GDP and the Price of Crude Oil

I read that Gross Domestic Product (GDP) lags the price of crude oil.  When the price goes up, then GDP goes down.  I decided to look into this and produced the chart below of actual and predicted GDP as a function of time. Since the lag is about 6 months, the predictions extend 6 months into the future. Note that the prediction shows a significant drop in GDP by September 2011 (Which agrees with many analysts).

This is a Google Document, so I'll try and update as new data is available.



I scaled the Oil Prices to 2010 dollars using the CPI data. Then, I used the following simple formula:

GDP_Predicted(date) = a * OilPrice(date - lag) + b

I know that there are many other factors driving GDP, but there seems to be an apparent correlation here. Time will tell whether the predictions show any validity. I probably should have learned my lesson on trying to predict financial futures, since my Stock Predictions failed about 7 months ago (most likely due to Bernanke's QE2).

Data Sources
GDP www.bea.gov
Oil prices www.eia.doe.gov
CPI www.bls.gov

Dieting and Cutting the Deficit

Pres. Obama announced that he plans on cutting the deficit in half. [1]  Sounds like a step in the right direction, but consider this:

You had the perfect physique in High School, but every year you've put on a few pounds and the last two years you gained 20 pounds each year.  You now weigh an extra 200 lbs and your doctor and loved ones are pleading for you to lose weight.  You promise to cut your weight gain in half!  Notice the subtle insertion of the word "gain".  What this really means is that you will still gain 10 lbs next year.  Not exactly losing weight.

The deficit is like your annual weight gain and debt is like the total weight you need to lose.  For example, the Federal deficit for fiscal year 2009 was $1.4 trillion (million million) [2] while the debt is ten times that (about $14 trillion) [3. The Debt Clock].  Cutting the deficit in half still means the debt is growing.

I wonder how fat we'll get before we go on a real diet.

I'd Rather Live in America

I've been following a story that has made the recent tragedy of a shooting spree in Arizona seem tolerable.  I would like to compare these two stories side-by-side

	Gabrielle Giffords	Salman Taseer
Position	A member of the U.S. House of Representatives.	The governor of province of Punjab in Pakistan.
Politics	A moderate/left-leaning politician	A left-leaning politician
Controversy	None, really. She supported Obamacare but she is actually quite moderate: supports gun rights and stronger immigration laws.	Defended a poor Christian woman, Asia Bibi, who was condemned to death for blasphemy.  He also was outspoken against the anti-blasphemy law
Attack	Was shot by Jared Loughner, a mentally disturbed young man	Was shot and killed by Malik Mumtaz Hussain Qadri, who was part of Salman's security detail
Reason	No reason was given, but apparently Jared was unhappy with a letter Gabby wrote to him in 2007 regarding questions he had asked her at a public meeting	Malik was more forthcoming with his reason: he didn't like Salman's opposition to the blasphemy law in Pakistan
Response	Jared was immediately arrested and is being prosecuted to the fullest extent of the law.  Additionally, his civil rights are being respected by being assigned a high profile defense attorney, Judy Clarke	Malik was arrested but his supporters blocked the attempts by the police to bring him before a judge.  They also threw rose petals on him [1].  He has been called a hero by religious groups [2].
Why I'd rather live in America	Even though there was some unwarranted finger pointing of blame for the attack, there was still universal condemnation of the attack.	There was wide spread acceptance of the attack on Mr. Taseer.  The blasphemy laws are so oppressive that even questioning them is blasphemy.  There is little legal recourse since hearsay is sufficient to convict since the stated blasphemy cannot be presented in the charges or in court since doing so would be blasphemous.

References
"Staring into the abyss: Pakistan's increasing radicalisation", The Economist, January 8th-14th, 2011
http://en.wikipedia.org/wiki/Gabrielle_Giffords

Inciting Violence

Here's some content in the media that could be used to incite violence.

Palin's "Hit List"

The Global Warming/Climate Change "10/10" project


Update 1/21/2011
Bears/Packers Playoffs (Parody Video)

Asian Envy

It all started in High School with the smart Asian kids.  My envy had a nasty flavor since I was in the top of my class and the Asian kids were competition.  Later my envy became healthier as I matured and enjoyed exchanging culture with my Asian friends in grad school: learning a little Chinese at lunch time and comparing our different worlds.  I still remember being told that the English words "Soup" and "Soap" sound identical (as well as "Shirts" and "Shorts").  Try saying them with an Asian accent - you'll see why.

My best friend at my first job was genetically 100% Asian, but really 33% Asian, 33% Hawaiian and 33% Californian.  He invited me to play in a 3-on-3 basketball tournament at his Asian Christian church.  It was the most civil basketball experience I have ever had.

Now my group at work is about one third Asian: my boss is Filipino and a new hire that I'm mentoring is Vietnamese. Even my Caucasian coworker's wife is Chinese. Two years ago our group climbed Mt. Whitney and I partnered with a Chinese coworker (hiking is a good bonding experience).  At the summit, we video taped ourselves talking to friends and family.  Mine was lame.  My friends was very heartfelt.

To top off the Asian influence in our lives, we currently have a Japanese student living with us.

What do I think of Asians?  They are disciplined, hard working, cohesive, fun and friendly.

So is there anything wrong with Asians?  Here's a couple of observations:

• Our house guest has dual citizenship (U.S. and Japan) since his parents were living here when he was born.  Japan makes him decide when he is 21 which he will be.  I was asking him about naturalized citizens in Japan and basically there are none:  no Blacks,  no Latinos, no Europeans, no Russians, no Indians, and no other Asians (not even Central Asians).  Senator Jim Webb, in his book "A Time to Fight" talks about how wonderful the Japanese prison system is compared to the U.S., but if you have no immigration and no cultural conflicts, it's not surprising.
• Recently there was a WSJ article explaining "Why Chinese Mothers Are Superior".  It has received much attention (which I am also envious of).  If Amy Chua's thesis that Chinese Mothers are superior, then explain this:  Due to China's One Child Policy (limits couples to having one child), the ratio of male births to female births has increased drastically.   The result is that there will be millions of men with no prospects for marriage.  So what is happening to the girls?  Since the Chinese culture values sons more than daughters, many girls are eliminated by selective abortion, infanticide and abandonment (Our neighbors adopted one of these neglected Chinese girls).  Chinese mothers may be superior; if your not a girl or you can survive their murderous ways.
• China owns all of our debt.  What this means is that the government has lots of wealth due to a trade surplus with the rest of the world, and instead of raising the living standard of their people (the average annual salary is about $7400) they keep the money, throw lavish parties and buy foreign debt.

I know that it would be wrong to call Asian cultures anti-immigration, greedy dictatorships full of baby-killing mothers.  That narrative doesn't fit with my personal experience.

New Look

I just finished creating a new look for my blog.  I've resisted doing this on the premise that simple is best, however I asked my son-in-law for constructive criticism.  He, of course, pointed out things to change, which happened to be things that I liked most.  I planned on ignoring his suggestions but I have since softened my stance.  It's funny how we don't like criticism (and consequently I think that we aren't vocal enough with our criticism; we're too afraid to offend even though we secretly may have strong opinions about how things are).

Wouldn't it be nice if we could get honest feedback from others and learn how to not be offended?

Here are the changes:

1. Warmer colors to reflect my attempts to be less polarizing and more civil  (Also the previous black and white colors do not reflect reality - there seems to always be an exception to black and white rules).
2. A picture of myself (I tried to cartoonize it to hide the bags under my eyes).
3. A border of words around the title to reflect some of the themes of my postings.

Light, Truth and Gravity

Once I was asked how I could believe in God and science.  It's true that religion and science have a history of conflict.  I think one of the problems is that religions extrapolate dogmas too far, then new scientific discoveries invalidate unfounded beliefs, and the battle begins.  Usually science wins as the theories are proven out.  When religion rationalizes outdated beliefs, it is discredited and the temptation for the "scientifically minded" is to "throw out the baby with the bathwater".

I've managed to see and experience the value in both systems of understanding, and in many instances I am satisfied to see science and religion in agreement.  This happened tonight as I was reading an article on some of the latest thinking in Physics.  The theories start by trying to explain what happens to "information" in the Universe with results of a quantum mechanical explanation for gravity (and dark energy, which no other theory accounts for).   Here's a quote from the article:

Some physicists are convinced that the properties of information do not come from the behaviour of information carriers such as photons and electrons but the other way round. They think that information itself is the ghostly bedrock on which our universe is built.[1]

There seems to be an interesting relationship between "information", "light" and "laws by which all things are governed".

Here are some religious verses:

D&C 88:11-13
11 And the light which shineth, which giveth you light, is through him who enlighteneth your eyes, which is the same light that quickeneth your understandings;

12 Which light proceedeth forth from the presence of God to fill the immensity of space—

13The light which is in all things, which giveth life to all things, which is the law by which all things are governed, even the power of God who sitteth upon his throne, who is in the bosom of eternity, who is in the midst of all things.

I would equate the bold items as such:

• "light" with "photos and electrons"
• "information" with "knowledge" or "enlightenment"  
• "gravity" with "the law by which all things are governed"
  

So what does this mean to me?

1. Scientific understanding is finite.  
2. Religion provides a hope of infinite understanding.
3. Religion overreaches
4. Science corrects religion with new understanding.
5. Go to step 1.