Sunday, November 30, 2008

Some things still need 'splainin

[Update. In my rush to get this done, I neglected to include the article's thesis. I have added the first quote below, before dealing with some atrocious problems with organization.]

A couple weeks ago I tried, with a striking lack of success, to come to terms with The Savings Rate, and particularly the frightening lack thereof.

Last week's Economist included this article, The end of the affair.
An important reason why the American economy has been so resilient and recessions so mild since 1982 is the energy of consumers. Their spending has been remarkably stable, not only because drops in employment and income have been less severe than of old, but also because they have been willing and able to borrow. The long rise in asset prices—first of stocks, then of houses—raised consumers’ net worth and made saving seem less necessary. And borrowing became easier, thanks to financial innovation and lenders’ relaxed underwriting, which was itself based on the supposedly reliable collateral of ever-more-valuable houses. On average, consumers from 1950 to 1985 saved 9% of their disposable income. That saving rate then steadily declined, to around zero earlier this year (see chart). At the same time, consumer and mortgage debts rose to 127% of disposable income, from 77% in 1990.

Strip from the rest of the article an unnecessary re-proving that anecdote-is-not-data, 24 some-odd column inches boils down to this:
The risk is that the recession will be longer and the recovery weaker than expected as consumers retrench.
Okay, fine. As far as it goes. However, something needs 'splainin. Except for a vanishingly small period in 2005, the US savings rate has always been positive.

So, riddle me this: how can debt increase in the face of a positive savings rate, no matter its actual value?

Saturday, November 29, 2008

The Oscar for the best performance in the inability to grasp the obvious goes to..

The Earthwatch Institute. Somehow it seems that it should be obvious that during an economic crisis popular support for economically harmful legislation to promote the Quixotic cause of Global Warming prevention would wane.
Efforts to support global climate-change falls: Poll
Peter O'Neil, Europe Correspondent, Canwest News Service
Published: Thursday, November 27, 2008

PARIS - There is both growing public reluctance to make personal sacrifices and a distinct lack of enthusiasm for the major international efforts now underway to battle climate change, according to findings of a poll of 12,000 citizens in 11 countries, including Canada.

Results of the poll were released this week in advance of the start of a major international conference in Poland where delegates are considering steps toward a new international climate-change treaty to replace the Kyoto Protocol, which expires in 2012.

There already are reports emerging that some countries, such as coal-dependent Poland, are pushing for special treatment to avoid making major commitments to slash carbon emissions during a global economic downturn.
A file photo showd snow cannons blasting artificial snow on a slope in Kitzbuehel, Austria. Due to the uncommonly warm weather many European alpine ski resorts have no snow.

Less than half of those surveyed, or 47 per cent, said they were prepared to make personal lifestyle changes to reduce carbon emissions, down from 58 per cent last year.

Only 37 per cent said they were willing to spend "extra time" on the effort, an eight-point drop.

And only one in five respondents - or 20 per cent - said they'd spend extra money to reduce climate change. That's down from 28 per cent a year ago.

Carbon taxes make about as much sense in the current economic climate as borrowing money to invest in magic bean futures, but some people just refuse to realign their religious ideology with reality or common sense.

"There's consumer reluctance that's creeping in, and we've seen that some are being stunned into inaction by the enormity of the task," said Earthwatch executive vice-president Nigel Winser.

Results of the poll suggested that 55 per cent of respondents in the 11 countries said their governments should be doing more by investing in renewable energy sources, such as wind, solar and wave power.

That's more than double the 27 per cent who wanted their governments to participate in Kyoto-style international agreements to reduce emissions.

In Canada, the same portion favoured renewable-energy options, while 32 per cent supported collective international efforts.

"People believe governments are focusing too much attention on indirect actions that pass responsibility for climate change onto others, such as increasing taxes on fossil fuels, encouraging individual environmentally friendly activities and participating in international negotiations, such as the Kyoto Protocol," the report said.

"More needs to be done to inform consumers about measures such as green taxation or carbon trading to help them understand how tangible these can be."

No, people believe governments are focusing too much attention on harmful and unnecessary actions that are called for by shrill activists with an ideological axe to grind with capitalism.

And people do not need to be more fully informed. They are already overinformed, and the are starting to make a judgment about where fuzzy fears about ecological calamity fit within their hierarchy of needs.

More break-up news

That the US may be on the verge of breakup is debatable but highly unlikely, but there are other major powers facing economic and demographic crises that make our problems look like an ice-cream headache:
China Faces A Sexual Crises

November 28, 2008: The U.S. National Intelligence Council recently issued a report, directed at national leaders; "Global Trends 2025: A Transformed World". Would you believe, the Executive Summary is about eight pages long? Few senior people have enough patience to wade through that. Fortunately, a lot of what was in the report was fairly obvious for anyone that's been paying attention.

But the main points are that by 2025, the post-World War II international system will be revolutionized, as new players, like Brazil, Russia, India and China, will have a seat at the international high table. This is a "Duh." Russia's been a player since 1945. China and then India joined up by the '90s, and Brazil, well, there's a saying "Brazil will always have a bright future"

The unprecedented transfer of wealth roughly from West to East now under way will continue for the foreseeable future. But beyond 2025, Russia and China face some serious demographic problems. China's "one child" policy (to halt population growth), and the unanticipated appearance of cheap sonograms (enabling parents to determine the gender of their child while there was still time for an abortion) has caused an imbalance in the gender ratio. There are now 115 boys for every 100 girls. Young men are having a problem finding wives. Wealthier urban males attract more women from the rural areas (where 70 percent of Chinese still live), leaving a lot of lonely, poor and angry young men in the countryside. The smaller generations means that the proportion of elderly (made wealthier and healthier by the booming economy) is skyrocketing, while the workforce is shrinking. Both these trends are bad, and will have negative social and economic impacts. India has the same gender imbalance problem, but a growing population that contains a higher proportion of poor people than in China. Not good.

Unprecedented economic growth, and a global population that has 1.5 billion more people, will put pressure on resources. There's not enough energy, food, and water to support the rising expectations of the growing middle class in China and India.

The Middle East remains a source of conflict. The social, economic, political and religious crises within the Islamic community will have to be resolved, somehow, before the threat subsides. Meanwhile, the spread of nuclear weapons makes future conflicts within the Middle East more dangerous.

More immigrants for us. The most capable will flee to here, the least capable will stay put and suffer. Somehow I don't see too many emigrants from China and India fleeing to Russia.

Friday, November 28, 2008

Too Close for Comfort

A friend of mine sent me this today:
Dateline Mumbai;

I was lucky. Just two hours separated me from a life altering event.

Yes I was there. My flight was on approach to BOM when the first terrorist attacks took place. Our ETA to the Oberi/Trident hotel was about 90mins later. The outbound crew was scheduled to be in the lobby about 20mins after the first attack at the hotel (10:30pm).

My crew spent 6hrs on the aircraft before being relocated to one of the airport hotels. In retrospect, NWA should have gotten us there immediately. We were the crew who would fly out of BOM. Being off duty on the aircraft is not resting, and I correctly guestimated how most of the decision process was going to play out over the next 12hrs. We were eating into what would be a 48hr period with (in my case) just 4hrs of sleep. I thought my day couldn’t get much worse.

At this moment, I’m on a flight from BOM-AMS. My crewmembers are all safe, and we have nine of eleven of the crew who were at the Oberi/Trident. Sadly, a pilot and FA are still at the Oberi, holed up in their rooms. NWA hired two different civilian extraction teams to get them out of the hotel safely ... you know, expats - challenge/response passwords & all that James Bond stuff ... That may have worked initially; but the hotel was locked down by the local military (to the exclusion of those rescue teams) and that simply provided the terrorists time to reorganize, take hostages, and prepare for a long standoff.

Flashback to Oberi hotel. Some stories from that unfortunate crew follow: (Apparently, a well built hotel muffles sound more than you might think ..... )

F/A exits the elevator in the lobby of the Trident. The terrorists (probably) just gunned their way through the lobby, into a connecting hallway to the Oberi (their primary target). Bodies and pools of blood everywhere. The two girls at the front desk, Bellman, and Doorman all killed in the initial attack. All other people in the lobby were either shot/killed or helped the injured out of the hotel. The FA returned to his room then followed a housecleaner out through a (sort of) hidden stairway into the relative safety of the street. I later found out the hotel manager, who lives in the hotel with his wife and children, were all killed in the initial attack. That may point to an “insider” helping the terrorists.

Another F/A goes to the elevator to head down to the lobby. Doors open and the interior of the car was splattered in blood. She returned to her room and got a few other F/A’s and left that floor via the emergency exit. Once out on the exposed outer stairway, the fire door locked behind them. If they ran into trouble down below, without another exit strategy, they’d be truly screwed. Near the bottom, they heard a lot of commotion beyond a set of double doors. They were potentially stuck in a real bad situation. They backed up a bit, laid down and played possum (wouldn’t have worked - no blood). A few minutes later a police team came up to their position and escorted them to the relative safety of a nearby parking garage.

A male Chinese F/A was trying to escape the hotel following a hotel employee through a different pitch black service stairway. He opened a door to a short hallway leading into the lobby. Shell casings and damage littered the floor. He started into the lobby and came face to face with one of the armed terrorists. Fortunately, he was not in uniform, and wearing a European style black leather jacket. He didn’t fit the victim “profile.” He turned around, back through the hallway ... got out alive.

That crew eventually spent about 9hrs on an ascending ramp at a concrete parking structure about two blocks from the hotel. The F/O on the scene separated that crew from perhaps 300 other confused civilians. Automatic weapon fire and hand grenade explosions permeated the restless night. They were able to keep in touch with NWA security via an international cell phone. They got on a charter bus about 9am, and were transported to the hotel where my crew was located.

I’m now in AMS. I’ll be on a flight to civilization in another 3hrs. The two crewmembers stuck in the BOM hotel are still OK, but ... still waiting to be rescued ... along with Lufthansa and Air France crews.

The above was a quick summary of what happened last night. I could get into a Lot more detail. But right now, there’s a shower with my name in it.

Going out on a limb here, I know, but I'll bet some Religion of Peace adherents found Revealed Justification for machine gunning people going about their daily lives.

Thursday, November 27, 2008

From the Wishful Thinking file

Russian analyst predicts decline and breakup of U.S.

MOSCOW, November 24 (RIA Novosti) - A leading Russian political analyst has said the economic turmoil in the United States has confirmed his long-held view that the country is heading for collapse, and will divide into separate parts.

Professor Igor Panarin said in an interview with the respected daily Izvestia published on Monday: "The dollar is not secured by anything. The country's foreign debt has grown like an avalanche, even though in the early 1980s there was no debt. By 1998, when I first made my prediction, it had exceeded $2 trillion. Now it is more than 11 trillion. This is a pyramid that can only collapse."

The paper said Panarin's dire predictions for the U.S. economy, initially made at an international conference in Australia 10 years ago at a time when the economy appeared strong, have been given more credence by this year's events.

When asked when the U.S. economy would collapse, Panarin said: "It is already collapsing. Due to the financial crisis, three of the largest and oldest five banks on Wall Street have already ceased to exist, and two are barely surviving. Their losses are the biggest in history. Now what we will see is a change in the regulatory system on a global financial scale: America will no longer be the world's financial regulator."

When asked who would replace the U.S. in regulating world markets, he said: "Two countries could assume this role: China, with its vast reserves, and Russia, which could play the role of a regulator in Eurasia."

Asked why he expected the U.S. to break up into separate parts, he said: "A whole range of reasons. Firstly, the financial problems in the U.S. will get worse. Millions of citizens there have lost their savings. Prices and unemployment are on the rise. General Motors and Ford are on the verge of collapse, and this means that whole cities will be left without work. Governors are already insistently demanding money from the federal center. Dissatisfaction is growing, and at the moment it is only being held back by the elections and the hope that Obama can work miracles. But by spring, it will be clear that there are no miracles."

He also cited the "vulnerable political setup", "lack of unified national laws", and "divisions among the elite, which have become clear in these crisis conditions."

He predicted that the U.S. will break up into six parts - the Pacific coast, with its growing Chinese population; the South, with its Hispanics; Texas, where independence movements are on the rise; the Atlantic coast, with its distinct and separate mentality; five of the poorer central states with their large Native American populations; and the northern states, where the influence from Canada is strong.

He even suggested that "we could claim Alaska - it was only granted on lease, after all."

On the fate of the U.S. dollar, he said: "In 2006 a secret agreement was reached between Canada, Mexico and the U.S. on a common Amero currency as a new monetary unit. This could signal preparations to replace the dollar. The one-hundred dollar bills that have flooded the world could be simply frozen. Under the pretext, let's say, that terrorists are forging them and they need to be checked."

When asked how Russia should react to his vision of the future, Panarin said: "Develop the ruble as a regional currency. Create a fully functioning oil exchange, trading in rubles... We must break the strings tying us to the financial Titanic, which in my view will soon sink."

Panarin, 60, is a professor at the Diplomatic Academy of the Russian Ministry of Foreign Affairs, and has authored several books on information warfare.

The fatal flaw in Pnarin's thesis is that nations are held together by prosperity. The same thinking could have been used, wrongly, to predict the breakup of the US during the Great Depression, when the cultural divisions among the various regions of the country were greater than they are today. If anything, I see the nation becoming more united by the current crisis. The incoming president will get the political leeway to inject the federal government into the economic and social life of Americans to a greater degree than any time since World War II. Whether his programs work or not, they will be clung to by a frightened populace as a shared response to a national crisis.

I think that Panarin is looking at the US through glasses tinted by ethnic nationalism. Ethnic nationalists will never get America. They don't understand what keeps the disparate racial, cultural and ethnic groups together under a single shared identity, so it is natural to hold a perpetual prediction of the imminent breakup of the US. It will take some time to recover from the current mess, but I give the US the longterm edge over every other power on the world stage, precisely because we are not ethnic nationalists. I doubt that any major country will be able to replicate what we have accomplished. It is not a short term accomplishment.

Wednesday, November 26, 2008

Religion Revealed

Just when worry was yielding to fear about putting that final touch on my Christmas list, a new translation of the Quran hit the bookstores just in time.

To prepare oneself for reading the Quran, keep in mind:

  • Unlike the Old Testament, It does not tell the history of a faith

  • Unlike the New Testament, it is not the biography of a particular prophet

  • It neither narrates Mohammed's life, nor Islam's rise

  • The Quran's 114 chapters (suras) are arranged by length, with no regard for chronology or theme

  • Sura titles typically have nothing to do with their contents

That's good to know, although how it will help the ever present credibility issue is less certain.
The Quran itself states that its verses have multiple meanings, some of which are unfathomable to human beings and known only to God. And yet, in both style and content, the Quran is unique among scriptures.
And yet? Huh? That is a an odd way to say "Clearly", as a preface to a statement of the obvious, which turns aside the sentence that really should be there: "Clearly, in both style and content, it serves as an example of concoction, not revelation."

Since the end of the 7th century, when the Quran became canonical in its current form,
It was believed that translating the Quran into any other language would violate the divine nature of the text. Translations were done, of course. But to this day, non-Arabic versions of the Quran are considered interpretations of the Quran. Unless the original Arabic verses are embedded on the page, it cannot technically be called a Quran.
How odd, that Allah in all his all knowing powerful perfectness, was monolingual. Of course, specific revelation is scarcely unique to Islam, nor is the failure of Muslims to wonder if the very specificity of the revelation renders the whole project suspect.

The consequence of this Arabic purity has been to put the revealed text beyond inspection for the vast majority of Muslims who cannot read Arabic, just as Christians before Gutenburg had no first hand knowledge of what the Bible said.
That is now changing. Over the last century, the Quran has been translated into more languages than in the previous 14 centuries combined. A great many of these translations have been done not by Muslim clergy but by scholars and academics, by Muslim laity and non-Muslims, and, perhaps most significantly, by women.
Unsurprisingly, Arabic words can have multiple, or even contradictory, meanings. Think of "cleave". Consequently, translations into another language (or, for that matter, exegesis even within Arabic) can have a lot to do with the eye and mind of the beholder.
Take the following example from Sura 4:34, which has long been interpreted as allowing husbands to beat their wives: "As for those women who might rebel against you, admonish them, abandon them in their beds, and strike them (adribuhunna)." The problem, as a number of female Quranic scholars have noted, is that adribuhunna can also mean "turn away from them." It can even mean "have sexual intercourse with them." Obviously, which definition the translator chooses will be colored by whatever his or her preconceived notions are about a husband's authority.
Now, there may be words within English that could, within context, be open to this degree of interpretation. Offhand, I can't think of any; cleave certainly would not qualify.
The new crop of Quran translators are brushing aside centuries of traditionalist, male-dominated, and often misogynistic clerical interpretations in favor of a more contemporary, more individualized, and often more gender-friendly approach to the Quran.
And, along the way, finally pitching any notion that the Quran is, in fact, Revealed verbatim right into the bulging dumpster of failed religious ideas.

In apologetics speak:
they are not only reshaping the way Islam's holy book is read; they are reinterpreting the way Islam itself is being understood in the modern world.
Translated from Orwellian to English: They are making it up as they go along.

The Book of Mormon's genesis is sufficiently recent so that all who are not Mormon are able to correctly identify it as fabricated where it wasn't plagiarized.

Just as with the Quran, the contents of which were essentially passed on by WOM until 50 years after Mohammed's death. The mists of time blur its status as a work of ad hoc fantasy and self glorifying delusion. However, that is no excuse for anyone to take it seriously; that millions think it gives their religious concoction warrant to rule the world should be a matter of widespread hilarity.

Maybe that will be the unintended consequence of humans compensating for Allah's monolingualism.

Thursday, November 20, 2008

It was vinegar to start with

A couple days ago, the Netflix coughed up 2001 A Space Odyssey, which has turned 40 this year.

I remember seeing it during its first run, my 13-yr old brain in thrall to its cosmocity. Coming only two years after the debut of Star Trek, it further fed my desire for all spacey things.
Despite receiving mixed reviews upon release, 2001: A Space Odyssey is today recognized by many critics and audiences as one of the greatest films ever made; the 2002 Sight & Sound poll of critics ranked it among the top ten films of all time.[1] It was nominated for four Academy Awards, and received one for visual effects. In 1991, it was deemed "culturally, historically, or aesthetically significant" by the United States Library of Congress and selected for preservation in their National Film Registry.


The other SWIPIAW, the woman-child and I, watched it last night, with high expectations borne of 60s-infected memory and the preceding puffery.

Its pacing is seven bad ADD cases shy of leaden. The acting, in the few moments when it can be detected without extremely sensitive instruments, is comatose. Of the three critical plot points, at least four are indiscernible to any viewer who hasn't committed the book to memory.

As for the special effects, it is unfair to judge a 40 year old movie by modern CGI so powerful that real human actors are probably soon to be rendered superfluous. Along with their agents. Still, it only takes, oh, 15 seconds of multi-colored lights streaming towards the viewer from the vanishing point to fully convey the notion of whoathatissoinfinitedude. Minutes on end, besides redefining overkill, served to nearly bring time to a stop, a feat similarly accomplished in more modern times by that second Lord of the Rings threat to the very concept of entertainment.

My wife and daughter had quite the hoot seeing who could heap the most abuse on what they came to call "2001 Minutes of Space Idiocy".

Space Idio ... Space Odyssey premiered the year before the first lunar landing. Its creators made the classic mistake of linear extrapolation. In their 2001, we have regular transportation to a moon base, and build in 18 months a space ship capable of carrying a crew of seven (five in hibernation) to Jupiter.

In our 2008, we have spent $100B building an International Space Station to nowhere.

Speaking of leaden pacing.

Thursday Evening Lyric

"War On Drugs"

She likes to sleep with the radio on
So she can dream of her favorite song
The one that no one has ever sung since she was small

She'll never know that she made it up
She had a soul and we ate it up
Thrown away like a paper cup
The music falls

The only flaw in her detailed plan
Is where she wins back the love of her man
Everyone knows that he's never coming back

He took her heart and she took his name
He couldn't stand taking all the blame
He left her only with guilt and shame and then she cracked

Won't it be dull when we rid ourselves
Of all these demons haunting us
To keep us company

In the dream I refuse to have
She falls asleep in a lukewarm bath
We're left to deal with the aftermath again

On behalf of humanity
I will fight for your sanity
How profound such profanity can be

Won't it be dull when we rid ourselves
Of all these demons haunting us
To keep us company

Won't it be odd to be happy like we
Always thought we're supposed to feel
But never seem to be

Near where I live there's a viaduct
Where people jump when they're out of luck
Raining down on the cars and trucks below

They've put a net there to catch their fall
Like it'll stop anyone at all
What they don't know is when nature calls, you go

They say that Jesus and mental health
Are just for those who can help themselves
But what good is that when you live in hell on earth?

From the very fear that makes you want to die
Is just the same as what keeps you alive
It's way more trouble than some suicide is worth

Won't it be dull when we rid ourselves
Of all these demons haunting us
To keep us company

Won't it be odd to be happy like we
Always thought we're supposed to feel
But never seem to be

Hard to admit I fought the war on drugs
My hands were tied and the phone was bugged
Another died and the world just shrugged it off

By the Barenaked Ladies.

Pop music, by definition, is loud and vacuous. Not this instance, though; it is both musical and evocative.

Very reminiscent of Brit's writing, IMHO.

Friday, November 14, 2008

Some things need 'splainin

The financial schlamozzle has forced me learn more about a whole host of financial terms than, frankly, I cared to know. In the process, it became clear that either I am completely ineducable -- full disclosure: this is my default option -- or that people who are paid to know better have little more insight into their professional area of expertise than a dog does of logarithms.

To wit: the US household savings rate.

Revving the WayBack machine nearly to the redline, what I remember from Econ 101 is that savings is the difference between income and the consumption of goods and services. According to the Bureau of Economic Analysis, I'm not too far off the mark: Personal saving. Personal income less the sum of personal outlays and personal current taxes.

Fine. That seems simple enough. If I spend every bit of what I earn, then my savings rate is zero.

According to, well, just about every expert who has rustled his vocal cords or pestered his keyboard on the subject, the US household savings rate has been in a nearly linear decline from around 8% through 1980, to an excellent approximation of zero today.

Looks like the whole country has taken a pass on that whole rainy day thing.

Or has it?

As simple as the BEA's definition of personal saving is, nearly every term is undefined. Personal income: is that pre- or post-tax? Which taxes; income only, or the whole panoply? Outlays: what counts as an outlay?

One consequence of this definitional quicksand is deciding whether 401(k) and IRA contributions are included in the national savings rate.

According to the Federal Reserve Bank of San Francisco, Yes.
Since IRA and 401(k) contributions are not part of personal outlays (and, therefore, must be included in the difference between personal income and personal outlays), these contributions are included in national saving computations.
According to Stephen G. Peasley, president of KPP Financial, No.
The BEA definition is the amount left over from disposable personal income after expenditures on personal consumption, interest payments and net current transfer payments. In other words, how much of your after-tax income, minus all expenses, is available for you to spend.
Which completely excludes 401(k) and IRA contributions.

For Pete's sake, I'm not asking for the origin of the universe here.

On the face of it, the FRB o' SF should win on authority points. However, extensive Googling -- about two hours worth, to be exact -- yielded a pronounced split on the question. Nearly the same number of hits said no as yes, and the disagreement centered on whether personal income was disposable income after taxes, or gross income.

There are several tie-breakers. The first is contained in a paper written for the BEA (FRB o' SF, sit up and pay attention here), the point of which was to list the ways the BEA could improve its statistical methodology. One of its conclusions was that the narrow National Income Production Account (NIPA) differs from a comprehensive measure "that includes savings in pensions and capital gains on equities."

So what?
The narrow measure showed a low rate, which declined from the 1980s to the 1990s. The comprehensive measure showed a very healthy savings rate of 25 percent for the 1990s. The latter measure better corresponds to the flush of wealth that households actually experienced, and indeed it probably explains the decline in the narrowly defined savings rate.
The second tie breaker is the chart above. The NIPA savings rate had been fairly stable from 1960 through 1980, at 9%, give or take 1%, then declined linearly to around 0% today.

At the risk of falling prey to post hoc reasoning, it is worth asking: What happened in 1980? Section 401(k) was added to the IRS code on Jan 1 of that year.

Finally, according to a recent Wall Street Journal (about how some Democritters want to appropriate 401(k) assets), 60% of Americans have 401(k) accounts, worth $3 trillion.

The ROBA (risk of blowing an aneurysm) meter is shooting into the red here. For Pete's sake, again, people define your frickin terms. Perhaps it is my software engineering background, or the precision that being a pilot requires, but somehow I don't think it asking to much to properly label things. Working age people account for 63% of all Americans. So, does the WSJ article mean that 95% of all working age Americans have 401(k) accounts? Well, that obviously can't be true, since not all working age Americans work. Perhaps the article means 60% of the 66.2% of the labor force with a job, or about 40% of all Americans, have made 401(k) contributions.

I'll go with that, if for no other reason than the result at least wanders within hailing distance of the plausible; 120 million Americans have 401(k)s worth 3 trillion as of this week. (Note, as of this year, there are roughly 75 million households in the US, at about 2.5 persons per household And, no, now that you mention it, I am not about to hunt down what the heck a household is, or what bin the other 113 million people in the US are pitched into.)

Squeezing the numbers through a calculator, from a starting point of zero in 1980, 120 million American wage earners accumulated an average $25,000 each in 401(k) accounts.

Is this consistent with a declining savings rate? I think not. And what about IRAs?

Sheesh. Four hours of research, and I don't even have a handle on personal income.

What the heck is a personal outlay? Well, according to the BEA: Personal outlays. The sum of personal consumption expenditures (PCE), personal interest payments, and personal current transfer payments.

Okay, what the heck is PCE? Personal consumption expenditures (PCE). The goods and services purchased by persons.

Okay, what the heck are goods? The combination of Durable (tangible products that have an average lifetime of at least three years) and Nondurable goods, aka Cheap Junk.

Finally, Services. Products that cannot be stored and are consumed at the place and time of their purchase.

That pretty much sums it up, right? Right? Heck, I dunno. If I buy stock, where does that fit? How about contributing to a 529 (education savings scheme)?

What about the houses we live in? Assuming a 2500 square foot house, and $125 per square foot to throw it all together, that comes to $313,000. I'm going to ignore the dirt it sits on, since that is neither a good, nor a service. That amount, absent interest, will be covered in less than 18 years at $1500 per month. The median age of owner occupied homes in the US was 30 yrs in 2001 Just guessing here, but that probably means roughly 3/4 of all mortgage payments in the US go for neither goods nor services.

In the absence of hard data, I am going to extrapolate from personal experience. According to the NIPA notion (assuming that notion excludes 401(k)-ish stuff), my savings rate in 2008 was 6%. Include 401(k) contributions, and it goes to 20%. I have increased the payments on my 30-yr fixed rate mortgage to yield a 15-yr payoff. That makes my savings rate something like 30%. Unless, of course, increasing the payoff rate is counted as increased spending -- which it appears to be -- meaning paying off my house sooner means a lower saving rate, down to 10%. Toss in 529 contributions, and it goes to 33%. Unless it is 13%.

I have no earthly idea which of these numbers is "correct"; however, I strongly suspect that the NIPA number we all read about is way at the lower end of that range.

Which means it has heck all to do with reality.

Why am I ranting? A whole host of reasons.

  • Depending upon the real answers, there could be a serious disconnect between the objective reality of the national savings rate.

  • The MSM's reporting (and deriding) of it could well reveal professional malfeasance, or negligence, of the very first order.

  • The consequence of this reporting could be too encourage people to save more when, in general, they are saving plenty already.

  • Additionally, the credit crunch could be very short lived. Mortgage payments and 401(k) contributions continue to inject a heck of a lot of liquidity into the system. (As it turns out, I saw on a news crawl yesterday that bank reserves are now well above required levels).

  • Finally, it raises the question How the heck much do we need to save, anyway? Near as I can tell, there are three reasons to save: to cover emergency expenditures, including interruption of the primary income stream; anticipatory saving for replacing medium cost durable goods (major appliances, say); and to provide post-retirement resources.

Well, based on that, how the heck much do we need to save? The emergency reserve amount is relatively fixed, whatever it may be. Having achieved it, there is no point saving any further. Anticipatory saving, by definition, nets to zero.

Which leaves retirement saving, about which the headline savings rate seems to say nothing.

Unless it does.

After over five hours of research and writing, I still have no idea.

Maybe I am a completely ineducable glorified heavy equipment operator.

Thursday, November 13, 2008

Home, as seen from Office

Downtown Anchorage is about 15 miles to the right; the now famous Wasilla 30 miles to the left.

Tuesday, November 11, 2008

Three Phases

Wednesday, November 05, 2008



While Obama flies, the world is turning.
Life goes on for you and me.
Our chief concern is money earning,
Why can't someone set us free?
Can't you feel him?
Can't you feel him?
Can't you feel him?
Can't you feel him?


You'll feel me coming
A new vibration
From afar you'll see me
I'm a sensation.
I'm a sensation.
I overwhelm as I approach you
Make your lungs hold breath inside!
Lovers break caresses for me
Love enhanced when I've gone by.
They worship me and all I touch
Hazy eyed they catch my glance,
Pleasant shudders shake their senses
My warm momentum throws their stance.
You'll feel me coming
A new vibration
From afar you'll see me
I'm a sensation.
Soon you'll see me can't you feel me
I'm coming...
Send your troubles dancing I know the answer
I'm coming...
I'm coming...
I'm a sensation.
You'll feel me coming
A new vibration
From afar you'll see me
I'm a sensation.
I'm a sensation.
I leave a trail of rooted people
Mesmerised by just the sight,
The few I touched now are disciples
Love as One I Am the Light...
I Am the Light!

"Sensation", ever so lightly altered, from The Who's rock opera Tommy.

Monday, November 03, 2008

I Blame Global Warming IV

Today, this popped up on my company's flight safety reporting system:
On R220, just west of NUZAN we received a fuel temp low. ANC fueled us with jet-A and I initialized the FMS accordingly. ANC via SATCOM confirmed that we were fueled with jet-A and that jet A-1 was not going to be used in ANC this winter. The flight was experiencing an extraordinary stream of polar air at FL330 out of the north at approximately 111kts, 80kts more than forecast with an OAT of -68C. Our fuel temperature dropped to -39C with a freezing temperature of -40C. We also were experiencing a lower cargo low temperature warning at this time, center lower cargo temporary 33 degrees. This additional warning in addition to the extremely cold OAT removed the thought of the possibility of a faulty fuel temperature sensor. I requested a descent to FL300 but control (PAZN) was unable to due to traffic ref: CPDLC request 2240Z. I then requested via CPDLC an emergency descent to FL280. They did not give me the descent but cleared me for a 180 to NUZAN. The flight was more than 500 miles closer to Narita than ANC; an air turn back was declined. I was finally able to get a southerly vector to R-580 and when established at Omotoa a descent to FL280. With the combination of the more southerly flight track and the lower FL we were able to stabilize the low fuel temp. Ultimately, the temperature was raised to the mid-20's and the lower center cargo temperature recovered. We climbed back up to FL300 and continued with our new routing to KIX. The GOC controller was quite helpful in calculating our new fuel burn and routing. Additionally, the GOC Controller was instrumental in establishing a SATCOM phone conference with ANC center. This conference made it possible to continue with a westbound clearance to KIX with the lower southern routing. We landed with approximately 28000 pounds.
To translate: Despite being early November, the transoceanic track not being all that far north (it runs just north of the Aleutians), and scarcely halfway into the flight, the Captain had to declare an emergency in order to get traffic priority so as to avoid wing fuel freezing and the subsequent flameout of the wing mounted engines. (The MD-11 also has a tail mounted engine.)

Notes to aid decoding:

  • Jet A-1 is a winter fuel formulation that lowers the freezing temp by about 6 degrees C.
  • OAT: Outside air temperature
  • FL xxx: Thousands of feet above sea level using standard air pressure
  • PAZN: Identifier for the western Anchorage Air Regional Control Center
  • CPDLC: Controller - Pilot Data Link Communication
  • R-220, R-580: established trans-Pacific routes
  • NUZAN, OMOTOA: fixes on the respective routes
  • GOC: Global Operations Control
  • KIX: Identifier for Osaka International

In related news, Anchorage temperatures this fall have followed the summer's pattern, only colder. Daily highs are scarcely above the average low temperatures.

I am guessing flight ops is going to rethink that whole Jet A-1 thing.

On account of Global Warming, of course.