The Great Zero-Zero Decade Oil Party
War with Iraq. Trouble with North Korea. What will happen next? According to one source, there will be a war with Iraq and oil prices will soar to $50 a barrel or so, but the government of Saddam Hussein will quickly be toppled. The new interim government will sign oil deals all over the place. The Venezuela situation will resolve itself, making that oil available again. With a lot of oil available, and with high oil prices, people are going to want to produce gasoline and other oil products all over the place. The result will be a gusher of oil to the world, mainly the developed world, and prosperity and a bullish stock market will return. This will happen in late 2003 into 2004 and 2005. If this happens, I will call it the Great Zero-Zero Decade Oil Party. Wheee! But the hangover of the runout of cheap oil will ominate after this party is over. We will be living as though there is no tomorrow. There really ought to be a better way.
A Journey through Blogrealm
Blogtrek
Blogtrek
2003/01/04
Toastmasters Officer Training
Today I attended Winter Leadership Institute, which is required of all officers of Toastmasters Clubs. I am a member of three Toastmasters clubs and I am an officer in each. So I went today to a building in the shape of a pentakis dodecahedron, with a pentagonal sanctuary. I learned how to be President of a club. One of the more interesting things they did this time was ask everyone for a motivational quote to put on a card; these cards would be drawn for raffle prizes. I was asked twice to do this, and here are the quotes I came up with:
Toastmasters is a Fire
Like a fire, a Toastmasters club requires the fuel of members, the air of a good educational program, and the heat of enthusiasm.
Just Add One
Just add one new member
Just add one new CTM (Competent Toastmaster)
Just add one new Speechcraft (introductory course to Toastmasters)
Just add one new DTM (Distinguished Toastmaster)
Above all, just add one new FRIEND.
There is never an end to Toastmasters.
We concluded with a lunch in which I met people I had not seen in a while.
Today I attended Winter Leadership Institute, which is required of all officers of Toastmasters Clubs. I am a member of three Toastmasters clubs and I am an officer in each. So I went today to a building in the shape of a pentakis dodecahedron, with a pentagonal sanctuary. I learned how to be President of a club. One of the more interesting things they did this time was ask everyone for a motivational quote to put on a card; these cards would be drawn for raffle prizes. I was asked twice to do this, and here are the quotes I came up with:
Toastmasters is a Fire
Like a fire, a Toastmasters club requires the fuel of members, the air of a good educational program, and the heat of enthusiasm.
Just Add One
Just add one new member
Just add one new CTM (Competent Toastmaster)
Just add one new Speechcraft (introductory course to Toastmasters)
Just add one new DTM (Distinguished Toastmaster)
Above all, just add one new FRIEND.
There is never an end to Toastmasters.
We concluded with a lunch in which I met people I had not seen in a while.
2003/01/01
The ultimate growth rate is zero
The economists are saying that growth will grow at a languid rate of about 1% this year. They seem to like it when it is 3% or more. Economists and others seem to want growth, growth all the time. They don't recognize a fundamental law: The ultimate growth rate is zero. This is the case because if growth rate is negative, soon you will have practically nothing, as things decay away. If growth rate is positive, things will keep growing until it exceeds the capacity of our finite resources. Therefore, neither positive nor negative growth rates can continue indefinitely, and thus the only real growth rate is zero. I think we will be better off when economists regard a year of -0.6% or 1.4% or something like that as being a good year. We certainly don't need more growth.
The economists are saying that growth will grow at a languid rate of about 1% this year. They seem to like it when it is 3% or more. Economists and others seem to want growth, growth all the time. They don't recognize a fundamental law: The ultimate growth rate is zero. This is the case because if growth rate is negative, soon you will have practically nothing, as things decay away. If growth rate is positive, things will keep growing until it exceeds the capacity of our finite resources. Therefore, neither positive nor negative growth rates can continue indefinitely, and thus the only real growth rate is zero. I think we will be better off when economists regard a year of -0.6% or 1.4% or something like that as being a good year. We certainly don't need more growth.
Review of Words book
I purchased a book recently called Predicting new words. It is about words that have been invented such as spin, meaning way of presenting something, and weapons-grade, meaning of superior quality. I found it quite interesting and I heartily recommend the book. He not only gives us many new words but he also predicts the chances of their success. His factors are:
1. Frequency of use
2. Unobtrusiveness
3. Diversity
4. Generation of other forms and meanings
5. Endurance of the concept.
OK, let's take a non-word from my Non-Words page. Try rurale, for instance. This means uncouth, crude, or ill-mannered, and is the opposite of urbane. Here is my ratings of it: Frequency, 0; Unobtrusiveness, 2; Diversity, 0; Generation of other forms, 1; Endurance of the concept, 2. It gets the two zeroes because no one has used them much except me; that is a problem with most of the words on my Non-Word page. It fits into language like a glove: "… behaving like a bunch of rurale brutes…", getting the 2 for unobtrusiveness. It has only one other form (ruralely), but the concept of well-mannered versus ill-mannered was around when I was a child and will continue, as I see it, well into the future. Total score is 5. If I start using it a lot, it will gain in Frequency and Diversity, and it then would have a good chance of entering the language. It main positive attribute is its Unobtrusiveness.
Mr. Metcalf, the book's author, rates atmosFear 0, and weapons-grade9. Thus atmosFear is going to get nowhere, while weapons-grade is likely to become part of the language. I agree with him on atmosFear, because in speech that does not sound different from "atmosphere",and on the page the F makes it look ugly. I agree with what Mr. Metcalf says about weapons-grade as well, that it has a good chance to enter our vocabulary, but I think it is ominous that this will happen. The word is violent; it implies that to be excellent you have to show some willingness to hurt people or things. So I hope it doesn't enter the vocabulary. I feel the same about blockbuster, which was named after a weapon capable of destroying an entire city block. But I think it is a good book anyway and I hope you have fun trying to predict which of my non-words will make it into the language.
I purchased a book recently called Predicting new words. It is about words that have been invented such as spin, meaning way of presenting something, and weapons-grade, meaning of superior quality. I found it quite interesting and I heartily recommend the book. He not only gives us many new words but he also predicts the chances of their success. His factors are:
1. Frequency of use
2. Unobtrusiveness
3. Diversity
4. Generation of other forms and meanings
5. Endurance of the concept.
OK, let's take a non-word from my Non-Words page. Try rurale, for instance. This means uncouth, crude, or ill-mannered, and is the opposite of urbane. Here is my ratings of it: Frequency, 0; Unobtrusiveness, 2; Diversity, 0; Generation of other forms, 1; Endurance of the concept, 2. It gets the two zeroes because no one has used them much except me; that is a problem with most of the words on my Non-Word page. It fits into language like a glove: "… behaving like a bunch of rurale brutes…", getting the 2 for unobtrusiveness. It has only one other form (ruralely), but the concept of well-mannered versus ill-mannered was around when I was a child and will continue, as I see it, well into the future. Total score is 5. If I start using it a lot, it will gain in Frequency and Diversity, and it then would have a good chance of entering the language. It main positive attribute is its Unobtrusiveness.
Mr. Metcalf, the book's author, rates atmosFear 0, and weapons-grade9. Thus atmosFear is going to get nowhere, while weapons-grade is likely to become part of the language. I agree with him on atmosFear, because in speech that does not sound different from "atmosphere",and on the page the F makes it look ugly. I agree with what Mr. Metcalf says about weapons-grade as well, that it has a good chance to enter our vocabulary, but I think it is ominous that this will happen. The word is violent; it implies that to be excellent you have to show some willingness to hurt people or things. So I hope it doesn't enter the vocabulary. I feel the same about blockbuster, which was named after a weapon capable of destroying an entire city block. But I think it is a good book anyway and I hope you have fun trying to predict which of my non-words will make it into the language.
Incredible media priorities
NBC News tonight (2003 January 1) showed an incredibly warped sense of priorities in its news reporting tonight. This past week was one in which a major disaster occurred. Entire islands had almost all life destroyed on them by Cyclone Zoe with its 217 mph winds. 2,000 people lived in these islands, and though these islands are so remote that information from them is still sketchy, it is likely that a huge number of these died. A thousand or more people dying constitute a major disaster and a major news story. It ought to have been the lead story tonight; it is possible that a number of deaths approaching what occurred on 2001 September 11 could have occurred, and that was a lead story.
Instead, NBC did not make it the first story. In fact, they did not even include it anywhere in their broadcast! They instead featured the "war" on terror and the injury of one person in a firefight in Afghanistan. To me this is an appalling lack of judgment in the prioritization of news stories. Someone needs to be done about NBC reporting. I can't tell what the other networks did, partially because some of them chose to broadcast sports instead of news. Google got it right. The story appeared as the second lead story on their news page. It is good that we have Google now, so we can hear news from wherever it comes, without having to put up with the antics of NBC and other networks.
(a cyclone is a tropical storm with winds exceeding 74 mph that occurs elsewhere than in the northwestern Pacific, the northeastern Pacific, or the Atlantic. Such a storm occurring in the Atlantic would be called a hurricane.) .
NBC News tonight (2003 January 1) showed an incredibly warped sense of priorities in its news reporting tonight. This past week was one in which a major disaster occurred. Entire islands had almost all life destroyed on them by Cyclone Zoe with its 217 mph winds. 2,000 people lived in these islands, and though these islands are so remote that information from them is still sketchy, it is likely that a huge number of these died. A thousand or more people dying constitute a major disaster and a major news story. It ought to have been the lead story tonight; it is possible that a number of deaths approaching what occurred on 2001 September 11 could have occurred, and that was a lead story.
Instead, NBC did not make it the first story. In fact, they did not even include it anywhere in their broadcast! They instead featured the "war" on terror and the injury of one person in a firefight in Afghanistan. To me this is an appalling lack of judgment in the prioritization of news stories. Someone needs to be done about NBC reporting. I can't tell what the other networks did, partially because some of them chose to broadcast sports instead of news. Google got it right. The story appeared as the second lead story on their news page. It is good that we have Google now, so we can hear news from wherever it comes, without having to put up with the antics of NBC and other networks.
(a cyclone is a tropical storm with winds exceeding 74 mph that occurs elsewhere than in the northwestern Pacific, the northeastern Pacific, or the Atlantic. Such a storm occurring in the Atlantic would be called a hurricane.) .
2002/12/29
Stocks going down even more
For a long time we have had prosperity and upward-rising stock prices. The Dow Jones, Nasdaq, and Standard and Poor stock averages were going up by 20% a year or more during the 1990s. Many stock analysts thought this was a bubble - a temporary inflation in value that eventually punctures like a balloon and falls back to normal long term trends. The bubble was caused by hypered-up dot-comism and to a lesser, but still significant extent, by cheap oil and gasoline. It seemed that everything was going on the Internet with dot-com and computer technology companies popping up all over the place. The people in the Internet-site industry were trying to convince us that they got some great products that will cause us to enjoy unbridled prosperity. And so we went along with this, investing in Quixtar and in stocks of all types, and unusually large growth rates occurred.
Some people were predicting that this trend would continue to go on, even into the zero-zero decade, as the baby boomers still continue to be active in the workplace and continue to push up the value of stocks. Some said this would continue even into the 20 teens, as with Schwarz and Leyden in their "Long Boom". Others, such as Harry Dent, said a crash was coming at the end of the decade and a long decline was going to occur, caused by retired baby boomers dragging the economy.
So I expected stocks would continue to go up into the 21st Century. They didn't. They hit a peak in early 2000, then have declined ever since. I did a little analysis recently and believe I have found out what is happening. The Big Dot-Com Lie was revealed, the bubble burst, and down went Enron, WorldCom and others. I feel we are headed back to long-term trends. But what are they?
I created a chart based on Dow Jones data. I fitted a least-squares exponential curve to the Dow Jones average all the way back to 1910. This shows an annual growth rate of 5.1% and is indicated in the magenta line. The actual average is in dark blue, and you can notice how all of a sudden the average leaves the long-term and starts heading for the sky. It is now headed back down. The yellow line is a least-squares exponential curve drawn since early 2000, when the Dow was around 11700. Notice that it continues to go down until late 2007, when it intersects the long term trend. The dot-com bubble burst is only half over. The remaining half has yet to play itself out. The Dow Jones average should be down to about 6500 or so in late 2007, after which it should follow the red 5.1% long term line and start to go up again, if other things don't occur, such as the running out of cheap oil.
I don't think this will be a steady decrease. A war in Iraq is likely, and the most likely (I hope!) outcome is a quick defeat of Saddam and an establishment of an interim government. If this happens, a gusher of oil will flood the developed world and cause prosperity to come back. So I expect a smaller bubble will occur, and the Dow will increase slightly in the next few years, to about 9000. After about two years, a crash or big decline will occur and the Dow will be at 6500 or so in 2007.
I don't think this is a good time to invest in stocks, however, since there is too much uncertainty in this forecast. The long term trend is downward until 2007, and this increase that I foresee may not come about. I say invest in bonds, money market funds or certificates of deposit, and pay off any debts, if you can. This decade should have been boom times with a 5-10% increase every year, but the Great Dot-Com Bubble ate all that up. After the long term comes back in 2007, we have the Fourth Turning coming so that I don't expect stocks will be a good investment for at least a decade or two.
For a long time we have had prosperity and upward-rising stock prices. The Dow Jones, Nasdaq, and Standard and Poor stock averages were going up by 20% a year or more during the 1990s. Many stock analysts thought this was a bubble - a temporary inflation in value that eventually punctures like a balloon and falls back to normal long term trends. The bubble was caused by hypered-up dot-comism and to a lesser, but still significant extent, by cheap oil and gasoline. It seemed that everything was going on the Internet with dot-com and computer technology companies popping up all over the place. The people in the Internet-site industry were trying to convince us that they got some great products that will cause us to enjoy unbridled prosperity. And so we went along with this, investing in Quixtar and in stocks of all types, and unusually large growth rates occurred.
Some people were predicting that this trend would continue to go on, even into the zero-zero decade, as the baby boomers still continue to be active in the workplace and continue to push up the value of stocks. Some said this would continue even into the 20 teens, as with Schwarz and Leyden in their "Long Boom". Others, such as Harry Dent, said a crash was coming at the end of the decade and a long decline was going to occur, caused by retired baby boomers dragging the economy.
So I expected stocks would continue to go up into the 21st Century. They didn't. They hit a peak in early 2000, then have declined ever since. I did a little analysis recently and believe I have found out what is happening. The Big Dot-Com Lie was revealed, the bubble burst, and down went Enron, WorldCom and others. I feel we are headed back to long-term trends. But what are they?
I created a chart based on Dow Jones data. I fitted a least-squares exponential curve to the Dow Jones average all the way back to 1910. This shows an annual growth rate of 5.1% and is indicated in the magenta line. The actual average is in dark blue, and you can notice how all of a sudden the average leaves the long-term and starts heading for the sky. It is now headed back down. The yellow line is a least-squares exponential curve drawn since early 2000, when the Dow was around 11700. Notice that it continues to go down until late 2007, when it intersects the long term trend. The dot-com bubble burst is only half over. The remaining half has yet to play itself out. The Dow Jones average should be down to about 6500 or so in late 2007, after which it should follow the red 5.1% long term line and start to go up again, if other things don't occur, such as the running out of cheap oil.
I don't think this will be a steady decrease. A war in Iraq is likely, and the most likely (I hope!) outcome is a quick defeat of Saddam and an establishment of an interim government. If this happens, a gusher of oil will flood the developed world and cause prosperity to come back. So I expect a smaller bubble will occur, and the Dow will increase slightly in the next few years, to about 9000. After about two years, a crash or big decline will occur and the Dow will be at 6500 or so in 2007.
I don't think this is a good time to invest in stocks, however, since there is too much uncertainty in this forecast. The long term trend is downward until 2007, and this increase that I foresee may not come about. I say invest in bonds, money market funds or certificates of deposit, and pay off any debts, if you can. This decade should have been boom times with a 5-10% increase every year, but the Great Dot-Com Bubble ate all that up. After the long term comes back in 2007, we have the Fourth Turning coming so that I don't expect stocks will be a good investment for at least a decade or two.
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