The Daily Parker

Politics, Weather, Photography, and the Dog

North Carolina 13th

As I checked email for one last time before going to bed, I found out who won the Republican primary in North Carolina's 13th district, in which I've spent considerable time this year. Meet Bill Randall, who will challenge incumbent Representative Brad Miller (D) on November 2nd:

As Talking Points Memo said last week, "But surprisingly, as oil poured into the gulf and Obama threw resources and rhetoric at the problem, the 'it's all a giant conspiracy' theory didn't catch on."

Perhaps when people talk about "tea parties" they refer to a different kind of tea than they serve at Starbucks? Just a thought.

Finally, a reminder to all my friends in the district: please, don't take it for granted Brad Miller will get re-elected. Sanity still needs your vote in November.

Morning round-up

After a Strategy exam, Finance exam, Strategy team paper, project estimate for work, and...well, that's really all I did the last four days, come to think of it...I'm more or less back.

Herewith a quorum of things I noticed but didn't have time to note:

  • The Washington Post reported yesterday that MC 900 Ft. Jesus—sorry, I meant an actual 30 m statue of Jesus—got struck by lightning Monday night and burned to the ground. Signpost to Armageddon? Probably not, but it has an element of Apocalyptic whimsy to it, don't you think?.
  • Via Sullivan, the Vision of Humanity project's Global Peace Index puts New Zealand at the top and Iraq at the bottom. We're 85th (of 149); Britain is 31st; and Finalnd and Russia, countries I'm visiting in two weeks, are 9th and 146th, respectively. Check out the interactive map.
  • The Economist's Gulliver blog linked to a Sunday Times (reg.req.) article about the beauty of window seats. I always get the window, if possible; so does Gulliver, apparently, and the Times author who wrote: "My favourite window-seat ride is crossing America — with the asphalt labyrinth of the crammed east coast giving way first to ceaseless Appalachian forest, then to the eerie geometric perfection of the farm-belt fields, then to the intimidating, jaw-dropping emptiness of the west, before the smog starts lapping at your window as California sprawls into view." Yep.
  • Today has tremendous significance to my small and fuzzy family which I will relate later.

Back to the mines.

Human error, not equipment failure

Terry Barr, president of Colorado-based Samson Oil and Gas, wrote in to the Wall Street Journal today explaining point by point how BP personnel, not BP equipment, caused the worst environmental disaster in U.S. history:

Mr. Hayward and BP have taken the position that this tragedy is all about a fail-safe blow-out preventer (BOP) failing, but in reality the BOP is really the backup system, and yes we expect that it will work. However, all of the industry practice and construction systems are aimed at ensuring that one never has to use that device. Thus the industry has for decades relied on a dense mud system to keep the hydrocarbons in the reservoir and everything that is done to maintain wellbore integrity is tested, and where a wellbore integrity test fails, remedial action is taken.

This well failed its casing integrity test and nothing was done. The data collected during a critical operation to monitor hydrocarbon inflow was ignored and nothing was done. This spill is about human failure and it is time BP put its hand up and admitted that.

Doubling down on disaster

It turns out, BP's estimates of the oil billowing into the gulf may have been off by a factor of two, or greater:

The new calculation suggested that an amount of oil equivalent to the Exxon Valdez disaster could have been flowing into the Gulf of Mexico every 8 to 10 days.

This assessment, based on measurements taken before BP cut the riser pipe of the leaking well on June 3 to cap some of the flow, showed that approximately 25,000 to 30,000 barrels of oil could have been gushing into the Gulf each day. That is far above the previous estimate of 12,000 to 19,000 barrels a day.

And this:

"It is technically not [Obama's] job as president to console families of men who died off shore," said Keith Jones, a Baton Rouge lawyer whose 28-year-old son, Gordon, a mud engineer, died in the explosion. “But he made it his business and we’re grateful for it."

"I don't know what people expected the president to do exactly, if they want him to go out there and wash pelicans," Jones said. "He's the president. He's not someone who cleans beaches. It's important for us Louisianans to know that we have his support and I think he's communicated that."

We won't know for months how bad this is, but you remember all those "worst-case" scenarios? Those might have been underestimates, too.

Politics reported by political scientists

From Slate, The Only Political Article You'll Ever Have To Read:

Obama now faces some of the most difficult challenges of his young presidency: the ongoing oil spill, the Gaza flotilla disaster, and revelations about possibly inappropriate conversations between the White House and candidates for federal office. But while these narratives may affect fleeting public perceptions, Americans will ultimately judge Obama on the crude economic fundamentals of jobs numbers and GDP.

Chief among the criticisms of Obama was his response to the spill. Pundits argued that he needed to show more emotion. Their analysis, however, should be viewed in light of the economic pressures on the journalism industry combined with a 24-hour news environment and a lack of new information about the spill itself.

The whole article is spot-on.

This week's Economist

Mondays are Economist days over here. I've got myself into a rhythm of travel, school, work, and keeping sane that requires me to put things in small boxes of time; on Mondays I read the latest Economist. This week had two unusually interesting (and short) articles in the "Finance and Economics" section[1].

First, a report that numeracy predicts mortgage defaults better than any other variable:

Even accounting for a host of differences between people—including attitudes to risk, income levels and credit scores—those who fell behind on their mortgages were noticeably less numerate than those who kept up with their payments in the same overall circumstances. The least numerate fell behind about 25% of the time. For those who did best on the test, the number of payments they missed was almost 12%. A fifth of the least numerate group had been in foreclosure, but only 7% of those who were more numerically adept had.

Surprisingly, the least numerate were not making loan choices that differed much from their peers. They were about as likely to have a fixed-rate mortgage as the more numerically able. They did not borrow a larger share of their income. And loans were about the same fraction of the house’s value.

They've even got a handy quiz of the type the researchers used. Two pages on, in the "Economics Focus" column, the newspaper reported on the FCC's decision two weeks ago to treat ISPs as common carriers for their last-mile service. This is a big deal:

A medieval innkeeper, for example, often offered the only lodging in town; a boatman could cross only with the king’s writ. Second, the state sometimes offers favours of its own to transporters—public lands and roads, say, or the seizure of private property to make way for new infrastructure—and expects a certain level of public service in return. Third, transport is essential to commerce. It represents an input cost to almost all businesses, and to restrict access or overcharge is to burden the entire economy.

All these arguments applied in spades to 19th-century rail. Like a medieval town’s sole inn, a railway line is a perfect example of a natural monopoly: it is tremendously expensive to build and it is difficult to justify more than one set of tracks on any route just to guarantee competition. ...

Telecoms operators argue that America does not need common carriage for internet access, because the country’s unique network of local cable monopolies competes against its last-mile copper-wire monopolies. ... The FCC’s current plan—to ask last-mile providers to subsidise rural service, and to ensure equal treatment of packets of information—is a mild intervention by global standards.

Time now to review, once again, the team's finance assignment due tonight, and then collapse in a heap. The Daily Parker will probably continue to have slightly less velocity than usual for a week or so as I twist myself into a small knot of anxiety over my finance midterm. If only it could be as engaging as a class as it is in a newspaper.

[1] Yes, the topic interests me in the abstract, but at the same time I can't wait until the end of doing concrete finance—e.g., working out CAPM calculations—once my finance class ends next month.