ownership Costs, and Home Value as a Percentage of GDP.

Commercial real estate tends to lag residential by 18-24 months. It is still adapting to the downsizing of America, particularly retail. The over-investment in commercial real estate of the past decade will take at least another 5 years to resolve, if not longer.

6. Deflation? Inflation?:  Well, as my pal Jeff Saut notes, we definitely have “flation.” Just not the type that everyone fears.

As of today, Deflation is a fact, inflation is an opinion. We are still living in a period of falling prices, heavy discounts, wage deflation, asset depreciation and lack of pricing power.  The S&P500 is below levels seen in the 1990s; Wages are flat for a decade.

The risk going forward is that the Fed fails to remove the accommodations in time. But they have Japan as an example of ZIRP with no inflation.  So long as labor under-utilization is near record levels, they can take their time in tightening.

7. The rest of the world: Europe is a disaster, and is likely to remain that way for a while. Asian economies are doing very well, helping to pull the rest of the world along — but China’s market is at 6 month lows, something few people are discussing. The risk in China’s real estate and stock markets has been mostly ignored,. Commodity regions and emerging markets still have strength.

Canadian Water Consumption During Olympics

EPCOR, the water utility company that runs the fountains up in Edmonton, Canada released this graph yesterday. It's water consumption during the Olympic gold medal hockey game, overlaying consumption of the previous day. How much do Canadians love their hockey? A lot.




The first period ends. Time to pee. The second period ends. Time to pee. The third period ends. Time to pee. Consumption goes way down when Canada wins and during the medal ceremony.

Finally, when it's all said and done, the rest of the country can relieve itself, figuratively and literally.

Article/graph  courtesy:  flowingdata.com

Thursday, April 29, 2010

Major League Baseball: No Rainouts through April 22nd

Hard to believe considering the volitile weather of early spring but so far, no rainouts in Major League Baseball. At least until last Friday.

A mixture of rain, sleet and snow in Denver forced the postponement of the Colorado Rockies’ game against the Florida Marlins.


 Photo: Courtesy:  Gazette.com

In the last two decades, at least half the time there was at least one postponement in the first week of the season, STATS LLC found. In 1995, the first rainout came on April 30, but that year started late after the players' strike was settled.



The longest MLB has gone into a season without a rainout was May 20, 1985, when Milwaukee and the Indians were called off at old Cleveland Stadium on the 43rd day of the season.

Wednesday, April 28, 2010

Medical Graduate Numbers

Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the  University of Michigan.  His blog "Carpe Diem" had a great article a few weeks back on the supply of medical graduates over the last few decades.  According to his research, the number hasn't increased as the demand increased in recent years.



This isn't an indictment on the new health care reform legislation but rather a look at the demand for services exceeding the health care system's inability to provide an adequate number of doctors to meet this increased demand.

"The supply of medical school graduates has remained basically flat for the last 30 years (data here). At the same time, the demand for physicians' services has increased over time because of a population that is both increasing and aging. So we've now got more people with more serious end-of-life medical problems demanding more medical care from a limited supply of physicians - and that's a sure prescription for rising MD salaries.

"The marketplace doesn't determine how many doctors the nation has, as it does for engineers, pilots and other professions. The number of doctors is a political decision, heavily influenced by doctors themselves. Congress controls the supply of physicians by how much federal funding it provides for medical residencies — the graduate training required of all doctors."

And we're now going to provide health care to an additional 20-30 million Americans under health care reform when the number of new physicians this year is about the same as the graduating class of 1980?"

Tuesday, April 27, 2010

Hurricane Season and Global Lightning

l Nino is weakening fast in the central Pacific.  As the sea surface temperatures slowly drop into the Summer, the trade winds will relax enough to allow tropical systems to develop much easier than last year.  Neutral conditions will stay steady through Hurricane Season.  Expect this season to be very active.


Back in 2005, Hurricane Katrina and Hurricane Rita ballooned into monster storms in the Gulf of Mexico due to increased water temperatures driven by a current of warm water that travels between Cuba and the Yucatan Peninsula.  This is called The Loop Current.


If a tropical storm develops over this current, it can build and strengthen extremely fast. The loop current could play a pivotal role in hurricane development this season in the gulf and subsequent landfalls.

A snapshot of the Global Lightning over the last 5 days shows activity along the equator heating up.  Notice the widespread lightning over the US during the recent severe weather outbreak last weekend.

 

Monday, April 26, 2010

Has 2010 Featured More Tornadoes Than Recent Years?

...After an event like the one this past weekend, its easy to say "yes" definitely.

In reality, the short answer is NO.  Not even close.

Here are the tornado numbers through the end of April since 2000:

2000:   309
2001:   206
2002:   168
2003:   221
2004:   186
2005:   236
2006:   460
2007:   410
2008:   549
2009:   383
2010:   153

2010 has been the least active tornado season in at least 10 years.  The tornado trend map below really tells the story.  The "79" at the bottom is this year's tornado number before this weekend's event.

Sunday, April 25, 2010

Tornado Outbreak Kills on Saturday

The largest tornado outbreak this season developed late Friday into Saturday across the south killing 10 in Mississippi.  17 Counties are under a state of emergency in Mississippi as the cleanup begins.  The initial reports estimate the tornado to be one mile wide.



Below is the most recent storm report from the Storm Prediction Center.


 The Storm Prediction Center posted their severe weather outlook which marks the first time this season with a HIGH PROBABILITY of severe weather, something that happens a few times a year.


At its peak, the middle of the country was covered in tornado watches.


The rainfall amounts were extensive.


Tornado watches extended into southern Ohio late Saturday evening.

Saturday, April 24, 2010

Severe Weather Outbreak Saturday

The first major severe weather outbreak occurred Saturday.  As of 10:45PM EDT, more than 49 tornadoes were reported since midnight.


Tornado watches are still in effect as of 11PM EDT

Wednesday, April 21, 2010

Happy 45th Birthday Moore's Law


If you follow computer technology then you have probably heard of Moore's Law. Gordon Moore, co-founder of Intel Corportation came up with his famous law back in 1965 sighting the rapid increase of circuits on a single chips. THE ORIGINAL ARTICLE IS HERE


An article on wired.com pointed out that Moore's Law is often misunderstood. The article goes to say that the paper "referred to the number of transistors that could be cost-effectively produced on a single integrated circuit, and he somewhat optimistically predicted that this number would double every year."


The full article is here:  http://www.wired.com/thisdayintech/2010/04/0419moores-law-published/#ixzz0lj2nMhEC

Some highlights of the original paper published in 1965 are:

1.  That means by 1975, the number of components per integrated circuit for minimum cost
will be 65,000

2.  Computer processing power would double every two years.

3.  The cost of computing is cut in half every two years.  In other words.  As the circuitry gets more complicated, the cost drops.

According to a press release from Intel back in September 2009, the new 22 nanometer chips contain the smallest SRAM cell used in working circuits ever reported at .092 square microns. You can fit 10,000 of these cells per millimeter.  Find your ruler, located the small hash marks on the metric side.  Now imagine 10,000 cells between each hash mark.

Eventually, the physical limits of microchips will be realized.  As Mr. Moore said in this article a few years ago:

"Moore reiterated, however, that there really are fundamental limits to his law, regardless of materials. Indeed, while he admitted to being “perpetually amazed” at how technologists have been pushing those limits out ahead of us, Moore said the end times are near. So when can you expect the law that has driven you to replace your computer every 2-3 years to be obsolete? You’ve got ten-to-15 years..."  Wired.com

Tuesday, April 20, 2010

Icelandic Volcano Continued

Measuring the particulates in the atmosphere from the Icelandic Volcano was critical in determining when and for how long air traffic was to be grounded.  A good friend of mine who is a pilot was flying one of the last flights out of Europe before they grounded air travel.

Astronomer Snaevarr Gudmundsson took this photo along with hundreds of others as the eruption was occuring.

He shared his incredible experience with Universe Today: 

“I stayed near the volcano from about 16:00 hours to 22:00 hours on Saturday and watched its impressive eruption,” Gudmundsson said in an email to me. “Amazing event, awesome explosions of 1200 C hot magma reaching ice and water. I shot more than 550 images during these hours of continuous enjoyment. Sounds ridiculous but its ever changing appearance was never boring.”


Yet another fantastic lightning image within the ash plume. 

This image is from a ground-based LIDAR (Light detection and ranging) using a 532 nanometer cross polarization NFOV (Narrow field of view) telescope.  The ash cloud is the brighter pocket of red and dark orange which sinks over time.


According to the SIRTA website out of France (research site for atmospheric detection--loose translation), the instrument is "capable of retrieving the optical and microphysical caracteristics of clouds and aerosols particles in the boudary layer and the troposphere (between 0.1 km and 15 km). Two wavelengths are emitted by the laser: 532 nm and 1.064 ┬Ám ; the detection system is capable of measuring the signal at 532 nm with the same polarization than the emitted beam."  In other words, instead of using conventional radar, which sends a microwave signal, this uses a laser.

A great simulation from the Rhenish Institute for Environmental Research at the University of Cologne showing the ash plume descending over Europe since last Wednesday.





Monday, April 19, 2010

The Icelandic Volcanic Eruption



Icelandic Volcano Photo.   Courtesy:  Snaevarr Gudmundsson

A large volcanic eruption on iceland from a volcano named "Eyjafjallaajokull" has shutdown airtraffic to an extent not seen since 9/11.  The particulates in the ashcloud have been known to shutdown jet engines.  As a precautionary measure, more than 60,000 flights have been grounded since the eruption.

While the science both volcanic and atmospheric is newsworthy, the pronounciation of the volcano's name is stealing headlines due to its phoenetic complexity and journalists' butchering of it.

NPR's website has a great writeup on how to pronounce it.   Trust me, it won't help too much but its worth a listen.

http://www.npr.org/blogs/thetwo-way/2010/04/iceland_volcano_eyjafjallajoku.html

...or this youtube audio clip.

http://www.youtube.com/watch?v=fqXc8i8CvNs

Here is a great satellite animation showing the ash plume.

 

The Norwegian Institute for Air Research shows the computer model ash plume dispersal forecast into Tuesday, April 20th.  You can see why given the aerial coverage of the ash why air traffic was so greatly affected.

 
Yet another snapshot of the ash plume moving across the Norwegian Sea


In 24 hours, the ash cloud moved southeastward into continental Europe.


A great FAQ section of the Icelandic Meteorology Office on volcanoes.

http://en.vedur.is/earthquakes-and-volcanism/articles/nr/1880

Also, a list of volcanic eruptions in Iceland since 1900

http://en.vedur.is/earthquakes-and-volcanism/articles/nr/1874






Friday, April 16, 2010

Recent article on the 1918 EL NINO in AMS Bulletin



I usually don't get to issues of the AMS Bulletin until I am knee deep in back issues.  So this morning, I flipped through February's issue and came across an excellent paper on the El Nino of 1918 and its relation to the influenza pandemic and other climate patterns that existed at that time.


Climate teleconnections before 1950 are very difficult to quantify due to the lack of data from that era.  Buoy arrays didn't exist.  Ground based temperature records are not as reliable as you go back to the start of the 20th century.  This paper aims to trace back the record through reanalysis of existing data.

The paper is not long nor is super-technical or filled with equations.


1918 EL NINO PAPER HERE

Thursday, April 15, 2010

US Statewide Temperature Ranks

The first 15 days of April have been uncharacteristically warm across the eastern 2/3rds of the US.  Here are the US temperatures compared to average for the first week of April.

 

A quick look at US statewide temperature rank starting in September of 2009









Was this March historically warm?  March of 2007 featured widespread warmth



The average temperatures from December 2009 through February 2010


 Remember the COLD summer of 2009?


Wednesday, April 14, 2010

Freakonomics Podcast: "Faking It"

As a supplement to the newest Freakonomics book called "Super Freakonomics", the Freakonomics Podcast on the New York Times website features updated elements from both Freakonomics books and their brand of economic theory applied to brand new societal subjects you've experienced but probably not thought much about.

The newest episode titled "Faking It" focuses on faking it in social situations, politically and religiously.



Its worth a listen.

Download from iTunes HERE


Or directly from the Freakonomics site.

Tuesday, April 13, 2010

Ballpark Orientations

A great graphic courtesy:  www.flipflopflyin.com  showing all Major League Baseball ballpark orientations.  It seems that even the newer ballparks keep the eastward orientation of the batter so that the hitter doesn't face the sun in the early evening.

Monday, April 12, 2010

NEW Video Game Record

If you've ever seen the  movie King of Kong: A Fistfull of Quarters, you will quickly understand why video game records are considered to be--by the ones who strived to break them--hallowed numbers that deserve to be placed on a pedistle with other records in other sports.


We all remember the classic games.  Pac-Man, Frogger, Donkey Kong, Gallaga.  Each one has a place in the minds of the classic gamers from the early 1980s.  Each one has had a record broken in recent years. Yet one game has eluded players for almost 30 years.



Astroids is a simple, shooter game that doesn't have the luster as the popular games mentioned above.  The record which was originally set back in 1982 by Scott Safran at the peak of the first video game boom.  His score of 41,336,440 just fell to John McAllister of Seattle with a score of 41,338,740. 

It took him 58 hours.

Friday, April 09, 2010

Thursday, April 08, 2010

Tim Berners-Lee on an "OPEN DATA" Web

The creator of the internet, Tim Berners-Lee has been pushing the Semantic Web for almost a decade. A web that is based on the data WITHIN documents rather than the documents themselves is how he sees the Internet of the future.

A new element found...more like created in the lab



Element number 117 discovered.  According to this article, it fits inbetween 116 and 118 which have already been discovered.


READ HERE FOR THE FULL ARTICLE

Look.  I'm not a physicist or chemist (although I took my fair share of high level science courses in college) but how do you discover element 117 AFTER 118?

The new name (unofficial) is:  ununseptium

If I create a new element in a lab, I want to be used as an artifical sweetner.  I can see it now:  Radioactive sweetner for your cup of "Joe" in the morning.  Its so heavy, you can taste the bevy of protons swimming around.

Wednesday, April 07, 2010

Economic Biases; Poor Reasoning



A great post on The Big Picture Blog describing how our biases have guided how we perceive the economic changes over the last several years. 

While this type of behavior isn't anything new--we are all human after all--biases and irrational conclusions seem to be getting a stronger lift through media outlets on both sides.   It is still amazing to me that even among individuals who are educated fall victim to biases and do nothing to change their habits.  They rarely weed through their ideology to get to the real truth.  As a psychologist once told me, "People are afraid of what they don't know or what makes them uncomfortable."

How do individuals perceive FINANCIAL REGULATORY REFORM, INFLATION, CREDIT CRISIS, MARKETS? Read ON HERE



Tuesday, April 06, 2010

Bank Failure Counter

This doesn't even make the last "block" of a newscast anymore. Yes, bank failures continue. This year, its the regional banks versus the larger banks.

NUMBER OF BANK FAILURES:

2000: 2
2001: 4
2002: 11
2003: 3
2004: 4
2005: 0
2006: 0
2007: 3
2008: 25
2009: 140

2010 (April 5th): 66

Sunday, April 04, 2010

2010 Pecota Projections Are FINAL

The 2010 Baseball season is here. PECOTA, the Player Empirical Comparison and Optimization Test Algorithm is a statistical method for evaluating players. Using this method, accurate predictions have been made on overall team performance.

Snapshot of the American League Central.


Full link: http://www.baseballprospectus.com/fantasy/dc/

Thanks to Roy Neyer of ESPN.com for this baseball note:

Box score of the last game in which a player went 7 for 7.

Box Score Snapshot:

Full link: http://www.baseball-reference.com/boxes/CHN/CHN197509160.shtml

Friday, April 02, 2010

Very First Satelllite Photo Anniversary


Try forecasting with an image like this in 2010. It was 50 years ago when TIROS-1 (Television Infrared Observation Satellite) sent the first images of cloud cover over the United States. The mission last only 78 days but the data proved incredibly valuable in developing future satellites to enhance weather prediction. Imagine hurricane forecasting without satellite technology?

FULL STORY HERE FROM NOAA