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Archive for December, 2012

The Mannski Family was faced with a choice and that choice has been made.

Nearly two years ago (March 2011), the Mannski Unit made the decision to move (temporarily) from our home in Virginia to France. The genesis for this lateral move was the fabulous opportunity presented to my wife to use her PhD for a non-profit.

My wife’s contract expires early next year and we were all set to move the family back to the Old Dominion.

Then, as usual, something out of the blue appeared over the horizon, took a cab to our apartment, and brought a croissant to munch on our balcony while it gave us the following opportunity.

My wife, through the contacts she has met here, has been offered a position with a multi-national corporation (MNC) to use her degree and experience to assist their affiliate in…

…wait for it…

Bangkok, Thailand.

It probably took us slightly over a day to make our decision.

Come the middle of 2013, the Mannski Family will be setting up shop in the Land of Smiles.

For my wife, the professional advancement and experiences offered by this position made her decision easy.

As for me, the non-working spouse who hit the pause button on his career, the choice to move across the globe from our Virginia home was also easy but for a different set of reasons.

I have been bitten hard by the international bug after living abroad for over a year and a half in a foreign country. Seeing new things, experiencing new cultural traditions, and eating new cuisines (to name a few) have been beyond my expectations and I do not want it to end. Thailand will only accelerate and intensify this broadening of my cultural horizons.

Reason Number Two (which dovetails with the first reason above) is that I believe that living abroad will also broaden the cultural horizons of our three children.

However, there is another reason why I am opting to not return to the country of my birth. That reason is because, in over a year away from the United States, I have come to the conclusion that the red-white-and-blue is completely bat-guano bonkers.

From the over-the-top negative tone of the 2012 Presidential campaign…
To the endless red-state versus blue-state sniping seen in news programs and Internet comments…
To the paralysis of its politicians (I point to the debt ceiling limit “debate” of 2011 and the “fiscal cliff” negotiations of now)…
To the lack of tolerance towards those with any dissenting views (I point to the on-line petition to the White House to deport CNN personality Piers Morgan)…
To, finally, my desire that I don’t want the lives of my children cut short courtesy of the “gun culture” of the United States…

For all those and other reasons, I have opted to not reside again in the best country in the world, the United States of America.

I am astounded at how much my perspective has changed after being away for a scant amount of time, but changed it has.

It is my sincerest wish that whenever my wife’s employment with MNC ends (whenever that may be), that the wonderful people and policy-makers of the United States of America get their act together and work together to make the “land of the free / home of the brave” the shining beacon I know it can be.

Until then, I will enjoy the view from the outside.

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Tripping through the wonderland that is the juxtaposition of cyberspace the federal government, I came across this blog post from the Department of Commerce.

In it, the Department of Commerce (specifically, the National Institute of Standards and Technology (NIST)) is proud to announce that they have teamed up with the United States Forest Service to create risk assessments for wildfires. The maps created by the government team-up show the risk posed by wildfires to various communities.

The image in the blog post, while interesting, reminded me of another type of map that contained a variety of colors to show risk – the flood map. Some examples of what flood maps like are here and here.

This realization of a comparison between flood maps and the wildfire maps brought me to a question.

I could use the new wildfire maps to assess my home’s risk for wildfire. With that information, I could contact the insurance agency that holds my home’s fire insurance and adjust my policy.

However, if I were to look at the flood maps for my home’s area, there are almost no private insurance companies I can contact to purchase – forget about adjusting – flood insurance.

If there is the philosophy that private enterprise does everything better than the federal government, then here is my follow-up question:

Why don’t most private insurance companies offer flood insurance when there is a need?

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After the terrorist attacks of September 11, 2001, the United States embarked on the Global War on Terror (GWOT). On September 20, nine days after the attacks, President George W. Bush said this

Our war on terror begins with al Qaeda, but it does not end there. It will not end until every terrorist group of global reach has been found, stopped and defeated.

When those remarks were made, the Department of State listed twenty-six foreign terrorist organizations (FTOs). They ranged from the Abu Nidal Organization to HAMAS to the Kurdistan Worker’s Party to al-Qaeda to the Shining Path.

In 2003, then-Secretary of Defense Donald Rumsfeld wrote a memo that posed this question…

Today, we lack metrics to know if we are winning or losing the global war on terror

I would offer up the following metric: How many FTOs exist today when compared against the number of FTOs in 2001.

According to the Department of State, as of September 28 of this year, there are fifty-one FTOs.

That list is slightly out of date as the Department of State, earlier this month, listed the al-Nursa Front in Syria as a FTO.

That brings the number of FTOs to fifty-two (there’s your number for the day).

In just over a decade since the GWOT began, the number of FTOs has doubled.

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This year of 2012 is coming to close. While some choose to look back and see who should win The Person of the Year award bestowed by TIME, I instead opt to opine that this was a horrible year for those in the prediction trade.

In South Africa, an amendment to a law would impose a sentence of ten years and a fine of 800,000 pounds on any meteorologist who issued a severe weather warning without receiving official permission first.

In Australia, a federal court issued a judgement against Standard & Poor’s, a financial services company, for providing high ratings to financial products that ultimately lost most of their value.

In Italy, six scientists and a government official were given prison terms of six years for failing to predict a 2009 earthquake in L’Aquila that killed nearly 300 people.

In the United States of America, during the presidential election of this year, many political prognosticators and pundits (and mostly those not relying on actual data) had egg on their face on November 7 when the final tally was not as close as their public pronouncements made out. Probably the biggest forecasting failure belonged to Dick Morris, who at least did admit he was wrong and offered up an explanation.

Given that three of my four stories above deal with legal and financial consequences being handed out for people and organizations that failed in their predictions, and;

Given that twenty-eight out of the thirty-nine political pundits being tracked by PunditTracker that have grades have a grade of “F”…

…my follow-up question is this:

What do you think would happen to the industry of talking heads and political pundits if each prognosticator faced a fine or other consequence for every wrong prediction they made?

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Say what you want about the United States government, but for a data-head like me, the offices, departments, and bureaus that comprise the executive department offer a wealth of numbers, figures, and reports that make me positively giddy.

Beside the charts, tables, and figures, the data put out by the United States government lead can reveal new discoveries (at least for me).

Our case study for this post comes courtesy of the Department of Agriculture and its report which is the second outlook for U.S. Agricultural Trade for the Fiscal Year 2013 (Link to the actual report, in PDF form, is here.).

You can view the report in all its total glory for yourself, but here are the items of interest I took from it. For those of you playing along at home, all the facts and figures I will be spouting from this point forward are from Fiscal Year 2012 (that would be from September 2011 to September 2012…I have no idea why the government can’t stick to a calendar year, but I guess that’s a thought for another post).

Agricultural products are one class of items where the United States has a surplus of trade. In other words, we ship out (export) more things of an agricultural nature than we ship in (import). In Fiscal Year 2012, the U.S. exported $135.8 billion worth of agricultural good while importing $103.4 billion.

So what are the big items that America exports to the world?

The number one item, according to the report, and this was a surprise to me, was soybeans. The United States exported $19.797 billion of the legume best known for being turned into tofu.

Second on the list was corn ($11.420 billion) followed by wheat ($8.353 billion).

An item I found of interest can be found under the heading “Livestock products”. Not sure why I should be surprised given the number of cattle in the Lower 48 (90.8 million head as of January 1, 2012), but I was surprised to see that a major export of the red-white-and-blue is “hide, skins, and furs” which racked up $2.764 billion in exports, which was more than rice ($1.988 billion) and unmanufactured tobacco ($1.052 billion). That’s a large amount of leather.

What countries are the largest receivers of American agricultural goods?

China takes the top spot as it paid $23.359 billion in exports, which comes out to 17.2%. A close second is our neighbor to the north, Canada, which took in $20.008 billion of our agri-goods. Mexico ranks third ($18.890 billion). Those three nations comprise 45.8% of the countries we export to.

Of note, and I will come back to it later, is the figure that India welcomed in $764 million of American agricultural products.

Looking at the other side of the ledger are imports. What are the biggest items, in terms of dollar value, that the United States ships or trucks in?

Those of you who need your daily jolt of java can be thanked for the fact that coffee beans (and other products) takes the top spot as America imports $7.789 billion of the stuff.

The silver medal goes to the fresh fruit category ($7.618 billion) and the bronze is awarded to fresh vegetables ($5.831 billion). I take this mean that American do in fact know how to eat healthy.

What are the Big Thee countries that the United States imports from?

Canada takes the top spot as the number one import partner as the country with the provinces sends us $20 billion worth of agri-stuff.

The European Union (yes, I realize they are not a country, but I’m only going with what the USDA has provided) sends us $16.6 billion and Mexico comes in third at $16.3 billion.

And know you know.

India (I told you I would come back to this) enjoys a large imbalance of trade with us when it comes to agricultural products. In Fiscal Year 2012, the United States imported $5.4 billion. That means that America imported in $4.636 billion (there’s your number for the day) more worth of agri-goods from India than they bought from us. Just for reference, the United States enjoys a surplus of $19.059 with China when it comes to agricultural items.

So what the heck is the United States buying from India? The USDA report has the answer. From page 11, it says…

From India, the chief imports include food thickeners (mucilages), spices, cashew nuts, and essential oils.

Over five billion dollars is a vast amount of thickeners, saffron, curry, and crunchy nuts.

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I haven’t visited this thought for some time so I wanted to come back to it before year’s end.

On the October 28, 2009, episode of Marketplace, a radio program about business distributed by American Public Media, the political pundit David Frum made the assertion that the precious metal gold was a bubble.

In fact, you can read his words by clicking here.

When he appeared on Marketplace, the price for an ounce of the yellow metal was $1029.90 an ounce.

In the three years since Mr. Frum’s assertion, I have posted updates (under my category of “veridiction”, my made up name for the act of verifying predictions) to see how the former speechwriter for George W. Bush has fared with his “bubble” warning.

My first post on the subject came half a year after Mr. Frum’s analysis of gold was heard over the airwaves. In those six months, the price had risen 13.7% to $1171.30 an ounce.

Ten months after Mr. Frum’s warning, I posted an update. Gold had then hit a mark of $1236 an ounce, an increase of 20%.

A shade after the two-year anniversary of Mr. Frum’s warning about speculating on gold, I again issued an update in blog form. At that point, the price of gold was hoverning in the neighborhood of $1730 an ounce. Anyone who had bought gold the day Mr. Frum warned against just such a foolish act and then had sold said gold nearly two years after Mr. Frum’s warning would have made a staggering 67.9% return on that investment.

I was content to end this particular update with a look at where the price of gold was today, three years and a month (give or take) after Mr. Frum’s original prognostication. However, something curious happened. While doing research for this post, I saw that Mr. Frum had made an updated prediction concerning gold. Nearly a year ago, on December 29, 2011, he wrote that he indeed was correct that gold was a bubble because it had popped. As he wrote…

The price of gold dropped $31 an ounce yesterday. Gold has dropped $400 since the summer…Further declines look likely.

When a bubble pops, prices plummet like…like…like a gold brick, I guess. Think tulips circa 1620, Beanie Babies circa 2004, and the United States housing market circa 2008. When those bubbles popped, the value of the item in question dropped faster than Felix Baumgartner.

As Mr. Frum was making his popping sounds, the price of gold was at $1571 an ounce.

Where is gold now?

One year after gold “popped”, the price, as of December 4, 2012, settled at $1712.70 an ounce.

Gold has increased 9% since its bubble “burst”.

It has also increased its value 66.44% (there’s your number for the day) since Mr. Frum first made his assertion in 2009 that gold was a bubble.

Allow me to end this post with the words I have completed my last two posts on this subject because I feel they are still valid…

As I have written before, my main point in highlighting Frum’s “gold-is-a-bubble” assertion is not to say he was wrong because at some point the value of gold will fall. My point has always been that anyone can say an asset is a bubble because at some point the value of said asset will fall.

The trick in calling a bubble is in the timing.

Had Mr. Frum predicted that gold was a bubble and it would pop in two years (or one or three or four, etc.), then we, as listeners, would have something to hang our hats on and Mr. Frum would have a real assertion to stand on.

But, instead, we, as listeners, only receive a bland dose of pabulum signifying nothing. Again, any listener who heard Mr. Frum’s advice and sold their stake in gold would be out a gain of thirty nearly seventy percent.

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