Crossroads of the Future

Engine economy

2011-04-08T19:35:00.003-05:00

This is my first posting in over two weeks. I just moved to Dallas and my new job is occupying most free time, thus, my posting frequency is going to decline. Since no one has ads on my blog, I feel free to do so.

In prior posts, Volt Full of Trouble, The Inconvenient Electric Car, and The real future energy crisis look into energy issues relating to transportation. I discuss the aspects of what will occur when crude oil supplies are depleted worldwide in the latter post. The former posts investigate why the electric car and hybrid are poor replacements for the current technology. My over all conclusion is we need a liquid alternative to crude oil along with innovative engines.

This post on MSNBC.com is just what the doctor ordered. Researchers at Michigan State University have developed their Wave Disc Generator. According to the authors,

The Wave Disk Generator uses 60 percent of its fuel for propulsion; standard car engines use just 15 percent. As a result, the generator is 3.5 times more fuel efficient than typical combustion engines.

If true, this is quite an improvement over current 100 year-old technology. They even claim that it reduces emissions by 90 percent in comparison to typical internal combustion engines. Double bonus for clean air.

How the engine works creating such high efficiency,

The engine has a rotor that's equipped with wave-like channels that trap and mix oxygen and fuel as the rotor spins. These central inlets are blocked off, building pressure within the chamber, causing a shock wave that ignites the compressed air and fuel to transmit energy.

If claims are true or not, it is going to be new technologies similar to this prototype that is our future, not electric cars.

Japanese suffering

2011-03-16T14:10:00.004-05:00

The news outlets are all loaded with the recent 8.9 earthquake followed with a tsunami that hit the northeast of Japan. My condolences and prayers go out to those poor people caught up in this horrendous disaster. There is nothing good to come of this mess. The media is focusing on the nuclear reactor problems Japan is having, but I believe that the problems with meltdown are overblown and the government should worry about other much more severe problems at hand.

Nuclear reactor issues at Fukushima have caused quite a stir. Some of the buildings had explosions and several fires have erupted. The fear is of a reactor meltdown releasing a significant amount of radioactive material into the atmosphere may occur if officials can not cool down a couple of the reactors. Fear of a meltdown is real. Radiation in the local area has been measured at a magnitude or greater than background. Long term exposure to this level is unhealthy, but could mitigated. If meltdown does commence, the release would be devastating to local regions up to 50 miles from the plant. Anyone present when a meltdown release occurs would be exposed to a large quantity of toxic materials potentially resulting in all sorts of radiation sickness and future cancer. Very bad! Beyond the local region, I do not see effects from radiation or radioactive materials hurting people. Even with winds blowing materials.

What should be of concern are more mundane, yet destructive problems that could occur from the disaster. The ability to deliver clean water and food has been wiped out by the disaster. Transportation methods are all disabled. Millions of people are also homeless in the aftermath. If these people do quickly get water and food, they will face dehydration or starvation. This requires only a few days without basics, so this threat is imminent. Getting in the necessary supplies into the area is difficult when roads, railways, airports and shipping are all wiped out. The secondary threat is from water-born disease. Cholera and typhoid easily spread with stagnate water loaded full of dirty debris including sewage and various animal/human corps. Dealing with a health epidemic inside a natural disaster would only add to the woes. If either problem previously described in this paragraph take hold, tens of thousand of people could unnecessarily perish.

I guess our media has to hype the politically sensitive issues even though they are the least threatening. No one wants to tune into hear the standard starvation/disease monologue which occurs routinely. Nuclear meltdowns occur once in a decade and make sensational stories. When watching media stories, remember this.

Ever elusive hipness

2011-03-08T15:01:00.005-06:00

Update: 3-9-2011:

One of my Facebook friends, Damian, pointed out that there are many groups who define what is "hip". What one group finds hip another finds repulsive. He is correct in this sense. There are many subcultures out there with a hip or in-crowd. Each is unique in their style, geography, social class, age range and philosophy. The best example I can think of a subculture is '80s punk's nihilistic underground. My original post covers what would be considered "mainstream American youth culture". The original post points to the ever changing composition of mainstream youth culture and its obsession with materialism and lack of philosophical ideals in comparison to recent youth movements.

Original Post:

Most of my posts tend to cover technology with a little finance thrown in for spice. This post is a personal view of modern American life. It is about the current state of being "hip" or "cool". The in-crowd member. American hipness is for young adults in the late teens through their 20's before they settle down and have kids. This is common and nothing new. Even in my 20's I was not with the in-crowd, but could spot culture trends. What I find confounding is the vapid nature of current hipsters.

Let's go back to previous decades, the 60's, 70's and 80's. In these decades, styles tended to be easy to pick out along with their social movements. The 60's had long-haired, second-hand clothed hippies. It was not difficult to pick out the styles and imitate them. The 70's had similar styles as the '60s, but certain aspects changed, most definitely the music. Fast-forward to the '80s, everything changed with the punk movement, electronica movement and hair-metal bands. Head-bands, bracelets, torn jeans and bright colors ruled the day. One could pick out these distinct styles. We will move on to early '90s with the grunge movement. The grunge movement was the antithesis of the '80s hair-metal. Simplistic in nature, grunge was easy to spot.

In the late '90s, styles became less distinct. There was no large scale social movement. Music became a rehash of prior styles (much of it good). Style sort of fell into a drift. What is cool? It seems like to be hip one had to have direct connection with the hip crowd. Styles change so fast it is difficult to even recognize that hat you are wearing was soooooooooo yesterday.

It almost seems as a few people monopolize on being hip. Instead of fitting into a crowd, it became excluding the majority of people, even young people. Often today, being a hipster has a negative connotation. I had a few friends about 4 years ago who were 18-19 years old. They were aspiring artists (i.e. no money). By all means, they would be considered hip. One night while at their numerous parties, a friend mentioned his bad run-in with a group of "hipsters" in Austin. This struck me as odd, but thinking more about it, it makes sense. I also know of a young lady who tried to keep up with the in-crowd and the chase put her $30,000 in debt. Currently, I believe being hip is more than about style and nothing to do with a social movement. It is about being the proper age/class and that is about being both young and wealthy.

I believe this reflects the income disparity and social stratification in our society. Even the youth are voluntarily excluding each other. Distinction not by race, religion, age, or philosophy, but exclusion by economic class.

Dwarfs will rule the world!

2011-02-17T10:38:00.004-06:00

Well, no, dwarfs may not rule the world. There is a good chance a certain group will outlive their contemporaries though. This recent study out of the University of Southern California studied a group of dwarfs who have Laron syndrome in Ecuador and worldwide. Laron syndrome is genetic and effects how growth is regulated in the body.

The individuals have Laron syndrome, a rare disease that causes stunted growth in about 250 people worldwide. Scientists have known the syndrome results from a mutation in a gene that regulates how cells grow and divide.

The dwarfism cause is also a barrier to cancer and diabetes. The disease limiting culprit in Laron's cases appears to be an insulin producing protein that binds with human growth hormone, insulin-like growth factor 1 or IGF1.

High levels of IGF1 have been implicated in cancer and diabetes in previous studies, and low levels have been found to cause increased longevity in everything from yeast and worms to mice.

"In worms, we don't see diabetes or cancer or anything — once we establish this potential [to extend life] in worms, we moved to mice," said Felipe Sierra, director of the Division of Aging Biology at the National Institute on Aging. "We do see similar things in this study [of humans], and it validates everything we do."
Sure enough, in the short-statured Ecuadorean group, the study revealed that deficient growth hormone receptor led to low levels of IGF1, and this was associated with the disease-resistance.

The final intention is development of a drug that will mimic reduced IGF1 in healthy individuals reducing cancer and diabetes.

Interesting concept, but I would guess other negative side effects would appear besides the positive reduction in cancer rates and diabetes. Wikipedia states one of the disease's symptoms in men puts fear in almost any healthy male,

.....a very small penis.

Flu's days are numbered

2011-02-08T16:16:00.003-06:00

This report by the media group UPI has news on a new, universal flu vaccine being developed in England. Unlike the typical flu vaccine we are inoculated with these days which protects against certain strains of flue, this would protect against all strains. The article states,

Current flu vaccines only work against a few kinds of flu and only for a short time, as seasonal flu evolves and changes to get around immunity provided by that year's vaccine, requiring constant research and re-vaccination, NewScientist.com reported Monday.

Several research groups, including one at Oxford University, are attempting to develop a flu vaccine out of proteins that are identical in all flu viruses in the hope this will protect people from all flu once and for all.

If science has enough time and resources dedicated to certain solvable problems, inevitably, many will have solutions appear. The key is dedication. We have this idea that by putting a bunch of smart people in a group and throwing a little money at them they will solve all of the world's problems. It does not work that way. The best example I can think of as a modern marvel is modern computing. We have more computational power on our desktop now than could be housed in 10 city blocks. What people often fail to acknowledge is the 40 years of innovation and billions of dollars invested.

We need to fund research and development in the US if we are to compete with rest of the world.

Never Change Nelly

2011-02-04T14:48:00.005-06:00

This is the second caricature in my blog series. My first caricature was the True Believer. This character could well overlap with True Believers, Never Change Nelly. Never Change Nelly wants everything to remain as they are currently. The ultimate conservative (not in the American political sense) who wants everything to remain constant day-to-day and so on. They refuse to take any chances no matter how detrimental their current position may be. Any discontinuity to their never changing world is taken as a threat without regards to the effects in their lives.

What may drive this worldview? My guess is a variety of things.
1. As people age they get set in their ways and want to change less
2. Personality, some people do not like surprises or challenges
3. One pathology of this thinking creates the mindset of I know everything. (Hint: no one knows everything or even possesses the majority of knowledge humans have. This really is another version of narcissism.)
4. They have worked hard to set their lives up in a certain manner which they like.
5. Life has been easy for them

Whatever the driving factor behind Never Change Nelly, a problem quickly arises. Our world is a quickly changing, highly dynamic place. Change will come. Change is inevitable. You cannot stop it. What was true yesterday may not be true tomorrow. Stubborn refusal to adapt creates dinosaurs. Being an expert with the typewriter 3 decades ago would have given someone employment. Today, it would equal unemployment. Adaptation is vital for survival. To paraphrase Andy Grove, the cofounder of Intel, in reference to the budding computer industry, "Only the paranoid survive".

I truly believe successful individuals adapt to changes. Never Change Nelly will never find a place among the successful.

True Believer

2011-01-18T19:43:00.006-06:00

This post is going to be one in a several on different caricatures who fill social roles and carry certain beliefs/worldviews. My initial caricature is a very familiar one, the True Believer. "True believer" is often associated with a deeply religious person in the traditional sense, which, is a great example (Myer-Briggs personality indicators put these type of people as SJs). I will take it further, as someone who is deeply dedicated to whatever their cause is may that be religion, career, organization, society and etc. This definition covers all personality types in all areas of modern society.

When I mean True Believer, it is someone who models their life around the ideal group "member". They have full, sincere faith in the institutions which they belong. They go the extra distance.

Why am I mentioning this seemingly obvious concept? It is because True Believers will move up their respective ladders in life (organization, career and etc.) well ahead of other caricatures. This Fortune magazine article talks about the most successful individuals in corporations are those who maintain the status quo when moving up the corporate rungs. This concept is universal with almost all organizations with individual groups having different criteria. The politically correct, communist professor who is a hit in academia would not last too long in a conservative business atmosphere. You get the drift. I think it has to do with trust among the leadership. It is easiest to trust those who are true believers in your cause.

The 4th generation

2011-01-07T15:58:00.004-06:00

There is an old saying "shirt sleeves to shirt sleeves in three generations". Basically, it means that a family's wealth only will last for three generations before it is lost. This saying is universal worldwide and the Chinese have the easiest to understand and most applicable version "Wealth will not last for over three generations".

Picture this scenario. The first generation is the founder of a family's wealth, whether it is a matriarch or patriarch. Founders work hard and have unique opportunities. The second generation consisting of several children continue on their parent's work ethic gradually expanding the wealth, while at the same time splitting the assets among them. By the time the third generation comes along, the wealth is split again among the grandchildren within less productive investments. The bigger issue is the third generation knows nothing but easy living. They do not develop the work ethic and sense to maintain the wealth. It is squandered away on poor investments and parties. The fourth generation gets nothing.

The best example of this that comes to mind is the Furr's grocery store chain in New Mexico (related to the restaurant). It was founded in 1929 by Roy Furr in Lubbock, TX. The chain expanded throughout Roy's life until passing away in 1975. Roy's three children squabbled over the business and it went bankrupt in 1979 through their mismanagement. West German investors took over the grocery store chain until it was finally closed in 2002. This is an example of wealth lasting two generations.

I am going to take this idea a little further and apply it to societies in general. Let's say an average generation is 25 years in time. Three generations would make 75 years. According to this idea, prosperity would last approximately 75 years before a time of chaos would befall a society in the form of an economic depression or war. Using American history as an example to guess where we stand in our cycle form this time line. NOTE: During prosperous times disastrous events do occur, but are limited in negative effect on the society. The lines below represent the cycle in order on each line the event, years in history, elapsed time and whether it was prosperous or chaotic in nature.

US Revolutionary War, 1776-1783 AD, 7 years, Chaos
Early Republic, 1783-1860 AD, 77 years, Prosperity
US Civil War, 1861-1865 AD, 4 years, Chaos
Turn of Century, 1866-1929 AD, 63 years, Prosperity
Great Depression & WWII, 1930-1945 AD, 15 years, Chaos
Post WWII superpower, 1946- ? AD, 64+ years, Prosperity

If this holds any water, we are approaching the end of a prosperous time in the US. The question is how long will this last? What will replace our current system? No one knows.

Global Reset

2010-12-23T15:45:00.006-06:00

As we are in the heart of the holiday season, people start to think about the new year and the potential it could bring. This blog tends to be technical ideals for the layperson, but this post is on a something that influences everyone, the economy. My wishes may seem demented initially. Think it through, they make rational sense. My wish is for our economic institutions to face their bankrupt reality and begin defaulting on their debt. This will force leaders everywhere to make decisions that are significant and lasting.

We are in economic trouble because of excessive debt levels at all levels of society. The main debt sources are mortgages, credit card debt and auto loans. Compounding this fact is in the US (all Western societies) we no longer manufacture many items. In essence, we consume more than we produce. Since the initial stages of the crisis appearing in July 2007 (two Bear Sterns MBS hedge funds collapsed), almost all policy has been kick-the-can-down-the-road type ignoring reality. The US federal government backed by the Federal Reserve and the banking industry backed our financial industry in the depths of the 2008-2009 financial crisis. The result was more debt was accumulated on the books of government agencies. US federal government debt stands at $13.8 trillion or ~90% GDP and is quickly rising. Our deficits are unsustainable and will make this debt burden impossible to pay in the next few years. If this was a US problem alone, rest of the world would continue on while we solve our problems. Unfortunately, this is a world wide problem with Europe and Japan in even worst conditions. There is more debt than the ability to pay, thus, it will not be paid. I predict by the next presidential election, much of the debt will be defaulted upon.

The defaulted debt will cause a Great Reset. If our leaders want a society worth living in, they will be forced to make hard decisions about a variety of topics including economics, government spending and social order. Why do I want this to occur? As the way thing are, the debt load is consuming available capital into useless support of an over sized financial industry along with other less productive pursuits like the war-machine and etc. Good portions of this capital could be put to more productive uses like dealing with replacing declining Crude Oil stocks are our main transportation source. Many other good social/economic forces could also be financed. One positive result would lead to the eventual reduction in unemployment since more people would be allowed to work. The other reason is it could bring about the next big thing in technology. The way it is now, future technologies are not emerging due to a lack of will from funding sources. I would like to join the next big thing, but it requires funding and societal support.

This is my wish. It would result in a beautiful renewal or rebirth. Happy holidays everyone!

Spenditis the Disease

2010-12-10T16:01:00.004-06:00

Today folks, I am going to talk about a disease that seems to permeate our society, Spenditis. You may ask what is Spenditis? To put it simply as spending every penny one makes plus future earnings through taking on mountains of unnecessary debt. It amazes me how many people I know buy an over sized (too expensive) house, several luxury vehicles, have several maxed out credit cards and a student loan (or loans if married) to boot. Folks, you are never going to pay this back. The problems will begin when economic trouble hits, i.e. job loss, sudden illness. At that point, you fall behind on payments and it will all vanish in a heartbeat.

I am not arguing against buying things that pertain to hobbies, travel or other nice items as long as it is within your economic means. We have our interests and that is one thing employment supports. Our interests should not enslave us though.

What is the cause of Spenditis? I am not sure. Things that contribute to this misdiagnosed malady are feelings of entitlement, narcissism, keeping up with the Joneses and our consumer culture. Personally, one factor that contributes heavily to those want-to-be high rollers is the inability to distinguish between a want and a need. Needs are the basics like food, clothing, shelter, medical care and other society factors like education. In most cases, if an item is a luxury purchase it fits into a want. The best want example is Imelda Marcos' 2700 pairs of shoes. For the 99 % of people who are not extraordinarily wealthy, this would bankrupt them. To her, being president of the Philippines, the want did not permanently damage her economic standing.

Please avoid Spenditis. You will appreciate it when the hard times come, and they will come. The best analogy is The Ant and Grasshopper fable from ancient times.

Next generation space flight takes orbit

2010-12-03T16:00:00.005-06:00

I made a previous post on the topic about how dangerous the retiring Space Shuttle is to those who fly the craft. In that same post I mention about the military's potential future workhorse, the X-37, an unmanned orbiter that is launched by a traditional rocket and lands through gliding back in the Earth's atmosphere touching down on a runway just like the space shuttle. If I am correct, this is the idea behind the original Space Shuttle back in the 1970's before NASA's bureaucracy took over and made it the expensive, dangerous, manned orbiter. Good ideas are generally recycled in history, and this is another example.

The Associated Press reports that the X-37 recently took a flight starting in April 2010,

The U.S. Air Force's secrecy-shrouded X-37B unmanned spaceplane returned to Earth early Friday after more than seven months in orbit on a classified mission, officials said.
The winged craft autonomously landed at Vandenberg Air Force Base on the California coast 130 miles northwest of Los Angeles, base spokesman Jeremy Eggers said.

"It's very exciting," Eggers said of the 1:16 a.m. PST landing.

The X-37B was launched by an Atlas 5 rocket from Cape Canaveral, Fla., on April 22, 2010, with a maximum mission duration of 270 days.

That is what makes this technology advantageous over the shuttle and traditional rockets. It is launched cheaply (like a rocket), but has the capability of the shuttle in flexibility while in orbit. No need to worry about anyone getting injured or killed during operation either. The X-37 excels in the fact it can remain in orbit for long periods of time. This is a capability neither the rocket or shuttle possess.

Research and development of the system has not been cheap or quick,

The voyage culminated the project's long and expensive journey from NASA to the Pentagon's research and development arm and then on to the secretive Air Force Rapid Capabilities Office. Hundreds of millions of dollars have been spent on the X-37 program, but the current total hasn't been released.

Compare the hundreds of millions of dollars spent on the X-37 to the $500 million per Space Shuttle launch, it justifies the capital spent. To be fair, anything hi-tech, new and revolutionary like this craft will be expensive to get from idea to final, successful product. Personally, this is a concept many business and government leaders are missing by not funding significant research and development in our society today.

Moving mutants

2010-11-24T12:58:00.004-06:00

I am just getting over a common cold today. Surprisingly, it was my first in about three years. Being scientifically trained, it makes me ponder how do they find a cure for the common cold through its spread.

The common cold is caused by a virus. Viruses routinely mutate when jumping host to host. This is why people need new flu shots each year because a new genetic variation of the virus is spreading among the population. Not being medically trained, the mighty Wikipedia saved the day giving a description of the many viruses that cause colds (links in quotes do not work)

The common cold is a viral infection of the upper respiratory tract. The most commonly implicated virus is a rhinovirus (30–50%), a type of picornavirus with 99 known serotypes.^[5]^[14]^[15] Others include: coronavirus (10–15%), influenza^[5] human parainfluenza viruses, human respiratory syncytial virus, adenoviruses, enteroviruses, and metapneumovirus.^[10] In total over 200 serologically different viral types cause colds.^[5] Coronaviruses are particularly implicated in adult colds. Of over 30 coronaviruses, 3 or 4 cause infections in humans, but they are difficult to grow in the laboratory and their significance is thus less well-understood.^[10] (5–15%),

I knew there were multiple "cold" viral strains out there, but I never realized there were several distinguishable viruses causing illness. The inability to grow with ease in a laboratory answers the question why have we not made little progress on a cure. The other main reason why we can not find a cure

Due to the many different types of viruses and their tendency for continuous mutation, it is impossible to gain complete immunity to the common cold.

How does one track this mutation? When does a virus become genetically variable to reinfect a healthy host? When is a virus a completely new strain? How many hosts are required for each step is the key factor.

My guess will be the use of laboratory animals since it would be impossible to track human to human transmission. Species that are helpful would need to resemble humans, i.e. rats, mice, pigs or primates. Once a host is infected, isolate the animal and allow only one other host to have contact limiting the infection's spread. This would be a long term research project. I am not necessarily sure that big pharmaceuticals are up to the expensive task.

Sun blows against reality

2010-11-18T10:31:00.006-06:00

I am a proponent of most alternative energies on the grounds of replacing limited fossil fuel sources and alternative energy's lower environmental impact. My global opinion on the subject can be read here. One issue that restricts alternative energy's growth is cost. These technologies are not cheap to implement. In an effort to offset the high cost, government subsidies are often given to wind and solar companies. This may seem fine, but when the political winds change, these mostly startup operations run into serious cash flow issues from the simple fact that they can not turn a profit on their high investments into equipment and talent.

This CNNMoney.com article warns of the expiring subsidies the US federal government has been giving to both wind and solar companies.

After years of rapid growth and darling status among many in Washington, the future of the American renewable energy industry is uncertain. That's because the government cash it has come to rely on may dry up on Dec. 31.
Before the Great Recession, renewable energy developments were helped by a tax credit, worth generally 30% of the cost of the project. When the recession hit, the stimulus package replaced those tax credits with direct cash grants of similar value.

Cash is considered more beneficial than credit to the industry.

So far, the government has handed out about $5.4 billion, according to the Energy Department.

Congress could vote to extend the grants, but that's highly unlikely.

$5.4 billion is a lot of money to be spending on technologies that may be abandoned from lack of interest. Those companies most likely will not survive without the stimulus money. Money thrown down a hole. What saddens me further is this is a repeat of the solar boom/bust that occurred in the 1970's. This is a demonstration of why socialism does not work on a large scale, the government's central planning is not efficient and is often driven by politics, not market reality. Do we ever learn?

What to do? The stark reality is these alternative energy technologies are not yet ready for prime time in the capitalist market place. Reality trumps a naive, orthodox environmental ideology. This should not be an excuse to fully abandon them though. As a supporter of these alternative energies, I believe we need to spend more money (government and private) on research and development (R&D) of these technologies. Develop them to the point where they can compete with the more traditional fossil fuel and companies will be able to turn a profit. The secondary benefit would be a revitalization of US R&D and industry.

This lesson should not be forgotten when the true energy crisis strikes, the exhaustion of crude oil.

After the ballots were cast

2010-11-08T12:24:00.004-06:00

Little less than a week ago the US had their midterm elections. The majority of candidates for positions in the federal government were for the House of Representatives and the Senate. The post is going to explore one way to reduce a common thread that has been evolving in our electorate, extreme partisan candidates on both sides of the aisle. Two simple changes in the way congress worked would reduce this problem without major changes in the constitution. It also would lead to both major parties working together better and independents would have a greater voice.

What I propose is the elimination of current seniority rules in both houses of congress. Specifically, the way committee members are selected. These vital positions are automatically given to the most senior party members from the majority party without any input from rest of congress. This gives quite a bit of power to ranking majority members over very important issues like military, social spending and law writing. Bills that were good for the US often died in these committees before making it to the main floor where it may have passed.

Why is this a problem? It has to do with how the most senior members being reelected year after year. In the case of the House, the jurisdictions are picked by a state's government. If a state leans towards one ideological direction, i.e. Texas to Republican or California to Democrat, the districts are setup so the majority of Representatives will come from the stat's dominant party. This is often referred to gerrymandering if blatant or is against Civil Rights laws. It occurs regularly even with the laws and I do not know of a way to eliminate the issue. The Senate has less of this issue due to the fact the entire state elects the position, but it is still a problem. The result is certain districts will elect a member from the same party over and over again. This is further exacerbated by reelecting incumbents since they become more senior in their own party and have greater ability to bring home pork spending projects to their home state. The voters know this instinctively. Vote for the incumbent because they will bring home the bacon. It is in the voter's favor to do so. The candidates also know this. Candidates respond by following the party line and not putting forth any ideas that may hurt their chance for reelection. This is another disincentive for congress members to break party line for the benefit our country. The final result is often political polarization.

Proposal #1: Bring committee members to full chamber majority vote

Instead of allowing the majority party full control over vital committee members, the rules should be changed to reflect the Speaker of the House. The Speaker of the House is nominated by the majority party and is picked through an election of the full House chamber. The elections often filter out the extreme members to a limited degree unless the chamber has a vast majority. To further filter out partisan hacks, I suggest all leadership positions (including the Speaker) and committee members come to full chamber vote and each member requires a 2/3 majority to be seated. This results in two outcomes. First, even if a party wins the majority it forces them to make some concessions when congress convenes. It forces a limited bipartisanship immediately. Second, it will prevent the extreme elements of a party from dominating the committees. Voters would also be less inclined to rubber stamp the incumbents if bringing home the bacon is a little more difficult. Congress members would have to work a little harder for their reelections.

Proposal #2: Eliminate congressional primary elections

Primary elections developed out of the 1960's as a more populist way to pick candidates. The daunting problem is the low key elections bring out the most fired up voters which are often the most partisan in nature. This leads to the most partisan and extreme candidates running later in November. The other problem is the extra money required to run in the early election. This forces a candidate to either be rich or depend heavily on wealthy contributions. This could potentially lead to elections being bought. We can return to the system in place before the 1960's, let the local parties directly pick their candidates for the election without opening the polls.

Psychic octopus passes on.....

2010-10-26T16:30:00.003-05:00

This summer, I blogged (here and here) about Paul the Octopus who predicted Spain to win the 2010 World Cup. He passed away in his German tank at age two last night. The aquarium's manager claimed Paul died of natural causes. Mmmmm, I am suspicious of fanatical German soccer fans.

Let this be a lesson, it is dangerous to speak certain truths.

Computers do not have psychology

2010-10-21T13:01:00.005-05:00

In previous posts, I discuss equities investing or stocks using technical analysis (TA) to guess the market (see here, here, here and here). One common form of TA is known as Elliot Wave Principle (EWP) which depends on the collective psychology of investors charting price patterns over time into 5 distinctive waves. Over the last couple of years as I have dabbled in stock investing I have attempted to use EWP unsuccessfully with the New York Stock Exchange indexes. EWP came to my attention in the 2007-2009 crash as the price action followed the 5 waves. If it was true then, it must be true just a few months later? I have come to the conclusion that TA including EWP is not very effective at the current time in US stock markets because of how the market's composition has changed even in a brief period. It has to do with investor psychology (or lack of) and other outside influences.

I will give a brief history of how the US stock market changed over the last couple of decades. In 2001, markets began to trade stock in $0.01 increments in a process known as decimalization. Prior to this, all stocks were traded in fractions of (n/16) fractions of dollars. One advantage of fractions was the fact stock brokers with ask and bid prices at the increments. The slight (n/16) difference between the bid and ask price was the amount a stock broker could make buying and selling blocks of stocks for customers. The second innovation was the market switched to partially computerized operations in NYSE operations and is fully computerized in the NASDAQ market. In a nutshell, the pits with traders buying and selling stock are gone. The price action mostly occurs within a giant computer.

This "modernization" of the markets led to new kind of investment strategy, computerized trading at a quick speed. Basically, picture supercomputers directly connected to the exchange computers through a high speed Internet connection. Why would anyone do that? It is capitalizing on the same trade strategy as day traders. Buy and sell millions of stock simultaneously of just a few pennies of profit and the pennies turn into hundreds of thousands of dollars quickly. Add in the ability to trade put in quotes and cancel transactions before they are processed, one has quite a money making strategy. This process is known as high-frequency trading (HFT).

How does this influence TA? As stated before, TA is based upon investor psychology and the desire to hold stock over various lengths of time from hours up to years. Traders make buys and sells in a response to price movement creating the distinctive TA patterns. HFTs buy and sell stock within a matter of seconds. HFTs can even move millions of stocks down to milliseconds time frames! The HFT responds in a near instantaneous, mechanized manner to stock movement. The resulting trade psychology does not appear on the stock price charts. If HFTs were a small minority in the stock community, it would not directly influence TA. This was partially the case during the 2007-2009 crash with HFTs being ~40 % of the market's participants. EWP traced out the 5 distinctive waves. Currently, HFT represents ~60 % of all trades made on the US exchanges and can account for ~70 % on light trading days. Since this represent the majority of trades, the price action is not driven fully by investor psychology making TA less effective. I believe TA is useless over short periods of time.

One other factor distorting the markets are US government authorities. The government's stimulus and various Federal Reserve programs (TARP, TALF, POMO and etc) are putting money into investors hands in indiscriminate, unequal ways. The "free" money ends up being investing in the market in unorthodoxy manners.

The aha moment I had last night was using TA to avoid these unwanted outside influences into the markets. The only market to my knowledge that is too large ($100s billions per day) for authorities to significantly manipulate are foreign exchange markets (FX). These markets are based upon converting money into different currencies worldwide and HFTs would also have no interest in these markets. What FX markets can follow using TA are carry trades and whether investors are seeking risk or are seeking a safe haven for their investing.

Baseball lumberjack

2010-10-08T12:12:00.006-05:00

This Yahoo! article reveals a very talented pro baseball player, Mariano Rivera currently of the New York Yankees, and his ability to break wooden bats with pitches. (Links do not work in quotes)

The best pitch ever notched four more kill shots Wednesday night. Mariano Rivera (notes) throws a cut fastball that at its 55th foot takes a hairpin turn into the fists of left-handed batters, and their feeble attempts to hit it end up reinforcing a long-held certitude: The only thing more dangerous to lumber than wood-boring beetles is the New York Yankees’ closer.
The impressiveness of Rivera’s four-out, four-broken-bat save during the Yankees’ thievery of home-field advantage from the Minnesota Twins in a 6-4 victory in Game 1 of the American League Division Series wasn’t because he set some record. He once cracked five bats in an outing. Nor did he earn extra credit for turning baseballs into buzzsaws. An out is an out, shrapnel or not.

This is a significant amount of force to shatter bats. Broken bats are caused by fast balls at either the bat's end or near a player's hand during a jamb. I am guessing Rivera is the master of the jamb against left handed hitters. In this article, the majority of bats that shatter are actually made of maple wood and not the more traditional ash which just cracks. Maple bats have physical properties that encourage shattering in comparison to ash.

What is interesting about Rivera, is his single minded approach to pitching. He has one pitch, a cutter fast ball. To top it off, he has been doing this for 13 years now and is still effective at past 40.

What’s mystifying – what has mystified for more than a decade now and will continue to mystify until Rivera retires, which, even after his 40th birthday, remains a long way off – is that he throws a single pitch, a dirty bomb of a pitch, yes, but just one nonetheless. Not only can hitters damn near never make solid contact, they fare so poorly that the lone weapon at their disposal often turns into a useless recyclable.

This is a demonstration of someone capitalizing a particular talent. Most pro pitchers can throw pitches that hard. It is just a handful who can routinely dominate batters.

As for the future of baseball, you think that getting away from wood might be in the works. There is something about hearing the crack of a wooden bat though to stir excitement into a fan's soul.

Next week is my honeymoon, thus, it will be two weeks before my next post. Cheers!

Wedding in the air

2010-09-30T09:13:00.003-05:00

This Saturday I am going to marry the love of my life, Joy. I am too busy for a serious post, but I shall return next week with some inquiry into an intellectual topic.

Tweeting trouble

2010-09-23T13:51:00.005-05:00

New forms of web sites are arising on the internet daily. One popular site is Twitter, a site where users "Tweet" short messages 140 characters or less. It is microblogging or blogging simple statements. I am assuming a large portion of this blog's readers are avid users. Yahoo! reports that a 17 year old Australian teenager caused a storm on Twitter recently with a short, malicious Javascript code that was spread using Tweets.

Pearce Delphin, whose Twitter name is @zzap, admitted exposing a security flaw which was then pounced upon by hackers, affecting thousands of users and causing havoc on the microblogging site for about five hours.
Delphin, who lives with his parents in Melbourne, said he tweeted a piece of "mouseover" JavaScript code which brings up a pop-up window when the user hovers their cursor over the message.

As is often found with computers, cutting edge things are performed by students messing around with simple computer code. I had a lot of computer scientist major friends in college that did similar things. This is an example where education enriches a person's life, but demonstrates that creativity is within. The young man was only in high school.

What is interesting about the incident is the extent which the code caused Twitter interruptions world wide. Once the genie escaped from the bottle, it was not returning. It eventually came back to haunt the code's creator.

Twitter apologised to its millions of users after the "mouseover bug" raged through the site, opening pop-up windows in Web browsers and automatically generating tweets from other accounts.

White House press secretary Robert Gibbs and Sarah Brown, wife of Britain's former prime minister Gordon Brown, were among those hit by the bug before engineers patched it up.

The "Netcraft" security website traced the malicious code back to Delphin, who said he got the idea from another user who employed a similar code to make his profile and tweets rainbow-coloured.

"After that, it seems like some of my followers realised the power of this vulnerability, and within a matter of minutes scripts had taken over my timeline," Delphin said.

It appears that the code was not used for malicious intent when hackers got a hold of the script. What is appropriate though is hackers used the script for one of the internet's biggest money generators, porn.

But the idea was soon taken up by hackers who tweaked the code to redirect users to pornographic sites and create "worm" tweets that replicated every time they were read.

I think too often these kind of accidental discoveries are not utilized enough in our society. People have to have proper education and proper titles to have their ideas or products spread. This incident is proof creative tinkering requires no titles and limited education.

Cause of Great Recession?

2010-09-16T15:20:00.006-05:00

This post is the second of a series covering an event that is going to strike the world economy over the next year or so. Inflation and deflation was the first posting in this series giving a definition of several economic terms for readers. Now, I am going to discuss what is the root cause of our current economic issues often referred to as the Great Recession. The link gives the Wikipedia explanation to our protracted downturn, but, I would not put too much faith in the details. The basic reason why our economy is having problems comes from excessive amounts of debt.

Debt is the result of credit. It is the lifeblood of an economy. Businesses are able to open and expand quickly with access to capital through credit. Consumers can purchase big ticket items such as homes or cars. These two examples would take years for most people to save enough money to execute these tasks without credit. In most cases, it would never be done. Credit expansion is good as long as it is limited to the point debtors can pay back their creditors. It becomes a problem when the debts are NOT paid back. We all know of the family who buys an enormous house, several vehicles and other items they can not afford. We never talk about the creditors taking back possessions.

Reading over several sources, the accumulated private and public debt of the USA is on the order of $54 to $59 trillion. Yes, that is a "t". In comparison, the gross domestic product (annual economic output) of the US is on the order of $14.5 trillion. We may ask, in what forms are the debt? I do not have an exact breakdown, but the main sources are:

Federal, state and local government
Housing
Automobile
Corporations
Student loans
Credit card.

This list is not exhaustive, but covers the biggest categories. Most are familiar with mortgages, auto loans, student loans and credit cards. The debt not familiar to most people are bonds. BondsIOUs issued by either governments or corporations to borrow money.

The government accumulation of debt is obvious. Taxes were cut over the last couple of decades as no one wants to pay while politicians refused to cut spending. Governments issued massive amounts of bonds to keep the social spending going. Debt was accumulated to keep people happy. The amount of debt issued by governments before 2007 was not that significant though. It does contribute to the overall problem now as the amount grows quickly. We will discuss this in the next installment why.

Large amounts of private debt is much more a problem. If everyone (businesses included) spend a significant amount of their earnings on repaying debt, there is not much left over to purchase new items or the demand within an economy decreases. In effect, the money was already spent on items consumer already own or past events. It becomes an even bigger issue if consumers can not keep up payments and default on the debt. This would limit the ability of an economy to grow. The US economy is based upon ~70 % consumer spending by the simple fact that we are not longer a major manufacturer. If consumer spending decreases, the economy contracts and the result is a recession. During normal economic cycles, this occurs every ~8.5 years or so which can be expected. Normal recessions last 6 to 9 months typically with a turn around caused by credit/economic growth.

The Great Recession is different. The number of jobs have not returned with the official unemployment rate U3 at ~9.6 % and true unemployment U6 is at 16.5 %. In a nut shell, U6 is all of the people who want to work but cannot find full time employment. 1 in 6 currently fit into this category folks! This is not your daddy's recession. It all comes back to excessive amounts of debt.

How did we accumulate this amount of debt? It has to due with a new financial innovation that began to appear in the '90s known as securitization. I will simplify this complex phenomenon for laymen. Securitization is the process in which banks take loans on their balance sheets and place them into new structured securities. These new securities are then sold to other investors who make money off of the payments from within the investment vehicles. Banks then remove the loans and risk from their balance sheets. The risk is passed onto the investors within the securities. The result is banks passed on loan default risk to others while in the past banks held onto the loan portfolio (risk). Final results of these new instruments were a credit explosion since the banks had greater incentives to make risky loans. Too much debt was then accumulated over a small time frame outpacing the economic realities underlying the loans.

Next post we will talk about where this is going to lead us.

Inflation and deflation

2010-09-08T16:32:00.012-05:00

One of my side interests is in economics. I am not formally trained in this field, but due to my engineering mathematical background, understanding the concepts are simple. There are many schools of thought on economics including the Chicago, Keynesian, and Neoclassical. I tend to lean towards the Austrian school of thought. This post provides background to a key topic among those interested in this field, specifically what is inflation and deflation. This post will later be followed up with a hotly debated topic, will the US face inflation or deflation over the next few years.

First, we are going to define what is the basis of economics, currency (money) and credit. Currency is a barter exchange medium within a state. It allows individuals to purchase items without the requirement of a specific barter item a retailer may desire. It is much easier to fill a cash register than to have stores of bulky commodities like grain for each transaction. Modern fiat money has not intrinsic value except what is backed by the government of issue. Fiat money in circulation is measured in many ways as M0, M1, and M2. Since M0 is the representation of physical, printed currency and is a small percentage of money available, the majority of existing money is nothing more than 1s and 0s on a bank's computer.

Credit is a loan from a banking entity (creditor) to a debtor. It is an IOU that is paid back to the creditor plus interest over a specified period of time. Credit behaves in a similar manner within the economy as actual money.

The amount of effective money (EM) flowing within an economy depends on the monetary base (MC) in circulation and credit (CR):
EM = MC + CR.

Second, in modern economies central banks (CB) control the EM through many means. The central bank for the USA is known as the Federal Reserve. They can create money out of thin air or withdraw money from the system. It is fiat money so they do not have to back it with solid assets, just the promise of the backing government. The most common means for CBs to manipulate the EM is through monetary creation (printing money) and interest rates. Interest rate increases discourages credit and decreasing interest rates increases credit availability. One other factor to note is it has been demonstrated that often commercial banks lend to customers before CBs create money. The CBs will increase the amount of currency accordingly later.

Third, I am going to define inflation and deflation. Most people have experience with inflation. We all hear stories of our parents buying nickel cokes and gas a quarter per gallon. Inflation has increased the value of these items. You dollar buys less, thus, inflation means the currency is losing relative value. The exact opposite is deflation with the currency gaining relative value. There are many causes of inflation and deflation. The issue I am going to tackle here has to do with effective money moving through the economy. If the supply of EM increases significantly, it has less value and inflation is the result. If EM contracts significantly, deflation occurs.

This has been an introduction to inflation/deflation. As early stated, the next post will cover the predicament the US will face over the next few years.

Burning sports car

2010-09-03T14:25:00.005-05:00

The old adage goes, "You often get what you pay for." In some cases, this is not true. This post covers a slight design flaw found in a very high end Ferarri 458 Italia supercar. In the CNN/Money website article, it details how the house priced car ($230,000) suddenly bursts into flames without warning.

"In rare instances the heat shield could become deformed, bringing it too close to the exhaust system and igniting," a Ferrari spokesperson said.
Ferrari is recalling all its 458 Italia vehicles after five fires were reported in California, Switzerland, China and France.

I find this interesting. If you pay a mint for this little car, the design flaws of this sort should be worked out by delivery. What are you paying for? One brief, expensive fireworks show? Specifications on this car are obscene,

It has a 4.5-liter 8-cylinder engine, 7-speed automatic transmission, 570 horsepower and has a base price around $230,000.

Most of us rarely see such a piece of engineering on the road unless visiting the ritzy part of town. My advice is not to worry about this incindiary vehicle visiting a road near you,

The NHTSA statement said 303 vehicles are being recalled, and owners could be eligible for reimbursement for if they spent money on repairs related to the problem before the recall was announced.

If you are going to build it, build it right. Reputation is precious.

Keys to success

2010-08-25T16:27:00.004-05:00

I have been busy with work, moving and a future wedding, so no postings recently. This post is an idea rolling in my head about people who succeed in a grand manner in life. It is often said hard work and luck create success. I made an earlier posting, Luck or Skill?, about how luck is a requirement towards opportunity. This being said, assume from hereon in this post an individual had the correct doors opened to him/her. Looking around at people I know who do well in life, sometimes it is not apparent they have any great talent or skill. Here is my theory on why this may be the case as I explain the two roads to success.

In any case, a successful person is going to require a baseline competency in a field. Whether that be art, science, athleticism or business. Second, the person is going to have to work (yes, that four letter word appears). Here are the two proper mixes.

Type 1:
Someone who has a tremendous amount of talent and puts it to proper use. They work as needed, but their inherent talent makes required tasks resulting in a simpler overall trip. This is what we typically think of as a successful person. They are really talented and bright. Their superstar abilities are focused in a proper manner resulting in success.

Type 2:
Someone who is competent, but is not highly talented. They are the B students. Each is capable, but does not excel with their talent alone. This is compensated through hard work. We are talking workaholic types here. Along the journey many mistakes are made, but they are minimal in damage because they work their way out of the holes they have dug. I think many business tycoons are of this breed for the sheer fact that business is tough and mistakes are made. It may also explain why some billionaires are ADD or dyslexic.

Beware of the unicorns

2010-08-13T09:53:00.004-05:00

This blog mainly covers technology issues and various science. Being trained as a scientist, the world is an immensely complex place with interconnections between various forces in ways within and even beyond human understanding. Our understanding of science and the world is ever evolving. I often see an over simplified line of thinking that appears in religion, philosophy and politics that runs against the concept of complexity and that events are a culmination of many small factors. Even more disturbing, it sometimes appears in various lines of academic thought.

The construct of this over simplification depends on having one entity to blame a multitude of events upon. This powerful entity, whether is be a political or religious group, is often the rival to the organization a member who expresses this line of thought belongs. The mock example below demonstrates how this line of thinking works. I am going to use will use the most dangerous of all creatures, the flatulent unicorn or unicorns for short. The following part of this post will give a problem facing society and how this line of thought works in response.

Cause 1:

Everywhere you look there are too many rainbow colored items and it drives me crazy!

Solution 1:

The unicorns encourage such colorful mythological images from antiquity.

Problem 2:

Many people have their heads in the clouds thinking about fictitious ideas and stories.

Cause 2:

Unicorns are a source of escapism into an ideal world.

Problem 3:

Americans spent too much money accumulating massive amounts of debt they can never pay off.

Cause 3:

Unicorns encourage this through construction of an idealistic world which is accessible to everyone. Spend the money you don't have so you can live in this fantasy world! It is okay.

Problem 4:

People don't spend enough time being productive.

Cause 4:

The unicorns demonstrate the world is a great place without need for hard work. Go ahead and slack off.

Cause 5:

People don't believe in the one true religion any more.

Cause 5:

The mythological world of the unicorn is corrupting people's minds through false religious imagery.

Problem 6:

People are not active in the correct political party any more.

Cause 6:

Unicorn stories demonstrate that things always work out for the best and no action is required. Wish for good things and they will occur!

The solution for problems 1-6, kill the unicorns and eliminate all references!

The list goes on and on and on. Don't get fooled for this line of thinking. It demonstrates a lack of critical thinking about issues. Extremist groups dwell on this kind of thinking blaming one group for all of the world's ills.

Volt full of trouble

2010-08-02T15:06:00.007-05:00

In a prior post, The Inconvenient Electric Car, I discuss the limitations battery powered electric cars face as the only replacement for gasoline and diesel powered vehicles. In a nutshell, electric cars lack range obtained from the battery charge and are not capable of moving heavy loads. This post is going to cover General Motor's Chevrolet Volt, a vehicle going into production this year.

First of all, I can remember the media touting the Volt as a revolutionary all electric car. It is not an electric car in the purist sense. The Nissan Leaf being released in December of 2010 is a true all electric car. The Volt really is a hybrid with plug-in capability similar to the Toyota Prius. Toyota began delivering a plug-in Prius version December 2009 according to Wikipedia. Once again, American car makers are behind the Japanese. This is nothing new.

Second, the main focus of this post is cost. Last week, Yahoo! reported that the Volt was going to be sold at a MSRP of $41,000. This is a typical price for a luxury American car. Compare this to the Leaf's $32,800 and the Prius' $22,400 sticker prices and one wonders, "Why would I buy a Volt?" I believe most people are going to answer this with a resounding "no".

The basic business lesson here is simple. If a product is to be successful, make the price competative and do not misrepresent the facts. It seems as if Chevy is intentionally making a product flop.

Paul the oracle octopus update

2010-07-16T15:35:00.002-05:00

In my last blog posting, Paul the oracle octopus in western Germany was mentioned for accurately predicting 2010 World Cup soccer games. The post was before the tournament's final and semifinal games. Well, Paul proved his psychic prowess by accurately picking Spain as champion and Germany as 3rd place. Paul was 100 % accurate in German team World Cup predictions. This article gives further information that Paul is going to retire. No more Paul in the limelight. He is going back to entertaining children as a day job.

I am guessing what you are not seeing behind the scenes is Paul is really being squidnapped by powerful authorities during aquarium off hours to predict other big sporting events. They will then bet big in Las Vegas and make millions. This octopus is worth big money!! Well, there is my half-baked conspiracy theory. Please take it with a grain of salt.

It is time to go visit my folks in Washington State next week, so it will be a while before any more posts.

Octopus oracle

2010-07-09T09:13:00.004-05:00

Usually, I post about science or other serious topics. Today concerns an octopus in Germany who had accurately picks soccer match winners up to this point. Paul, the psychic soccer octopus (picture above) lives in the Oberhausen Sea Life aquarium in the western German city of Oberhausen.

According to the Yahoo! article, the octopus has been accurate in picking winners of the FIFA 2010 World Cup tournament up to this point.

Paul correctly predicted Germany’s wins over Argentina, England, Australia and Ghana and the country’s loss to Spain and Serbia.

This mollusk had a small, cult following in the past beginning in 2008.

Paul first developed his abilities during the 2008 European Championship in which he predicted five out of six games involving Germany correctly. But while he had only a community of local fans two years ago, his World Cup prognostications have brought him international stardom.

It looks like the aquarium put 8 legged prediction maker on the spot by having Paul predict a German game. Not being human, Paul had a politically incorrect answer for a German defeat against Spain in the semifinals. The knives and grills came out after Paul's correct choice leading towards an international political incident.

Spain’s defeat of Germany in the semifinals as predicted by Paul prompted many Germans to wonder about how he would taste grilled for dinner. Spanish Prime Minister Jose Luis Rodriguez Zapatero fretted about the safety of “El Pulpo Paul,” as he’s known in Spain, and offered Paul protection.

“I am concerned about the octopus,” Zapatero said. “I’m thinking about sending in a team to protect the octopus because obviously it was very spectacular that he should get Spain’s victory right from there.”

In response to hundreds of angry e-mails from disappointed German football fans who sent in recipe suggestions for the 2 1/2 year-old floppy mollusk, the aquarium actually did take extra precautions, Porwoll said.

“I even told our guards and people at the entrance to keep a close look at possible for football fans coming after Paul for revenge,” Porwoll said. He added, however, that the number of love declarations the aquarium is receiving from Paul’s fans far outweighed the hate mail.

Paul most likely taught us a good lesson, people hear what they want to hear and not the truth. This even pertains to an oracle octopus.

If I could find a small aquarium creature with clairvoyant powers like Paul, Vegas watch out!

The stock market casino

2010-06-30T13:04:00.007-05:00

One institution that has significant amounts of mythology and lore surrounding it operation is the US stock market. Wall Street has made many a man wealthy. These wealth generating stories are legends. What no one really talks about is about those who lose money and are often bankrupted by the same institution. In a prior post, Baseball cards as equities, I give a brief analogy describing stock trading as an ongoing auction. What is important is stocks have no value except what an individual is willing to pay and in the end, it is a zero-sum game.

As the market has been plunging over the last week and a half, it caught me by surprise on Tuesday with a sudden drop. That is the nature of the casino. I am guessing most stock owners are in a bloodbath at the moment. This gives me a chance to outline three kinds of investors on Wall Street.

Investor #1, The Insider
The insiders are professionals who either play stocks/bonds as a profession or are extremely wealthy individuals who have the inside track to corporate America. This group is the smallest consisting (guessing here) of at 0.1 % or 1 in 1000 investors. I guess they own 15-20 % of all stocks and bonds though. This group will always make money in the end because they have the knowledge and power to manipulate individual stocks. Insiders know when a big time news event is going to happen even before a public announcement. One fictional character who fits this category is Gordon Gecko in the 1987 movie Wall Street. The majority of all profits reside in this elite group. We define this group as those who know what is occurring.

Investor #2, Experienced, Successful Traders
This group of traders do not have the inside track as The Insiders do, but they have an idea of how Wall Street works. This group consists of smart hedge funds, individual traders and those at big bank trading groups. They consist of about 10 % of all investors. They probably have 15-20 % share in total assets. This group makes money most of the time. Since they lack advanced insider knowledge, they also lose on many trades. One subcategory of this group are high frequency traders (HFT). This subgroup uses high speed supercomputers to beat the market. What is even more interesting, HFT represent ~80 % of all trades made on the New York Stock Exchange. HFT are what control the majority of stock movement in modern stock exchanges. We define this group as those who know that they do know what is occurring.

The initial two groups outlined above are known as the smart money. They make money off of stocks and bonds. Who do they make money from? The following group, the dumb money.

Investor #3 Retail Investors and Inexperienced Traders
This group of traders represents the majority of investors. It includes all of those who put money into mutual funds, 401ks, IRAs, day traders (yes, day traders) and the majority of part time traders. This largest group of investors is fed the normal "fundamentals" and "over the long run stocks are the best investment" advice. Unfortunately, this is not the case because the stock market does crash. Crashes wipe out a significant amount invested in this group. As I previously stated, stocks are worth only what someone is willing to pay and they do not have an intrinsic value. The "fundamentals" advice is just smoke and mirrors to convince the average Joe to invest. Smart money knows these stock truths and avoid crashes. The lost dumb money proceeds ends up going to the smart money. We define this clueless group as those who don't know that they don't know.

You must be this size to ride......

2010-06-25T14:58:00.006-05:00

The title of this blog usually refers to roller coaster rides and riders having a minimum height requirement. Recently, this has been taken to the next level at the new Universal Studios' Harry Potter themed park in Orlando, FL. Potential riders were turned away from the 'Wizarding World's' ride because their girth was too much for the safety restraints to secure them. This Yahoo! post exclaims the predicament.

Most people remember the feeling of not being tall enough to ride an amusement park ride, but some would-be riders of the signature attraction at Universal Studios' new "Wizarding World of Harry Potter" theme park in Orlando are being turned away because of their girth. The ride, "Harry Potter and the Forbidden Journey," employs individual restraints to keep each guest tucked in to his or her seat, but the restraints aren't large enough to accommodate heavier riders.

The article goes on to state a growing problem in the US, people are becoming significantly overweight (quote link does not work).

That's all fine and good, but considering the average weight of an American man is 191 pounds (and rising: in 1960 it was 166 pounds), "Harry Potter and the Forbidden Journey" could be turning away quite a few potential revelers.

I am not going to make an outright political statement here, but I am going to make a cultural critique. This effect is not limited to the US anymore just to point out the problem's extent. Everyone argues why the world is getting larger, I have a theory below.

We as Americans are getting larger due to two main reasons, lack of exercise and diet. The lack of exercise makes a person unhealthy. Before the exercise craze of the 1980's, most adult Americans did not exercise significantly. In the past average Americans were not the healthiest around, but at least the majority were not overweight. This leaves one last culprit, poor diet. I truly believe what is packing on the pounds is an overload of sugars in the diet. The easiest sugar sources to remove would be soft drinks and snacks. Even if one accomplishes that goal, the amount of sugar found in food sources such as cereals and other processed foods are enormous. Go to a supermarket and look at the amount of sugar in "healthy" cereals? Most tend to have a minimum of 19 grams per cup and the second ingredient on the box is sugar!! Multiply this amount through most of the foods we eat. Sugar has little nutritional value and creates body fat if a significant amount is consumed. Excessive amounts of consumed sugar is the problem.

The international sport

2010-06-18T13:59:00.012-05:00

Beginning about a week and a half ago, one of the world's largest sporting events kicked off in South Africa, the 2010 FIFA World Cup. Soccer (football in most of the world) is the most played sport in the world. Personally, I do not like to watch it or play it. Not being a fan makes me wonder why is soccer universally loved? This post is dedicated to a theory on why soccer is the international sport.

Issue #1: Entertainment

For people to play a sport and continue a sporting tradition, the sport has to be entertaining. No one is going to play a boring sport. No one is going to watch a boring sport. What may be fun for one person, may be drudgery for another. This is universal to all competition. What is required in a sport's continuation generation to generation is mass entertainment appeal for both participants and those watching a sporting event.

Issue #2: Cultural adoption

Adopting a sport requires the game not to offend the native culture or religion. Another point that would make a sport's rejection would be the sport reminds a group of a rival, conquering tribe/nation.

Issue #3: Nonviolent action

It can be said that violent sports permeate the world. Their appeal tends to be limited though due to the destructive nature on participants. It is much preferable to play a sport that allows one to live a long, healthy life and even participate in one's later years in comparison to a senior broken body.

Issue #4: Accessibility for the masses

The majority of professional athletes in the major sports do not come from wealthy families. It is difficult to gather enough athletes for a successful league using only well-to-do athletes. Wealthy classes do not push chidren towards professional sports. Building a large fan base would also be difficult without the majority of average citizens. The classic sport that fits this category is skiing. The game has to be simple and be accessible to even the poorest children to be universally adopted.

Looking at the major sports limited to a few countries, here is where they fail to meet the criteria above.

Archery and shooting sports - Not entertaining, lacks accessibility since bows/arrows and firearms cost quite a bit.

Baseball - Need a glove, bat and ball to play. Baseball requires significant sized field. Inaccessible to the poor. Of the major American sports, this is the most international.

Cricket - Same as baseball except British. It has the further disadvantage of being complex.

American football - Violent

Running - Not entertaining for the masses

Golf - Extremely expensive sport requiring a course, thus, inaccessible to the poor.

Tennis - Tennis is similar to golf.

Basketball - The only disadvantage basketball has is the requirement of a hoop on a court. It has the potential to become universal sport over time.

Soccer fits all of the criteria above. Soccer only requires a ball and very little space to play. The rules are extremely simple. It also had the further advantage of being spread through the late British empire at the end of the 19th Century.

Vader in psychotherapy

2010-06-11T17:14:00.004-05:00

This Yahoo! posting is funny. Darth Vader was analyzed for psychological disorders by a group of French researchers. This strikes me as being strange, because are we American's culturally inferior (according to the French) to Europeans? It appears they respect good American movies though. Moving on to subject at hand.

After analysis of Lord Vader's behavior in the six Star Wars episodes, their conclusion was Vader has borderline personality disorder (BPD). Their diagnosis of the Sith,

His enemies and underlings are painfully aware that Darth Vader is highly irritable and prone to bursts of anger. But until now, we don't think anybody knew that the Dark Lord of the Sith may have suffered from borderline personality disorder.
According to a popular blog over at CNN, French researchers have concluded that Mr. Vader (aka Anakin Skywalker) has, at various times, exhibited six of the nine criteria for borderline personality disorder. To be diagnosed with BPD, you need only showcase five of the behaviors.

They go onto address his unstable relationships with his son, wife and other family members. One may ask, what is BPD? Wikipedia defines it as in the link above (links do not work in quote below),

Borderline personality disorder (BPD) is a personality disorder defined in DSM-IV and described as a prolonged disturbance of personality function in a person (generally over the age of eighteen years, although it is also found in adolescents), characterized by depth and variability of moods.^[1] The disorder typically involves unusual levels of instability in mood; black and white thinking, or splitting; chaotic and unstable interpersonal relationships, self-image, identity, and behavior; as well as a disturbance in the individual's sense of self. In extreme cases, this disturbance in the sense of self can lead to periods of dissociation.^[2]

I am glad the French are doing cutting edge research. At least, it is entertaining.

The wave of pain

2010-06-04T14:45:00.009-05:00

In previous posts, I gave a brief outline of Elliot Wave principle and how it pertains to investor psychology in stock markets (click here and here for the postings). I also spoke about the sovereign debt crisis in Greece along with the problems of the PIIGS. This post will bring together these two concepts and what is currently happening on the US stock exchanges.

Today was a massacre. The three major indexes (Dow, NASDAQ and S&P 500) all fell more than 3%. One major factor roiling the market is the continued debt crisis in Europe. Even after ~$1 trillion USD bail out a few weeks ago from the European Central Bank (ECB) and the International Monetary Fund (IMF), the European Union (EU) is still not economically stable. More debt does not solve Europe's fundemental marcroeconomic issues. The country that is the focus of attention is Hungary. Hungary is not part of the EU, but the former communist block country received significant amounts of loans from EU based banks. Hungary is threatening to default and the potential massive losses to those EU banks are both enormous and destablizing. The jobs report for May also came out worst than expected. These events contribute to the main stream media's story to why the market sell off occured.

Was this sell off predictable? It is impossible to determine the exact movement or level of the stock market on any given day. Anyone who says they can is a liar or an insider. Insiders can only predict with a certain stock for limited amounts of time (insider trading is illegal). For us average folk, it is possible to approximate the direction and pattern a market may take using Elliot Wave principle (EW) which is a technical analysis method based on the Dow Theory. EW prescribes potential outcomes. The EW community tends to believe we are in Primary wave 3 of a secular bear market. We are a heavily indebted society with a debt bubble that needs bursting. Accordingly, I believe we are at this stage in the bear market as of today:

Cycle 3 of 5 (Primary wave 3)
Intermediate 1 of 5
Minor 3 of 5
Minute 3 of 5

Remember, each wave is further divided into 5 subwaves in the repetitious fractal form. The minor 3 of 5 represents the largest 3rd wave of a fractal. I was skeptical about any waves smaller than the minors, but the last couple of weeks made me a believer. The 3rd wave is also the most violent in action. The sell off today represents the sudden movement expected in this bear market stage.

The answer for the predictability question is yes. The massive sell off was predictable being limited to approximate dates and amplitudes. I was prepared by going long on inverse ETFs or funds that respond in an inverse manner to the market movement (represented stocks go down, fund goes up). This current downturn should continue on for a least a few more trading days.

Firearms failure

2010-05-31T20:49:00.006-05:00

Today is Memorial Day, a day to remember those who gave everything for our country. This post covers a topic that upsets me quickly. Our standard issue rifle in the military is the M4, a shorten version of the M16A2. It uses the standard NATO 5.56x45 mm ammunition or .223 Remington. This rifle is controversial for several reasons.

The lack of kill force from the smaller .22 bullet is a problem if the bullet travels at subsonic velocities.
Smaller mechanical components often fail to move causing the rifle to jam during combat in dirty conditions
Direct-impingement gas operation causes premature aging of the rifle's mechanical components due to excessive heat and fouling from direct exposure to the barrel.

When the initial M16s were given to soldiers in Vietnam, the weapons were a disaster. The inherent flaws mentioned above made the initial design useless to a soldier as they constantly jammed in the hot, humid jungles. After significant redesign (and change in powder), the rifle then became somewhat useful. Fast forward to the 1980's and beyond with the newer updated versions of the M16XX, the A2, A3 and A4. The newer incarnations limited the issues listed above through engineering improvements, but still it is a flawed design in nature. No other current assault rifle uses the direct-impingement system. It is a failed design and should be replaced with a short stroke or long stroke gas operating system. The internal moving parts also should have greater clearances preventing the rifle from jamming due to contamination.

The longer 20 inch barrel makes the NATO 5.56x45 mm ammo useful on the battlefield, but to what degree is still a topic of hot debate. Other countries use this round for their troops, thus it has validity as a reliable munition. Decreasing the barrel to 14.5 inches as in the M4, the velocity decreases to the point it is ineffective. This article reveals the inadequacies of the M4 in our current Afghanistan conflict. The Army even admits at long range,

But a U.S. Army study found that the 5.56 mm bullets fired from M-4s don't retain enough velocity at distances greater than 1,000 feet (300 meters) to kill an adversary. In hilly regions of Afghanistan, NATO and insurgent forces are often 2,000 to 2,500 feet (600-800 meters) apart.

At the end of the article, the expert's opinion rings true,

Martin Fackler, a ballistics expert, also defended the 5.56 mm round, blaming the M-4s inadequate performance on its short barrel, which makes it easier for soldiers to scramble out of modern armored vehicles.
"Unfortunately weapon engineers shortened the M-16's barrel to irrational lengths," Fackler said. "It was meant for a 20-inch barrel. What they've done by cutting the barrel to 14.5 inches is that they've lost a lot of velocity."

When a soldier's rifle fails, he is defenseless. Not only does he become an easy target, others in his company are easier targets for the enemy. This is a serious problem.

There is an easy, intermediate solution. Immediately replace the issued M4 with the M16A4 and it would not cause a large ordinance supply problem. It seems politics rule the day and our soldiers are paying with their lives. Since the M16 was not replaced years ago, it demonstrates who dominates our modern military, the military industrial complex.

Glass of wine for the brain?

2010-05-25T16:37:00.006-05:00

Health studies are constantly being completed. The results are sometimes even surprising. This Spanish study links a delay in Alzheimer's disease to moderate drinking in women. The study took into lifestyle considerations while performing the research. Results were conclusive with the alcohol consumption benefiting nonsmoker women the most.

"Our results suggest a protective effect of alcohol consumption, mostly in non-smokers, and the need to consider interactions between tobacco and alcohol consumption, as well as interactions with gender, when assessing the effects of smoking and/or drinking on the risk of Alzheimer's disease," the study's lead author, Ana M. Garcia, from the University of Valencia's department of preventive medicine and public health, said in a news release.

This seems odd when initially thinking about the issue, but not really. Drinking effects the brain's function (ever had a conversation with a rational drunk?) and specially the chemistry. The study's authors point this out.

"Interactive effects of smoking and drinking are supported by the fact that both alcohol and tobacco affect brain neuronal receptors," Garcia explained.

The take home message from this study is scientists may know quite a few things about the human body, but a significant amount of study could still be completed on the things we don't know. The medical field has much to learn and research should be heavily funded.

Good upbringing is warm as apple pie

2010-05-18T16:37:00.004-05:00

I occasionally cover health topics on this blog. This study that was recently published supports the nurture side of the nurture versus nature argument. The study examined the blood of 53 individuals from lower socioeconomics status (SES) and examined for genetic markers of inflammation. In layman's terms, they are trying to track potential, chronic illness later in life and correlate it with the factor how close an individual is to their mother. Apparently, chronic illness and inflammation are correlated. Correlations do not mean guarantees, but are higher probabilities. The article puts it simply.

Chronic inflammation is linked to a number of conditions, including cardiovascular disease, diabetes, depression and cancer. Cole compared inflammation to a "fertilizer" that feeds disease. For example, in women who have been successfully treated for breast cancer, those who show high levels of inflammation have twice the risk of a recurrence of the cancer, research has shown.

This study found that having a harsh life when young does lead to a greater number of inflammation markers. The environment is activating certain genes. The article states.

Early life experiences can lead to the release of hormones that channel the body into being more or less prone to chronic inflammation, Cole said.
Harsh family life

In another recent study, published online April 29 in Psychological Science, researchers found that adolescent girls who reported having harsh family lives growing up - abusive, neglectful or violent - had increasing markers of inflammation during the 18-month study period compared with girls who came from more stable homes.

Neither an abusive home nor a cool relationship with mom automatically translates into disease later on in life, however. Cole said early family experiences are one factor that shapes the way the body responds to stress. From his research, Cole hopes to develop a checklist of risk factors, including family upbringing, that can guide treatment decisions.

Being a good loving family not only spiritually encourages people, it physically helps. The article gives hope by also stating that coming from a low SES is not a cause for the markers if the family is loving and caring. This gives further hope for those who come from disadvantaged backgrounds.

Europe stops fiddling while Greece burns!

2010-05-10T12:30:00.010-05:00

This post is a combination of several other past blog topics. It will cover economics and the stock market.

In March, I discussed the economic crisis in Greece in the post The slippery slope of Greece. In the post, four options to Greece's crisis were presented:

Option 1: EU bails out Greece with emergency loans at low rates and Greece implements austerity budget spending.
Results: If the money comes in from the other EU members, it will give Greece a little breathing room to fix problems. This requires the most powerful EU member's, Germany, blessing. If the money does show, I rather doubt Greece will do more than superficial changes to government spending. Greece has cheated on its obligations in the past, thus, why should it change now? EU members know this. The cash influx would last about 6 months and nothing structurally would have changed. Greece would be where it started. Even if the austerity measures were fully implemented, Greeks make is a national past time to protest. The economy would face a decline in productivity resulting in further economic problems.

Option 2: Bailout from the US Federal Reserve in low rate loans
Results: Same as in option 1. The advantage of this scenario is it could be kept secret. For Europeans, it is the best option since Europe do not have to pay. American taxpayers get the bill when option 4 below occurs.

Option 3: International Monetary Fund (IMF) steps in and gives emergency loans to Greece.
Results: Same as option 1 again. Two negative aspects loom here. One, I believe this would break terms of the EU. Other EU states would retaliate, dumping on Greece in various ways. Greece might get thrown out of the EU. Two, the spending restrictions the IMF imposes during its assistance programs are harsh. Greece will enter into an economic downward spiral as socialist union workers shut the country down from mass protests.

Option 4: Greece defaults on sovereign debt
Results: It is impossible to determine what will occur after the actual fact. Greece would enter into a severe depression though. The key is membership within the EU. Will it remain a full or partial EU member? Will it keep the euro as a currency? I am guessing the IMF would step in here and impose their will. Greece would have to accept a bitter pill.

It appears as if a variation of Option 1 won. The ECB announced last night along with aid from the IMF a $955 billion rescue fund for the entirety of the EU states dependent upon the Euro. The plan is bailing out all of Europe! The intention of the rescue was to defend the value of the Euro. Really, the plan is nothing more than printing money and providing it to banks across Europe. In the long term, it is going to devalue the Euro even further. It does not directly address the crisis in Europe and especially Greece, too much debt.

In two previous posts, Markets and psychology along with Market observations, I present Elliot Wave Theory and how equity markets are driven by investor sentiment. It is time for a Dr. Coffee's Market Update.

In February, I was predicting that we had begun Primary Wave 3, AKA the Ponzi wave. The market had a mind of its own and recovered after the sell off in January and February. It continued on the ever appreciating march to the moon. Primary Wave 2 had not yet finished and had me fooled into a sudden crash as expected in Primary 3.

Well, things have changed. The sudden drop and high volume accompanied with the sell off starting on April 27 is more characteristic of a 3rd wave. Last Thursday had the Dow Jones Industrial Average briefly drop almost a 1000 points! Today, after the European bailout was announced, all of the US indexes shot up over 4%. This is typical of a bear market rally and indicates that Primary 3 has launched. I believe this is where we are at within the wave structure:
Cycle 3 of 5 (Primary wave 3)
Intermediate 1 of 5
Minor 2 of 5

If this is true, expect significant downside to the US stock market. If not, the market may fool me again!! I reserve the right to be wrong.

Oil all over the Gulf

2010-05-04T15:43:00.006-05:00

Everyone is talking about that British Petroleum (BP) oil rig that is leaking 200,000 gallons (~40,000 barrels) of oil into the Gulf of Mexico daily. I try to avoid politically charged topics, but this fits into a couple of prior post covering the limited oil available in the world and the current, unrealistic view of alternative energy. I will converge on these ideas near the end. I really see no good side to this mess as the politicos will start spewing hateful, partisan words. No one is willing to accept our society's dependency on oil or is willing to properly invest in an alternative.

First, the oil spill from this oil rig is a disaster. The oil is getting spread everywhere in the Gulf and will find its way onto the Gulf beaches. Most likely the spill will contaminate beautiful beaches for years into the future. Tourism is going to drop. It will also devastate the local fisheries and shrimping industry. My heart goes out to these victims living in the region. BP should pay for every portion of the clean up and also provide a monetary fund for these people. Even if BP pays, it will not make up for the economic damage. Damage is done.

Second, the technological issue comes from the leak source. It appears as if safety mechanisms failed, and the several leaks are hundreds of feed underwater. The high oil pressure is just spraying crude oil into the water uncontrollably. It is difficult working at such depths. BP can't just easily turn off the oil. That is why this incident has turned into such a mess. Whether BP was drilling responsibly or whether they were taking undue risks, we shall never know. Hopefully, what did occur will bring about new equipment or regulations to prevent such a mess in the future (there is some optimist in me).

Third, we would like to ween ourselves off of oil, but no alternative exists. Two factors play into this: 1) partisan politics preventing significant action, 2) those who are proponents of alternative fuel sources are dishonest at the current oil alternative development, years from implementation. This being said, if the oil supply decrease by 50 % or more over night the results would be devastating to the Western world. These events would occur.

The economy would suffer a severe slump. Transporting goods and items from factories to stores would cease. Consumers could not reach stores to buy goods. Workers could not go to employment sites. Severe disruption to our daily life would occur.
Travel beyond a few miles would cease. No planes, trains or automobiles. Kiss any business or pleasure trip good bye.
Mass starvation. Our food sources from agriculture are dependent upon oil. It takes oil to power tractors to plow fields. Oil is required to plant and harvest crops. Modern day nitrogen based fertilizers use oil as the primary feedstock. Even what little food could be harvested, it would not make it to market.

Oil is more important than what people realize. This is why we as a society should be investing heavily into research and development towards an ecologically safe, renewable oil alternative. Government and private sources combined. We need to make this a reality in the next few years, not decades as the current path is leading us. It will be a liquid fuel based transportation and not electric vehicles as I argued against (electric cars could contribute in a limited fashion). Potentially, our modern society's future survival depends upon this action.

Buying a house part 2

2010-04-26T14:47:00.011-05:00

This post is the second part investigating why buying a house in Austin at this point in time is not a good idea. First, I am not condemning the purchase of family homes. It is a great idea most of the time. It helps investors build equity and brings a sense of pride. Unfortunately, right now is not the time to jump in areas like Austin where prices are way above reasonable. This is not even addressing places like California where home prices are at ridiculous levels. I have had many arguments with people that seem to be backed with an unwritten American mythology concerning house buying. Here are their arguments with my counterpoint to each statement.

Their statement: It does not cost much more to buy a house over renting.
My argument: In the first part of this post, the monthly cost to rent was about $1050 in comparison to buying an average priced Austin house ($187, 000) at $1700 per month.

Their statement: It is best to build equity in something you own. Renting is throwing away money.
My argument: This point leans slightly towards their side. One thing to note though, during the first 5 to 7 years the majority of mortgage payments goes to interest, not principle. It takes a long time to actually build any real equity in a house. If one is not going to live in a place at minimum 5 years, it is not worth the effort of buying.

Their statement: Interest rates are going to rise.
My argument: Yes, interest rates are going to rise. What they fail to comprehend is as interest rates rise, the amount of money banks will loan to families will decrease. The result will end up reducing home prices. The mortgage a family is paying will be greater than the house's value in the future. This is not a way to build equity!

Their statement: The first-time home owner's $8,000.00 tax credit runs out at the end of April.
My argument: Yes, it does. This is only a federal tax credit. If a family is at a 28% federal tax rate that means their tax liability decreases by about $2,200. It is really not that much. What happens to housing prices rush to buy is over? Demand for houses will decrease driving house prices down just as the cash-for-clunkers had automobile demand decrease when the program ended. (Addendum 4-27-10: My argument was a little off. The tax credit is a dollar-for-dollar $8000 reduction of your federal tax bill as pointed out by my friend Lasso. It is only once. This still is not enough money to make a difference in buying when housing prices are $187,000+.)

Their statement: Housing prices will only go up!
My argument: Housing prices will not go up, but will go down. Two reasons why this will be true. The most important one is the banks are not making the excessive loans as they did in 2004-2007. The exotic loans that allowed janitors to afford mansions are things of the past. They will never return. Finally, good paying jobs have yet to return and most likely it will take a long time for them to return. No one can afford a house unemployed!!! No jobs, not housing boom. The plot below from the blog Calculated Risk shows home prices decreased in February. This trend is just going to continue until a significant amount of hiring is going to take us out of this 17 % (9.7 % official collecting benefits) actual unemployment rate. When I mean actual unemployed are those who wish to work, but can not find jobs. When house prices decrease, you lose money!

What I have learned in this intellectual practice is that people tend to follow the herd mentality. The rush to buy a house now is because everyone else is doing it or they are afraid that prices will skyrocket again. Get the free money with the tax break! Rational thought is dismissed during the rush.

Buying a house

2010-04-13T13:16:00.004-05:00

My blog covers a wide range of topics. Often, economics is one field I poke around. This post is inspired by a conversation with my coworkers about a week ago. They suggest I purchase a house in the current market/economy. At the moment, my job is not secure at Spansion due to Chapter 11 bankruptcy, but that may change over the next few months. It is uncertain. Putting that aside, I am going to discuss why someone should NOT purchase a house at this time. My coworkers were correct in the past sense. I should build equity in a house. Yes, I am throwing away money in rent. Those statements are true in the Austin home market until the recent housing bubble (yes there is one in Austin) and the current state of employment within Austin. It is not wise to currently buy a house.

First, it is a false statement saying that buying a house is a little more than paying rent. Bull. The breakdown below will show you why. These are approximations.

Renting a 2 bed 1 bath apartment per month in Austin, TX:
Base rent = $900
Renters insurance = $50
Utilities = $100
Upkeep = $0
Total = $1050

The average home price in Austin is $187, 000 according to the Austin Chamber of Commerce. This is low compared to many places like California and Florida, but it is quite a bit higher than surrounding areas. Using a mortgage calculator and the average home price to get the monthly mortgage payment after a 10 % down payment at 5% interest.

Buying an average priced home in Austin, TX per month costs:

Base mortgage + Mortgage insurance + Tax = $1395
Homeowners insurance = $100
Utilities = $150
Upkeep = $200
Interest tax break = -$125
Total = $1720

Note folks, this is a 63 % payment increase over just renting alone. This does not even take into consideration the down payment of $18,700 and the extra fees of paying escrow along with a realtor (6% commission). In reality, it is about 73 % more expensive to buy a house. It is not a slightly higher cost to buy a house in comparison to renting an apartment.

This is part 1 of 2 posts that makes the simple point of purchasing a house is not slightly more than renting an apartment. The next post, part 2, will discuss why one should wait to buy a house a couple of years from now.

Fighting Israeli's

2010-04-02T17:24:00.004-05:00

Ever since its inception in 1948, Israel has been at a state of war or constantly on the verge of war with their Arab neighbors. Actual major conflicts since independence include the 1948 Arab-Israeli War, the Six-day War, the Yom Kippur War and a pair of conflicts with Lebanon. Currently, all of Israel's neighbors are hostile and terrorists such as Hezbollah within the occupied territories would love to wipe Israel off the map. It is no wonder that Israel spends over 7 % of its GDP being ranked 6th highest in the world on military expenditures in this category.

This tank system dubbed the "Trophy" seems to be the latest in the Israeli military's arsenal. It is an active defense system to knock down anti-tank missiles or rockets. It uses a radar system and shoots quickly at incoming targets.

The tiny Trophy system, lodged behind small rectangular plates on both sides of the tank, uses radar to detect the incoming projectiles and fires a small charge to intercept them, said Gil.

After firing, the system quickly reloads. The entire process is automated, holds fire if the rocket is going to miss the tank, and causes such a small explosion that the chances of unintentionally hurting friendly soldiers through collateral damage is only 1 percent, the company says.

I am curious what the small "charge" is they are referring to. The only 1 % collateral damage would make this quite a unit if the claim is true. The article has capabilities for the system at quite a high standard.

Developers say the Trophy can stop any anti-tank rocket in the formidable Hezbollah arsenal, which struck dozens of Israeli tanks and killed at least 19 Israeli tank crewmen during their month long war.

"We can cope with any threat in our neighborhood, and more," said Gil, the Trophy's program manager at Rafael. Citing security considerations, the company would not permit publication of his last name.

I am guessing the date weapons of Isreal's neighbors would not stand a chance against this unit. Modern weapons most likely would defeat the Trophy. Looking through the article, one key factor appears as with all nifty high tech weapons, cost.

Israeli analyst Yiftah Shapir said it is premature to tell whether the Trophy can make a major difference, however. He said the army must cope with the high costs of the system and determine exactly how it will be used.

"When everyone knows that it works properly, it will change the battlefield," he said.

Israeli media have said the cost is about $200,000 per tank. Rafael refused to divulge the price of the system, saying only that it's a "small fraction" of the cost of a tank.

This might prevent deployment of the weapon. Israel is price sensitive to unproven, expensive weapons due to the country's small size. We shall see Trophy's outcome over the next couple of years.

Prodigies and geniuses

2010-03-25T17:01:00.005-05:00

I found an interesting story on Yahoo today about a 13 year old young man, Colin Carlson, who is attending the University of Connecticut. He is doing well in his ecology and environmental studies with a 3.9 GPA (good by any standard) and plans on attending graduate school later in his teens. Obviously, he has an IQ at genius level. These types of individuals are rare and I am guessing his IQ approaches the off the charts level of 200 even at his young age. Many psychological studies have been performed on these types of individuals.

It appears as if our young protege is having problems completing his degree though. He is required to take a course in South Africa and UConn is not allowing him to attend due to safety reasons associated with his age (remember he is barely a teenager). The universities official line is,

Michael Kirk, a spokesman for UConn, would not comment on Colin's case. But he said that generally, safety is the university's first concern when travel is involved.

In true American fashion, the young teenager's mother responds with a lawsuit claiming age discrimination.

He and his mother say university officials told them he is too young for the overseas course. So he's filed an age discrimination claim with the university and U.S. Department of Education, which is investigating.

Finally, to top off these unusual circumstances the young prodigy claims,

"I'm losing time in my four-year plan for college," he said. "They're upsetting the framework of one of my majors."

The article goes on to mention he graduated from a high school curriculum at age 11 and how he felt out of place at school with pupils his own age. Yes, someone that smart would have trouble functioning in middle school where the rest of his cohort currently resides. I do believe we should allow students who are far ahead of their peers to skip a few grades. This case is a little extreme though.

IQ is just one measure of capability. It measure how well an individual solves a certain kind of problem. The test fails to measure other factors that lead to success like hard work, people skills and dedication. These skills develop over time resulting in a successful, mature person. This kid may be intellectually capable, but he will not be mature enough to deal with the kind of work a Ph D performs at only 22. I was considered a young Ph D when graduating at 29. The 7 years of living after 22 rounded out my general knowledge of the world. I fear this prodigy is going to end up as a puppet for some cruel entity wasting away his talent. This even does not touch on the simple concept of doing things that a teenager and young adult does at those ages. No prom, dates or other normal youth activities for him.

Finally, universities should put age limits on full time students. I would guess that 15 or 16 would be appropriate. That would stop these weird situations from appearing. UConn was right in not allowing the genius to travel to a dangerous country like South Africa. UConn was wrong in allowing him to be a full time student on track for a degree.

Ghost chili fights back

2010-03-23T12:51:00.005-05:00

Just when you thought every simple, conceivable weapon has been invented, the Indians (India, Asian) are going to weaponize their bhut jolokia or ghost chili. Yes folks, they have figured out the practical application of pepper heat besides burning your mouth and your innards with hot Indian cuisine. What are they going to do beside force you to gulp water in excessive amounts? It appears as if they are going to make a form of mace out it.

"This is definitely going to be an effective nontoxic weapon because its pungent smell can choke terrorists and force them out of their hide-outs," R. B. Srivastava, the director of the Life Sciences Department at the New Delhi headquarters of the DRDO said.

Srivastava, who led a defense research laboratory in Assam, said trials are also on to produce bhut jolokia-based aerosol sprays to be used by women against attackers and for the police to control and disperse mobs.

I always thought the hottest chilis in the world were habaneros, but I was wrong. It appears these ghost chilis are the hottest in the world according to the Scoville scale. The article makes a comparison to the common jalapeno pepper demonstrating their true heat.

It has more than 1,000,000 Scoville units, the scientific measurement of a chili's spiciness. Classic Tabasco sauce ranges from 2,500 to 5,000 Scoville units, while jalapeno peppers measure anywhere from 2,500 to 8,000.

NCAA basketball tournament

2010-03-18T13:11:00.004-05:00

It is collegiate spring break in March, thus, the NCAA men's basketball tournament is beginning this week. At time of this post, 1:20 PM CST, the games have begun. This post will cover just a few statistics associated with the 65 team, three week long single elimination tournament. I am playing in a bracket on ESPN.com with my coworkers. I know little about college basketball, but after my last place showing in the bracket last year this year is going to be based on the professional sportscasters' prognostications.

First, we will investigate random picking of winning teams starting at the 64 team start. If one flips a coin, the chances of landing on one side (say heads up) is 50 % or 1 in 2. Flip the coin a second time, there is still a 1 in 2 chance that coin will land heads up. Basic statistics have you multiply the results together for the odds of both coin flips being heads up, 0.25 % or 1 in 4. The simplest way to calculate the odds of every flip being heads up are 1 in 2^n, where n is the number of coin flips. We will apply this to the NCAA tournament. In the single elimination tournament with 64 teams, 63 games are played. The odds of picking every game correctly in a random fashion (50% odds per game) are 1 in 9*10^18 or 1 in 9,000,000,000,000,000,000!

Second, the tournament setup has teams in 4 regional brackets. Each bracket has teams ranked as seeds 1 to 16 according to their regular season record and strength of competition. The first round has the seeds playing against each other in this manner: 1 vs 16, 2 vs 15, 3 vs 14, 4 vs 13, 5 vs 12, 6 vs 11, 7 vs 10 and 8 vs 9. According to wikipedia since 1985 and institution of the 64 team bracket, the following odds apply during first round.

The #1 seed has beaten the #16 seed all 100 times (100%).
The #2 seed has beaten the #15 seed 96 times (96%).
The #3 seed has beaten the #14 seed 85 times (85%).
The #4 seed has beaten the #13 seed 79 times (79%).
The #5 seed has beaten the #12 seed 66 times (66%).
The #6 seed has beaten the #11 seed 69 times (69%).
The #7 seed has beaten the #10 seed 61 times (61%).
The #8 seed has beaten the #9 seed 46 times (46%).

Using these statistics by picking the highest seeded team through entering points 1 to 6 above in our statistics and assuming that rest of the tournament has 50% odds, the new odds of picking every game correctly is still the astronomically high 1 in 7*10^13 or 1 in 70,000,000,000,000.

Those people who do correctly pick every winner in the brackets are not using random choices, they are using educated guesses (statistics) with some luck to help them out.

Baseball cards as equities

2010-03-14T16:53:00.010-05:00

Most Americans know of that sports fanatic who seriously trades baseball cards. I had a little interest in these things when young. Recently, I am had an idea using these sports memorabilia items as an example to explain the general operation of the stock market. First, I will define why stocks and baseball cards have any value.

Baseball card value is dependent upon a collector's desire to own the card. Rarity, nostalgia and the desire to complete a collection often add to a card's value. The actual card has no inherent economic value except what a trader is willing to pay.

Stock shares are portions of a business. Companies sell shares in initial public offerings to raise money. The owner of a share(s) owns a small portion of that company. Most shares are traded publicly on stock exchanges and these are known as public companies. We are going to focus on public companies for simplicity sake in this analogy. The only value a stock has except the listed price on an exchange comes from dividends. In most cases, dividends paid are on the order of a few percentage of a stock's listed value, not the main factor leading to ownership. Excluding dividends, the actual stock has no inherent economic value except what a trader is willing to pay.

Back to the baseball card analogy, we are going to have a giant conference where all of the biggest traders congregate to trade in auctions. The purpose of the auction is for buyers and sellers to get the best price for their cards. It determines a fair value for cards in the auction at that given point in time. English auctions (most common type in the US) work in a simple manner. An auctioneer will start announcing to the crowd a price or ask for a card. In the crowd, investors will start bids increasing the ask price of the card. When the ask price no longer increases, the bid and ask match. The auction for the given card is over and the card is sold to the bidder from the seller at the agreed price.

Alternate the scenario a little and the stock market basic operation will be represented. Picture the baseball card traders ditching their day jobs and trading baseball cards full time? Everyday, the same baseball card is traded at an auction. The mechanics of the auction change as follows:

1) The beginning ask price of the day is the ask/bid price from the previous day.

2) Bids can now take card price in both directions. Price can increase and decrease.

This is similar to the bidding found in stock markets, except this occurs for millions of shares (cards) hundreds of times per individual stock daily. Total stock exchanged on a market is on the order of a few billion daily. The stock market is nothing more than a complex auction house to trade stock between investors buying and selling stock. Stock markets themselves have no inherent value, the participants have the capital and stock. Participants are where a market's value lies.

This analysis covers stock market basics. It does not take into consideration advanced trading strategies such as shorting stock, options and day trading to name a few.

Wine and weight control

2010-03-09T07:19:00.008-06:00

Many studies concerning weight gain and loss are always being published. This study recently published is about moderate alcohol consumption and weight gain by women. It hints that alcohol in the subject's diet reduced weight gain. Once again, the supposed evil things in life may help us in moderation. It may help explain the French conundrum of eating rich foods and staying thin (French drink wine). In a prior post, I discussed how cheese has the chemical compound linoleic acid that increases a person's metabolism slightly reducing weight gain. What are the exact benefits to moderate alcohol consumption?

First of all, heavy alcohol consumption is NOT good for anyone. It leads to weight gain and other various chronic health problems. Societal problems also arise with the inability to properly function among people. Alcoholism goes down all the bad paths your mother warned you about. I condemn daily drinking of 3 or more drinks in a setting. Even more damaging to a person's body is binge drinking at 5+ drinks in one setting. We as a society should find ways to reduce such drinking.

Moderation in all things. Drinking a couple of drinks a day will not hurt you. The study linked above followed 19,220 women aged 39 and older who started with a normal body mass index or healthy body weight. The study followed these women 13 years and found:

"An inverse association between alcohol intake and risk of becoming overweight or obese was noted for all four types of alcoholic beverages [red wine, white wine, beer and liquor], with the strongest association found for red wine and a weak yet significant association for white wine after multivariate adjustment," the authors write.

Very interesting. The exact reason why is not speculated in the article. It is another study that questions the dietary orthodoxy we are often hear. We need more studies like this example.

Slippery slope of Greece

2010-03-04T12:59:00.011-06:00

The mainstream US media tends to emphasize stories that often bring about passion from their directed audience. Americans are often disconnected from important world events. The cause of this international detachment is our relative large size or isolation from the largest Europe/Africa/Asia landmass is a topic of long debates. In either case, economic events in Europe may be powerful enough to reach our sovereign shores soon. It has to do with national debt of the commonly referred to PIIGS, (Portugal, Italy, Ireland, Greece and Spain) and its influence on the economic entity the European Union (EU). We are going to specifically focus on the current hot spot, Greece.

Greece is facing debt on the order of 120 % of its gross domestic product (GDP). It would take over 1 year and two months of the country's complete economic output to pay off this whopping total. This is one of the highest debt loads in the world. It grew to this large size through many avenues, some of them legal and others illegal underneath the Treaty of Maastricht forming the EU. Greece was supposed to limited its yearly deficit to just 3 % GDP by treaty terms. It seems the the Greece government has been cheating on this promise in many ways. I will avoid details here. What I am going to discuss are potential international responses to this mess from best case scenario to worst case scenario. I call into question any "best case" options though.

Option 1: EU bails out Greece with emergency loans at low rates and Greece implements austerity budget spending.
Results: If the money comes in from the other EU members, it will give Greece a little breathing room to fix problems. This requires the most powerful EU member's, Germany, blessing. If the money does show, I rather doubt Greece will do more than superficial changes to government spending. Greece has cheated on its obligations in the past, thus, why should it change now? EU members know this. The cash influx would last about 6 months and nothing structurally would have changed. Greece would be where it started. Even if the austerity measures were fully implemented, Greeks make is a national past time to protest. The economy would face a decline in productivity resulting in further economic problems.

Option 2: Bailout from the US Federal Reserve in low rate loans
Results: Same as in option 1. The advantage of this scenario is it could be kept secret. For Europeans, it is the best option since Europe do not have to pay. American taxpayers get the bill when option 4 below occurs.

Option 3: International Monetary Fund (IMF) steps in and gives emergency loans to Greece.
Results: Same as option 1 again. Two negative aspects loom here. One, I believe this would break terms of the EU. Other EU states would retaliate, dumping on Greece in various ways. Greece might get thrown out of the EU. Two, the spending restrictions the IMF imposes during its assistance programs are harsh. Greece will enter into an economic downward spiral as socialist union workers shut the country down from mass protests.

Option 4: Greece defaults on sovereign debt
Results: It is impossible to determine what will occur after the actual fact. Greece would enter into a severe depression though. The key is membership within the EU. Will it remain a full or partial EU member? Will it keep the euro as a currency? I am guessing the IMF would step in here and impose their will. Greece would have to accept a bitter pill.

Reviewing the four options above, unfortunately they all will lead to option 4. The amount of debt Greece has accrued is too much. Greece is not positioned towards a future booming economy in their current political and economic position. The bailouts (options 1-3) lead to just more debt down the road, thus, they default eventually. To put in prospective, if they pay 4.5 % annual interest on their 120 % GDP debt (~$340 billion USD according to Wikipedia) that translates into $18.4 billion (5.4 % of all economic activity) annually to service their debt interest alone. This value does not include debt principle repayments (much higher value). In recent Greek bond issues, the interest was north of 6%. They are paying significantly more than just outlined!

We are just using Greece as an example of the debt problems facing all the PIIGS. The other oinkers are much larger nations and have similar debt problems. How this will effect world bond, commodities and equity markets will be determined over the next few weeks to months. The time frame depends on if one or more of the initial three options occur, delaying the event.

Funding strikes back

2010-02-25T12:30:00.013-06:00

In a previous post, Fuel cell energy, I debate a new product by Bloom Energy, the Bloombox. In a nut shell, it is a giant box full of fuel cells that run on natural gas operating as a small electrical generator. Online Fortune magazine has an update on the Bloom boxes' debut. Their view of the technology is similar to mine with many downfalls. Without 30 % state economic subsidiaries, the box would not compete with more traditional electrical sources on the grid. No surprise. In the end after the fanfare, it is all about the money and pleasing investors. Two patterns emerge from this story reflecting the current state of research and development towards product commercialization in the US. The cruel cycle of funding and the half truths concerning the current state of alternative energy.

To put the record straight, I like the concept of fuel cells generating electricity. The technology is NOT ready for prime time yet. It needs more development. We should have an army of scientists and engineers working on this technology. It will have twofold benefits:
1. Add to the US economy through employment
2. Viable product to sell in the end.
This is where the first ugly reality shows its face, the current state of research funding.

In a way I feel for the inventor, K.R. Sridhar, and the decision he was forced to make when founding his company. Venture capitalist (VC) invested in his company. VC have high expectations. Companies will demonstrate progress towards a product with an actual deliverable product by a certain date. What if the product is not ready in this time frame? The VC funding goes away. End of game. If Sridhar wanted his dream to come to fruition, he took the money with terms. In many cases, successful product development time is longer than allotted, the final product flops. Darn if you do, darn if you don't.

I propose investing more capital into long term research and development laboratories (national labs or corporate) to develop these technologies. Yes, I know over along time R&D loses money, but nothing significant will ever be developed again without extensive research. What about universities? Universities are in the business of producing researchers and most projects end with Ph D students graduating. The same short term issue as VC funded projects. Our technical competitive edge depends on long term research and development funding in appropriate venues.

Second, the development stage most alternative energy currently stands lacks commercial viability. Even with economic subsidiaries, most alternative energy sources will not eliminate our dependence upon foreign oil. Click here for a more complete argument. One exception comes to mind, wind turbines. Wind turbines are commercially viable. They share the similar drawback of low energy density through. No one ever mentions another obvious problem, what happens when the wind stops? Solar, geothermal and various other alternative energy sources are just not at a development stage that will displace more conventional fossil fuel based technologies.

I repeat, this post's intention is not about bashing venture capitalists or alternative energy, it is to inform about the current reality. Venture capitalists have a vital role in the US economy in funding successful technology start ups. The VC success key is funding technologies that are close to production stage, not products that require a significant amount of engineering. As for alternative energy, I would love to see solar panels on every roof. Commercialized economically competitive versions of the fuel cells would be outstanding. The new technology has significant potential. As we currently stand though, the lack of funding and efforts to develop alternative energy sources will doom them to failure. We as a society need to accept the situation's reality.

Fuel cell energy

2010-02-22T16:25:00.008-06:00

The vast majority of modern energy sources require fuel combustion in the process. Fossil fuels are the most common fuels using this principle. This inventor, K.R. Sridhar, is supposed to launch his company's, Bloom Energy, new fuel cell based generator called the Bloom box in the next couple of days. The main website is even having a countdown to product launch. What is so spectacular about this new product? I will discuss that below.

Fuel cells are nothing new. They are basically electrochemical cells that work similar to batteries. The main difference is fuel consumption occurs in the fuel cell creating exchangeable electrons and protons for the anode and cathode, respectively. Several issues with fuels cells have prevented their widespread use:
1) The catalyst are expensive making electricity production cost prohibitive.
2) Hydrocarbon fuels (carbon based) foul the cathode leaving hydrogen as the only source of fuel. Hydrogen is not found in elemental form in nature. Significant amounts of energy is required to obtain hydrogen even before the fuel cell has energy output.
3) The low energy density often makes the exercise a mute point in practical terms.

The inventor claims one of these boxes (however big that may be) can power a house? I am skeptical. The inventor once worked for NASA where he developed an oxygen generator that was scrapped from space flights. My guess is this oxygen generator is being used to increase the production efficiency of the best currently available fuel cell technology. This is in comparison to more traditional fuel cells obtaining oxygen from the surrounding environment. The new fuel cells would work better with pure oxygen, but the technology still faces the three hurdles above.

I am skeptical. It seems like a bunch of hype. Unless other significant improvements were engineered into the box, this is going to be a flop. What is driving the coming out party is the $400 million investment by venture capitalists. Time to deliver goods or lose the funding.

Market observations

2010-02-17T16:41:00.009-06:00

In a prior post, Markets and psychology, I mentioned a market theory known as Elliot wave principle. Elliot wave principle states the markets move in five wave fractal shapes dependent upon investor sentiment. It is a tool based upon probabilities estimating future outcomes. The theory gives investors windows of buying and selling opportunities.

I have encountered difficulty using this theory within the last week. If one examines stock charts over long periods of time, the wave can be easily identified in the data. Sometimes, the waves are not clear as they are being formed. For example, on February 9 I predicted we were on this step in the current Cycle:

Primary = 3 of 5
Intermediate = 1 of 5
Minor = 2 of 3
Minute (not sure)

After about a week of market action, this stage in the Cycle has yet to be fulfilled. My current guess as of today's close (2/17) is:
Primary = 3 of 5
Intermediate = 1 of 5
Minor = end of 2
Minute (still not sure)
I was assuming the Minor 2 of 3 was unfolding as we had entered into the 3rd Minor wave. Further market action completed a nice rebound 2nd Minor wave demonstrating we were not that far into the overall wave structure yet. The 3rd Minor is coming at a later date.

What went wrong? Two things come to mind.
1. I had my investments ready for a 3 of 3 Minor movement. My bias.
2. Other more experienced bloggers I follow came to the same conclusion. The waves were unclear as they were being traced.

It is now obvious what the wave patterns are, not so in real time. Stock market investing in general follows this unknown path. Mr. Market will move as Mr. Market chooses. As Yogi Berra said, "It's tough to make predictions, especially about the future."

Religion and science

2010-02-11T09:58:00.008-06:00

We as scientists often like to believe that we are truly neutral in evaluating experimental data and theories. Reams of legitimate literature exists that remains relatively neutral in results discussion, always giving several explanations to experimental outcomes. Unfortunately, literature appears that is driven by philosophical or religious (the two concepts are the same) motivations and are not true scientific inquiry. This kind of literature embarrasses the entire scientific community, invalidates the studies within this biased literature and creates mass public confusion.

This post is about one poorly written book from the vegan philosophy camp, The China Study, by T. Colin Campbell and Thomas M Campbell II. I started reading the book and made it through the 4th chapter before giving up. Obviously biased information within the first 81 pages is enough to repudiate anything else within the book.

First, the book is written by a father/son team. This immediately casts a shadow on the results. Why do you need your son to coauthor a book? I will tell you why. No other respectable scientist who needs a careers would put his/her name on such a piece of work.

Second, and more importantly, is science depends upon addressing other findings from within the scientific community and giving appropriate responses to their theories. The author talks about other scientists not giving "open-minded" intercourse to his ideas. This "open-minded" discussion runs two ways and there lies the problem. Everyone is supposed to just accept his simplified animal based protein is the cause of Western disease theory as a fact. Other scientific views backed by years of research are not relevant. Campbell even arrogantly makes the comment in Chapter 1,

....we scientists focus on details while ignoring the larger context. For example we pin our efforts on and our hopes on one isolated nutrient at a time, whether it is vitamin A to prevent cancer or vitamin E to prevent heart attacks. We oversimplify and disregard the infinite complexity of nature.

This entire book is a simplification of three studies stating that animal based protein is the cause of all degenerative diseases like heart disease and cancer (referred to as Western disease). What makes your simplistic idea any better than other scientist's? Did God have a direct communication with you? This is double-speak my friends and shows tremendous bias towards a philosophical idea.

Third, the book's premise are based upon experiments that lack any serious analysis. I could personally rip each of the poorly executed experiments to shreds, but for brevity sake they all have one conclusion without any thorough discussion. Thousands of factors could lead to the found results like nutrition, genetics and other biological mechanisms instead of one simple answer, his anti-meat explanation. This saddens me the most, because anything useful to be gained from the various studies was wasted among the dishonest conclusions. Other deep flaws litter the experiprocedures. It raises a further question, are the results repeatable?

Finally, the author contradicts himself in Chapter 4. The basic premise I outlined in an early blog posting, Supplementing what?, is long term veganism is not found in any large human populations worldwide. It results in malnourishment from lack of certain vitamins and minerals. Poor health is the result. Of course he could not find one of these vegans for his study (they would not live long enough), but he goes on to attack the closest thing. He describes one of his studies' subjects in China as consuming about 1/10 the amount of animal protein than in American diets and his results were on page 80,

We expected that when animal protein consumption an d blood cholesterol were as low as they are in rural China, there would be no further association with Western diseases. But we were wrong.

Maybe the exclusive cause of "Western disease" is not animal protein consumption?

I will stop here because I could fill several posts on this horrendous book. What I am pointing out is sometimes science is distorted with the purpose to sway a select audience. Often, it is for religious or philosophical reasons. In worst case scenarios, it is for outright fraud. In both cases, it is unethical.

Markets and psychology

2010-02-09T13:33:00.010-06:00

This post covers a topic of interest to me, the stock market. I mentioned in a previous post, driving with the rearview mirror, about some basic concepts of the stock market. Several months have passed since my last market posting. Accordingly, I have been studying and stock trading resulting in both failure and success. The more I watch the market, the easier it is to understand that investor psychology drives the market.

One technique that I am studying is Elliot wave principle (EWP) developed in the 1930's by Ralph Nelson Elliot. Elliot observed that markets move in 5 distinct sets of waves according to prevalent market psychology. When in a bull market, impulse waves move the market up. In a bear market, impulse waves move it down. Waves 1, 3 and 5 are the impulse waves, while 2 and 4 are the corrective waves. Impulse waves are further subdivided into smaller sets of 5 fractal waves. Corrective waves have an a-b-c wedge like pattern and are also subdivided into smaller waves. The time span of the waves are from decades to hours on ticker charts. To be honest, the larger waves on the order of days (Minute) up to years (Primary) follow this pattern making distinctive patterns on ticker charts. Time spans greater than several years and less than several days tend not to fit into exact scenarios. It is just wishful thinking putting noisy or irrelevant data into such a pattern in my opinion. The take home message is Elliot wave principle follows what truly drives a market, investor sentiment.

Elliot wave principle is a loose theory, it has multiple outcomes during any given situation. Market timing and wave amplitudes are based upon Fibonacci numbers. Exact values fit into a range. Here is where EWP is useful, it tells us approximately when the market will turn and to the approximate degree a rally or sell-off will carry a market. It determines buying or selling windows ahead of time. I suggest using other technical indicators (MACD, stochastic and etc.) as complimentary tools when waves are not clear, which often waves are unclear. Investigation of the stock's price movement (who owns it and why) will further help an investor.

In practical application, I believe as of February 9, 2010 we are in a bear market at the following point in a Cycle. This means the overall market movement is downward.
Primary = 1 of 3
Intermediate = 1 of 5
Minor = 2 of 3
Minute (not sure)
Using this, I made a successful and unsuccessful trade. The unsuccessful trade occurred because of undesired price movement premarket. My blunder even as the stock moved in the desired predicted direction. This is why the system is not going to make anyone rich without following good trading practices.

I will post further on this topic to see if my evaluation and Elliot wave principle holds true.

Dr. Coffee blog's updates

2010-02-02T14:58:00.012-06:00

This post is a continuation from two past posts with new observations. Both topics are on human health and diet.

First update stems from the previous post Supplementing what? in which I warn about the dangers of long term strict veganism. This weekend, I had the luck of meeting an individual who became a Vegan within the last couple of weeks after being a practicing lacto-ovo vegetarian for about a year. It was a sight to see. She was about 10-15 pounds underweight. Her complexion was similar to a ghost, pale white. She is obviously intelligent, but the mental sharpness was not present. This on top of being sick with a cold or flu. Her friend (she was also present) who just started practicing veganism (same time) after being lacto-ovo vegetarian even longer was in the same physical state. I wish both of them would realize they are destroying their own healths'. It seems that these extreme vegetarian types have a cult like following. This trend is very disheartening in the least.

One argument that I read from a vegan propaganda publication this past week concerned the actress Alicia Silverstone. Her source of Vitamin B12 comes from Miso soup. I was not aware of this vitamin source, but I rather doubt the concentration is enough to fulfill an individual's daily requirement without eating several bowls of the soup. This is the very basic problem with veganism. Yes, you can find these necessary vitamins in certain vegan approved sources, but they will not provide enough of the vitamins to an individual for healthy living. I repeat once again, healthy, long term, strict vegan adherents do NOT exist. It is a dangerous lifestyle. One other quirky thing about the article was her description of feeling holistic (??????). I am coming to the conclusion that this general "feeling" comes from a lack of energy and mild hallucinations. Yeah, you feel holy, but what is it really?

The other update is on my own health and is a follow up to the post, Give me a D, Vitamin D, where I discuss a potential Vitamin D deficiency in my own diet during winter. I would my overall feeling as constantly tired even though I am not sick and been sleeping quite well. After taking about 2000 IUs of Vitamin D from store bought vitamins, I felt better the following day. After one week of the supplements, I felt back to normal or similar to summertime. My guess was right, I was lacking Vitamin D in my diet and it was manifesting itself as symptoms similar to Chronic Fatigue Syndrome. From now on, I am going to start taking lower doses (~800 IUs) starting in November to prevent this problem from hitting me in the middle of winter again. I am sure this is a very common problem in our modern society that lives indoors during daylight winter hours because of employment.

Stealth operations

2010-01-29T14:10:00.005-06:00

This post is about the long awaited Russian military aircraft technology response, Sukhoi T-50, to the US F-22 Raptor. For those who do not keep up with fighter aircraft, the F-22 is America's top of the line fighter aircraft being referred to as the only operational 5th generation fighter currently in existence. The other US 5th generation fighter is the F-35 Lightning II planned for delivery later this year. In a nutshell, these aircraft have all of the latest developments in avionics, materials, engines, and electronics integrated into an advanced system. Once distinction of the next generation aircraft is stealth technology or the ability to evade most radars. 5th generation aircraft have a significant advantage during combat over older 4th generation and earlier fighters.

The Sukhoi T-50 is a product of the once proud Russian military industrial complex under the Soviets that easily kept up with the Western bloc countries until communism fell in 1991. Now, the Russian arms producers are just a remnant of their former greatness. It partially explains why it took so long to produce the initial prototype. It appears as if the plane has a long way to go before actually combat readiness.

Russian Prime Minister Vladimir Putin hailed the flight as a "big step forward," but admitted that "a lot remains to be done in terms of engines and armament."

Reading further into the article, it appears the new technology is NOT a significant change from the prior generation of aircraft.

The NPO Saturn company said in a statement that the jet has new engines, but military analysts suggested that they were a slightly modernized version of the Soviet-era engine powering the Su-27 family of fighters.

"It's a humbug," said independent military analyst Pavel Felgenhauer. "It's just a prototype lacking new engines and a new radar. It takes new materials to build a fifth-generation fighter, and Russia lacks them."

It appears as if this new plane is an upgrade for the Russian military and not really a true 5th generation fighter. In the end, I think Russia may have it right in improving upon their tried and true technology into better weapons. In contrast, the US spent tens of billions of dollars to build a complete new weapon without a defined military need or combat role.

Give me a D, Vitamin D

2010-01-25T09:52:00.007-06:00

This blog was originally intended to cover science and technology, but it has grown to cover other topics related to this area. I have been writing several posts on nutrition and health since it is of interest to everyone. This post will be about a very important vitamin, Vitamin D. What differentiates this vitamin from the rest is the main source is not from our diets, but from sunlight exposure. It turns out the wavelength range in sunlight that produces Vitamin D in our skin, UVB radiation at 295-300 nm, is the same radiation that causes skin cancer. This supports the statement, "moderation in all things." As for dietary sources, the only concentrated natural vitamin D sources are seafood based. It appears in much lower doses within egg yolks. Vitamin D is routinely added to the US milk supply to prevent the deficiency in Americans which was first observed in the 1920's as the disease rickets in the general population. Rickets mostly vanished in the US after the fortification program started.

What inspired me to discuss this topic is evidence exists that Vitamin D deficiency may lead to chronic fatigue or even potentially Chronic Fatigue Syndrome. What I have noticed in the last few days is feeling tired with no real purpose. My diet was good. I exercised regularly. My sleep was high quality with about 7 hours on the weekdays and 8+ on the weekends. Why do I feel sluggish all of the time? Thinking about it, this is how I always feel since living in Texas from mid-January to mid-March. Going further back, it is the same sensation that I felt in the gloomy Oregon winter with no sunshine. Fast forward to the present, we have had lots of cloudy days and little sunshine in the last few weeks. Due to my indoor work environment, when it was sunny I did not get any sunlight exposure outdoors. That is when it hit me, I might have Vitamin D deficiency. To battle this affliction, I am taking a multivitamin (400 IU dose), eating tuna fish sandwiches at lunch and taking 10 minute walks in the sun at around noon when possible. The regiment might also have some Vitamin D supplements added. I will update my rehabilitation progress after about a week.

Football strategy part 3

2010-01-20T10:16:00.007-06:00

The post is a continuation on two previous posts, Football strategy parts 1 and 2, examining the various influences upon a successful team in the NFL playoffs. The initial posts demonstrate that coaching strategy alone does not guarantee a winning team. Another weekend has passed by with the second round results giving a clear indication of other factors that significantly contribute to victory. Of the three games, three of four games had the home team winning (Saints, Vikings, and Colts) by land slides. The fourth game had the visiting team winning (Jets) by a small margin. The home teams all had one week off without a game. Knowing these facts, two factors stick out here: homefield advantage and player rest.

Homefield advantage is as it sounds, the home team has a slight advantage. Reading up on the topic, the bookies in Las Vegas give the home team a ~3 point advantage. Why? To me, these following things are obvious. Playing in an arena who cheers for your side will help the momentum in your favor. This contributes to the fact that the field is familiar and is your turf. Defend the homeland, it is instinctual. The other factor is sleeping in your own bed without the hassle of travel. Stress levels are reduced. It is easier to prepare for game day.

The other important factor, especially at this late point in the season, is one week of rest without a game. These guys have been working hard since late July in weight rooms, practice fields and during games. The physical punishment upon a human body is severe. Even to the young in-shape men it is tough. Players are big and strong enough to routinely deliver head trauma through concussions with helmets on for protection. Teams are riddled with injuries of all sorts. Psychological stress to keep playing your best is also really high. Failure to perform on the field and someone else will gladly take your spot on the team. The one week of rest allows injured players to heal and prevents new injuries opportunities that could occur during a game. Rest will allow further focus on the game at hand instead of recovering from a prior game. I believe the one week off is the true advantage to a team.

Oil and water solar power

2010-01-13T09:40:00.012-06:00

One main topic of this blog concerns energy and the issues facing our modern society. In a previous post, the real future energy crisis, I discuss how coal could supply the US electricity demand for the next 200 years. The downside to using coal are air pollution and the destructive effects of coal mining. This post will investigate a recent solar cell development that is promising and put it into context with the current overall solar power picture.

First of all, I am going to mention a few facts about solar power without giving citations giving an overall general view of the solar industry.

1. Solar power is relatively new in large scale implementation. It has been used in niche applications for decades, but using the technology for large scale applications is still experimental.

2. Solar power is truly an environmentally less destructive alternative in comparison to all fossil fuels generation methods.

3. Solar power is not a very dense energy source. If we put solar plants covering every square inch of available land and on top of roofs, we still would not have our energy demands satisfied.

4. Finally, solar systems do not generate energy consistently around the clock. The sun sets and generation stops. On cloudy days, the amount of electricity generated also drops significantly.

5. Even when solar systems are generating electricity using current technology, the cost per unit is significantly higher than all other traditional forms of generation including fossil fuel, hydroelectric and nuclear based systems.

Here is my beef with solar power, the amount of money and effort that a society would pour into solar power would not be beneficial with the current solar technology. No current technology commercially available (Si solar cells, thin film or concentrators) has high energy yield at low cost. The price per kiloWatt is significantly higher than conventional electricity production. Large scale solar implementation will end up bankrupting us, while failing to achieve our energy goals. For solar to be viable, the overall manufacturing and system construction costs will have to drop significantly. Construction is a fixed cost, but manufacturing could be significantly reduced. The only way to achieve a significant reduction in solar cost would be through the research and development of new solar technology resulting in high yield, low cost solar energy process.

One interesting solar technical development comes from the University of Minnesota with self-assembled solar cells. The BBC reports that researchers have used self-assembly to organize Si onto a substrate patterned with Au for electrical connections. Self-assembly is a process that uses hydrophilic (water compatible) and hydrophobic (water incompatible) substances like vinegar and oil. The two are immiscible with each other separating upon mixing. In the case of self-assembly, separates into desired patterns or configurations. It appears as if the scientists have devised a way to self-assemble working solar cells. One technical advantage is mentioned in the article.

"Self-assembly is probably the best method for integrating high-performance materials onto unconventional substrates," he told BBC News.
The method tackles what Dr Parviz said is the most challenging problem - the proper alignment of thousands of parts, each thinner than a human hair. But it also works with the highest-performance materials, he said.
"For example, this method allows one to use single-crystal silicon, which is far superior to other types of silicon for making solar cells."

High yield devices could be produced with greater electrical conversion than current Si solar cells. The other advantage comes from low cost substrates significantly reducing the overall manufacturing cost. Further development of this idea would result in a high yield, low cost solar system. Before we start dumping money into the professor's group, the article only briefly touches upon the amount of development before a final manufactured product will come to market. It will be years. Investing in that kind of development would be a good investment in our energy future.

Football strategy part 2

2010-01-11T09:17:00.008-06:00

The results of the first round of the playoffs are in and my predictions were wrong in my last post, Football strategy. I predicted the following and we can compare them with actual results below:

Predicted:
Bengals
Cardinals
Eagles

Actual:
Jets
Cardinals
Cowboys

Total Correct: 1 of 3

Looking at the true games outcomes, I should stay away from Vegas and save my money with an accuracy of only 33%.

My theory had the coaches on the losing teams the week before intentionally not putting forth their best game. The losing coaches had nothing serious to gain by winning the last regular season games and were not willing to risk revealing to their opponents their top strategies or injuring their stars. The coaches were holding back in the following manners:
1. Top players had limited play time
2. Most successful plays were not utilized
3. Experimental plays were brought into the playbook
In comparison, the winning teams during the last game of the regular season had no other option but to bring forth their best game and win. This lead to an imbalance in preparing for the playoff game. The losing team in the regular season's game knew what the best plays and match ups their opponents possess. In addition, the loser also had the advantage of trying various plays on their opponents allowing them to weed out the bad plays. The winning side was in the dark concerning the best plays of their opposition.

Any one who knows something about football realizes there are hundreds of factors contributing to a successful victory. Talent, coaching, team spirit, mistakes, luck, homefield advantage and on-field execution are to name a few. What this blog theory exercise demonstrated was the advantage a team gains by playing this coy coaching strategy is insignificant.

I smell nothing but a continuous winning streak by the Cowboys. Go Cowboys!

Football strategy

2010-01-09T16:06:00.004-06:00

As I am starting this post, it is 4:09 PM Central Standard Time to track this statement. I will make a follow up to confirm or deny my theory. My theory has to do with NFL football and first round playoff wins due to intentional coaching influence on a team. For some reason this year, three of four first round playoffs had the same teams play each other one week before in the last game of the regular season. The games are:
Philadelphia Eagles - Dallas Cowboys
Cincinnati Bengals - New York Jets
Green Bay Packers - Arizona Cardinals
What is of interest last week is the teams that had nothing significant to gain lost. Accordingly, teams that had something significant to gain won. The Cowboys, Jets and Packers won. If two teams did not win, they were going to either be eliminated from playoff contention (Jets) or lose home field advantage in the first round (Cowboys). The Cowboys also had to save face after the brutal loss last year during the last game of the year ('08 season) to the Eagles, 44-6. The Packers had nothing to gain or lose in their victory.

It was no accident the prior week's outcomes happened. What makes it even more so suspicious is the lopsided manner the winning teams achieved their victories with the following scores:
24-0
33-7
0-37
It has to do with coaching strategy and the advantage these teams will gain in the first round playoffs contributed to these extreme scores. The playoffs advantage far outweighed the one win in the team's regular season's record. I predict that the following teams will win in the first round of playoffs: Eagles, Bengals and Cardinals. What is being tested is the effect of coaching and player psychology in a team's success. I will further extrapolate in the next post.

To put forth my bias, I am a Cowboys fan living in Texas. I deeply hope that my theory is faulty and that the Cowboys beat the snot out of the Eagles. Go Cowboys!

Supplementing what?

2010-01-07T13:29:00.011-06:00

I have been at a quandary on topics to write. Today at work, we had a discussion concerning veganism. First, I will give a definition on veganism and categorize the diet as an extreme form of vegetarianism. The most common form of vegetarianism is lacto-ovovegetarianism or a vegetarian who eats eggs and consumes dairy products. Several variations of the protein loving vege types exist. If the diet is carefully planned, the egg/milk consuming vege types can live long, healthy lives. Be warned, a poor vegetarian diet is just as bad as a poor omnivorous diet though. As your momma said, "Eat your vegetables!"

Veganism takes a further step removing all forms of animal byproducts including dairy and eggs. Animal products have high concentrations of certain vitamins and minerals that may be found in plants, but the plants have low concentrations. These are iron, zinc, calcium, vitamin D, and B12. Removal of all animal byproducts severely limits the intake of these vital nutrients and could lead malnourishment. Supplements are often taken by vegans to fulfill their needs. The one of interest is vitamin B12. B12 is from yeast or bacterial activity, but the only source in modern diets is through animal products. Vegans do not eat any forms of animal products, thus, they will suffer vitamin B12 deficiency over a long period of time. What if they take supplements? Supplements come from a form of living animal byproduct, they are not vegan if B12 is one of them. Other deficiencies will also come into play from lack of these nutrients over a long period of time. Someone may live in good health over a few weeks or months, but any longer that is not possible. No large group of individuals is found worldwide that strictly adheres to veganism as a result. I will make the statement simple and clear. Healthy, strict, long-term vegan adherents are like Santa Claus and the Easter Bunny, they DO NOT EXIST.

This leads me to the second half of my post, something of interest to vegans, vitamin supplements and their benefits. In a prior post, I spoke about the value of research studies on health and continuing medical care. This study questions the beneficial value of supplemental vitamins. The multitude of vitamins individuals take for various disease preventative purposes may not have that significant of an effect on actually preventing the disease. In some cases, as with antioxidants and heart disease, it may actually be worst than not using the vitamins. (Note: Links do not work in paraphrase.)

The news on antioxidants, the darlings of the vitamin menagerie, is even more troubling. These compounds, which include Vitamins A, C, and E, selenium, beta carotene, and folate, fight free radicals, unstable compounds thought to damage cells and contribute to aging. But not only do antioxidant supplements fail to protect against heart disease, stroke, and cancer; they actually increase the risk of death, according to a 2007 analysis of research on more than 232,000 people, published in the Journal of the American Medical Association, as well as other studies.

The article does make the statement that in cases of diets that lack certain nutrients (i.e. Vegans) vitamins are recommended and are beneficial. Vitamin supplements are not all bad. As for the preventative ideals concerning disease, this study demonstrates our basic lack of medical knowledge about the complex interactions vitamins have within our bodies. More studies are required in the future to clear our understanding.

Diet to lose weight?

2010-01-01T09:34:00.009-06:00

First of all, Happy New Years y'all! This post is over a socially complex topic that needs addressing for the health of American citizens for decades to come. Overweight people in our society. This study based upon the effects of eating cheese on weight loss flies in the face of the prevailing wisdom often given to us by our medical doctors. High fat food that has the ability to reduce weight? It turns out that an individual's metabolism is increased through the ingesting of conjugated linoleic acid found in cheese. This does not surprise me that an element like this in a supposed bad food makes people thinner to a degree. Look at the French, they eat lots of rich foods and remain thin. The issue at hand has a weight loss diet competing with a healthy diet.

Fat in general has been labeled a negative factor ever since the Framingham Heart Study (began in 1948) identified a diet high in animal fats contributes to heart diseases. If you dig further into the topic, it specifically is saturated fat that contributes to heart disease and not unsaturated fats (mononunsaturated and polyunsaturated). Unsaturated fats are beneficial for humans and are necessary for life. The general name "fat" also gives us a visual impression of an overweight individual. Cheese is loaded with unsaturated and saturated fat, so the benefits from linoleic acid would not outweight the negative effects from fat. Here is the conflict. Yes, excessive amounts of fat in cheese could potentially (depends on individual) contribute to heart disease, thus, limiting the amount of cheese would be advisable.

What contributes to gaining weight is excessive calorie consumption in comparison to the body burning calories through physical activities. Excessive calories are stored by the body as human fat. Consumed fats (from food) are low in calories. The human body does not take in significant amounts of calories from food fats. Even though saturated food fat is not healthy, it will not lead to significant weight increase. Excessive calories tend to come from an overload in carbohydrates, i.e. sugars and breads. Here is the conflict within the layman's reasoning. The reality is a healthy diet may lead to weight gain. Other side of the coin is an unhealthy diet may lead to weight loss. Dr. Atkins diet, if not carefully intepreted, can result in a poor diet leading to weight loss. The conundrum of the French eating rich foods like cheese makes rational sense if analyzed in the proper manner.

Conquering the overweight American may require more studies similar to this cheese study and rethinking the way we view certain foods. Healthy and weight sensible are different. More factors than mentioned in this blog are at play. The final step would be to properly educate the public.

The Inconvenient Electric Car

2009-12-27T22:06:00.007-06:00

This post is a continuation of a previous post concerning the true energy crisis that will affect our modern society within the next few decades, the depletion of worldwide crude oil. About two weeks ago, I saw a Tesla electric sports car in downtown Austin. It was a beautiful ride! It costs over $100,000 making it out of the reach of average Joe and Jane. The car can go from 0 to 60 in 3.9 seconds and goes up to 244 miles per day. It may be unfair to judge the future of electric cars by this one extreme example. The technology that would go into a mass produced electric car (i.e. the Chevy Volt) would be similar, but cost restrictions would create many drawbacks. The lack of capability is sourced from the vehicle's energy storage.

We are going to first talk about where electric cars currently stand. I have a friend, Brian, who converted a 2002 Saturn from gas to electric power over a period of about a year. AustinEV is a nonprofit organization which aided my friend during the conversion. The amount of work required to complete the task was significant. All components that had use with the gasoline power were removed from the car. This included the gasoline engine, gas tank, alternator, radiator, air conditioner (needs mechanical power), old 12 V battery, power steering and other gas engine dependent systems that I am leaving out. In simple terms, the Saturn was gutted. New DC powered components were then installed in the Saturn. These included an electric engine, 1000 pounds of lead acid batteries, new controller, 1 F capacitors, air conditioning, and all the actuators were made DC compatible. Once assembled, it was quite a novelty. The car that plugs in and drives. It keeps up with city traffic and actually has significant acceleration. Our converted Saturn performs just like any gasoline powered vehicle until the batteries are drained after traveling 50 miles.

Converting the Saturn required about $28,000 in capital. The main expenses were purchasing the Saturn, the electrical components and the batteries. Labor was minimal in cost. This price tag is a little high for what the average driver is willing to pay for a automobile. If an electric car was mass produced in the future, the cost would be reduced through reduction in labor and purchasing of parts in large quantities. Technological improvements would also reduce cost. It is safe to say that an electric car would resemble this Saturn. The only main variation would be batteries with a higher energy storage density would be found on commercial cars, such as NiCad or Li ion cells.

This brings us to issue one with the electric car, lack of energy storage. The Saturn goes about 50 miles per charge carrying not much more than two passengers. 50 mile range would get an average person around an area of a medium sized city such as Austin for transportation purposes exclusively. Brian uses the Saturn to commute and do tasks like buy groceries or to go visit friends, events and etc. In Austin, this is fine. Someone living in a highly urbanized place like Southern California or Washington DC would barely have enough charge for a commute (maybe, commutes in many areas are longer than a 50 miles round trip). That's it! If any emergencies arise or desires to travel further within a day overwhelm an electric car owner, tough luck. The way around this is to use more advanced batteries with higher energy density. Production costs would soar as these are not cheap. This is why the Tesla is so expensive, Li ion batteries. Consumers are going to stick with the gasoline automobile if the gas car is significantly cheaper. The first new development electric cars require for a commercially competitive vehicle are inexpensive batteries capable of dense energy storage.

The lack of energy storage could be overcome with repeated charging. Charge the car at work, the local store or at a communal charging station. This sounds good, but it takes 6-8 hours to fully charge the batteries. This may be possible at work (no trips to the local Chinese restaurant), but it is not possible during brief stops. Driving down the road and stopping for a charge is not like gassing your current car. Long road trips are out. Many consumers would find this unacceptable. This is a larger technological hurdle than increased battery storage density since it affects all current battery technology and may limit the electric car's potential.

This post was to evaluate the electric automobile as a potential candidate replacing all current gasoline powered vehicles. Using the two obvious issues raised with energy storage in electric cars, here what I believe the future of electric cars will become.

The electric automobile will NOT:
1. Replace heavy transportation such as 18-wheeler trucks
2. Be used as interstate transportation
3. Used as a work vehicle, i.e. dump truck

The electric car will BE:
1. Practical automobile for local, light transportation
2. Drag racer (yes)

The reality of the electric car hinges on development of a cheap, high energy density battery. Until this occurs, the technology fights an uphill battle. This is why I believe the future fuel replacing crude oil derivatives will be in a liquid form. It will fulfill all of the practical uses gasoline vehicles currently do.

Holiday break

2009-12-20T08:51:00.004-06:00

It is that time of year to do the holiday thing with family and friends. I will not be posting anything for over a week. Plenty of time is going to elapse at my parent's in NM, thus, ideas and posts will incubate. Happy holidays!

-Shawn

Theft in West Campus

2009-12-17T09:17:00.009-06:00

As a fellow Longhorn, I know word on the street says Austin, TX has a low crime rate for a city its size of about 1 million people. This website has the highest theft rates of various neighborhoods throughout the US according to statistics. Before living in Austin, I use to reside in Albuquerque, NM and the Duke City is thought to have a high crime rate for its 1/2 million residents. It turns out that none of the neighborhoods in Albuquerque made the list while Austin's West Campus west of the University of Texas was #6 on the list with the odds of being a property crime victim being 1 in 2!

Digging further into statistics, this website compiles FBI statistics and the two cities rank the same overall for property and violent crime. This is the way statistics work. Changing the bounds or limits of the included numbers within the calculations results in varying results. If these kinds of numbers put into manipulative hands, anything could be supported or not leading to what the population at large believes. What is more important though is public perception. I was told in Albuquerque that it was a really dangerous city and the opposite in Austin. This distorted my view of reality. As Mark Twain made famous, there are "lies, damn lies and statistics."

The real future energy crisis

2009-12-14T09:41:00.014-06:00

With the new Barack Obama administration and the Democrats winning majority in the US Congress a little over a year ago, there has been a significant amounts of talk and money thrown at green technologies or environmentally friendly alternatives to current technologies. The main philosophical basis of the push comes from the concept that current energy and industrialization are damaging to the planet's ecosystem. Personally, many of the overarching ideas in the environmental movement are good: less pollution in the air and water, preservation of remaining natural areas and making the planet a livable place for our children and grandchildren are all good directives. The issues I have are with the environmental orthodoxy and their view of the world. We need to have open debates and discussion about these sensitive issues within all varieties of communities. It is not happening though. This blog is not about politics or religion, thus, I am going to talk about one of the environmental issues that is going to survive beyond the current zeitgeist due to necessity. The replacement of oil for transportation needs is a vital issue facing our modern industrialized society over the next couple of decades.

The rest of this post is going to discuss energy sources. Over the last few decades and especially within the last couple of years as commodity prices have risen, the call for fossil fuel replacements have grown. Fossil fuels are limited resources and one exhausted, they are gone forever. Our industrialized society is dependent upon fossil fuels for energy. In order of dirtiest to cleanest fuels: coal, oil and natural gas. We are going to look into the relative economic and societal value of each fuel.

Coal is an ancient fuel source used in the modern production of electricity. It is incinerated in a furnace. The generated heat converts water into high pressure steam. High pressure steam is then used to turn generators creating electricity. The down side to this process is creation of air pollution in the form of fly ash, soot, sulfur (creates acid rain) and various other radioactive contaminants into the air. When I was young living in Arizona, I lived next to a coal fired power plant (Navajo Generation Station) and yes it causes air pollution. Majority of these pollutants can be removed through emission controls known as scrubbers. Excessive amounts of carbon in the form of carbon dioxide will still be emitted though. (Carbon dioxide is often blamed for global warming. I take issue with this though thinking that the true cause of global warming is the urban heat island effect.) Second, the mining of coal also tends to pollute natural water sources. Ignoring this, the take home message here is the US has ~250 year supply of the black stuff in the ground. Using appropriate scrubber technology, the US could go centuries without the use of alternative electrical sources (solar or wind generation) while still having adequate electricity sources. The US does NOT have to develop solar or wind energy for the next two centuries. I am not a fan of the coal solution due to the pollution issues, but it does exist.

Natural gas is based upon smaller chained hydrocarbons in gaseous form. The main uses of natural gas are electricity production, heating and miscellaneous purposes such as cooking. Natural gas can also be used as a fuel for engines in cars or various transportation. Natural gas seems like the ideal fix. One problem exists though, the majority of natural gas reserves are not within the US with the US being ranked #5 in the world according to the CIA. The other top ten countries (Russia, Iran and etc) are or have the potential to be politically hostile to the US or unstable. Our reserves alone would last just a few years if this became our primary energy source. This does not bode well for natural gas. The uses also could easily be substituted with oil or natural gas.

Finally, we come to the most common fossil fuel, crude oil. Crude oil is found in various grades within the ground. Highest quality oil is light sweet crude or crude with low sulfur content and the hydrocarbons have smaller chains (light). Both of these oil characteristics are desirable for the simple fact they allow easy refining or processing into final products in comparison to lower quality heavy sour crude. The other factor that makes some oil more desirable is accessibility. If the oil is found within large pockets easily reachable with traditional drilling technology, extraction is simpler and cheaper. Oil that is found in inaccessible places like in deep ocean waters or in small pockets makes extraction significantly more expensive. Oil has several uses in our modern world, transportation is the main use with residential heating as a secondary use.

What makes oil such a valuable commodity for the US in comparison to natural gas and coal has to due with the fact our transportation system is fully dependent upon oil. Automobiles, trains, aircraft and watercraft all use fuels obtained from crude oil. Without our daily fix of oil, our cars and delivery trucks will stop running. The alternatives of trains, aircraft and watercraft would face the same fate. Commerce would cease. Basic needs like food would not get to the grocery store. Employees would not get to work. Everyday functions in our society would come to a grinding halt.

The amount of accessible oil reserves left in the world are limited. An unpleasant fact is the US oil reserves are mostly depleted. Exact amounts of oil reserves worldwide is another topic of hot debate. Pessimists argue the majority of oil is already exhausted and production will decline over the next couple of decades. The best description of this effect is peak oil. Optimists argue there are several decades of oil exist before we even need to worry about this effect as often touted by the US Energy Information Administration. In either case, both sides agree on the fact that we are quickly consuming all worldwide available light sweet crude sources that are easily available. Lower quality crude oil will not make up the energy difference over a long period of time. The fact is once oil reserves are consumed, we have have no infrastructure in place as an alternative to our current transportation. Serious societal disruptions will occur. This is the true energy crisis.

Future posts will cover potential alternative fuels to crude oil based technology.

Ultimate compost

2009-12-07T09:49:00.005-06:00

It is always good to see someone attempt to fix an environmental problem with a creative, technologically advanced solution. Mass amounts of sewage is an issue in large cities and this Marin county, California based company, Humanure, is trying to update an ancient technology for modern urban use. It is simply put, composting human waste. Yes, your sewer system will be replaced with a waterless holding tank that allows your recycled meals to decompose. The decomposed waste ends up eventually as fertilizer on some organic farmer's field.

For more than a decade, 57-year-old roofer and writer Joseph Jenkins has been advocating that we flush our toilets down the drain and put a bucket in the bathroom instead. When a bucket in one of his five bathrooms is full, he empties it in the compost pile in his backyard in rural Pennsylvania. Eventually he takes the resulting soil and spreads it over his vegetable garden as fertilizer.

I get a kick out of the name for this version in California (yes I have Irish roots).

Meanwhile, over in California, the Marin Composting Portable Odorless Outhouse Project, a.k.a. MCPOOP, is doing Klehm one better. The goal of MCPOOP (which is pronounced the Irish way as opposed to the rap-star way) is to get the government into the night-soil business and put humanure toilets in county parks and town squares. The group is less than a month old but already has the support of the local environmental establishment and Marin County supervisor Steve Kinsey. "The whole thing is like a good acid flashback," says Kinsey. "We approved several experimental permits like this in the '70s." He estimates that a small-scale municipal demonstration project could be under way in less than a year.

Those selling the idea claim it does not smell. In my experience with compost, if done well it does not smell that much. Odor will still be present though.

Personally, I think the idea works on a small scale and in certain situations. Portable toilets and rural type outhouses that require pumping the holds out would be excellent use of the simple technology. Serious problems arise if we replaced all sewers and toilets using this crappy technology (pun intended). Think of the amount of oil burnt to remove the compost. The inconvenience to households as workers invade your house to clean the can about once a month. Conventional toilets systems are still the best deal on large scales.

The unhappy intellectual

2009-12-06T20:50:00.010-06:00

Often, you will find really smart, successful people who tend to be unhappy even with all of their achievements. When I refer to happy in this post, I mean general contentment in life. Everyone has good and bad days, but when I mean unhappy it is someone who spends a significant amount of time in a gloom. Not all intellectuals are unhappy, but intellectuals tend to be be less happy than the general population. Of the professors whom I met in my 10 years of college, I can only name 3 or 4 who were happy as the typical populace. One famous instance is Nobel winning writer Earnest Hemingway having a tumultuous life with several wives who he deserted. Hemingway finally took his own life. I believe there are two main factors behind this trend, socialization and the acceptance of issues in life.

I am going to talk about what makes individuals happy as an argument point. I have browsed over many studies to happiness and they seem to come to many conclusions, but three seem to stick out. First, happiness has some roots in genetics. People are born with a certain amount of happiness or lack thereof. It is pick of the genetics draw, thus this is not relevant to making intellectuals less happy than the general populace. Second, having strong interpersonal relationships helps. Good supportive family and friends to talk with and depend upon in times of trouble and need. Finally, one factor that leads to happiness is being religious. I do not think it is the religiousness that makes one happy, it creates an explanation of the universe. It creates a coping mechanism for unpleasant items such as injustice and inequality. Everyone has religious beliefs, but following an organized set of ideals allows greater coping skills or acceptance of the thorny issues found in life.

Intellectuals are not known to be the most social group. They often tend to spend many hours in their cubicles working on ideas. They are valued for their ideas not their brawn or teamwork. Is the lack of socializing part of their personalities? Is it the quest for bringing new ideas? Is it conquering the next challenge? I do not know. What does take a toll are relationships: family and friends. This makes it difficult to have trusted people within a social circle. It makes happiness less plausible.

Pondering this great thing called life brings about a great deal of questions. The vast universe has many wonders to explore. It also has a dark side of discrimination, injustice, inequality and finally death. Bad things happen to good people. The average person knows these things exist, he/she is typically not pleased with the darkness, but also does not dwell on them. The intellectual tends to dwell on these dark concepts wanting to make the world's wrongs all right. Logical ideas like if this person does this action or behavior, the problem will be solved. The wish to tell the multitude they are wrong! This dwelling on unobtainable change is lack of acceptance. Standing up to a fight without any possibility of winning. It breeds discontent out of unnecessary frustration.

Lack of acceptance also appears in the inability to enjoy life's simple things. Having a complex, curious mind leads to the desire for more knowledge. Teach me more, I want to know! However, this prevents an individual from deriving more than just fleeting pleasure from life's simple things like sunsets, flowers and etc. The result is boredom. If someone is bored, this prevents the appreciation of good things in an individual's life. It eventually leads to a lack of acceptance for what is and not what should be. I want a better job, car, house and etc because what I have makes me bored. In a bad situation (poverty or other extreme adverse situations), this can be good leading to an improvement in one's life. There is a point where one has to accept the good things in life to ever have happiness. I believe intellectuals struggle with this out of boredom.

Dr. Coffee's Innovation Award #2: Lighting Magic

2009-11-30T13:26:00.012-06:00

I often showcase various technologies, but the extraordinary inventions earn a Dr. Coffee's Innovation Award. This invention from WiTricity Corp. of Cambridge, MA uses magnetic waves to safely transfer electricity through the air and into working devices. The device takes AC power and converts it into magnetic waves. Magnetic waves are then taken to a resonance device which amplifies their magnetic field. After the amplified magnetic wave is transferred to the consuming device, it is converted back into an AC power signal. The company's "technology" website gives a brief description of their proprietary resonance technology.

Resonant Magnetic Coupling: Magnetic coupling occurs when two objects exchange energy through their varying or oscillating magnetic fields. Resonant coupling occurs when the natural frequencies of the two objects are approximately the same.

Two idealized resonant magnetic coils, shown in yellow. The blue and red color bands illustrate their magnetic fields. The coupling of their respective magnetic fields is indicated by the connection of the colorbands.

If this technology works as claimed, it would be like a science fiction movie come to life. The problems that I can see they will have to overcome are:
1. Scaling down the resonant coils to less than a large book.
2. Energy loss in the electricity-to-magnetic conversion and back.
3. How do you control several devices in one room (frequency)?

This is definitely a leap forward if practically done.

Thanksgiving

2009-11-25T12:45:00.004-06:00

No serious post here. It is time for me and my fiance to travel to New Mexico and have dinner with my folks. Please, everyone go to family or friend's places and enjoy some turkey (none of that tofu crap). Enjoy the bountiful harvest we all share. I will be back next week with more insightful posts.

-Shawn

Technophobia

2009-11-23T13:38:00.011-06:00

We as Americans (anyone in a developed nation) live in a complex, technologically advanced world. We have equipment that transports us in quick efficient manner, like automobiles and airplanes. We also have information technology such as radios, televisions and computers that transport information almost instantly across the world. Many more technological marvels exist in our world. As an engineer, these tools are magic without any of the deception. What always strikes me strange are individuals who have strange or irrational beliefs about technology. Sometimes, these beliefs are to the point of fear and often the terms technophobe or Luddite are used. I believe three main reasons why someone would reject a form of technology:
1) Utilitarian
2) Ignorance
3) Cultural influence of a potential failed society

Technology exists to make our daily lives easier. It is utilitarian in nature. As with anything in life, we choose whether to bring the useful gadgets into our lives or reject them. It can be argued that too much technology eventually becomes the accumulation of things and is materialistic. The Amish believe that technology disrupts the social order and prevents them from focusing on their cherished beliefs of community, simplicity and religion. As for those of us in mainstream society, this extreme rejection seems ridiculous. Looking to a more common pragmatic view is the selective acceptance and rejection of technologies. If someone accepted all new gadgets when they become available, their house would be filled to the brim with all sorts of things. Several conflicting technologies would be sitting next to each other. Since only one tool would be used as a primary phone or entertainment piece. Clutter would ensue. Significant amounts of money would also be wasted. This would not make our daily lives easier. It really is best if we limit our technology to what is needed. Rejection of some technology on the grounds of simplicity is necessary.

When I was young, they had a movie The Gods Must Be Crazy. The basic storyline is when a Coke bottle is dropped out of an airplane to a primitive tribe in Kalahari Africa. The natives are fascinated with the bottle never before seeing such a wonder and end up fighting over the bottle. They try to get rid of the bottle because of all the trouble within the tribe it is causing. We as individuals in industrialized countries are used to seeing such items. We do not fight over them in the same manner. The Bushman's lack of understanding is a form of ignorance. I am not degrading the tribesman, they just simply do not know what the item is due to lack of knowledge from experience. Being an engineer, I am exposed to high technology on a daily basis. I do not expect people with less experience/education to understand how advanced technology works. I do expect them to become comfortable with a technology after contact. Too often, this is not the case. New technologies come out and unsubstantiated claims immediate appear. The one that quickly comes to mind is nanotechnology making gray goo in people's minds. Note, this is science fiction and not reality. No form of nanotechnology exists that can replicate and turn your brain into goo! The lack of experience in everyday society allowed for the formation of media headlines stating such falsehoods. This kind of ignorance too often extends to common everyday technology unfortunately.

Something that has sort of a mythological place in western culture is the dystopia, the anti-utopia. Several well known dystopia stories are 1984, Brave New World and the Terminator movie series. The world has become an unpleasant, giant dysfunctional society with the technologically armed leaders keeping others in check. The future is an unknown arena. New controlling technologies may emerge, creating a potential dystopia. This is a fear raising idea without anyway to argue for or against. The Man may start watching with his new technology. How do I avoid this? Is this really a fault of technology. I would say no. This is really the product of an authoritarian government using technology to their advantage. It is a negative product of human action. The concept is old as the hills.

Technology can often generate other undesired results creating an unpleasant future, like pollution or various ecological destruction. These are controllable factors, once again by people. It is not a forgone conclusion the entire natural world will be destroyed. Societies have the option of adopting or rejecting a certain technology on the same principle as an individual for the common good. It is not fair to scapegoat all of modern life on the basis of an unknown future outcome. What is even more mystifying is the destructive results are from a minority of technologies. One can not throw the baby out with the bathwater. Truly, I believe prevention of a ecological disaster will come through the development of less harmful technologies and through cleaning up pollution using new techniques. Repealing technologies' march forward will not stop ecological damage.

Digging for aged liquid gold

2009-11-18T09:22:00.008-06:00

It always amazes me as archaeologists dig up many ancient artifacts. This Yahoo story outlines a New Zealand based exploration searching for a past cache that might cause future hangovers. Drilling for 100 year old scotch whiskey in the antarctic! Now, why would someone dig in the frozen south for a potent potable that could be found in your local liquor store?

The drillers will be trying to reach two crates of McKinlay and Co. whiskey that were shipped to the Antarctic by British polar explorer Sir Ernest Shackleton as part of his abandoned 1909 expedition.

Whyte & Mackay, the drinks group that now owns McKinlay and Co., has asked for a sample of the 100-year-old scotch for a series of tests that could decide whether to relaunch the now-defunct Scotch.

They claim in the story that the main reason for traveling hundreds of miles though extreme conditions is to later replicate the recipe for modern sale. The lead explorer does not want to taste the buried whiskey. I have a little skepticism with this comment from the explorers though.

"It's better to imagine it than to taste it," he said. "That way it keeps its mystery."

Richard Paterson, Whyte & Mackay's master blender, said the Shackleton expedition's whiskey could still be drinkable and taste exactly as it did 100 years ago.

Using this logic, if I dig in my fridge for a forgotten beer does that count as true exploration?

Limitations of dreams

2009-11-15T20:46:00.008-06:00

My scientific training is as an experimentalist surface scientist in a materials science related study. I spent a significant amount of time in the lab. It is one of my secondary homes. One bone of contention in the scientific world is the clash between experimentalist (us) versus theorist (what is a lab?). Both disciplines take large amounts training, rigorous work and deep thought. In an ideal world, theory should follow after experimental data. Occasionally, theory should predict a result like nuclear weapons is a great example. This post is going to cover a potential dark side associated with theory.

Theory is based upon experimental data sets and observations. Most experimental data fits into trends following mathematical relations. New data usually has previous bodies of work to support the new theoretical idea or concept. Over time, a story is built within a given area of study. It becomes easier to predict experimental outcomes ahead of time. New chapters in the story are written as evidence is presented with a theorist entering the wording.

One very basic concept that is the basis of all theory are assumptions. The theory holds true if for example in a chemistry experiment, the temperature, pressure and etc. are at certain levels. Note, these are serious limitations. All related conditions have to be met for the theory to be true. One assumption is not met, the theoretical framework fails. During initial theory development, many pieces are missing and often all assumptions are not yet known. This will often lead to semi-independent theories. In science and engineering fields, this learning process is benign. Trouble comes with other less easily quantifiable subjects such as sociology, psychology and history for several reasons. First, many subtle factors come into play. Second, not all of the necessary pieces are known. Finally, if a theory is not correct and taken by public policy makers as gospel, significant damage to society may occur. One of the worst historical outcomes from a theory comes from the false science (accepted in the past) known as Eugenics. Eugenics is the idea of keeping a genetic stock pure without undesired genes like genetic diseases. Sterilization of those with less than desirable traits was the main cure. Sometimes death was the their cure. Eugenics was one of the main driving forces behind the Nazi concentration camps.

Groupthink is when a group of individuals comes to a consensus without any serious debate leading to the suppression of all opposing ideas. This is not a fault of theory itself, but of those who are authorities on a given subject. It promotes continuation of false ideals and is a greater threat to any organization than an incomplete theory. Development of a theoretical framework requires legitimate questioning of an idea or concept. If the theory can not comprehensively address a proper inquiry, the theory has serious problems. The problem can often be fixed with a slight refinement. Other times, the theory is then disproven and a new concept is proposed. Groupthink suppresses all questioning, thus, faulty theories are allowed to live and often thrive. Some faulty theories cause serious damage if applied without any moderation to public venues touching us all.

New monitoring technology

2009-11-11T19:34:00.005-06:00

There is a huge debate going on in the US concerning the monitoring of public places using video cameras. I am personally in favor of monitoring some public areas within a limited context, but I also feel the cautious warning of civil libertarians against abuse. Privacy is also an issue with cameras constantly monitoring. This post is about an interesting monitoring technology that can locate gunfire within a given area. The makers (ShotSpotter of Mountain View, CA) claims the technology can pin point the discharge of a firearm according to when the shot occurred and the physical location.

ShotSpotter monitors only one thing: gunshots. Its microphones can detect a gunshot from a mile or more away. The system determines the exact location of each shot using triangulation and wirelessly transmits a recording of the sound to police dispatchers.

This technology solves the conflict between public security and personal privacy. If used in a proper context, cities and crowded locations guns have no place being fired, this would help prevent crimes infiltrated with guns. Since it is illegal to fire a gun in the city, all events recorded are crimes. Initial trials seem promising.

The system was installed in San Francisco late last year as part of a crime-fighting initiative. Since the beginning of the year, the city's homicide rate has dropped 50%.

The secondary use of a system would be as evidence in the proof of self-defense.

In an argument against the ShotSpotter system, it does not help law enforcement in crimes where no firearm was discharged. The system dose not help with a significant portion of crimes committed.

Vital Abilities

2009-11-05T21:09:00.010-06:00

This post is a continuation of an earlier post, Luck or Skill, discussing the merits of luck and skill towards success in life. In that post, I concluded it is a combination of both luck and skill that leads to an individual's success at any endeavor. This post will investigate two vital skills I believe are more important than either luck or quantifiable skills such as mathematical abilities. The capabilities are abstract in nature and are not really teachable, per say.
1. Accepting the world as is and shaping your environment to reality and not to a desired reality is necessary. Simply put it, adaptation.
2. Looking forward to the future and adjusting the present, while simultaneously preparing for the future is the next even more difficult skill to learn. No one can fully predict the future.

We all want to believe in ourselves, sometimes greater than the truth. Being the great scientist, artist, business tycoon, surgeon and etc. Nothing is wrong with a little fantasy to escape the daily grudge. Once the daydreaming stops, unless we are independently wealthy (majority of us aren't) we have to find a way to support ourselves through employment. Often, many aspects of this employment thing are not pleasant. This is the reality we face everyday and serves as an example. Challenges come daily. The obstacles can be annoying or at the other extreme dangerous. Sometimes reality is a dead end. No where to go. In all cases, successful individuals will accept what is truly presented to them. Obtain something useful from the moment being presented. Not accepting reality allows any situation (potentially threatening) to catch an individual off guard.

Two extreme variations are those who live obsessed with a different time, the future or past. We all know of those who constantly say, "I will do this when this occurs". It is good to put off gratification to a limited extent. Taking this mind set to an extreme will has someone ignoring a possible opportunity though. The future is an accumulation of past (at that point in time present) actions. Carpe Diem loosely translated from Latin is "seize the day". This rings true. The expected tomorrow may never materialize. The opposite side of the coin are those trapped in the past. Life was good when I was a "enter position", but everything is wrong now. It is all my contemporaries' fault. Life moves on through various stages. Past events are water underneath the bridge. The past taught lessons and brought good memories, but dwelling there is unhealthy. The high school football star who won the state championship was glorious, but that is yesterday's news. As the slave said to Julius Caesar while riding the chariot in victory, "All glory is fleeting."

Finally, the ability to avoid negative situations both in the present and future. These damaging events can be layoffs, elimination of a profession through replacement by a newer technology, organizations turning against a member and etc. I personally think this skill is not teachable. It is deep within their mind and soul, a skill that is not quantifiable. The positive end of the skill is the ability to see emerging trends into the future. What is the next big thing? In the computer world, names like Bill Gates, Michael Dell and Steve Jobs are just the beginning. Multitudes of others made their fortunes by doing relatively accurate future predictions. Bringing any organization into the future is going to require some forecasting.

Space travel in the 21st Century

2009-11-01T10:20:00.017-06:00

Our best known and really only truly operating space agency currently in the world is the National Aeronautics and Space Administration or NASA. NASA is funded by the United States government through taxpayer money. The organization is well respected for its many achievements including its crown jewel, the Apollo program landing astronauts on the moon.

NASA's main orbital launch vehicle for satellites and humans at the moment is the Space Shuttle. The space shuttle was designed and developed during the 1970's with what is now 30+ year old technology. During the Space Shuttle's inception, the concept of a reusable craft capable of reaching orbit was revolutionary. Original plans called for a reusable unmanned orbiter utilized as a satellite launch vehicle. After several rounds of politics, an area was added that would support humans. This increased the overall project costs twofold through:
1) Building a larger spacecraft
2) Increased amount of fuel and supplies during launches.
Currently, it costs $450 million per launch. The Space Shuttle's large price tag annuls the original purpose of a cheap, reusable space craft intended for launching satellites.

The other serious issue the space shuttle faces is the overall reliability and safety. Within the 28 year Space Shuttle mission span, the Challenger and Columbia both failed with disastrous results taking all honorable lives on board. To put this in prospective, here are approximate probabilities of dying over a span of 1 year using various transportation methods from Reason Magazine:
Airlines crash = 1 in 400,000 or 0.00045 %
Walking across street = 1 in 48,500 or 0.0021 %
Automobile crash = 1 in 6,500 or 0.015 %
Space Shuttle crash = 1 in 1800 or 0.06 %.
Yes, to date an astronaut has an extremely high chance of dying if routinely flying shuttle missions.

The numbers speak for themselves, the space shuttle is both expensive and dangerous. Space flight is a relatively new phenomenon being around for little over 50 years. Loading multi-million dollar satellites and really brave souls onto oversize candles was at one time patriotic in the Cold War, but the Berlin Wall fell and it is time to move on. This is why the Obama Administration is reconsidering the program's future.

It looks like the future may not be NASA's (NASA is involved through), but through the Defense Advanced Research Projects Agency (DARPA) and US Air Force as the X-37B. The exact details are being kept secret due to the military aspect, but some details have slipped out.

The vehicle itself is about 29 feet long with a roughly 15-foot wingspan and weighs in at over five tons at liftoff. Speeding down from space, the craft would likely make use of Runway 12/30 — 15,000 feet long by 200 feet wide — at Vandenberg Air Force Base in California. This vague description is more in line with the original idea behind the Space Shuttle. That was to build a cheap, reliable spacecraft. As with all X-class aircraft, they tend to be experimental in nature with technology development as the main intent.

Just last month, a U.S. Air Force fact sheet noted that the Air Force Rapid Capabilities Office (RCO), located in Washington, D.C. "is working on the X-37B Orbital Test Vehicle to demonstrate a reliable, reusable, unmanned space platform for the United States Air Force."

It looks like the military is stepping into the forefront here. Hopefully, the technology will make its way into civilian hands through NASA.

"NASA has a long history of involvement with the X-37 program. We continue to monitor and share information on technology developments," said Gary Wentz, chief engineer Science and Missions Systems Office at the NASA Marshall Space Flight Center. "We are looking forward to a successful first flight and to receiving data from some advanced technologies of interest to us, such as thermal protection systems, guidance, navigation and control, and materials for autonomous re-entry and landing."

I truly believe the ability to reliably launch satellites cheaply into orbit would prove to be extremely profitable. This may not be too far away. Other ventures such as economically practical research and human space flight for the masses could then follow.

Luck or skill?

2009-10-28T16:28:00.019-05:00

This post is going to discuss a little of my philosophy on life. The debate about someone being truly lucky or creating their own luck through certain behaviors, i.e. skill or talent associated with hard work. This an open ended question and forgive me for this post's length. Personally, I believe it is a combination of both.

One point I want to initially make is about a certain trait that will make any and all forms of luck or skill meaningless, self-destructive individuals. Many individuals end up unnecessarily losing opportunity or squandering gains through their own actions. Often these actions are found in antisocial behavior, laziness, substance abuse, self-absorption, disregard for all rules and my favorite, chronic denial. All people have weaknesses, but most people keep their weakness in check. Win the lottery and spend every penny the following day on illicit items is not going to help any one's situation. No amount of luck or skill would end with a net gain if squandering through anti-productive behavior. What causes individuals to be self-destructive is a topic beyond this post.

Let us start with an argument for those who use skill and talent to make their own luck. In most professions, there is a minimal skill set requirement to practice. In professional sports, an individual needs to be an outstanding athlete. Musicians are musically gifted. Writers are good with language. Politicians are good at debate. In my profession, engineers need a knack for mathematics before even beginning core curriculum. It can then be argued that the best in any given field rises to the top through possession of greater skills in comparison to the pack. In our egalitarian society the best of best will find a way to achieve. From the poorest of neighborhoods up to leader of the pack. Capitalism at its best! I would like to believe this, as many of us were taught as children, "You can do any thing when you grow up." Rags to riches stories occur, but it is not that common. Hard work brought a better life, but many of their poor cohort with undeveloped talent never improved their lot in life. Here is where the skill exclusively brings success argument fails. If skill was the only reason why individuals succeed, the top tiers in all professions would have an equal representation of our society. Most of us know, this is not true.

It is an obvious statement to say that the wealthier classes have a greater representation in the higher paying professions: medical doctors, lawyers, stock brokers and corporate executive positions. Entrance into the bottom rung positions require at minimum an undergraduate college degree. Medical doctors and lawyers require advanced degrees. These all take money. If a high school student has mediocre grades, enough money and some private college would enroll them. The same deal applies if the student faces dismissal. Donate to the alumni groups. When the lackluster student eventually graduates, contact an old friend of the family who owes a favor. I could go on and on. One book of interest on this topic is The Millionaire Next Door. The vast majority of people are not wealthy. They vast majority does not possess the money or contacts. It is easy to say that skill or luck do not apply to the wealthy. I disagree. Those who are born into the privileged classes are lucky in the material sense. For any one who has the opportunity to enter a desired career, the luck was obtained from birth status or situation.

Let's be more arbitrary. Take two white, male, middle class, US citizens finishing their equivalent undergraduate degrees from a university with similar grades. Why does one end of as CEO of a company and the other at bottom of the corporate ladder? Let us say both graduates have their greatest strength as being sociable, well liked fellas. For our example, one graduate ends up being a computer programmer (grad A) and the other as a salesman (grad B). Both positions have similar potential for advancement. Grad A may do well at his programming position, but his greatest strength is not utilized. He may be capable in his work requiring skill, but his greatest attribute remains untapped. Now grad B as a salesman takes his position and excels as his greatest attribute is a vital part in his job. He becomes the best among his peers and moves on up the corporate ladder. Grad B was lucky to land the right position in comparison to grad A. Even if both grads take sales positions, many lucky characteristics take play such as a good company with upward mobility. Avoiding any devastating unlucky event (layoffs, illness) is itself a form of luck. The luck factor kicks in as an opportunity to use an individual's talents or skills.

Personally, I believe a combination of hard work and luck creates success in any endeavor. Hard work allows one to develop talents and skills leading to success. Hard work is vital, not optional. Luck on the other hand opens the doors to opportunity. Without opportunity to utilize talent, success will not follow.

Next generation shark

2009-10-26T20:03:00.005-05:00

This posting is on a new type of ship the navy is working on. Yahoo News puts forth this article on the race for a highly anticipated, next generation warship. The ships in competition are a monohull ship versus a trimaran (three hull ship). The sailing ships that are used in the big money races like the America's Cup use trimarans as top-of-the-line designs. The three hulls have low water friction with added stability from balance and are typically advantageous to the single hull design. Neither design in this sense is new.

What is new are nontraditional propulsion systems in the two rivals.

Both versions of the Littoral Combat Ship use powerful diesel engines, as well as gas turbines for extra speed. They use steerable waterjets instead of propellers and rudders and have shallower drafts than conventional warships, letting them zoom close to shore.

Driving close to shore is going to be easy for this new generation ship. This will have the multiple advantages of going up rivers, docking in many inaccessible places and going close to shore chasing the world's unpleasant variety. Pirates, yarrrrrrrh!

The other neat thing is this boat goes automobile highway speeds.

Independence, a 418-foot warship built in Alabama, boasts a top speed in excess of 45 knots, or about 52 mph, and sustained 44 knots for four hours during builder trials that wrapped up this month off the Gulf Coast. The 378-foot Freedom, a ship built in Wisconsin by a competing defense contractor, has put up similar numbers.

Whoever wins the contract will make a mint due to the navy's rush.

Driving with the rearview mirror

2009-10-21T21:59:00.013-05:00

One source of continuous fascination is the stock market. Why not? Put in a little money, it grows, and in the end profit without labor. How can you not like that! Billions of dollars is exchanged on the world's stock exchanges daily. Stock markets exist as an easy way for companies to raise money through a collective public ownership. Of course, the market operation is much more complex.

The psychology behind this money for nothing concept supports the main market drivers, fear and greed. Everyone who has struggled to make a dollar and put it into an online brokerage account understands this. They love when the market goes up and make money. Optimism pushes buying, the market rises. They absolutely hate when the market goes down with money evaporation. Pessimism leads to selling, the market craters. In the end, the market is a sentiment machine driven by the various kinds of investors summarized by this site.

Excluding day traders, two main kinds of investors exist: fundamentals and technical. Fundamental trading is based upon the idea that a stock is worth a certain value according to corporate size and revenues. Profitable companies are worth more than unprofitable entities. The other investors are technical traders and their trading is dependent upon derived indicators. Some of the best known indicators are:
Moving Average Convergence-Divergence (MACD)
Fast and Slow Stochastics
Relative Strength Index
Bollinger Bands.
The basic concept behind all of these indicators is to identify the point at which a stock changes momentum, i.e. stops going down in price and begins to appreciate.

The movement of the markets has thousands of traders everyday bidding prices up and down. Buying and selling stock. One school of thought has stock market movement being random. Looking over years of stock market data, patterns appear. Typically in upward movements followed with an occasional sell off forming a wave pattern. Personally, I believe the day-to-day patterns are random, but over time patterns do exist. Technical trading is supposed to clue an investor into these patterns identifying momentum changes. Honest traders admit they are lagging indicators or tools that tell investors when to buy (or sell) after the momentum has already changed. I agree, but another serious issue that is a fly in my ointment is these indicators all use past data. What happened yesterday, may not necessarily happen tomorrow. Yes, the indicators show stock price going up. If another disaster like 9/11 hits New York, will the indicators show this. NO!!!!!! As we discussed earlier, the market tends to be a sentiment indicator. One frustrated mutual fund manager has heart burn from his favorite Indian restaurant may drive down a stock. The indicators will not pick this up until it is too late. I think the best analogy is driving down the road using the rearview mirror instead of looking through the windshield. That crash ahead is pretty rough.

Devolution

2009-10-20T21:34:00.008-05:00

Once in a while, I see something that is so ridiculous by a supposed educated individual, it just requires a little constructive criticism. This post is based upon a book published by an Australian anthropologist asserting claims about our ancient ancestor's physical abilities. The author makes outrageous claims like a normal, healthy Rwanda man jumping his own height, aboriginal Australians running faster than current world record sprinters and marathon running Roman centurions. After reading the post, only one claim has any hard evidence that is not circumstantial. I respect other branches of science that are out of my field, but come on!!! Out of curiosity, I have a few comments for our anthropologist or subjects.

Really what our author found was the use of a early super steroid. Athletes everywhere should be taking a trip to Rwanda to find this enhancing substance. An enterprising individual could make a mint off of this!

After a typical day of pillaging and plundering for the Roman empire, was the only daily form of entertainment they could find involve running about 40 miles? Was the prize an Emperor's Cup?

Ancient Neanderthal men, word of caution. When dating the ancient opposite sex, be careful. They can easily pick you up and throw you like a rag doll. That would make a bad scene, especially in the grocery store.

Dr. Coffee's Innovation Awards # 1, Have a Heart

2009-10-16T13:51:00.009-05:00

This blog is new. I am quickly finding out that blog topics are easy to find. The amount of work required to put the ideas into words is significant though. As a way to keep the posts coming, I am going to have a blog series with common themes. This blog is the inagural post for Dr. Coffee's Innovation Awards. Basically, it will be a series of posts covering outstanding, contemporary discoveries or innovations.

This post comes from Yahoo News concerning a recent discovery involving a new type of human cardiac stem cells capable of growing heart tissue. According to the article, the stem cells can be used to create portions of working heart muscle outside of the human body within laboratory conditions. The future hope is using a heart attack patient's own cadiac stem cells to create new working heart tissue. It would then be possible to easily replace damaged tissue without biological rejection.

Now, if they could only find adult human brain stem cells.

Learning by Computer or Learning the Computer

2009-10-14T23:04:00.006-05:00

Screen shot of Nintendo's Super Mario Brothers

My friend Joe recently posted this comment on Facebook concerning learning and suffering:

” Pathein estin mathein, mathein estin pathein.”
To learn is to suffer; to suffer is to learn.
-Aeschylus, Agamemnon (paraphrased)

Does learning have to be painful, or can it be made more pleasurable?

This brings up an old debate about calculators or computers being used for math education. When is the computer useful for learning or when is the computer doing the work for the student? Personally, I think calculators are great for math that requires tables (logs) or excessive amounts of algebra, i.e. complex differential equations. Unfortunately, basic math like multiplication tables require memorization to grasp the knowledge. Significant amounts of work is involved. Repetition is what allows students to recall values in the future. Making the repetitious process less tedious would result in students being more willing to memorize.

Taking this into consideration, I think computers could be used for basic mathematics education in an interactive manner. The program would require students to follow a programmed series of scenarios with the student controlling the action in a video game. The student could have a customized character going through a mathematical world. Think Indiana Jones running through a jungle maze. Each step of the way through the game, a student makes one of two inputs answering questions:
1) answers with exact numbers

2) multiple choice numbers.

The method in which a student answers the question depends on the

question being asked. The game based on multiplication tables would present a question on screen:

5 × 5 = ?

If the student types in the correct answer of 25, the character proceeds in the game. The next question is presented and the cycle is repeated. Wrong answers would have the same question repeated up to three times after which a new question is posed. The character remains in place until a correct answer is given. In a more advanced level, the multiple choice option would be utilized with equations. The jungle landscape would then fit the equation’s plotted shape. The final touch would be to have students compete with each other within a multiplayer game. Keep students interested by getting the competitive juices flowing.

My first blog

2009-10-12T14:40:00.003-05:00

Hello everyone,

This is the beginning of my first blog. I am a voracious reader of economic blogs, thus, I want to contribute in my specialty area, technology. Let me introduce myself. My name is Shawn Coffee and I have my Ph D in Chemical Engineering from the University of Texas at Austin. The dissertation focused on nanotechnology and the similar processes that make microchips. Currently, I work at Cerium Laboratories (subsidiary of Spansion) as a Materials Engineer in Austin, TX, which I reside. We are the characterization laboratory for Spansion's fab25. Cerium performs analytical work for both internal and external customers from a whole host of industries: semiconductor, solar, automotive, military, academia and a variety of start ups. That is what inspired the name of the blog, because I sit at the crossroads of future technology. This blog will be updated about twice weekly with insightful analysis. Comments are always appreciated.

-Shawn