Saturday 4th of May 2024

a dark horse...

black swan

picture by Gus...

Before the Great Recession, America’s economic gurus - from the head of the Federal Reserve to the titans of finance - boasted that we had learned to master risk. "Innovative" financial instruments such as derivatives and credit-default swaps enabled the distribution of risk throughout the economy. We now know that they deluded not only the rest of society, but even themselves.

These wizards of finance, it turned out, didn’t understand the intricacies of risk, let alone the dangers posed by "fat-tail distributions"- a statistical term for rare events with huge consequences, sometimes called "black swans". Events that were supposed to happen once in a century - or even once in the lifetime of the universe - seemed to happen every ten years. Worse, not only was the frequency of these events vastly underestimated; so was the astronomical damage they would cause - something like the meltdowns that keep dogging the nuclear industry.

Research in economics and psychology helps us understand why we do such a bad job in managing these risks. We have little empirical basis for judging rare events, so it is difficult to arrive at good estimates. In such circumstances, more than wishful thinking can come into play: we might have few incentives to think hard at all. On the contrary, when others bear the costs of mistakes, the incentives favour self-delusion. A system that socialises losses and privatises gains is doomed to mismanage risk.

Indeed, the entire financial sector was rife with agency problems and externalities. Ratings agencies had incentives to give good ratings to the high-risk securities produced by the investment banks that were paying them. Mortgage originators bore no consequences for their irresponsibility, and even those who engaged in predatory lending or created and marketed securities that were designed to lose did so in ways that insulated them from civil and criminal prosecution.

This brings us to the next question: are there other "black swan" events waiting to happen? Unfortunately, some of the really big risks that we face today are most likely not even rare events. The good news is that such risks can be controlled at little or no cost. The bad news is that doing so faces strong political opposition - for there are people who profit from the status quo.

...

In the end, those gambling in Las Vegas lose more than they gain. As a society, we are gambling – with our big banks, with our nuclear power facilities, with our planet. As in Las Vegas, the lucky few - the bankers that put our economy at risk and the owners of energy companies that put our planet at risk - may walk off with a mint. But on average and almost certainly, we as a society, like all gamblers, will lose.


http://english.aljazeera.net/indepth/opinion/2011/04/201146115727852843.html

---------------------------

Gus: Unfortunately the biggest black swan that we're facing today, tomorrow and for the next 1,500 years is a dark horse — quite more costly than a day of champers at the Melbourne Cup. It's called "Global Warming"... This thinkster demands drastic financial adaptation in out capitalist system, which at the moment does not take the environment into its equation... The worry is that the capitalist system DOES NOT WANT TO consider the environment, except if it can be chopped down, concreted over or lanscaped into a garden of expensive weeds....

We have to do better than that...

pro-market coalition sides with Lenin...

The point is that this game could go on and on with very little impact and possibly negative impact on total emissions. And there is example after example of this. Think of the taxes required to employ all the inspectors and personnel to ensure that regulations are doing what you wanted without unintended consequences. Sure, it can be done but you will need a government that would make Lenin blush to make it happen.

Contrast that with a carbon price - by tax or trade. That requires none of this because it hits directly on the problem: emissions create external costs so we need everyone to build that cost into their decision-making. The problem is, as right-wing economist Frederick Hayek pointed out, that no-one has the information required to plan out what individuals might do themselves. By placing the decisions of environmental management in the hands of the people, you can let things work themselves out in a way the heavy-handed Government involvement cannot.

It is ironic that on climate change policy, politics are in the bizarro-world where the supposedly anti-market Greens side with Hayek while the supposedly pro-market Coalition sides with Lenin. The economic evidence strongly suggests that the Greens policies match their goals while the reverse is true for the Coalition. I can’t parse the dual hypotheses that either the Coalition just deny economic evidence or that they actually want more emissions and handouts to business. Perhaps one of their number can enlighten us.

http://www.abc.net.au/unleashed/55450.html

hot and cold mood of the day...

US researchers have found people's climate beliefs blow hot and cold depending upon the weather of the day.

When people think the day's temperature is hotter than usual they are more likely to believe in and feel concerned about global warming.

Likewise, when the day's temperature is lower than usual, people's belief in global warming plummets.

These are the findings of a new study from Columbia University's Centre for Research on Environmental Decisions published in Psychological Science.

"This myopic focus on their immediate experience suggests that people's beliefs can be as mercurial as the weather," the researchers wrote.

Using an online survey, the researchers asked a group of 582 people from the United States to report how convinced they were that global warming is happening and whether they were concerned about global warming.

http://www.abc.net.au/news/stories/2011/04/08/3186411.htm

Gus: as I have mentioned before on this site, if we could actually FEEL global warming, we would be in very very deep TROUBLE!!!

And guess what...

Almost all of Britain will bask in glorious sunshine this weekend with the mini-heatwave showing no sign of fizzling out.

Forecasters predict the recent warm weather in London and the South will extend across the whole of the UK today, bringing with it balmy highs of 20 degrees C (68F).

The Spring sun is then expected to last right through into Sunday with temperatures peaking at a higher-than-average 21 degrees C (70F).

Brendan Jones, forecaster at MeteoGroup UK, the Press Association's weather division, said: "On Saturday just about the whole of the country is going to have a good day with lots of sunshine and a light wind.

"All in all it will be pretty warm almost everywhere with temperatures in the high teens and getting towards 20 degrees."

http://www.independent.co.uk/news/uk/home-news/britain-to-bask-in-weekend-warmth-2265139.html

half-baked and re-cooked concepts...

...

Just before the last IPCC report came out in 2007, Professor Rahmstorf published research showing that sea levels had been rising faster that climate models predicted.

Since then, he and others, using various techniques, have concluded that somewhere between half a metre and two metres is likely by the end of the century.

He came to the EGU with a further analysis putting the likely range at 0.75-1.9m - the range reflecting uncertainties in how ice sheets may melt, and in how society may or may not respond to the findings of climate scientists by controlling greenhouse gas emissions.

http://www.bbc.co.uk/news/science-environment-13011073

--------------------

Gus: this study is in line with what happened during the last big melt when the sea rose at least 100 metres in a 2000 year time-frame approx. With our EXTRA carbon disturbing the behaviour of water vapor in the atmosphere (please note that the upper atmosphere is quite dry and most of the disturbances are in the lower atmosphere) we can expect a rise of 50 metres in the sea level by the year 3000. Some people will argue that 3000 is very very far far away but our dumb intellectual culture still clings to old religious concepts half-baked 4000 years ago and re-cooked 2000 years ago...

See my own calculated estimates on sea level rise on this site...

 

intelligent support vs stupid protest...

Hundreds of people have rallied in Brisbane's CBD to show their support for the Federal Government's plan to price carbon.

Over 1,000 people packed Brisbane's King George square to support the Federal Government's proposed carbon tax.

Signs calling for cuts to pollution and more spending on clean energy were littered through the crowd.

Some people rallying say the Government is not doing enough to sell its plan to tackle climate change while others say they are glad it is trying.

The Acting Prime Minister Wayne Swan attended the rally with his family and said the time has come for action.

Meanwhile, an anti carbon tax rally has been held in Sydney's west today, with more than a 1,000 people in attendance.

It is the third anti-carbon tax rally in as many weeks.

Protesters at the Blacktown Showgrounds are carrying signs accusing the Federal Government of lying about its policy to put a price on carbon.

http://www.abc.net.au/news/stories/2011/04/09/3186893.htm?section=justin

----------------

 

dirt storm in the motherland...

A freak sandstorm that swept across a motorway in northern Germany caused a multiple pile-up, leaving eight people dead and dozens injured.

Sand and dirt were blown on to the four-lane A19 near Rostock, close to the Baltic Sea in Mecklenburg-Western Pomerania state, on Friday.

The pile-up involved 80 cars and three lorries, with 20 vehicles set ablaze.

A combination of recent dry weather, ploughing of fields and high winds was blamed for the accident.

At least 41 people were hurt. Many suffered serious injuries and there are fears the death toll could rise.

http://www.bbc.co.uk/news/world-europe-13023407

union should mind its onions...

The high-profile head of Australia's biggest manufacturing union has warned it will withdraw support for the Federal Government's carbon tax if "a single job" is lost under the scheme.

Australian Workers Union national secretary Paul Howes has warned the Government that "if one job is gone, our support [for the carbon tax] is gone".

Mr Howes has called a crisis meeting of AWU officials this morning to discuss the impact of the tax and the compensation package being offered to protect jobs.

He says he will not be making any more comments until after this morning's meeting.

Opposition Leader Tony Abbott seized on the union's concerns when speaking on Channel Nine this morning.

"They're very understandably taking the view that you can't compensate someone who's lost his or her job. If you've lost your job, where's the compensation?" he said.

Opposition Climate Change spokesman Greg Hunt says Prime Minister Julia Gillard will find it hard to guarantee no jobs will be lost.

"Today, the Prime Minister must make the guarantee that Paul Howes demanded, that not one job will be lost because of the carbon tax, to India, to China or to Indonesia," he said.

"But she can't make that guarantee because that's the reality."

http://www.abc.net.au/news/stories/2011/04/15/3192080.htm

-------------------------

Gus: the sad part is that JOBS WILL BE LOST in quantities unimagineable should we do nothing about global warming... The union should shove its grandstanding where no light shines and apologise to the PM.

The alternative would be Abbott's little revival of the dead, buried, cremated WorkChoices in a nasty little spiritual format as he dreams of every day... That would not only make a few jobs disappear but it would kill the union as well...

The union knows that at any time a job can be lost (or gained) at the whim of employers who could cry wolf whether the new carbon tax is involved or not...

Cheers Mate... Idiots!...

http://www.abc.net.au/news/audio/2011/04/15/3192123.htm?site=news

let the new season rip...

The worst tornadoes to strike the United States in nearly three decades have left at least 44 people dead and hundreds injured across six states.

The spring storms first hit Oklahoma on Thursday last week and left a trail of destruction as they whipped up more than 100 reported tornadoes through Arkansas, Mississippi, Alabama and North Carolina, before petering out in Virginia on Saturday night.

Witnesses described hailstones the size of grapefruit and powerful twisters that ripped the roofs off houses and picked up mobile homes as if they were children's toys.

Large trees knocked out power and fell on cars and houses, killing occupants, while flash floods reportedly washed away an entire camping site in worst-hit North Carolina.

"This is the worst storm, tornado-wise since 1984," said Patty McQuillan, a spokeswoman from the Federal Emergency Management Agency (FEMA) in North Carolina's state capital, Raleigh.

Ms McQuillan put the death toll in the area at 23.

http://www.abc.net.au/news/stories/2011/04/18/3193916.htm

flight reductions...

Short-haul flights across Europe could be replaced by high-speed rail under ambitious European Union proposals to reduce carbon dioxide emissions from transport by 60% over the next 40 years.

According to the EU, Heathrow's congestion problems could be eased by cutting domestic and European flights, while demand for new runways could be suppressed by building new rail networks. The EU transport commissioner, Siim Kallas, has announced a series of green transport goals including shifting the majority of flights longer than 300km to rail and phasing out the use of petrol cars in city centres by 2050.

"At Heathrow there are no new runways, but we desperately need to increase capacity and you can do this if you reduce short-haul flight connections," said Kallas. The commissioner added in an interview with the Guardian that the UK should look at the example of Spain, where high-speed rail has hit demand on a previously popular flight corridor.

"This has happened in Madrid and Barcelona, where 50% of the market has moved to high-speed rail. It is comfortable for everybody. Airlines can put emphasis on long-haul flights, which is better for their business."

Noting the debate over expanding London's squeezed airports, he added: "If we are successful in creating new railways they can take over short-haul airline connections. It makes it easier for the runway issue."

Kallas hit the headlines this month when he declared a target of phasing out petrol and diesel cars from city centres by 2050. The commissioner said he was unfazed by criticism of the benchmark. "If you don't like the idea of reducing the use of conventional cars in city centres, what are your proposals?"

http://www.guardian.co.uk/world/2011/apr/18/eu-transport-plan-short-haul-flights

from another cartoonist...

“Total disbelief”


By Tom Toles

That was the reaction of residents to the recent catastrophic storms in the South. Let’s start right out by presuming climate change had NOTHING to do with these storms. Okay?

You can’t attribute specific storms to climate, and you know what else? As the climate continues to shift due to increased levels of CO2, you will NEVER be able to attribute specific storms to it. And so your conclusion is...what? Here’s MY conclusion: a warmer climate does not mean just basking in a lounge chair with a cool drink. Climate change can and will kill people. It may or may not already have done so. But look at storms like this last on and ask yourself, do you WANT to create a more unstable climate? Do we want to destroy what has been a remarkably human-friendly period of climate history? That is what we are doing RIGHT NOW. And for what? For the convenience of being able to waste cheap fuel.

But it’s not really even about storms, bad as those can be. Think massive shifts in rainfall patterns where we are trying to grow food, just for starters. YOUR food. But you don’t want to believe that such a thing could be real. Not possible! “Total disbelief.”

http://www.washingtonpost.com/blogs/tom-toles/post/total-disbelief/2011/04/29/AFvdL1EF_blog.html?hpid=z7

more records...

"Tomorrow night it looks like some showery rain will start to edge into Northern Ireland and it might start to edge into Scotland on Thursday morning."

The forecaster said both Scotland and Northern Ireland had just two-thirds of the rain it would normally expect in April.

With 1.7in (43mm) falling across Scotland, it was 68% of the normal rainfall, and the 1.5in (38mm) in Northern Ireland was 66% of normal levels.

Last month was the hottest April on record in England and Wales, Mr Knightley said.

http://www.independent.co.uk/news/uk/home-news/heathland-fires-continue-to-rage-across-the-uk-2278237.html

more record dust in the bowl...

Survivor of Dust Bowl Now Battles a Fiercer Drought


By

BOISE CITY, Okla. — While tornadoes and floods have ravaged the South and the Midwest, the remote western edge of the Oklahoma Panhandle is quietly enduring a weather calamity of its own: its longest drought on record, even worse than the Dust Bowl, when incessant winds scooped up the soil into billowing black clouds and rolled it through this town like bowling balls.

With a drought continuing to punish much of the Great Plains, this one stands out. Boise (rhymes with voice) City has gone 222 consecutive days through Tuesday with less than a quarter-inch of rainfall in any single day, said Gary McManus, a state climatologist. That is the longest such dry spell here since note-keeping began in 1908.

The Dust Bowl of the 1930s, caused in part by the careless gouging of the earth in an effort to farm it, created an epic environmental disaster. Experts say it is unlikely to be repeated because farming has changed so much. Boise City recovered from the Dust Bowl and has periodically enjoyed bountiful years since.

But this drought is a reminder of just how parched and unyielding life can be along this wind-raked frontier, fittingly called No Man’s Land, and it is not clear how many more ups and downs Boise City can take.

“The community is drying up,” Mark Axtell, the area’s only funeral director, said on a walk through the cemetery, where brown tufts of buffalo grass crunched underfoot.

http://www.nytimes.com/2011/05/04/us/04dust.html?hp=&pagewanted=print