Categories
Economics

[628] Of have we gone passed some kind of second derivative for oil demand fuction?

How high will price be before consumers cut back demand for crude oil? I asked the same question more than a year ago.

It seems that USD70 per barrel is the price. My gut tells me that the prices which demand turned direction is lower due to lag. Probably in the range of USD60 to USD70 per barrel. Even before that, SUV sales had decreased tremendously.

Crude oil prices at the New York Mercantile Exchange for November delivery hover around USD62 per barrel while November Brent lingers at USD59 per barrel. The fall in crude prices started during early September after prices reached USD70 per barrel in last August. The fall is happening in spite of production capacity loss due to Hurricance Katrina.

So, are we going to see continuing fall in prices?

The looming winter in the US and Europe is expected to be colder than usual. Unless prices could cushion its rise during the upcoming winter, I don’t expect this price decrease would continue unabated.

But some innovations might help reduce demand of crude oil just like what happened during oil crisis in the 70s. Malaysia is planning to mix biofuel with gas while hydrid vehicles are hot in the US. Still, we may only know for certain where we are when the northern winter ends in April next year (May for People’s Republic of Ann Arbor).

Whatever it is, a falling demand is a bad thing for OPEC. They do have the incentive to increase production to lower prices a bit. The last time crude oil prices broke some records, oil became really cheap for about two decades because fuel consumption efficiency was forced to increase.

p/s – wow! Deja vu!

Categories
Economics Politics & government

[627] Of where is the anti-corruption agency?

So, Mohamed Isa Abdul Samad has been found guilty of corruption by UMNO disciplinary committee weeks ago. He made an appeal and the committee reduces his penalty.

However, why the case hasn’t been brought up to anti-corruption agency? Am I missing something here? Is federal law inapplicable to a political party’s internal matter?

p/s – two persons won the Prize in Economics for “having enhanced our understanding of conflict and cooperation through game-theory analysis”.

Categories
Economics Kitchen sink

[626] Of PPS economics, free market and market failure

Project Petaling Street is all good and cool but it suffers one complication – how many participants are too many participants? In short, what is its carrying capacity? Will it fail if the limit, if any, is not observed?

Allow me to explain further.

PPS, or to be precise, its ping portal, PPS Pings – hereafter PPS – is a first-in, first-out list (FIFO). The list itself has limited slots.

If there are five slots in a clean list and if person A is the first pinger, he will sit on top of that list. Later, when four other persons ping the list after person A, A will sit at the bottom of the list while the four persons will sit on the top four slots. It follows that if a sixth person pings the list, person A will get the boot. In short, if there are n slots, the person on top of the list will be out of the picture when pinger (n+1) pings.

All this assumes strictly one-to-one relationship; a person leads to a ping and a ping leads to a person. This assumption is not true (enthusiastic posters, as a PPS founder calls them, like Kahsoon and Otis, is a proof) but it definitely simplifies our model. Once we’ve laid out the model, then you and I could relax the restriction considerably.

With FIFO explained, let’s talk about rate. Let’s also assume that each slot receives x visitors per time unit. Here, I don’t think one-to-one assumption is critical but for consistency’s sake, let’s just assume one-to-one relationship.

Assume further that each ping is pinged into the list at a rate of a ping per time unit. Holding time unit constant, the rate is dependent on the number of pings. Subsequently, a ping goes down the list at that rate. Therefore, person on top of the list will be out by the (n+1)th time unit. Also, amount of visitors of that ping will be x(n).

So, imagine that a slot receives 60 visitors per hour and there are five slots. With this setup, a ping will attract 300 visitors throughout its lifetime in the list. Now, what if a ping switches a slot per minute?

That would make each slot a visitor and a total of five visitors throughout the ping’s lifetime. What if, the rate is a ping per second?

Oh, boy. A ping gets a sixtieth of a person; total a twelfth of a person. Ugly.

Ceteris paribus, the rate of which a ping goes down the list depends on the number of pinger. However, the more pingers there are in a timeframe, the greater the rate and as such, less visitors for every ping. The dilemma is, PPS wouldn’t be so successful if it weren’t for all those pingers. I would probably explain how more pingers leads to more visitors later. But I do have a feeling that at first, more pingers leads to more visitors until at one more point, any additional pinger will lead to less visitors.

This brings us back to the question how many participants are too many participants? In short, what is its carrying capacity? And when the carrying capacity is known, should PPS administrator put a cap on number of pinger? Or at least control the rate?

These are normative questions – there is no right or wrong. Nevertheless, by answering this, you might realize where you sit in economic freedom spectrum with controlled economy on the left-hand side and free market on the right-hand side. Of course, basing your political belief on this is absurd but hell, its fun.

So far, PPS Ping rules state that:

PPS will not tolerate ping flooding. Multiple pings within 7 minutes of each other is considered ping flooding, no exceptions, even if you are an “enthusiastic blogger”. It does not matter whether the content is duplicate or different from the previous ping. It is your responsibility to ensure your blog does not multi-ping PPS in consecutive fashion.

This alone is an attempt to control the rate. Does this mean the administrator distrusts free market?

I don’t know but it seems that rule is not strictly enforced.

However, I’m content to say that this is an attempt to prevent abuse and maybe, even market failure. The current DoS attack is similar to market failure there where is too many pings that visitors for each slot goes down to zero, albeit PPS fails due to bandwidth flight (capital flight? LOL!) first before market failure actually takes place.

Categories
Humor

[625] Of what’s the price of a Nobel Prize?

Do you know?

Most likely an honest typo and it deserves a blind eye. There’s really no reason to announce to the world that BBC committed a typo. Hell, if I had aspired to become a grammar police, I’d have to give myself a good spanking.Yet, when I first saw the mistake on TV yesterday, I actually ran to my room, rummaged my desk for my cam, ran back to the TV and took a snapshot.

Another proud moment brought to you by the __earthinc.

p/s – it’s time to sulk at a corner.

Categories
ASEAN Politics & government

[624] Of East Timor and ASEAN

Should Turkey be allowed to join the European Union?

Tony Blair believes Turkey EU’s answer for the future. Austria and a few others on the other hand don’t quite relish the prospect of Turkey as Euroland’s 26th member. I wish Turkey the best but halfway around the world, how would ASEAN member states react to East Timor as the grouping’s 11th member?

Currently, ASEAN has ten members with Papua New Guinea as an observer. In 2002, East Timor expressed its intention of gaining an observer status in ASEAN. The country proves its seriousness by informing ASEAN of its willingness to sign a non-aggression pact with the grouping.

In my opinion, the country’s greatest obstacle of gaining membership is Indonesia. Indonesia is like father of the bride. If the father hates you, you’re practically screwed. Maybe not father. Maybe just the older brother.

Reason is, the more influential ASEAN members – namely Thailand, Singapore, Malaysia and the Philippines – have traditionally stood by the Indonesian side whenever East Timor hit the headlines in the recent past. Though Indonesian atrocity was deplorable, the four nations had to refrain themselves from criticizing Indonesia in the name of solidarity.

Fortunately for East Timor, Indonesia doesn’t seem to hold any grunge against the tiny state despite the two countries’ turbulent past. Indonesia had previously annexed East Timor in 1975. East Timor later gained independence in 2002 via an United Nations-administered referendum in 1999. With Indonesia out of the way, East Timor can rest assured that the four members and the rest of ASEAN will not object save, maybe, Myanmar.

Myanmar currently disapproves the notion of East Timor as an observer – much less a membership – due to East Timor’s support for Aung San Suu Kyi. I do think however that if East Timor could somewhat water down its explicit support of Aung San Suu Kyi, then Myanmar might retract its objection.

Regardless, East Timor has a lot of catching up to do. With respect to that, I believe ASEAN has unique role to play in East Timor’s effort to build up itself. Yet, ASEAN has done little to aid East Timor. Instead, Australia is East Timor’s most active partner. ASEAN must play a greater role in East Timor if the 10-member group wishes to see a stronger ASEAN.

p/s – I saw this on BBC’s ticker last night. I thought it’s old news but heh, all hail to the greatest theocracy the world has ever known. LOL!

pp/s – cold feet?

Minnesota last defeated the Wolverines in 1986.

“You look at that whole series and it’s kind of lopsided,” Minnesota coach Glen Mason said. “If I had it my way, I wouldn’t play them anymore. Michigan has those types of series with a lot of teams.”

Let’s hope Michigan won’t do anything too interesting. Minnesota in the past few years is that kind of team which you think they gonna lose but somehow, due to final minutes miracles, we are the winner instead.

I hope Michigan will stop that trend and win outright. The best thing is, Michigan has the psychological advantage to do that.

Well, may the best team win. (BTW, the Little Brown Jug is ours).