Nathan Chitty Weblog

TED Conference Bill Gates speaking about Malaria and Making Great Teachers

Bill Gates gives a great talk at the TED conference about Malaria and Making Great Teachers. Malaria is important but I would listen to the Making Great Teachers first (it starts at 8 minutes 10 seconds into the 20 minute video.. Malcolm Gladwell has a section in his new book Outliers: The Story of Success about great education too with a lot of similar themes. 

The talk itself is at this link http://www.ted.com/talks/view/id/451

T. Boone Pickens initiative on alternative energy and wind power

I was watching CNBC's Squawk on the Street and heard Boone Pickens describe how America could substaintially reduce dependence on the $700 billion sent annually to foreign countries for our oil purchases.

The plan is described in the website pickensplan.com and consists of using the north/south wind corridor from West Texas to Canada to utilize the strong winds to generate electricity. He proposes using the liquified natural gas that is currently used to generate 22% of America's electricity as fuel for automobiles.

One thing I found interesting about his presentation was that he used a whiteboard to draw the situation. His completed drawing highlights his estimate that 38% of the $700 billion could be retained in this country rather than going to other nations. That is over $300 billion.

Cost to add soldiers to Army and Marines

In their testimony, Gates and Mullen ask Congress to support a $588.3 billion request for defense spending in the 2009 budget year, which begins Oct. 1.
The spending blueprint allots $20.5 billion to boost the size of the Army by 7,000 soldiers, to 532,400, and add 5,000 Marines to expand the Corps to 194,000.
That is $1,708,333 per soldier. How?

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Geoffrey Canada interview on Charlie Rose

This is a wonderful interview with Geoffrey Canada about education in America. He is a black activist from Harlem. I bet a lot of educators are mad at what he is saying.

I got at really good comment from http://muriella.wordpress.com/2008/01/03/geoffrey-canada-on-education-with-charlie-rose/, it is well worth a read.

Crisis may make 1929 look a 'walk in the park'

Click the "read more" line below to see the article I am talking about in this post.

This is a believable article with lots of specifics about a cascade effect of banks having to take the bad assets back on their balance sheets and damaging their capital ratios to low levels. When writeoffs are considered, there is danger that the captial will be gone from the banks and that they will not lend to each other.

I learned about an interesting economist in the article whom I did not know before: http://en.wikipedia.org/wiki/Anna_Schwartz

The bank crisis scenario described in the article is very credible to me.

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This is an amazing story

This is the story of Paul Potts. He is the British mobile phone salesman who won the "Britains Got Talent" contest by singing Opera.

High Oil Prices-"Why $100 Oil Can't Float"

I was reading the Wall Street Journal this morning about high oil prices and why $100 a barrel oil won't last. All I know is that when something goes straight up, it won't last. I heard a good quote one time attributed to a farmer "High prices cure high prices and low prices cure low prices."

I do think that even if there is plenty of oil, we should have been on a massive conservation drive over the past 6 years to reduce our dependence on Mideast oil.

http://online.wsj.com/article/SB119448112481785861.html

Why $100 Oil Can't Float

Justifications for the Price,
Like Supply and the Dollar,
Crumble Under Economics
November 8, 2007; Page C14

With oil flirting with $100 a barrel, there seems to be no stopping the dizzying ascent of black gold. In such a frothy market, it may seem old-fashioned to talk about supply and demand. But they and other fundamentals give a clear message: The price is too high to be sustainable.

There are 10 solid reasons why:

1. Supply above ground is abundant. The amount of oil in storage tanks around the world is near all-time highs -- 4.2 billion barrels at the end of June in the industrialized countries of the Organization for Economic Cooperation and Development alone, according to the U.S. Energy Information Administration.

Falling inventories in the

U.S.

have received a lot of attention, and the EIA does predict slightly lower stocks by year-end. But this has more to do with inventory management than a lack of supply.

2. Supply below ground is abundant. The world's proven reserves are now at 1.4 trillion barrels, up 12% in the past 10 years, according to BP.

That's not even counting the estimated 1.7 trillion barrels of oil locked in

Venezuela

's

Orinoco

tar sands. Combined, that comes to a century of production at the current rate.

3. Production is set to increase. Sustained high oil prices have encouraged drilling. There are 45% more oil rigs in service today than there were three years ago. New rigs are more productive than old ones and new technology is helping to squeeze more oil out of old fields.

4. The cost of production is much less than $100 a barrel. Even with oil-services costs soaring, Royal Dutch Shell's lifting cost per barrel of oil equivalent in 2006 was about $9, according to energy research firm John S. Herold. Extracting oil costs Saudi Aramco, the Saudi Arabian producer, an estimated $4 to $5 a barrel.

The full cost of new production -- including both capital and operating-cost components -- in the most challenging oil fields, for example in Canada's oil sands, is perhaps $30 a barrel. Oil prices can fall heavily without making any of this production uneconomic.

5. Iranian exports aren't likely to be cut. The

U.S.

is in practice unlikely to take military action against an adversary three times the size of

Iraq

. And with oil exports accounting for 50% of

Iran

's gross domestic product and 90% of its hard-currency earnings, a self-imposed cut in exports would be self-destructive.

In any event, the world has the equivalent of nearly three years of Iranian production in storage, according to research from Oppenheimer. This risk shouldn't be a big factor in oil prices.

6. High prices are pulling back demand. Oil consumption in the

U.S.

fell by 1.3% in 2006 and world-wide demand grew a measly 0.6%, according to BP.

World-wide, demand this year is expected to be flat compared with last year. Exxon Mobil cut its long-term forecast for oil-consumption growth this week.

7. High prices are forcing governments to cut subsidies.

Iran

is rationing gasoline, and last week

China

ordered a 10% increase in oil-product prices. That should curb demand growth, too.

8. Energy from oil is looking expensive compared with energy from gas. Oil by the barrel has usually traded at six to 10 times the price of natural gas (measured per million British thermal units). It is currently at 13 times.

9. The weak dollar is a poor excuse for high oil prices. Since Aug. 22, the dollar is down by only 8% against a basket of currencies while the oil price has risen by 40%.

10. Speculation is artificially boosting prices. A speculator needs to put down only $4 per barrel as margin to bet on the oil price in futures markets. The net volume of open crude-oil contracts held by financial players is up 50% since August, when the credit crunch made it harder to make leveraged bets in some other markets. This looks like short-term, hot money.

• This column is by breakingviews.com, an online financial commentary