tag:blogger.com,1999:blog-109465972024-03-07T16:06:31.203-08:00The Dark Star GazetteBoldly going forward 'cause we can't find reverse.False Datahttp://www.blogger.com/profile/07901490109393153935noreply@blogger.comBlogger394125tag:blogger.com,1999:blog-10946597.post-88632243600421527742009-03-15T19:19:00.000-07:002009-03-15T19:28:44.639-07:00Useful Things I Learned This Weekend1. World of Goo is a very cool game.<br /><br />2. An hour playing with World of Goo will give you a better intuitive feel for stress analysis and the effects of resonance in a structure than ten hours reading a textbook will.<br /><br />3. The ramshackle buildings you wind up with in World of Goo remind me of a lot of some source code I've seen.<br /><br />4. The Wii Internet Channel's a pretty good browser (being Opera and all), but it doesn't have the horsepower to play an NPR podcast.<br /><br />5. An electric crock pot turned on "high" can crack a Corian countertop.<br /><br />6. You can make an effective trivet using a 12" piece of ceramic tile and five of those sticky-back felt tabs you put on chair legs. You really only need four tabs, at the corners, but the fifth in the middle is belt-and-suspenders.<br /><br />7. If important work e-mail's going to arrive, the most likely time is right after you've mixed the catalyst with the self-etching primer and started spraying.<br /><br />8. Just a hunch, but I'm guessing the "answer e-mail while wearing latex gloves half covered with catalyzed primer" scenario didn't figure prominently in Blackberry usability testing.False Datahttp://www.blogger.com/profile/07901490109393153935noreply@blogger.com2tag:blogger.com,1999:blog-10946597.post-75223344980111931432009-03-08T22:41:00.000-07:002009-03-08T22:43:04.473-07:00Sealing the trailing edge<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj2lYHnYI6hiSspsvD2M2FZiIVkFJl4gI7GdAQYSqeFKbKq0pGib1KM0fvq_9fhT4Z0Pzxmx2c8KXHizpoesP9pIpJoP8hyphenhyphenMmUiAOdV2aWQEiZ4xn4QOCZRqaD4q6a6kjmbfeA_CQ/s1600-h/IMG_0255.JPG"><img style="CLEAR: both; FLOAT: left; MARGIN: 0px 10px 10px 0px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj2lYHnYI6hiSspsvD2M2FZiIVkFJl4gI7GdAQYSqeFKbKq0pGib1KM0fvq_9fhT4Z0Pzxmx2c8KXHizpoesP9pIpJoP8hyphenhyphenMmUiAOdV2aWQEiZ4xn4QOCZRqaD4q6a6kjmbfeA_CQ/s320/IMG_0255.JPG" border="0" /></a> The stripper arrived about a week ago. I put the traling edge wedge from the rudder in the portable spray booth, now pressed into service as a fume hood. (As it turns out, the the stripper doesn't seem to give off a lot of fumes, but I was taking no chances with stuff capable of removing epoxy.) I didn't need to strip the rudder's skins because the epoxy adhered much better to the trailing edge than it did to the skins.<br /><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgwbPgg1hCcI2WhmJcPmserk9cJjRSCDwUL-6n6dj1lHlZEnd8r8GHE1L-4wQqer0TCBpKUcd5G4mzqaE7XqHKU9OFAsqyzvnIjH2ACwaFnwm2rvh_ZoFdIDPdCD_fn6HJLi-7tzQ/s1600-h/IMG_0260.JPG"><img style="CLEAR: both; FLOAT: left; MARGIN: 0px 10px 10px 0px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgwbPgg1hCcI2WhmJcPmserk9cJjRSCDwUL-6n6dj1lHlZEnd8r8GHE1L-4wQqer0TCBpKUcd5G4mzqaE7XqHKU9OFAsqyzvnIjH2ACwaFnwm2rvh_ZoFdIDPdCD_fn6HJLi-7tzQ/s320/IMG_0260.JPG" border="0" /></a> Stripping was a matter of brushing the epoxy on, using a disposable paintbrush, waiting a while for it to bubble or show signs of softening, and then cleaning it off. The stripper dissolves in water, but it took a while to find a suitable scraper. I eventually settled on a green Scotchbrite pad, which did a pretty good job of taking off epoxy without itself dissolving. I went through three coats of stripper. The epoxy came off just fine--in fact, it came off pretty well with the first coat--but I'd also primed the wedge. To make sure the fuel tank sealant adhered well, I also wanted to strip as much of the primer as possible, so the sealant would be gripping aluminum on both sides of the bond. Except for a couple small patches, almost all the primer came off with a combination of the stripper, scrubbing with the Scotchbrite pad, and a bit of wet/dry sandpaper.<br /><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh8wNRZ8BIhyrVK4rDbOqa73_4Hy1JtWQM0SPygq-EwPczhAsLzT_V-ye6CZQmYriuBkBSbXU-EzoaR5x6TwdkSDDqIni1p5NRllGV4SMP-CoPuiGuHoUh75Ejuhe_i1r6KCkHX9Q/s1600-h/IMG_0451.JPG"><img style="CLEAR: both; FLOAT: left; MARGIN: 0px 10px 10px 0px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh8wNRZ8BIhyrVK4rDbOqa73_4Hy1JtWQM0SPygq-EwPczhAsLzT_V-ye6CZQmYriuBkBSbXU-EzoaR5x6TwdkSDDqIni1p5NRllGV4SMP-CoPuiGuHoUh75Ejuhe_i1r6KCkHX9Q/s320/IMG_0451.JPG" border="0" /></a> The intervening week was a busy one with no opportunity for workshop time, and we were out of town this weekend. When we returned this evening, I mixed up the batch of sealant. If you've never seen the stuff, looks like sticky, somewhat runny black tar that gets into absolutely every place it shouldn't. You can remove it with MEK or acetone, at least before it cures, but it's a challenge to keep it under control. It won't stick to the non-sticky side of packing tape, though, so I put a piece of packing tape the length of the aluminum angle. After squirting sealant between wedge and skin on top and bottom, assembling the trailing edge, and clecoing it to the aluminum angle, I spent a fair bit of time with paper towels cleaning up all the sealant that oozed out and trying mighty hard to get the sealant off the aluminum instead of spreading it further.<br /><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiawky5aCedQULiQtAOYBBUe4c5VzOPpTIM6F3449nRTbxETAu01uDNyJO1MQ_t8llSwhoSaf17Y5ESzM3ji2POMb-3Fuf3c1MATjePQf6Xa9w-ECNHC_VwLLDl1-72-9fZPFePkw/s1600-h/IMG_0457.JPG"><img style="CLEAR: both; FLOAT: left; MARGIN: 0px 10px 10px 0px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiawky5aCedQULiQtAOYBBUe4c5VzOPpTIM6F3449nRTbxETAu01uDNyJO1MQ_t8llSwhoSaf17Y5ESzM3ji2POMb-3Fuf3c1MATjePQf6Xa9w-ECNHC_VwLLDl1-72-9fZPFePkw/s320/IMG_0457.JPG" border="0" /></a> Also, to ensure the trailing edge came together fairly tightly (without the wide gap I ended up with before), I decided to clamp a second piece of aluminum angle along the narrow space between the rivet holes and the very trailing edge of the rudder. You can see that here.<br /><br />The next step is to wait. The sealant has a 30 minute working time, but it'll need to stay there at least 48 hours to cure properly before I can mess with trying to rivet the trailing edge.<div style='clear:both; text-align:LEFT'><a href='http://picasa.google.com/blogger/' target='ext'><img src='http://photos1.blogger.com/pbp.gif' alt='Posted by Picasa' style='border: 0px none ; padding: 0px; background: transparent none repeat scroll 0% 50%; -moz-background-clip: initial; -moz-background-origin: initial; -moz-background-inline-policy: initial;' align='middle' border='0' /></a></div>False Datahttp://www.blogger.com/profile/07901490109393153935noreply@blogger.com1tag:blogger.com,1999:blog-10946597.post-35498831262181235662009-02-25T20:53:00.000-08:002009-02-25T20:54:40.111-08:00Disassemble, reassembleI spent some time last night taking apart the rudder's trailing edge.<br /><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhIHQctwRfXKKkIJgCsuDIk9GxfKiiHdMgGxoI_QpX3at8kU8oyC1swBn5Ek5f6FwA9zCZj9UzwTpo2XpD6CETyS3wWKjAOESYsVMvcykyrJDQZWG3_-JTVvyUef57Gk0JFbDhPJQ/s1600-h/IMG_0242.JPG"><img style="CLEAR: both; FLOAT: left; MARGIN: 0px 10px 10px 0px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhIHQctwRfXKKkIJgCsuDIk9GxfKiiHdMgGxoI_QpX3at8kU8oyC1swBn5Ek5f6FwA9zCZj9UzwTpo2XpD6CETyS3wWKjAOESYsVMvcykyrJDQZWG3_-JTVvyUef57Gk0JFbDhPJQ/s320/IMG_0242.JPG" border="0" /></a> The process of drilling out rivets is pretty simple. If you haven't seen one before, a rivet has a broad head and a cylindrical body. You drill partway down the body, use a pin punch to pop off the head, and then push the rest of the body through the hole. The tricky part is you don't want to make the hole any larger, or the rivet you put in there when you reassemble the thing won't hold properly. I usually have a problem with the drill bit trying to walk a bit off center when I start drilling, so I use a center punch to make a starting dimple in the center of the head. It's not perfect, but it helps. I also check often while drilling.<br /><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhdFwkvkR2963AVoWD-3iZGeKIsounj7wAv9kUcAeA-QYYH02fPW1b1QAxj9W97mAdaeQrDltvklBlF8PEP0ek7uVsuCAKnfbWdc-DZNhGMdnGpf8CYASZisUdOISBHsjolDRx4Tg/s1600-h/IMG_0245.JPG"><img style="CLEAR: both; FLOAT: left; MARGIN: 0px 10px 10px 0px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhdFwkvkR2963AVoWD-3iZGeKIsounj7wAv9kUcAeA-QYYH02fPW1b1QAxj9W97mAdaeQrDltvklBlF8PEP0ek7uVsuCAKnfbWdc-DZNhGMdnGpf8CYASZisUdOISBHsjolDRx4Tg/s320/IMG_0245.JPG" border="0" /></a> After a lot of careful drilling, I eventually managed to drill out all the rivets without enlarging the holes. Here you can see the wedge that goes between the trailng edge skins. What you can't really see in the photo is that the wedge has dried T-88 epoxy on it. (So do the skins, but not as much.) The web site for the epoxy manufacturer says you can remove dried epoxy using a suitable paint remover. So there's now a quart of Certified Coatings Sure Strip paint remover on its way from Aircraft Spruce.<br /><br />By the way, Aircraft Spruce was most helpful with this order. According to the epoxy maker, "suitable" means the paint remover must contain methylene chloride. I couldn't tell from the Aircraft Spruce web site whether Sure Strip contains methylene chloride, but the folks at the Aircraft Spruce order desk went into the warehouse, pulled out a can, checked the contents, and called me back to confirm that it does.<div style='clear:both; text-align:LEFT'><a href='http://picasa.google.com/blogger/' target='ext'><img src='http://photos1.blogger.com/pbp.gif' alt='Posted by Picasa' style='border: 0px none ; padding: 0px; background: transparent none repeat scroll 0% 50%; -moz-background-clip: initial; -moz-background-origin: initial; -moz-background-inline-policy: initial;' align='middle' border='0' /></a></div>False Datahttp://www.blogger.com/profile/07901490109393153935noreply@blogger.com0tag:blogger.com,1999:blog-10946597.post-47263159545707607802009-02-23T09:21:00.000-08:002009-02-23T09:30:22.352-08:00Follow-up on the rudderI heard back from tech support this morning. They recommend drilling out the rivets, cleaning it up, and redoing it with fuel tank sealant. It'll be a pain, but I agree with them. <br /><br />So now I need to order some sealant. Proseal at Aircraft Spruce is tres expensive, $78 for the smallest quantity, but it turns out Vans has it, or a newer incarnation of it, in 3.5 oz quantities for around $16. Horray for Vans!<br /><br />I'm still working out how to clean the epoxy off the aluminum parts.False Datahttp://www.blogger.com/profile/07901490109393153935noreply@blogger.com2tag:blogger.com,1999:blog-10946597.post-80099949162729000722009-02-21T15:19:00.000-08:002009-02-21T15:20:21.064-08:00Rudder issuesI'm having rudder issues. One of the more ticklish bits of building this particular airplane is the trailing edge of the rudder, one of the last things to touch the air as the plane goes by. You have to get it straight, and ideally you need to have it nice and, well, together. The trailing edge consists of two rudder skins and a wedge-shaped piece of aluminum that all meet at a point. The instructions say to put fuel tank sealant or some kind of glue on the wedge, glue it all together, clamp it, leave it alone for 48 hours, and then go through the ticklish process of riveting it so it comes out nice and straight.<br /><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjYZZRVWGPrrDdpcyttTwOrVkTlXNTy06uoIU82vXCeF4CbOFrN_Nl7gsGg6Xnl_dokscCITbsNg0hRZ3b1z_r2VzgtMdLwSVGWVgeadnV81vvRK5gHU0v746mA7r27pKNnLoowIw/s1600-h/IMG_0211.JPG"><img style="margin: 0px 10px 10px 0px; clear: both; float: left;" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjYZZRVWGPrrDdpcyttTwOrVkTlXNTy06uoIU82vXCeF4CbOFrN_Nl7gsGg6Xnl_dokscCITbsNg0hRZ3b1z_r2VzgtMdLwSVGWVgeadnV81vvRK5gHU0v746mA7r27pKNnLoowIw/s320/IMG_0211.JPG" border="0" /></a> Now, this is the second time I've built this rudder. The first time around, I got it all finished and hung it on the wall of the workshop to get it out of the way. (I was in a rather small workshop at the time; space was precious.) A few weeks later, the string I'd used to hang it broke, the rudder took a catastrophic fall, and the trailing edge got crunched rather badly. After much wailing and gnashing of teeth, I ordered new parts.<br /><br />I recently finished the rebuild, and it was time to do the trailing edge again. The last time I did this, I used fuel tank sealant and had a whole bunch of the stuff left over, that I wound up tossing because, let's face it, how often are you going to use fuel tank sealant around the house? (Fuel tank sealant comes in two parts. Once you mix them, it'll eventually set. I ordered a small quantity, but it came in a container where you had to mix the whole thing, and the whole thing was enough to do a whole fuel tank and quite a bit more than I needed. You can store mixed sealant in the freezer for up to about six months, but at the speed this project's progressing, six months won't cut it.)<br /><br />So this time I tried T-88, an epoxy used in aircraft construction. Here you can see it clamped together so the glue will set. That little aluminum bit at the left is a test piece. All seemed to go reasonably well. I gave the glue a full week to set and the test piece seemed pretty solid, so I started working on it. That's where I ran into problems.<br /><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjVWtga2mSVA_mXhR7Xg8popVRUkiQ4s8NLsTihlzsBkhJvazc105kIJ_Lrr0fWcx_T8si7JcawXQ3RbUfsYB6M47nlbSGuNtiZoPVCQP_jan2It1wSkfTLAn-VEsHCZz0FmvYA2A/s1600-h/IMG_0229.JPG"><img style="margin: 0px 10px 10px 0px; clear: both; float: left;" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjVWtga2mSVA_mXhR7Xg8popVRUkiQ4s8NLsTihlzsBkhJvazc105kIJ_Lrr0fWcx_T8si7JcawXQ3RbUfsYB6M47nlbSGuNtiZoPVCQP_jan2It1wSkfTLAn-VEsHCZz0FmvYA2A/s320/IMG_0229.JPG" border="0" /></a> Here you can see a shot of the new trailing edge, on top, and the old one on the bottom. The epoxy separated as I set the rivets. It turns out T-88 on aluminum just doesn't have the peel strength fuel tank sealant does. When I tried peeling the test piece apart, I was able to pop it as well. I've written the tech support folks at the kit manufacturer to find out how serious a problem this is.<br /><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgf1FoQy8OeHCTSJDZMgW_NWAldetvvL8aOV6S65MhO_xe9lLctI9oU6MyMt5vmzQVKg9teyTT6NEzntXROyryi-P_XTkXW8gRTpTcMe6p4XgKsaeJZPleS4LBBHTun713VaY8YAQ/s1600-h/IMG_0220.JPG"><img style="margin: 0px 10px 10px 0px; clear: both; float: left;" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgf1FoQy8OeHCTSJDZMgW_NWAldetvvL8aOV6S65MhO_xe9lLctI9oU6MyMt5vmzQVKg9teyTT6NEzntXROyryi-P_XTkXW8gRTpTcMe6p4XgKsaeJZPleS4LBBHTun713VaY8YAQ/s320/IMG_0220.JPG" border="0" /></a> The trailing edge itself came out pretty straight. It wasn't perfect, but there weren't any major problems. I've contacted tech support about the width of the trailing edge. We'll see if I need to drill out the rivets and redo it.<div style="clear: both; text-align: left;"><a href="http://picasa.google.com/blogger/" target="ext"><img src="http://photos1.blogger.com/pbp.gif" alt="Posted by Picasa" style="border: 0px none ; padding: 0px; background: transparent none repeat scroll 0% 50%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" align="middle" border="0" /></a></div>False Datahttp://www.blogger.com/profile/07901490109393153935noreply@blogger.com0tag:blogger.com,1999:blog-10946597.post-69358141552907680912009-02-06T18:28:00.000-08:002009-02-06T19:09:44.564-08:00Driving in the RainThis is not a rant. OK, it's sort-of a rant, but actually it's an attempt to turn a rant to productive use. In the interests of improving the general level of rain driving skills in Southern California, please consider a few thoughts from someone who's lived in places where serious, heavy rain is a regular occurrence.<br /><br />1. <span style="font-style: italic;">Use your headlights.</span> Seriously, it's not about you being able to see. It's about other people being able to see you and not run into you. By turning on your headlights, you're also turning on your tail lights, side lights, and all the other things that make your car a mobile Christmas tree, improving the chances that traffic coming your way will stop in time.<br /><br />2 <span style="font-style: italic;">Be predictable</span>. This is basic defensive driving stuff. The people around you may be hydroplaning, might have fogged up windshields, or might be totally freaking out because there's precipitation falling from the heavens. Use your turn signal when you change lanes. Don't weave. Don't make quick lane changes except in an emergency. Basically, pretend you're surrounded by a bunch of jumpy, freaked-out psychotics armed with two ton chunks of plastic and steel and don't do anything to startle them.<br /><br />3. <span style="font-style: italic;">Drive in the wheel marks of the car in front of you.</span> The wheels of the car in front of you are doing a bang-up job of clearing water off the roads. You can see those wheel marks on a wet road as a somewhat more dryish patch. The tires throw the water to the sides, and then the water gradually flows back where it was before. That means that, for a window of time, there's a somewhat more dry patch of road. By driving in that dry-ish patch, you reduce your chances of hydroplaning.<br /><br />4. <span style="font-style: italic;">Drive towards the middle of the road</span>. Most of the big puddles will be towards the edges of the road, because that's how we slope roads. Drive towards the middle to avoid them.<br /><br />5. <span style="font-style: italic;">Allow extra stopping distance.</span> Your brakes don't work as well when they're wet. And even if they do, your tires have less friction on a wet road. And even if they work well, you might find out, at the wrong time, that you're hydroplaning. Allow yourself some extra stopping distance.<br /><br />6. <span style="font-style: italic;">Try not to hit the brakes in the middle of a curve</span>. In a curve, your tires are already doing what they can to hold your car on the road. Hitting the brakes might be just what it takes to get them sliding instead of gripping. Try to slow down <span style="font-style: italic;">before</span> you get to the curve. Once you're in it, if you need to slow down further, take your foot off the gas and coast. Use the brakes in the curve as a last resort.<br /><br />7. <span style="font-style: italic;">If you're hydroplaning, try not to steer or brake.</span> If you're hydroplaning, your car wants to go straight ahead. Your front tires aren't gripping well, if at all, so steering can send you into a spin. The best thing to do, if the road and traffic will allow it, is to take your foot off the gas and coast till the wheels grip again. (The faster the car, the more likley it is to hydroplane. By slowing down, you give the water more time to get out from under the tires, so the tires can grip the road again.) If you have antilock brakes, they should still work to slow the car, but not as well as on a dry road--see "allow extra stopping distance" above. If you don't have ABS, and you have to use the brakes, use them with caution and remember that you might have to pump them. Sometimes you'll hit a large puddle on only one side of the car. That'll tend to pull the car in the direction of the puddle, because of the friction from the water. Correct as you would for any other skid, steering away from the puddle to keep the car moving straight ahead.<br /><br /><span style="font-style: italic; font-weight: bold;">Driving in Flood Waters</span><br /><br />And now a word for the aspiring Captain Nemos out there--and I count myself a proud member of your ranks.<br /><br />First off, let's talk about why driving in flood waters is usually a bad idea. <br /><br />If it's not a bad flood, your car's likely to be hydroplaning a good bit of the time. Also, you can get water up the tailpipe, which will toast the engine pretty darn quickly. As you drive forward through the flood, a bow wave will build up ahead of the car, and water will start sloshing through the engine compartment. That sloshing water can short out the ignition wires, stalling the engine. Also, a car's door seals are designed to keep out rain, not flood water, so she'll start taking on water, which means, at a minimum, you're going to have to replace the jute that glues the carpet to the floor, you'll need to worry about rust, and you might soak the computer (which is often on the floor under one of the font seats).<br /><br />If it's a bad flood, the tires might leave the road surface. A car will float, at least for a few minutes. During that time, the front wheels become rudders and the drive wheels act like paddle wheels, but minus the paddles. Congratulations, skipper: your vessel will doggy paddle along at maybe 5 miles per hour until she stalls, sinks, or gets swept away by the current to a nasty fate somewhere downstream.<br /><br />So, it's usually a bad idea to drive through flood waters. However, if you should find yourself in this situation, here are a few things to keep in mind.<br /><br />1. <span style="font-style: italic;">Consider whether bailing out is the better answer.</span> If the car's in danger of getting swept away, you mght be better off abandoning it. After all, chances are good you can swim better than a car can.<br /><br />OK, Cap'n Nemo, you've decided to hang with the car. Let's talk about driving in this new environment.<br /><br />2. <span style="font-style: italic;">Downshift.</span> You need to keep water out of the tailpipe, which means you need to keep lots of exhaust bubbling out. Hybrid drivers (and I'm one) don't have a lot of choices at this point, but folks with non-hybrids should downshift (that's "L1" if you're in an automatic) to keep the engine revved up.<br /><br />3. <span style="font-style: italic;">Watch the speed.</span> The last thing you want to do is slosh water up onto the ignition cables and stall the engine, because then water gets into the tailpipe and it's all over. (As an aside, if you do stall it, but you manage to coast to a dry-ish area, drying off the ignition cables may be all you need to do to get it started again.)<br /><br />4. <span style="font-style: italic;">If the wheels leave the road, don't panic.</span> You'll feel it if it happens. Keep the engine revved up and doggy paddle to the nearest relatively dry area. Remember, though, not to rev too much because once those wheels grab again, you don't want the car to suddenly launch itself into something. Once you're back on solid ground, make an appointment with your mechanic, cause you'll probably need it.<br /><br />You can find more<a href="http://http://www.edmunds.com/ownership/safety/articles/45401/article.html"> rain driving tips here</a>.False Datahttp://www.blogger.com/profile/07901490109393153935noreply@blogger.com0tag:blogger.com,1999:blog-10946597.post-49040540949545978112009-01-21T12:43:00.000-08:002009-01-21T13:24:18.689-08:00Airlines "Hedging" Fuel PricesDuring a lull at work, I was skimming the financial headlines and came across an opinion piece with this provocative headline: "<a href="http://www.marketwatch.com/news/story/falling-oil-prices-play-havoc/story.aspx?guid=%7BA6D46177-22C8-4C2E-A8B2-43180BDAC6BF%7D&dist=msr_3#comments">The perils of plunging oil prices: UAL's effort to fight fuel costs backfires</a>". The piece goes on to talk about how airlines' heading strategies are backfiring now that oil prices have dropped, so they're suffering financial losses and having to lay people off.<br /><br />What's odd here is that <span style="font-style: italic;">hedging</span> shouldn't backfire. Hedging is a method of reducing risk, kind of like insurance, but if you're a clever airline on a tight budget you can often do it for no out of pocket cost. For instance, an airline might decide it can afford jet fuel when oil's $100 per barrel but no more, so it might sign a forward contract, a contract with a supplier to pay that price for jet fuel--no more and no less--for the next two years. True, if oil drops below $100, the airline may be upset that it's locked into the $100 price, not the lower market price, but those are losses it's already figured into its business model. At least theoretically. Or if it wants to to limit the range of fuel prices, it could set up a <a href="http://en.wikipedia.org/wiki/Collar_%28finance%29">collar</a> (or, more accurately, a costless collar): pay someone for the right to buy fuel from them at the $110/barrel price (buy a "call" option), and finance it by selling someone else the right to sell fuel to the airline at the $90/barrel price (sell a "put" option). If oil goes above $110/barrel, the airline's covered, and it oil goes below $90/barrel, the airline has to buy it at $90, so the airline's locked into the $90-110 price range.<br /><br />A look at United Airlines' <a href="http://idea.sec.gov/Archives/edgar/data/100517/000136231008006184/c76278e10vq.htm">quarterly report</a> for the quarter that ended September 30, 2008 reveals a somewhat different story:<br /><br /><span style="font-weight: bold;"></span><blockquote><span style="font-weight: bold;">Aircraft Fuel Hedges.</span> We have a risk management strategy to hedge a portion of our price risk related to projected jet fuel requirements primarily through collar options. <span style="font-style: italic; font-weight: bold;">The collars involve the simultaneous purchase and sale of call and put options with identical expiration dates. In order for the Company to obtain more favorable terms for a portion of its hedge positions, the Company also entered into collars with additional features. These hedge positions include extendable collars, referred to above, and collars that include twice the amount of put volume as call volume.</span> Gains and losses derived from the Company’s hedge positions are not accounted for as cash flow or fair value hedges under SFAS 133. The Company’s hedges that are classified either in Mainline fuel expense or nonoperating income (expense), based on the nature of the hedge instruments. </blockquote>(emphasis added) This looks more like speculation than hedging. Twice as many "put" options as "call" options? No wonder they're getting hit. Using the collar example above, for each person they've paid for the right to buy fuel at the higher price, they've sold two people the right to sell them fuel at the lower price. And the price of oil dropped way below that lower price. (In reality, probably no fuel is changing hands. Instead, they just settle up the amount of money each party would have gained or lost if it had traded fuel. Financially, the net result should be pretty close, give or take some taxes.)False Datahttp://www.blogger.com/profile/07901490109393153935noreply@blogger.com0tag:blogger.com,1999:blog-10946597.post-70444870834622832592008-10-22T20:33:00.000-07:002008-10-22T22:29:12.679-07:00more on prop 7The <a href="http://dsgazette.blogspot.com/2008/10/prop-7s-giving-me-fits.html">prior</a> research and discussion on Prop 7 continues, both on this blog and in the comments <a href="http://www.peterwall.net/index.php/2008/09/10/more-about-proposition-7/">here</a>. Here's where things stand now.<br /><br /><span style="font-weight: bold; font-style: italic;">1. I've managed to convince myself that Prop 7 will not affect the legal status of distributed power generation (such as rooftop solar) that's operating under a net metering program.</span><br /><br />Net metering is a program where you hook your rooftop solar up to the grid. You pay your utility company for the amount of power you use minus the amount you generate. Under net metering, if you generate more than you use, the utility doesn't have to pay you for it unless you have some sort of separate contract with them.<br /><br />I was concerned that Prop 7's language would interfere with distributed generation. It turns out it still might, but not the part of distributed generation that's part of net metering. The <a href="http://www.sandiego.edu/epic">Energy Policy Initiatives Center</a> has a useful <a href="http://www.sandiego.edu/epic/publications/documents/070625_RECs_SB107_FINAL_000.pdf">article</a> (pdf) on California law governing Renewable Energy Credits. Section 5, along with its footnotes, gets into distributed generation. It points out that distributed generation through net metering is governed by a separate set of laws, not by the part Prop 7 changes. That's what the exclusion from the definition of "Retail Seller" of generation consistent with Section 218(b) is all about in Public Utilities Code section 399.12(i)(4)(A).<br /><br />Now, if you want a contract where you get paid for generating more than you use, that may well put you in the category of being a photovoltaic producer under 30 megawatts, so Prop 7 may have some implications for you.<br /><br /><span style="font-weight: bold; font-style: italic;">2. It's still not clear what effect Prop 7 has on producers under 30 megawatts.</span><br /><br />There are basically two arguments that prop 7 locks out producers of less than 30 megawatts. I think I may have cleared one up, but the other's still murky.<br /><br /><span style="font-weight: bold;">2.a. Must an "in-state renewable electricity generation facility" be a "facility"?</span><br /><br />The first argument goes something like this: to be an "eligible renewable energy resource," you must be a "solar and clean energy <span>facility</span>" and you must also be an "in-state renewable electricity generation facility" as defined in the <a href="http://www.leginfo.ca.gov/cgi-bin/calawquery?codesection=prc&codebody=&hits=20">public resources code</a>. The public resources code § 25741 <a href="http://www.leginfo.ca.gov/cgi-bin/displaycode?section=prc&group=25001-26000&file=25740-25751">defines</a> "in-state renewable electricity generation facility" as "a facility that meets all of the following criteria" and then gives a list of criteria. It also contains a <a href="http://www.leginfo.ca.gov/cgi-bin/displaycode?section=prc&group=25001-26000&file=25100-25141">definition</a> of the word "facility" in § 25110, which the text of prop 7 (official <a href="http://www.voterguide.sos.ca.gov/text-proposed-laws/text-of-proposed-laws.pdf#prop7">pdf</a>, unofficial <a href="http://californiaphoton.com/policy/propositions/prop7/text/index.html">HTML version</a>) changes to specifically include "solar and clean energy <span>plant</span>", a term that means a plant of 30MW or more. So the question is whether an in-state renewable electricity generation facility must be a "facility" as defined in § 25110, or whether the word "facility" there is just the generic, English word "facility" without the statutory meaning. If it has the statutory meaning, then to qualify for the renewable portfolio standard, your solar or clean energy generator would have to generate at least 30MW.<br /><br />I haven't been able to find a court case, a California Public Utilities Commission decision, or a California Energy Commission decision that addresses that question. However, the California Energy Commission publishes a <a href="http://www.energy.ca.gov/renewables/documents/index.html#rps">set of guides</a> for energy producers interested in the <a href="http://www.energy.ca.gov/portfolio/index.html">Renewable Portfolio Standard</a>. One <a href="http://www.energy.ca.gov/2007publications/CEC-300-2007-006/CEC-300-2007-006-ED3-CMF.PDF">guide</a> (pdf), in particular, covers what energy generators are eligible to participate in the Renewable Portfolio Standard. The <a href="http://www.leginfo.ca.gov/cgi-bin/displaycode?section=prc&group=25001-26000&file=25100-25141">current definition</a> of "facility" is restricted to transmission lines and thermal power plants (which must have a capacity of at least 50 megawatts), but the eligibility guide says that solar photovoltaic generators are eligible and doesn't give a minimum size. So I can't point to chapter and verse, but it seems likely that the CPUC and CEC are using "facility" in its common meaning in this case, rather than as the defined term.<br /><br /><span style="font-weight: bold;">2.b. Is a "solar and clean energy plant" the same as a "solar and clean energy facility"?</span><br /><br />When the "no on prop 7" folks put in their ballot response that prop 7 excludes renewable energy producers of less than 30 megawatts, the "yes on prop 7" folks took them to court. Peter Wall was kind enough to get a <a href="http://www.peterwall.net/documents/prop_7_judge_kenny_decision.pdf">copy</a> (pdf) of the ruling, which he posted to his <a href="http://www.peterwall.net/index.php/2008/09/10/more-about-proposition-7/">blog</a>. The associated <a href="http://www.peterwall.net/documents/prop_7_legal_white_paper.pdf">legal whitepaper</a> (pdf), which appears to be a moderately-edited legal brief, goes into more detail about the arguments. Essentially, the argument boils down to the fact that, to be eligible under the renewable portfolio standard, prop 7 requires that you be a "solar and clean energy facility" and an "in-state renewable electricity generation facility." But it doesn't define "solar and clean energy facility." It does define "solar and clean energy <span style="font-style: italic;">plant</span>," however, and that definition sets a 30 megawatt floor on its size. It also defines "facility," but it does it over in the Public Resources Code, not in the Public Utilities Code where it uses "solar and clean energy facility."<br /><br />In the court case, the folks against Prop 7 argued that Prop 7 made the two terms the same, that a "solar and clean energy facility" is a "solar and clean energy plant", blocking out producers under 30 MW. The folks in favor of Prop 7 argued that they're different. The court found "each of the party's interpretations has some support in the initiative's text." Personally, I'm not convinced either way by the arguments, so this one's still murky.<br /><br /><span style="font-style: italic; font-weight: bold;">3. And now, two rants.</span><br /><br /><span style="font-weight: bold;">3.a. Rant the First: For cryin' out loud, California, fix your defined terms!</span><br /><br />When you write a contract, it's common practice to capitalize defined terms. For instance, you might say something like this:<br /><blockquote></blockquote><blockquote>"Facility" means an thermal power plant which produces electricity and has a capacity of at least 30 megawatts.<br /></blockquote>And then when you use the definition, if you mean the defined term, you capitalize it, and when you don't mean the defined term, you leave it lower case to indicate the word takes on its ordinary meaning in common written English:<br /><blockquote>The Commission will consider the application of any facility, but it will approve an application only if it is submitted by a Facility.<br /></blockquote>This is something California does not do. Which means when they pepper the Public Utilities Code and the Public Resources Code with the word "facility," there's no way to know whether they mean the common term or the defined term. I mean, come on, all you'd have to do is distinguish between "Solar and Clean Energy Plant" and "solar and clean energy facility" and that whole issue 2.b. would just go away.<br /><br /><span style="font-weight: bold;">3.b. Rant the Second: Could we please raise the level of information here?</span><br /><br />The amount of time it's taking to get hard info on this initiative is really adding up, and a big part of the problem is the "yes" and "no" campaigns. The "<a href="http://www.noprop7.com/">no on 7</a>" web site is mostly <a href="http://www.noprop7.com/thefacts.html">conclusory statements</a> with nary a link or cite to supporting data. I can't even get on the "<a href="http://www.yeson7.net/">yes on 7</a>" site because it's flash-only, and flash is giving my browser indigestion right now. The Union of Concerned Scientists' <a href="http://www.ucsusa.org/clean_energy/solutions/renewable_energy_solutions/no-on-CA-prop-7.html">"no on 7" page</a> is marginally better, but it still doesn't provide the raw info necessary to really assess this complex set of changes. And there are rapidly approaching limits to how much time I can spend analyzing this stuff. It really shouldn't be necessary to spend hours digging for primary sources to cut through the crap.False Datahttp://www.blogger.com/profile/07901490109393153935noreply@blogger.com3tag:blogger.com,1999:blog-10946597.post-78939882089778261912008-10-21T12:52:00.000-07:002008-10-22T22:30:49.455-07:00prop 7's giving me fitsDuring a slow period at work, I decided to research some of the initiatives that will be on the ballot in the November election. Proposition 7 is causing some consternation. That's the one that increases targets for renewable energy, but it also does a number of other things. One of the questions I find most troubling is whether it blocks or tilts the playing field against small energy producers. See, I eventually want to be able to put solar panels on the roof, use what I need, then sell the rest back to the power grid. And even more importantly, I want everyone else in sunny California doing the same thing, because that means fewer transmission lines, fewer fossil fuel and nuclear plants, fewer distribution losses, and eventually a more resilient grid. The Prop 7 opponents say small renewable generators don't count towards the power plants' renewables quota, while the proponents say the proposition doesn't rule them out. The news reports haven't actually quoted the language at issue, and I can't find the Sacramento County Superior Court ruling by Judge Michael Kenny (in which he reportedly refused to take sides). So I decided to dive into the <a href="http://www.voterguide.sos.ca.gov/text-proposed-laws/text-of-proposed-laws.pdf#prop7">language of the proposition itself</a>.<br /><br />Let's start at page 121 (page 42 of the PDF), section 399.11(a). It discusses the intent of the law: "to attain the targets of generating 20 percent of total retail sales of electricity in California from <span style="font-style: italic;">eligible renewable energy resources</span> by December 31, 2010" (plus 40% by 12/31/2020 and 50% by 12/31/2025) (emphasis added). That term "eligible renewable energy resources" also shows up in the definitions of "renewables portfolio standard" (section 399.11(g) at page 122) and "renewable energy credit" (section 399.11(h) at page 122). Basically, if it's not from an eligible renewable energy resource, it doesn't count for the renewables portfolio standard and you can't get a renewable energy credit from it. The renewables portfolio standard governs what portion of renewable energy the utility (technically, any "retail seller", defined in section 399.11(i)) has to buy (sections 399.14 and 399.15). I think renewable energy credits are the currency of the carbon trading system. (Section 399.13) As a result, what constitutes an eligible renewable energy resource is crucial to this whole question.<br /><br />An eligible renewable energy resource is, with a few exceptions related to hydroelectrics and waste incinerators, a "solar and clean energy facility" that meets the defintion of "in-state renewable electricity generation facility". (Section 399.11(c).)<br /><br />Now we're getting somewhere.<br /><br />An "in-state renewable electricity generation facility" is a kind of "facility." (<span style="text-decoration: underline;">S</span><a href="http://www.leginfo.ca.gov/cgi-bin/displaycode?section=prc&group=25001-26000&file=25740-25751">ection 25741</a>.) A "facility" includes a regulated "solar and clean energy plant." (Section 25110, as amended, at page 124) And a "solar and clean energy plant" is an "electrical generating facility using wind, solar photovoltaic, [or] solar thermal . . . technologies, <span style="font-style: italic;">with a generating capacity of 30 megawatts or more</span>" (plus small hydro of under 30 MW). (Section 25137, at page 125.)<br /><br />As a result, it's entirely plausible to me that my rooftop solar of less than 30 MW would not be a "solar and clean energy plant", so it wouldn't be a "facility", so it wouldn't be an "in-state renewable electricity facility", so it wouldn't be an "eligible renewable energy resource", so it wouldn't count for the "renewables portfolio standard" and I couldn't get a "renewable energy credit" for it. Interestingly, when I searched on some of these terms looking for definitions in California law, I came across the California Solar Energy Industries Association's site which has a <a href="http://calseia.org/proposition-7-analysis.html">similar analysis</a>, though they bolster it with some of the intent language.<br /><br />Now, counter-arguments exist, and I'm sure they came up in the Superior Court case, but since the folks who drafted California's Public Resources Code put all the defined terms in lower case, it's tricky to tell what's a defined term and what's not (and where the boundaries lie), leading to this kind of ambiguity. And frankly, the whole thing cuts too close to the line for my tastes, so as much as it galls me to do it, I think I'll most likely be voting against this proposition. And if some wrong-thinking commentator interprets that vote as a vote against renewable energy in general, well, I guess I'll just have to point him or her to this blog entry.<br /><br />[<span style="font-style: italic;">Added 10/22: See the comments for more discussion. Also, see the follow-up post <a href="http://dsgazette.blogspot.com/2008/10/more-on-prop-7.html">here</a>.</span>]False Datahttp://www.blogger.com/profile/07901490109393153935noreply@blogger.com4tag:blogger.com,1999:blog-10946597.post-38052080917733571812008-10-01T09:16:00.000-07:002008-10-01T09:28:13.976-07:00AIG and Mark to Market AccountingThere's an interesting article <a href="http://paul.kedrosky.com/archives/2008/09/30/how_the_us_save.html">here</a> on the link between AIG and under-capitalization in the European banks. The author points out that AIG's insurance on defaults allowed European banks to operate with much less capital than regulations would normally require, hence the chaos in Europe when AIG was on the skids (and the big federally engineered bailout of AIG).<br /><br />There's also an interesting collection of quotes <a href="http://calculatedrisk.blogspot.com/2008/09/mark-to-market-quotes.html">here</a> about the proposal to give the SEC the power to suspend mark-to-market accounting. The comments are also a great read. Favorite quotes:<br /><ul><li>"Suspending mark-to-market accounting, in essence, suspends reality." -- Beth Brooke, global vice chair at Ernst & Young LLP; </li><li>"As a former MBS derivative trader...... all I can say is that not requiring traders to [d]o MTM is essentially a license to print your own bonus...to say the least, this is not what an already opaque asset class needs at this time!" -- comment by Anonymous; </li><li>"If the credit markets have seized up because nobody knows who holds the toxic waste on their balance sheets, how is hiding it and pretending it isn't there going to help?" -- comment by IrvineRenter.</li></ul>OK, that's enough bad news for now. If the federal government's debating suspending accounting rules, the accounting equivalent of pulling the covers over your head, then I can do the literary equivalent. Off to find some good news.False Datahttp://www.blogger.com/profile/07901490109393153935noreply@blogger.com1tag:blogger.com,1999:blog-10946597.post-28886508853855319212008-09-30T19:01:00.000-07:002008-09-30T20:29:08.311-07:00just sayin'<blockquote>Mortgages had one key advantage over junk bonds: they were rated AAA by the major credit-rating agencies. The U.S. government felt that home mortgages were important and it subsidized them, not only allowing taxpayers to deduct interest payments, but by implicitly backing the payments on mortgage bonds.<br /><br />Salomon stripped these mortgages into pieces in the same way First Boston had stripped junk bonds. Salomon created a trust . . . transferred a pool of mortgages into the trust, and then created a structure to separate the mortgages into different tranches. . . . These strips of mortgages were generally known as Collateralized Mortgage Obligations, or CMOs, and the different varieties had fantastically colorful acronyms . . . In most cases, the wilder the name, the riskier the bond. The riskiest versions were sometimes just called "nuclear waste."</blockquote>-- Frank Partnoy, <span style="font-style: italic;">Infectious Greed</span> at 103, describing the creation of Collateralized Mortgage Obligations in the early 1990's.<br /><blockquote>As average investors learned about the losses, they became upset with Wall Street, and bankers briefly became pariahs, as they occasionally do. . . . The bankers didn't seem to care about all the fuss. They knew it would go away soon, as it always did. Instead, they disclaimed any responsibility, and blamed investors for making stupid bets and for failing to supervise their investments.</blockquote>-- Frank Partnoy, <span style="font-style: italic;">Infectious Greed</span> at 137-38, describing the climate in December 1994 and early 1995 as news began to spread of major losses due to derivatives trading, especially losses in Collateralized Mortgage Obligations due to the Federal Reserve's increase in interest rates on February 4, 1994.<br /><blockquote>For more than a decade, a massive amount of money flowed into the United States from investors abroad, because our country is an attractive and secure place to do business. This large influx of money to U.S. banks and financial institutions -- along with low interest rates -- made it easier for Americans to get credit. . . . Easy credit -- combined with the faulty assumption that home values would continue to rise -- led to excesses and bad decisions. Many mortgage lenders approved loans for borrowers without carefully examining their ability to pay. Many borrowers took out loans larger than they could afford, assuming that they could sell or refinance their homes at a higher price later on.</blockquote>-- President George Bush, <a href="http://www.whitehouse.gov/news/releases/2008/09/20080924-10.html">Address to the Nation</a>, September 24, 2008, describing the economic crisis of 2007-2008.<br /><blockquote>As we all know, lax lending practices earlier this decade led to irresponsible lending and irresponsible borrowing. This simply put too many families into mortgages they could not afford. . . . A similar scenario is playing out among the lenders who made those mortgages, the securitizers who bought, repackaged and resold them, and the investors who bought them. These troubled loans are now parked, or frozen, on the balance sheets of banks and other financial institutions, preventing them from financing productive loans. The inability to determine their worth has fostered uncertainty about mortgage assets, and even about the financial condition of the institutions that own them. The normal buying and selling of nearly all types of mortgage assets has become challenged.<br /></blockquote>-- Treasury Secretary (and former CEO of Goldman Sachs) Henry Paulson, <a href="http://www.npr.org/templates/story/story.php?storyId=94799954">Statement to Congress</a>, September 19, 2008, describing the economic crisis of 2007-2008.<br /><blockquote>Mortgage and asset-backed securities include residential and commercial whole loans and interests in residential and commercial mortgage-backed securitizations. Also included within Mortgage and asset-backed securities are securities whose cash flows are based on pools of assets in bankruptcy-remote entities, or collateralized by cash flows from a specified pool of underlying assets. The pools of assets may include, but are not limited to mortgages, receivables and loans. Additionally, the Company’s mortgage-related trading positions consist of loans purchased as non-performing loans, equity interests in commercial properties and asset-backed securities that are backed by mortgage loans or other assets.<br /><br />It is the Company’s intent to sell through securitization or syndication activities, residential and commercial mortgage whole loans the Company originates, as well as those acquired in the secondary market. The Company originated approximately $0.5 billion and $2 billion of residential mortgage loans for the three and six months ended May 31, 2008, respectively, compared to the $17 billion and $32 billion for the three and six months ended May 31, 2007, respectively. The Company originated approximately $2 billion and $4 billion of commercial mortgage loans for the three and six months ended May 31, 2008, respectively, compared to the $19 billion and $32 billion for the three and six months ended May 31, 2007, respectively.</blockquote>-- Lehman Brothers, <a href="http://www.sec.gov/Archives/edgar/data/806085/000110465908045115/a08-18147_110q.htm">Quarterly Report on Form 10-Q</a>, July 10, 2008.<br /><blockquote>Lehman Brothers reported a preliminary net loss of approximately ($3.9) billion, or ($5.92) per common share (diluted), for the third quarter ended August 31, 2008, compared to a net loss of ($2.8) billion, or ($5.14) per common share (diluted), for the second quarter of fiscal 2008 and net income of $887 million, or $1.54 per common share (diluted), for the third quarter of fiscal 2007. The net loss was driven primarily by gross mark-to-market adjustments stemming from writedowns on commercial and residential mortgage and real estate assets<br /><br />Net revenues (total revenues less interest expense) for the third quarter of fiscal 2008 are expected to be negative ($2.9) billion, compared to negative ($0.7) billion for the second quarter of fiscal 2008 and $4.3 billion for the third quarter of fiscal 2007. Net revenues for the third quarter of fiscal 2008 reflect negative mark-to-market adjustments and principal trading losses, net of gains on certain risk mitigation strategies and certain debt liabilities.<br /><br />During the fiscal third quarter, the Firm is expected to incur negative gross mark-to-market adjustments on assets of ($7.8) billion, including gross negative mark-to-market adjustments of ($5.3) billion on residential mortgage-related positions, ($1.7) billion on commercial real estate positions, ($600) million on other asset-backed positions and ($200) million on acquisition finance positions. These mark-to-market adjustments were offset by $800 million of hedging gains during the quarter and $1.4 billion of debt valuation gains. The Firm is also expected to record losses on principal investments of approximately $760 million.</blockquote>-- Lehman Brothers, <a href="http://www.sec.gov/Archives/edgar/data/806085/000110465908057829/a08-22764_2ex99d1.htm">Press Release</a> filed with <a href="http://www.sec.gov/Archives/edgar/data/806085/000110465908057829/0001104659-08-057829-index.htm">Current Report on Form 8-K</a>, September 10, 2008.<br /><br />I thought the symmetry was striking. What does it all mean? I dunno. You decide. I just blog here.<br /><br />Oh, here's one more:<br /><p></p><blockquote><p>Turmoil in the credit markets has pushed Libor—the London interbank offered rate—to an all-time high, according to the British Bankers' Association. . . . Libor . . . [is] the rate at which banks lend to other banks that need temporary funds, by way of the London interbank market. This benchmark is significant because it represents the rate at which the world's most preferred borrowers are able to borrow money, and it's also a widely used reference point for short-term interest rates. . . . After the rejection of the bailout bill by the House of Representatives, banks hoarded cash, driving Libor up to 6.88 percent.</p></blockquote><p>-- U.S. News & World Report, <a href="http://www.usnews.com/blogs/new-money/2008/09/30/the-low-down-on-libor-why-its-surge-signals-desperation-in-the-credit-markets.html"><span style="font-style: italic;">The Low-Down on Libor: Why its Surge Signals Despiration in the Credit Markets</span></a>, September 30, 2008, noting that more than half of U.S. adjustable rate mortgages are tied to Libor.<br /></p>False Datahttp://www.blogger.com/profile/07901490109393153935noreply@blogger.com0tag:blogger.com,1999:blog-10946597.post-38638671078142436282008-09-26T08:49:00.000-07:002008-09-26T08:54:08.902-07:00sub-ocean methane leakingI'm surprised <a href="http://www.independent.co.uk/environment/climate-change/exclusive-the-methane-time-bomb-938932.html">this news</a> hasn't gotten more coverage: there's preliminary news that, as the permafrost is melting, methane that was previously trapped beneath the Arctic Sea is bubbling to the surface and escaping to the atmosphere. Methane is about 20 times as powerful a greenhouse gas as carbon dioxide. It's not yet clear just how much methane is escaping, but it does raise the concern of a positive feedback loop, where more methane escapes, warms the climate, causing more permafrost melting, more methane escaping, and so on.False Datahttp://www.blogger.com/profile/07901490109393153935noreply@blogger.com0tag:blogger.com,1999:blog-10946597.post-28866372720816120332008-09-25T14:27:00.000-07:002008-09-25T18:19:05.668-07:00One More QuestionMr. President, there's one more question that's been bothering me. In a free market, I would expect assets to move to the entity best equipped to extract the most value from them. For instance, I would expect banks to hang onto their mortgages, because banks are in the best position to make sure that the mortgage holder makes payments on time. If the bank sells the right to receive mortgage payments to someone else, and the mortgage holder defaults, won't that someone else have to go back to the bank to harass the mortgage holder into paying up, or to seize and sell the house? It seems to me that having to go back to the bank would increase transaction costs, making the right to payment worth less to that someone else than it is to the bank. So the bank shouldn't normally be willing to sell that right in the first place.<br /><br />Yet, according to your speech, mortgage securitization, selling that right to get payments, is a big part of the mess we're in. A really big, $700 billion size, part. That means a lot of banks have been selling mortgages that basic economic theory says they shouldn't be able to sell. And it wasn't a fire sale, because they were doing it in a period of rapid economic growth. What's going on?<br /><br />The only thing I can think of is that someone was either fibbing or asleep at the switch. Maybe the people buying the securitized mortgage debt didn't know how to value it properly, either because they had bad information from the sellers or because they simply weren't financially sophisticated enough to value it, despite the accredited investor safeguards we have in place. Or maybe that debt was being repackaged into securities designed to skirt around laws and regulations that would normally prevent purchasers from buying that kind of debt.<br /><br />In any case, I'd really like to know. Preferably before we commit to giving these people $700 billion of our tax money. After all, if they're not savvy enough to value the mortgage debt properly, are we confident they'll use the money wisely? And if they were fibbing, then we'll want to keep an extra close eye on them, maybe closer than what a few members of a bipartisan panel can keep.<br /><br /><span style="font-style: italic;">Follow-up: if you're not sure what I'm talking about, you can find a readable summary of mortgage securitization, complete with "chicken parts" analogy, <a href="http://money.cnn.com/2007/10/15/markets/junk_mortgages.fortune/index.htm?postversion=2007101609">here</a>.<br /></span>False Datahttp://www.blogger.com/profile/07901490109393153935noreply@blogger.com0tag:blogger.com,1999:blog-10946597.post-17261129157107417982008-09-24T21:08:00.000-07:002008-09-24T22:14:46.944-07:00The Bush Economy SpeechDear Mr. Bush,<br /><br />Thank you for taking time out of your busy day to explain to us why your administration is proposing this $700 billion Troubled Asset Repurchase Plan. I feel it is the least I can do to respond to some of the points you have raised.<br /><br />First, you mentioned a number of questions that you knew many Americans have tonight: "How did we reach this point in our economy? How will the solution I've proposed work? And what does this mean for your financial future?" I would like to add two more: How will we prevent this situation in the future? And why is the solution you have proposed the appropriate one?<br /><br />I couldn't help but notice that your discussion of how we reached this point in our economy did not touch on some factors that are probably significant. You mention large amounts of foreign investment, easy credit, a faulty assumption that house prices would continue to increase, and a large number of mortgage defaults triggered by an oversupply of housing. But you did not discuss the role of deregulation in creating a complex, intertwined financial system, in which no one knows the size of the Credit Default Swap market, an issue that led to the government's $85 billion line of credit to American International Group. <br /><br />You also did not address the role of the credit ratings agencies and their failure to properly rate this mortgage debt. Nor did you touch upon the role moral hazard plays, in which a free market, hands-off philosophy only during good times allows financial companies to keep their profits but encourages them to take on too much risk, on the belief that the government will bail them out. Finally, you did not provide your thoughts on whether compensation packages that reward chief executive officers for short term gain, coupled with severance packages that do not take into account the long term financial position of the company, create an incentive for too much risk. <br /><br />In fact, Mr. President, your discussion of how to avoid this situation in the future was limited to Mr. Paulson's suggestion that the Federal Reserve (not the SEC?) "take a closer look at the operations of companies across the financial spectrum and ensure that their practices do not threaten overall financial stability" and that Congress consider "other good ideas," but with the stern caution that they must "ensure that efforts to regulate Wall Street do not end up hampering our economy's ability to grow." <br /><br />That last caution was enough out of step with the rest of our address that it seems necessary to address some of its implications. In justifying this deviation from your normal inclination against intervening in the markets, you said that "these are not normal circumstances" and that "the market is not functioning properly." Mr. President, I put it to you that, by the time a company has grown "too large to fail," it is already operating outside the free market system--by definition. Once it has reached that size, the market forces that apply to that company are already not functioning properly.<br /><br />You also did not address why the solution you propose is the correct one. You made a case for quick action, painting a gloomy picture of the consequences of inaction and noting that the government's top economic experts are warning there must be immediate action. But from there, the primary justification you offer for this particular economic rescue plan is to say "after much discussion, there is now widespread agreement on the principles such a plan would include." I cannot help but note that the news reaching us taxpayers does not portray anything approaching "widespread agreement" from Congress.<br /><br />Why are you confident that $700 billion, spent primarily to buy bad debt from financial institutions, is the appropriate fix for this problem? What will be the long term effect on the economy of raising the debt ceiling? Is it appropriate to delay addressing those "good ideas" to prevent this problem in the future until after spending the money, rather than building provisions into the contracts with the firms that will receive the money, or at least building in additional latitude such as the ability to obtain a significant voting block of stock?<br /><br />Finally, I understand there is only so much you can fit into a fifteen minute appearance, and you no doubt had good reasons to limit your talk to fifteen minutes. In the future, however, may I suggest asking your speech writers to include a good sound bite. Here's a good starting point: "we have nothing to fear but fear itself."False Datahttp://www.blogger.com/profile/07901490109393153935noreply@blogger.com0tag:blogger.com,1999:blog-10946597.post-37823070379005627252008-09-10T13:28:00.000-07:002008-09-10T21:58:48.596-07:00ConjugalCory Doctorow has a <a href="http://www.boingboing.net/2008/09/05/help-design-a-cipher.html">wedding ring</a> designed by Bruce Schneier. It's a secret encoder ring, naturally. Now they're looking for an encryption algorithm that can use the ring. I hit a slow patch at work, waiting for some documents to arrive (which means it's going to be all the worse when they actually do arrive), so I spent a few minutes on one. I'm going to post the short version of the algorithm at boingboing, but here's the long version, implemented in Perl. (I deliberately avoided using Perl tricks to keep it clear.)<br /><br /><i>Update 9/10/08: you get better results if you calculate the advance a bit differently. Start with 1. If ring 2 has a dot above, add 2; if it has a dot below, add 1. If ring 3 has a dot above, add 6; if it has a dot below, add 3. I'm still experimenting with the advance, though.</i><br /><br /><pre><br />#!/usr/bin/perl -w<br /><br /># Calculates how many positions to advance a ring to get to the desired letter<br />sub calcAdvance {<br /> my ($pos, $newPos) = @_;<br /> my $advance = $newPos - $pos;<br /> if ($advance < 0) {<br /> $advance = $advance + 26;<br /> }<br /> return $advance;<br />}<br /><br /># Ring1 is inner-most, Ring3 is outer-most.<br />#<br /># A B C D E F G H I J K L M N O P Q R S T U V W X Y Z<br />my @ring2Dots = (9,9,0,0,3,3,9,9,0,0,3,3,9,9,0,0,3,3,9,9,0,0,3,3,9,9);<br />my @ring3Dots = (2,2,2,0,0,0,1,1,1,2,2,2,0,0,0,1,1,1,2,2,2,0,0,0,1,1);<br /><br />#<br /># The Conjugal Encryption Algorithm.<br />#<br /># Initialization using the crypto key.<br />#<br /># Start by aligning all the "A"'s.<br />my $ring2Pos = 0;<br />my $ring3Pos = 0;<br /><br /># Then initialize the ring.<br />my $key = "congratulations";<br />while ($key ne "") {<br /><br /> # 1. Get the next character of the key<br /> my $keyChar = substr ($key, 0, 1);<br /> $key = substr ($key, 1);<br /><br /> # 2. Rotate rings 2 and 3 together so the A on<br /> # Ring 1 aligns with the key character on <br /> # Ring 3.<br /> my $advance = calcAdvance ($ring3Pos, <br /> ord (lc ($keyChar)) - ord ("a"));<br /> $ring2Pos = ($ring2Pos + $advance) % 26;<br /> $ring3Pos = ($ring3Pos + $advance) % 26;<br /><br /> # 3. Calculate an advancement amount.<br /> # a. Start with 1.<br /> # b. Look at the Ring 2 letter next to the A of Ring 1.<br /> # If there's a dot above, add 9. If there's a dot<br /> # below, add 3.<br /> # c. Look at the Ring 3 letter next to the A of Ring 1.<br /> # If there's a dot above, add 2. If there's a dot<br /> # below, add 1.<br /> $advance = 1 + $ring2Dots[$ring2Pos] + $ring3Dots[$ring3Pos];<br /><br /> # 4. Advance Ring 3 that many letters.<br /> $ring3Pos = ($ring3Pos + $advance) % 26;<br />}<br /><br /><br /># Generate some useful output<br />my $plaintext = "Wishing you a happy life together!";<br />print $plaintext, "\n";<br /><br /># Skip whitespace and punctuation when encrypting.<br />$plaintext = lc($plaintext);<br />$plaintext =~ tr/a-z//cd;<br />print uc($plaintext), "\n";<br /><br />#<br /># Encrypt text. Initialization vector omitted for clarity.<br />#<br />my $cyphertext = "";<br />while ($plaintext ne "") {<br /><br /> # 1. Look at the letter on Ring 3 adjacent to the A on Ring 1.<br /> # Rotate Rings 2 and 3 together so that same letter on<br /> # Ring 2 is adjacent to the A on Ring 1 (and some different<br /> # letter on Ring 3 will now be adjacent.)<br /> my $advance = calcAdvance ($ring2Pos, $ring3Pos);<br /> $ring2Pos = ($ring2Pos + $advance) % 26;<br /> $ring3Pos = ($ring3Pos + $advance) % 26;<br /><br /> # 2. Calculate an advancement amount.<br /> # a. Start with 1.<br /> # b. Look at the Ring 2 letter next to the A of Ring 1.<br /> # If there's a dot above, add 9. If there's a dot<br /> # below, add 3.<br /> # c. Look at the Ring 3 letter next to the A of Ring 1.<br /> # If there's a dot above, add 2. If there's a dot<br /> # below, add 1.<br /> $advance = 1 + $ring2Dots[$ring2Pos] + $ring3Dots[$ring3Pos];<br /><br /> # 3. Advance Ring 3 that many letters.<br /> $ring3Pos = ($ring3Pos + $advance) % 26;<br /><br /> # 4. Get the next character of the plaintext.<br /> my $plainChar = substr ($plaintext, 0, 1);<br /> $plaintext = substr ($plaintext, 1);<br /><br /> # 5. To encrypt this letter of plaintext, find the<br /> # plaintext on Ring 1 and write down the matching<br /> # cyphertext on Ring 3. (To decrypt, look at<br /> # the cyphertext on Ring 3 and write down the matching<br /> # plaintext on Ring 1.)<br /> my $ring3CryptoPos <br /> = (ord ($plainChar) - ord ("a") + $ring3Pos) % 26;<br /> $cyphertext = $cyphertext . chr ($ring3CryptoPos + ord ("A"));<br />}<br /><br /># Print the cyphertext.<br />print $cyphertext, "\n";<br /></pre>False Datahttp://www.blogger.com/profile/07901490109393153935noreply@blogger.com0tag:blogger.com,1999:blog-10946597.post-57069433696651553082008-08-14T21:43:00.000-07:002008-08-14T21:57:56.624-07:00more on inverting the patternI've been thinking a bit more about <a href="http://dsgazette.blogspot.com/2008/08/inverting-pattern.html">inverting the pattern</a>, moving from a blog-like pattern of lots of talking and not much listening to something with more listening and less talk, or at least more meaningful listening. <br /><br />Broadcast media is not the answer. A radio or TV station is basically the same thing as a blog, still a monologue where the speaker is hoping listeners will tune in. There might be more listening, but only because there are fewer speakers.<br /><br />If you look at the pattern of a typical conversation, it's a group of people with only one person talking at a time. It happens that way because if two people try to talk at once, they interfere with each other. And it's usually considered bad form for one person to monopolize the conversation. With blogs, though, there's really no limit to the number of people who can talk at once, so there's a lot more talking. But with all the talk, who has time to listen and evaluate?<br /><br />So what would it mean to bring a conversation-like pattern into the Internet? One example might be Internet Relay Chat: when one person types, everyone on the channel sees it. Another example, which I like even better because it moves a little more slowly, allowing the opportunity for greater depth, is a computer bulletin board. The modern version would be a web forum. Unlike blogs, where the blog's author holds most of the conversational power, the participants in bulletin board systems or forums [1] all have roughly equal power, so there's more room for the give-and-take that makes for conversation.<br /><br />[1] Apologies to the classics purists, but I just can't bring myself to write "fora".False Datahttp://www.blogger.com/profile/07901490109393153935noreply@blogger.com0tag:blogger.com,1999:blog-10946597.post-91756349992775492822008-08-12T22:10:00.000-07:002008-08-12T22:23:40.920-07:00inverting the patternBlogs are all about talking, but they're rarely about <a href="http://dsgazette.blogspot.com/2007/02/blogging-and-communities.html">conversing</a>. They're more like monologues within earshot of one-another, and sometimes another person will tune in and change their own monologue in response. Twitter's basically the same thing, which isn't too surprising since it's really a form of blogging.<br /><br />I wonder, though, if there's a way to invert the pattern. Instead of everyone talking and hoping someone listens, is there a way you could reverse it so there's much more listening going on than talking? What would such a thing look like? And would people use it?False Datahttp://www.blogger.com/profile/07901490109393153935noreply@blogger.com0tag:blogger.com,1999:blog-10946597.post-20600001484199625312008-07-22T21:36:00.000-07:002008-07-22T22:35:59.644-07:00Al Gore's speechThis post was originally going to be an analysis of <a href="http://www.wecansolveit.org/pages/al_gore_a_generational_challenge_to_repower_america/">Al Gore's energy challenge speech</a> and some of the <a href="http://news.yahoo.com/s/realclearpolitics/20080722/cm_rcp/gores_plan_just_a_dream">criticism</a> of it.<br /><br />If you view the <a href="http://www.wecansolveit.org/pages/al_gore_a_generational_challenge_to_repower_america/">speech</a> as a logical or rhetorical argument, it has its share of problems. For example, when talking about the falling price of silicon for solar cells, Gore says, "the same thing happened with computer chips--also made out of silicon. The price paid for the same performance came down by 50 percent every 18 months--year after year, and that's what's happened for 40 years in a row." This conclusion doesn't follow: the price per unit of performance for computer chip drops because transistors keep getting smaller, but making the features on a solar cell smaller will quickly run out of steam because you're fundamentally limited by the amount of sunlight per unit area. Even if you increase efficiency by 50% every 18 months, and in a few years you get darn close to 100%, you still hit the limit imposed by the sun. That's not to say that solar cells won't get cheaper, but microchips' cost per unit performance is not the right model. Also, Gore has the annoying habit of not citing his sources, even in the transcript, which makes the speech very hard to fact-check.<br /><br />The <a href="http://news.yahoo.com/s/realclearpolitics/20080722/cm_rcp/gores_plan_just_a_dream">criticism</a> is worse. It opens by saying "Al Gore wants you to do as he says, not as he does" and spends fully a third of its length calling Gore a hypocrite. But that doesn't follow either: the validity of Gore's contention that we need this energy challenge, and the underlying reasoning he presents, have nothing to do with his personal energy consumption habits. It could just as easily come from, for example, <a href="http://www.kvii.com/news/news_story.aspx?id=38035">T. Boone Pickens</a>. The next third of the criticism is devoted to an argument that says, essentially, it's impossible because we're not doing it now: renewables are a tiny percentage of our current energy production, therefore it is unreasonable to expect that they could reach 100% in ten years. But at its core, this argument is a simple assertion that change is impossible, which we know by experience to be false. Finally, two thirds of the way down, the criticism brings up a <a href="http://www.aps.org/units/fps/newsletters/200807/monckton.cfm">scientific paper</a> that denies human impact on global temperature change, which is at least fodder for debate. (More background on that paper <a href="http://www.webcommentary.com/aps.htm">here</a> and <a href="http://wattsupwiththat.wordpress.com/2008/07/19/american-physical-society-and-monckton-at-odds-over-paper/">here</a>.)<br /><br />But you know, my heart just isn't in the analysis. Deep down, the reason is that I missed the last Apollo project and want one I can be a part of. And this is a cause I can get behind. It's big, it's inspiring, it'll create some fantastic spinoff technologies, and it'll produce great results. Even on the (exceptionally remote) chance that the IPCC is wrong and the paper the criticsm cites is right, that anthropogenic global temperature change is an illusion, it's extremely hard to deny that much of U.S. foreign policy is driven by a dependence on foreign oil, that even if we tap all our domestic sources they won't meet our demand, and that shifting to domestically produced renewables would give us a ton of new flexibility in foreign policy. So, yeah, I hope this thing takes off. And if it does, I want in.False Datahttp://www.blogger.com/profile/07901490109393153935noreply@blogger.com0tag:blogger.com,1999:blog-10946597.post-20093833927998751562008-07-13T10:57:00.000-07:002008-07-13T11:23:37.173-07:00redundancy and unexpected interdependencyA couple weeks ago, the office network went down. Not surprisingly, we couldn't print or get to any electronically filed documents. Maybe a bit more surprisingly, the phones also went out because we've moved to fancy new Cisco network-based phones, and they took voice mail--which is now e-mail-based--with them. And so did the fax machines, because when faxes come in they get scanned and e-mailed to us. The net result was that we were almost dead in the water. Fortunately, the Blackberries stayed up, so we could use cell phones and could still send e-mail through the Blackberry server.<br /><br />These sorts of unexpected interdependencies are cropping up more and more often as we begin to link one network to another, and as traditional network technologies shift around. I've already <a href="http://dsgazette.blogspot.com/2007/09/unexpected-interdependences-or-why.html">written</a> about how my (now former) cell phone's alarm clock stopped working when the phone couldn't reach the cell network. There was a radio discussion today about an issue with digital TV: many people put battery-powered analog TV sets in survival kits so they can get news if there's a natural disaster, but (1) the set-top converter boxes that we'll need to use once HDTV becomes standard require wall power to run, which would make those analog battery powered TVs useless, and (2) many radio stations no longer have a news department, acting more as satellite feeds for a central office, so your transistor radio may not be able to pull in anything useful, either. Oh yeah, and many folks are moving away from conventional land-lines at home and going to VOIP phones or cell phones exclusively.<br /><br />The classic way to deal with system failure is through redundancy: if the TV network goes out, you still have radio, which can get you much of what you need, or maybe you still have telephone. And so forth. The problem is that redundancy only works where you can stop a failure in one system from propagating to other systems. That's one reason most software doesn't have a redundant design: it's very hard to predict how far the effects of a failure will propagate through software, so it's generally not cost-effective to make it redundant. As our networking capabilities become more sophisticated, we're getting to the point where it's becoming harder to figure out what effect a failure of one network will have on the other networked systems we use.<br /><br />The right way to do this, from an engineering perspective, is to take these sorts of problems into account when designing the systems, and then to periodically test them to make sure we got it right. That's not going to happen, at least right now, for social and economic reasons. The second-best approach would be to invest time and money into developing the design and evaluation tools necessary to either constrain the effects of a failure, so they don't propagate to other systems, or to at least be able to predict the likely failure modes and how far they'll propagate. We might eventually do that, but it'll take time. What's most likely to happen is the same thing that happened in structural engineering a hundred years ago: we may well see a series of unexpected, unforecasted failures, and they'll likely continue until we implement one of the first two approaches above.False Datahttp://www.blogger.com/profile/07901490109393153935noreply@blogger.com0tag:blogger.com,1999:blog-10946597.post-76744351598796000752008-07-06T16:36:00.000-07:002008-07-06T16:51:30.923-07:00switching antivirus softwareFor a couple years, now, I've been using <a href="http://www.grisoft.com/ww.product-avg-anti-virus-free-edition#tba2">AVG Free edition</a>. And for the last month or two, they've been pressuring me to upgrade to version 8. When I install new software, I often skim the End User License Agreement. In this case, here's what I turned up in the EULA for AVG Free 8.0:<br /><blockquote><br />6. Miscellaneous.<br /><br />. . .<br /><br /> b. Privacy.<br /><br /> i. You acknowledge that AVG Technologies collects certain information regarding the users of the Software, including certain personally identifiable information. You hereby consent to AVG Technologies' collection and use of such information, and agree that AVG Technologies' collection and use of such information will be governed by AVG Technologies' Privacy Policy, currently published at www.avg.com, as AVG Technologies may revise the same from time to time.<br /><br /> ii. BY PROCEEDING TO INSTALL THE TOOLBAR, YOU ACKNOWLEDGE AND ACCEPT THAT, UPON ITS INSTALLATION, THE TOOLBAR WILL MODIFY VIA THE SETTINGS OF YOUR BROWSER THE "DNS ERROR PAGE" AND "ERROR 404 PAGE". . . . </blockquote>I'm not too thrilled with the idea of my antivirus software communicating personally identifiable information back to the manufacturer based on a privacy policy they can change at any time. Based on the language in this agreement, I don't see any restrictions that would prevent them from changing the privacy policy in such a way that they could return any contents of my hard drive that they chose to. I also don't really like the idea of a toolbar redirecting DNS and Error 404 pages. The intent is probably to allow them to redirect to a "we didn't find your web page, but here are several similar pages" search engine that provides revenue to AVG, but (a) they don't make that explicit in the agreement, and (b) I don't know what effect such a redirection would have on Firefox, especially in odd situations like running a search while there's no wireless network connection, something that happens fairly frequently when our wireless cuts out.<br /><br />Net upshot: I'm giving <a href="http://www.avast.com/eng/avast_4_home.html">Avast Free Edition</a> a try, instead. I've been running it on a desktop machine that I use occasionally for games, but this'll be the first time on the laptop I use frequently. The only difficulty I ran into is that Avast doesn't automatically uninstall AVG, so you need to do that manually via Add/Remove Programs (off the Control Panel). Also, Avast has a spinning logo in the tool tray, which is cute (the logo spins while it's doing its thing), but I find the movement distracting. However, the EULA was clean. Now we'll see how the program works.False Datahttp://www.blogger.com/profile/07901490109393153935noreply@blogger.com2tag:blogger.com,1999:blog-10946597.post-47165204735895748642008-06-21T16:30:00.000-07:002008-06-21T17:52:36.966-07:00Off-Shore Oil DrillingI've been sick for the last few days, which has left me with the dangerous combination of being grumpy and having some time on my hands. Which brings me to the topic at hand.<br /><br />President Bush <a href="http://www.whitehouse.gov/news/releases/2008/06/20080618.html">has called for</a> drilling in the outer continental shelf. Specifically, he has said the following:<br /><blockquote>In the short run, the American economy will continue to rely largely on oil. And that means we need to increase supply, especially here at home. So my administration has repeatedly called on Congress to expand domestic oil production. Unfortunately, Democrats on Capitol Hill have rejected virtually every proposal -- and now Americans are paying the price at the pump for this obstruction. Congress must face a hard reality: Unless Members are willing to accept gas prices at today's painful levels -- or even higher -- our nation must produce more oil. And we must start now. . . .<br /><br />First, we should expand American oil production by increasing access to the Outer Continental Shelf, or OCS. Experts believe that the OCS could produce about 18 billion barrels of oil. That would be enough to match America's current oil production for almost ten years.<br /></blockquote>What's interesting about this statement is that the Department of Energy ran a <a href="http://www.eia.doe.gov/oiaf/aeo/otheranalysis/ongr.html">study</a> on drilling in the OCS just last year. The study looked at the current restrictions, which expire in 2012, and mapped out the cases where drilling is allowed and where the restrictions are renewed and no drilling takes place. It found that<br /><blockquote>access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030. Leasing would begin no sooner than 2012, and production would not be expected to start before 2017.<br /></blockquote>So if we suppose that Congress ends the restrictions in 2008, a good first guess is that'd accelerate the timeline by about 4 years across the board: no production sooner than 2013 and no significiant impact on prices before 2026.<br /><br />The reason there's no significant impact on prices is that OCS drilling would increase domestic oil production by about 7%, but oil prices are set on an international basis. In other words, the amount of increased production domestically wouldn't be enough to have a significant impact on global oil supply. Let's assume that oil would increase supply and therefore lower prices in the U.S.. In that case, the oil companies would have the choice of selling at a lower price in the U.S. market or at a higher price to the international market. Past behavior suggests that the executives directing those companies would feel constrained by a fiduciary duty to their shareholders and would therefore sell on the international market. As a result, the domestic prices would rise to meet the international prices. Now, we could impose laws that prevent the oil companies from selling that crude overseas, which might artifically drive down domestic prices, but those sorts of trade restrictions seem out of character for Mr. Bush's administration. So the most likely result is that a goodly sized chunk of any oil drilled here will <a href="http://news.xinhuanet.com/english/2008-04/29/content_8075648.htm">feed China's demand</a> for it.<br /><br />Earlier in the speech, Mr. Bush said, "In the long run, the solution is to reduce demand for oil by promoting alternative energy technologies." It is not clear what time frame "the long run" represents, but there are already interesting developments on the alternative energy horizon, particularly in storage of electricity. For example, Zenn Motor Company and EEstor <a href="http://media.cleantech.com/2644/zenn-gearing-up-for-eestor-powered-car">have announced</a> plans to ship an electric car in late 2009 that will go 80 MPH and have a range of 250 miles and that a properly equipped charger could recharge in a few minutes. Similarly, <a href="http://www.a123systems.com/">A123 Systems</a> is currently selling a new lithium ion battery technology with dramatically better energy density. (You can currently buy their stuff in certain lines of Dewalt cordless power tools while they work on the long battery life necessary for plug-in hybrids. They are also currently selling plug-in conversions for the Toyota Prius, though at $10K they're currently a little pricey for my budget.) It's also possible--today--to <a href="http://gas2.org/2008/03/29/first-algae-biodiesel-plant-goes-online-april-1-2008/">produce biodiesel from algae</a> (rather than, say, corn), something you don't need arable land to do. (Hmm. I wonder how much land you'd have to devote to algae production to <a href="http://dsgazette.blogspot.com/2007/02/sir-richard-branson-dude-you-rock.html">remove a billion tons</a> of carbon dioxide per year from the atmosphere, since bamboo <a href="http://dsgazette.blogspot.com/2007/02/more-on-co2-challenge.html">ain't gonna cut it</a>.)<br /><br />In the meantime, higher fuel prices are having an impact on demand. Amtrak ridership <a href="http://www.amtrak.com/servlet/ContentServer?pagename=Amtrak/am2Copy/News_Release_Page&c=am2Copy&cid=1178294057347">continues to set records</a>, and high gas prices are <a href="http://www.ajc.com/travel/content/travel/southeast/ga_stories/2008/05/22/trtrainvacay_0524.html">sending it way up</a>. And Ford is <a href="http://www.cbc.ca/consumer/story/2008/06/20/ford-production.html?ref=rss">scaling back production</a> for gas guzzlers due to decreasing demand.<br /><br />Bottom line? Maybe drilling the OCS is not an effective answer either to Mr. Bush's short term goal of increasing supply (beyond insignificant levels) or to his long term goal of reducing dependence on foreign oil.False Datahttp://www.blogger.com/profile/07901490109393153935noreply@blogger.com1tag:blogger.com,1999:blog-10946597.post-23351529812511458342008-04-27T17:57:00.000-07:002008-04-27T18:10:10.192-07:00I tawt I taw a bomberWhile cooking dinner, I happened to glance outside just now and saw an airplane silhouette that looked, well, unusual. A quick check with binocs confirmed it: round tail, four engines, big, and not moving all that fast. A B-17 maybe? A few minutes later, it turned and flew over the house, making that distinctive, rumbling big radial engine sound that only World War II warbirds make. And an H-tail. Not a B-17, but a <a href="http://en.wikipedia.org/wiki/B-24">B-24 Liberator</a>. Probably taking people out for rides on a beautiful flying day. Pity there was no camera handy.False Datahttp://www.blogger.com/profile/07901490109393153935noreply@blogger.com0tag:blogger.com,1999:blog-10946597.post-51594510514688576572008-04-25T23:25:00.001-07:002008-04-25T23:34:31.836-07:00The Park and Supergenius Criminal MastermindsSo I've started reading <a href="http://www.wagonburg.com/">The Park</a>, about a trailer park full of people with superpowers. The idea's got a ton of potential, maybe even for some social commentary. And it looks like the villain just showed up.<br /><br />Which has got me thinking: why is it that so many supergenius criminal masterminds want to rule the world? "What are we going to do tonight, Brain?" "The same thing we do every night, Pinky, try to take over the world." I mean, say you do take over the world. What do you get? The massive headache of running the whole friggin' world, that's what. And guess who everyone's going to blame the next time there's a war, or a recession, or some government agency muffs disaster relief?<br /><br />So I'm thinking the really clever supergenius criminal masterminds--you know, the ones a cut above the Wile E. Coyotes of the world--they're not in it for the money or the girls or the private 747 with the jacuzzi tub and reporters and NORAD interface, 'cause there are a lot easier ways to get those things. And they're probably not in it for the recognition, either. Let's face it: a good PR firm will take you a lot further for your dollar than world domination will.<br /><br />So what is it? Resume padding? The sheer challenge of the thing? The belief that they can run things better than anyone else?<br /><br />Hmmm. Considering how well things sometimes run, maybe there's something to that last possibility.False Datahttp://www.blogger.com/profile/07901490109393153935noreply@blogger.com1tag:blogger.com,1999:blog-10946597.post-40746448428532177312008-04-05T13:36:00.000-07:002008-04-05T16:04:43.350-07:00the learning curve continuesWe moved in last weekend and are getting the new place up and running.<br /><br />Today's adventure involves the sprinkler system. Since the rains have mostly stopped, our landscape's been dying, which made getting the sprinklers working a high priority. One of the <a href="http://www.rainbird.com/landscape/products/valves/jtvf_avb.htm">manifolds</a> that controls one of the sprinkler stations is gushing: not merely leaking, but leaking a whole awful lot of water whenever it turns on. So one project for today was to fix or replace the manifold.<br /><br />I made the mistake of taking the advice from one of the guys at Home Depot who recommended replacing it with a new one. I also learned that replacing one of these beasts involves shutting off the water, cutting the pipes that connect it to the system, and assembling and gluing in the new manifold. So I bought all the parts necessary to do that. The operation started smoothly enough: I assembled the new system, dug around the old one, and cut it off. Only then did I realize that the pipes on the old manifold are a different distance apart than the pipes the new manifold is designed to fit. So, lesson #1: be careful when taking advice from Home Depot.[1] Lesson #2: check the sizes before cutting any pipes.<br /><br />That left me (us) in a quandary: I had to shut off the water to cut off the manifold, now the pipe's cut, and as long as there's no manifold I can't turn the water back on. At this point, I was in over my head. So we ran a quick web search looking for a plumber who could solve the problem. Lesson #3: plumbers don't necessarily do irrigation, even though both involve pipes. We eventually found an irrigation person, who may or may not be able to make it here before Tuesday morning. In the meantime, he recommended gluing a cap on the supply pipe. So I've done that, and now I'm waiting for the glue to set up before I turn the water back on. Hopefully it'll hold. I guess we'll find out around 3:30 or 4:00.<br /><br />So much to learn.<br /><br /><span style="font-style: italic;">Update: at 4:00, I turned on the water and the cap held, so the situation's stabilized until someone who knows what he or she is doing can fix the problem.</span><br /><br />[1] The advice from the ex fireman who used to do plumbing work on his days off and now works in the plumbing section turned out to be very helpful for getting the washer and dryer working, so I'm not saying it's all bad, just that caution is necessary.False Datahttp://www.blogger.com/profile/07901490109393153935noreply@blogger.com0tag:blogger.com,1999:blog-10946597.post-14903445907762271352008-02-10T20:24:00.001-08:002008-02-10T20:28:43.510-08:00new thermostatWhen installing a new Honeywell digital thermostat to replace an old Honeywell round thermostat, keep in mind that the wire labeled "H" on the old thermostat may, in fact, be the "R" wire. Especially if whatever machine printed the "H" on the thermostat just happened to miss ever so slightly and cut off the top of the letter. And you also have a "W" wire, and the instructions don't seem to account for having both a "W" and an "H."<br /><br />OK, so pretty obvious. But if you don't figure it out, you can spend an hour puzzling over why the fan won't come on. <br /><br />Trust me on this one.False Datahttp://www.blogger.com/profile/07901490109393153935noreply@blogger.com0