Tapping The Oil Reserve

From The Washington Post:

President Gerald Ford signed the Energy Policy and Conservation Act in 1975 to establish an oil reserve of up to 1 billion barrels in vast salt caverns near the Gulf Coast. The act did not set a “trigger” for tapping reserves but left the president to determine whether a drawdown would be required by “a severe energy supply interruption” or by U.S. obligations as part of the International Energy Agency (IEA).

“The legislation defines a “severe energy supply interruption” as one which 1) “is, or is likely to be, of significant scope and duration, and of an emergency nature”; 2) “may cause major adverse impact on national safety or the national economy” (including a spike in oil prices); and 3) “results, or is likely to result, from an interruption in the supply of imported petroleum products, or from sabotage or an act of God.”

Many economists and policy makers caution against using the reserve simply to lower prices.”

Definition of Retrospective Distortion:

Retrospective Distortion. This is the problem of explaining or relating or accounting for, “. . . or examining past events without adjusting for the forward passage of time.” (p. 310) This gives rise to the mistaken belief that these events were predictable at the time, This is an illusion, and is closely related to the narrative fallacy since it reflects our need to make sense of sequences of events after the fact.

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Jobs: Thanksgiving Turkey?

For the third straight month, the unemployment numbers have fallen: it was 9.8% in November and it is 8.9% now. Extrapolating this to argue that the economy is on the right track, would be a classic case of the problem of induction (Taleb).

“One of Taleb’s favourite allegorical tales is the story of the turkey and the butcher. As previously described by Bertrand Russell, a turkey may get used to the idea of being fed but when, the day before Christmas, it is slaughtered, it will incur ‘a revision of belief’.”


In the new job numbers then, do we have a Turkey at hand?

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Land Transactions: 10 Percent Of China’s GDP

We spotted this statistic today via konaxis: Land Transactions amounted to a whopping 450 Billion USDs this past year alone, in China. Works out to approx 10 percent of Chinese GDP for 2010.


“Land and resources minister Xu Shaoshi says 2.7 trillion yuan ($470 billion) was spent on land transactions last year. His comments Friday were posted on the ministry’s website.
He said the land transactions had resulted in uneven benefits and social conflicts.
Authorities have been trying to cool China’s property market by discouraging investment buying that has helped drive prices out of reach for many city dwellers.”

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India Accounts For 25 Percent Of Gold Demand Worldwide

World Gold Council is reporting that India accounted for more than 25 percent of total worldwide demand for Gold in 2010. India and China together account for more than 50 percent of the worldwide demand for Gold.

“India was the strongest growth market in 2010. Total annual consumer demand of 963.1 tonnes registered growth of 66% relative to 2009, which was largely driven by the jewellery sector. In value terms this was worth US$38 billion.”

One explanation provided by the World Gold Council:

“Emerging country banks are likely to continue purchasing gold as a means of preserving national wealth and promoting greater financial market stability. Any gold sales from advanced economies are unlikely to be significant as the official sector remains highly risk-averse. Collectively, the official sector is still a significant holder of gold. Central banks remain committed to its importance and relevance in maintaining stability and confidence as they have been for hundreds of years”

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USA Entitlement Spending equals India’s GDP

Talking about scale, this one is a stunner – remember, India has a population of more than 1.2 billion, compared to the U.S population of 300 million. The stat is a little old, but the scale holds.

Going through Mary Meeker’s USA INc report, we spotted this statistic:

“USA Entitlement Spending equals India’s GDP”


With a population of 1.2 billion (vs. USA’s 310 million) and 2010 GDP growth of 10% (vs. USA’s 3%), India is a well recognized emerging country on the global stage.

It’s notable that India’s 2010 nominal GDP* of $1.43 trillion was equal to USA’s $1.43 trillion in federal government spending on Social Security, Medicare, and Medicaid.

Statistics Source: Mary Meeker, “About USA Inc” Report

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1.1 Trillion: The New Deficit Number

Per Obama’s new proposed budget, the new deficit number would be 1.1 Trillion USDs.

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3 Billion: Coupons Redeemed In The US

With a 300 Million Population, how many coupons (absolute number of coupons, not the amount) do you think were redeemed in the US alone, every year? Take a Guess!

“More than three billion coupons a year are redeemed in the United States, says Steven R. Boal, C.E.O. of Coupons.com, founded in 1998 and based in Mountain View, Calif. Last year, about half of all redeemed coupons originated in the weekly coupon supplements inserted in local Sunday newspapers, according to Coupons.com’s estimate. But coupons distributed online accounted for 9.8 percent of all coupons redeemed in 2009, up sharply from 1.1 percent in 2006. (Efforts to find data from another source were unsuccessful.)”

Statistics Source: NYTimes

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Black Friday Retail Sales Numbers

10.69 Billion USD: The retail sales number for Black Friday. At just a 0.3 percent increase from 2009, this marks a not-so-great beginning for the holiday season. Retailers totally expect Cyber Monday to turn things around for them.


Statistics Source: AP

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How the US Government Measures Unemployment

Did you know that the US Government measures unemployment using a survey, and not on number of persons claiming unemployment benefits?


“Because unemployment insurance records relate only to persons who have applied for such benefits, and since it is impractical to actually count every unemployed person each month, the Government conducts a monthly sample survey called the Current Population Survey (CPS) to measure the extent of unemployment in the country. The CPS has been conducted in the United States every month since 1940, when it began as a Work Projects Administration project. It has been expanded and modified several times since then. For instance, beginning in 1994, the CPS estimates reflect the results of a major redesign of the survey. (For more information on the CPS redesign, see Chapter 1, “Labor Force Data Derived from the Current Population Survey,” in the BLS Handbook of Methods.)

There are about 60,000 households in the sample for this survey. This translates into approximately 110,000 individuals, a large sample compared to public opinion surveys which usually cover fewer than 2,000 people. The CPS sample is selected so as to be representative of the entire population of the United States. In order to select the sample, all of the counties and county-equivalent cities in the country first are grouped into 2,025 geographic areas (sampling units). The Census Bureau then designs and selects a sample consisting of 824 of these geographic areas to represent each State and the District of Columbia. The sample is a State-based design and reflects urban and rural areas, different types of industrial and farming areas, and the major geographic divisions of each State. (For a detailed explanation of CPS sampling methodology, see Chapter 1, of the BLS Handbook of Methods.)”

Source: Bureau of Labor Statistics

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India’s Little-Known Billion Dollar Firm

In the small state of Kerala, India, there is a firm that makes more than a billion dollars in revenue every year. And it is a growth industry:  double digit growth for the past five years. Solid margins as well: 82 percent – yes, 82 percent. Which firm is this? Read On.

Kerala State Beverages Corporation (Bevco), the State’s liquor retail monopoly, has sold liquor worth Rs.5,540 crore  (1.2 Billion USD) and this year it hopes this figure will go beyond Rs.6,500 crore (1.5 Billion USD). This year, the rise in turnover is likely to hit 20 per cent.

A Liquor Store in Kerala Bevco is by far the largest public-sector revenue-earner for the State government. For the past five years, Bevco’s revenue has been growing at a solid pace.

No other  public-sector enterprise in the State rakes in as much money as Bevco.

Source for Statistics: The Hindu

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