Monday, June 23, 2008

Oil - Speculators - Only for the weak minded

A lot has been said in the medi over recent months about the role of speculators in pushing up the price of oil.

The Economist has a good piece on oil. In it, they highlight a key fact that has been overlooked by the feeble-minded: That oil speculators cannot push the price of oil futures above the price that markets are willing to pay for delivery just before expiry.

So for example, if the refinery is only willing to pay $100 per barrel, then that is what the final futures contract must be worth immediately prior to delivery. You then work backward by induction over the earlier contracts.

So if speculators are willing to push up the price of oil, it is only because the refineries are also willing to pay that much for physical delivery. Not the other away around.

A virtual chocolate fish to anyone who can point to a leading politician who actually has publicly acknowledged this.

Of course since when did logic mean an end to populist soundbites.

Thursday, June 19, 2008

Diluting the liquor

According to Aunty Helen, there is a causative relation between alcohol outlet density and criminal behaviour.


TVHE prodded that one with a stick and found it wanting.

This is policymaking by playing around with the edges for the sake of being seen to do something. Does reducing the number of liquor outlets mean there will be less crime? Forget about the stats - someone please tell me how it is meant to work. I really don't see the linkages.

On top of that, any first-year uni student who has done a stats course should be able to tell you that correlation is not causation. It staggers me that the pollies can stoop this low. Yes - it's de rigeur for Winnie What-me-baubles Peters - but for a PM to use that sort of flawed logic shows how desperate she must be to get the populist vote.

As soon as you start using (and accepting) this kind of shoddy reasoning, sensible policymaking goes out the window.

Let's get the election over with and try to get back some sanity... pleeeeease.

Wednesday, June 11, 2008

You've come a long way, baby.... Now eat lead!

The story of the polar bear that made it across to Iceland and was promptly shot for its effort kind of sums up my view on life.

You can struggle to achieve something meaningful but if it doesn't suit the guy with the uniform, you are for the taxidermist.