The Emirates Economist

T. Boone Pickens goes long in windmills

2009-07-09T00:20:00.005+04:00

Forbes, What The Pickens Fiasco Means To Green

He's stuck with $2 billion worth of General Electric turbines, which he hopes to move to smaller projects throughout the Midwest and Canada. He's also decided to wait for the government to build transmission to carry wind power in Texas.

Transmission is a critical and often overlooked component to making green energy work, particularly because wind and solar resources are often located in rural areas far from major transmission backbones.

With respect to this project, Pickens was always tilting at windmills.

Good line:

In May 2008, Pickens announced that his company, Mesa Power LP, would order 687 wind turbines, or 1,000 megawatts of capacity, from GE for about $2 billion. By 2014, he expected to expand the Panhandle wind farm to 4,000 megawatts.
...
GE will start delivering them in the first quarter of 2011. Pickens has about 18 months to find a place to put them.

"I don't have that big a garage to put them in, so I've got to start getting ready to use them," he said.

Pickens said company officials are considering six sites, including places in Wisconsin, Oklahoma, Kansas and Texas. He aims to build three or four wind farms with around 150 turbines each.

The Emirates has lots of wind and solar potential. The "only problem" is how to you get it to market? Transmission is a problem. There's only so much local demand.

But Helene Pelosse thinks the transmission problem of shipping out Gulf generated solar and wind could be surmounted. It's not as easy, though, as it might be in China. Even if substantial technological progress in shipping electricity great distances was made, you have the same political problems you have with getting pipelines completed across several political jurisdictions.

You only have to look to the troubled history of electrical interconnectivity between Dubai, Sharjah -- and the rest of the seven Emirates for the matter.

Addendum:

WESTON, W.Va. - The Lewis County Commission has become the fifth county commission in West Virginia to formally oppose a proposed high voltage multistate transmission line.

The county has filed for intervenor status with the state Public Service Commission. That would allow it to present written testimony and participate in cross examination at evidentiary hearings.

The PSC is considering whether to approve the Potomac-Appalachian Transmission Highline, or PATH, a joint venture of Pennsylvania's Allegheny Energy Co. and Ohio's American Electric Power Co.

It would run from AEP's John Amos plant in Putnam County, across parts of northern Virginia, and end at a substation near Kemptown, Md.

6 Minute Man

2009-07-04T17:26:00.003+04:00

Apparently all it takes is 6 minutes to a new you:

In one of the group’s recent studies, Gibala and his colleagues had a group of college students, who were healthy but not athletes, ride a stationary bike at a sustainable pace for between 90 and 120 minutes. Another set of students grunted through a series of short, strenuous intervals: 20 to 30 seconds of cycling at the highest intensity the riders could stand. After resting for four minutes, the students pedaled hard again for another 20 to 30 seconds, repeating the cycle four to six times (depending on how much each person could stand), “for a total of two to three minutes of very intense exercise per training session,” Gibala says.

Each of the two groups exercised three times a week. After two weeks, both groups showed almost identical increases in their endurance (as measured in a stationary bicycle time trial), even though the one group had exercised for six to nine minutes per week, and the other about five hours. Additionally, molecular changes that signal increased fitness were evident equally in both groups.

6 minutes doesn't sound like much more than zero. Not that I resemble that remark.

You might want to reconsider that name

2009-07-04T06:55:00.002+04:00

Russia has entered a natural gas venture with Nigeria with the name Nigaz.

Will that be with or without attitude? Apologies to N.W.A.

An invisible curriculum you learn from having a job

2009-07-03T19:32:00.003+04:00

Some news from the U.S.

While Obama blames the unexpectedly steep rise in unemployment this month on the Bush administration, it could have more to do with the hike in the minimum wage.

Forbes

The outlook for teen jobs is so bleak that it's weighing down the entire employment report, which the Bureau of Labor Statistics released on Thursday. The country is headed for an entire decade with no job growth. In June, the report showed unemployment climbed to 9.6% from 9.5%, and 467,000 jobs were lost, thanks in large part to the decline in jobs for teens.
...
Minimum wage increases raise the bar for entry-level employment. From 1997 until 2007, the minimum wage stood at $5.15. Congress raised it to $5.85 in 2007, to $6.55 last year, and in July it is scheduled to increase again to $7.25.

In June 2006, 7 million teens were working. Since the wage hikes and recession kicked in, 1.4 million of those jobs have disappeared. For African-American teens, the job market is even worse--their unemployment rate is 38%.

"For teens who are not in the work force, as many as 10 years later there are financial impacts to that. Ten years later, if you were not employed, you're lagging behind your peers," says Lopez Eastlick. "There's an invisible curriculum you learn from having a job."

Dubai continues restructuring of finances

2009-07-03T14:58:00.001+04:00

Dubai's 2nd $10B Bond May Get UAE Govt Guarantee (WSJ)

"It will be the first time an emirate's bond has been backed by the federal government," the Dubai government official, who is involved with the bond told Zawya Dow Jones. Dubai is seeking federal support to help sell the bond to international banks who otherwise may be reluctant to buy the debt as the emirate continues to restructure its finances. The bond issue will be the first by Dubai backed by the federal government.
...
The bond program will support government spending plans and the private sector at a time when loans from international banks have dried up as global lenders have become too nervous to lend. At the same time, local banks are grappling with a large loan-to-deposit gap of about AED90 billion.

S&P cuts ratings on 3 Dubai GREs (AP)

A leading international ratings service said Tuesday it had cut its credit rating of three Dubai government-backed entities, voicing concerns about the emirate’s willingness to continue backing some companies in the one-time Arab boomtown hard hit by the global recession.

Standard & Poor’s Ratings Service said it downgraded the ratings for port operator DP World, the Jebel Ali Free Zone and Dubai Multi Commodities Centre Authority, all of which had been on credit watch with negative implications since the end of April.

“The rating actions reflect Standard & Poor’s reappraisal of the likelihood of extraordinary financial support by the Government of Dubai to its GREs to ensure the timely repayment of their financial obligations,” the agency said in a statement. S&P said the reappraisal also was the result of “increased uncertainty regarding the government’s willingness to provide such support” to Nakheel, the property developer famed for building Dubai’s manmade islands.

UAE Banks in Talks with Saudi Debtors (Khaleej Times)

Although UAE banks refused to specify their individual exposures to the Saudi borrrowers, Central Bank Governor Sultan bin Nasser Al Suwaidi, speaking earlier this week, described their combined exposure as “significant.” Media reports peg total outstanding loans from UAE banks at around $767 million — more than one-tenth the estimated $7.4 billion that all banks worldwide have lent to the Saudi groups.

“Some of the banks in the UAE have large gross exposure to these groups but they also have large collateral,” said Emmanuel Volland, Senior Director for Financial Institutions Ratings at Standard & Poor’s. “You need to look not at the gross exposure but (the) net of the collateral. Of course, you have to evaluate the quality of this collateral — cash being the best.”

Standard & Poor’s does not rate all UAE banks and cannot comment on their total exposure, said Volland, who is based in Paris. “We rate two banks in Abu Dhabi, NBAD and ADCB.

Both banks have recently received (a) capital infusion by the [federal] government.

No doubt Abu Dhabi will attach strings to the loan guarantees to Dubai, and has examined the quality of the collateral Dubai has to offer.

In other news Dubai continues to think big, and studying the possibility of submitting a bid for the 2020 Olympics. The construction costs are estimated in the billions of dollars.

al-Maktoums and al-Nahyans at odds in court?

2009-07-02T21:28:00.002+04:00

In the UAE slander is broadly defined and taken seriously. Abu Dhabi has reached out to help Dubai weather the worldwide economic downturn. One wonders whether a disagreement over the publication of horse doping story could harm that relationship.

Q: Slip 78. Sherif Abd el Mayin of Slip 68 becomes el Main, el Mayein, el Muein, el Mayin, and el Muyein.

2009-06-30T22:39:00.002+04:00

A: Good egg. I call this really ingenious.

From an exchange between T.E. Lawrence and his proofreaders.

Also,

Q: Slip 20. Nuri, Emir of the Ruwalla, belongs to the 'chief family of the Rualla.' On Slip 23 'Rualla horse,' and Slip 38, 'killed one Rueli.' In all later slips 'Rualla.'

A: Should have also used Ruwala and Ruala.

Q: Slip 28. The Bisaita is also spelt Biseita.

A: Good.

Q: Slip 47. Jedha, the she-camel, was Jedhah on Slip 40.

A: She was a splendid beast.

Read it all.

There are 32 ways to spell Mu`ammar al-Qadhafi.

Online instruction wins: It's about time

2009-06-30T01:55:00.003+04:00

A new empirical study by the US Department of Education finds that education outcomes in online environments are superior to face-to-face instruction. And that a blend of the two seems to be best. The key reason seems to be that students spend more time studying when they are doing it online.

Inside Higher Ed:

Notably, the report attributes much of the success in learning online (blended or entirely) not to technology but to time. "Studies in which learners in the online condition spent more time on task than students in the face-to-face condition found a greater benefit for online learning," the report says.

In noting caveats about the findings, the study returns to the issue of time.

"Despite what appears to be strong support for online learning applications, the studies in this meta-analysis do not demonstrate that online learning is superior as a medium," the report says. "In many of the studies showing an advantage for online learning, the online and classroom conditions differed in terms of time spent, curriculum and pedagogy. It was the combination of elements in the treatment conditions (which was likely to have included additional learning time and materials as well as additional opportunities for collaboration) that produced the observed learning advantages. At the same time, one should note that online learning is much more conducive to the expansion of learning time than is face-to-face instruction."

Interestingly, online quizzes had no effect: "The use of video or online quizzes -- frequently encouraged for online education -- 'does not appear to enhance learning,' the report says."

What recession? Colleges offer students valet parking

2009-06-25T23:17:00.004+04:00

Inside Higher Ed:

When the concept of starting a valet parking service came up at a recent Florida Atlantic University Board of Trustees meeting, it seemed less out of place than one would think. With the number of students growing, and the number of convenient parking spaces on campus unchanged, the idea to charge students and faculty for such a convenience did not seem unreasonable.

Florida Atlantic is just talking about valet service. Other colleges have implemented it. Florida International University and Columbia University introduced valet programs this spring. The University of Southern California has had a program in place since 2008, and High Point University brought in valet at the behest of its president, Nido Qubein, to provide a better student experience. California State University at Sacramento has also begun a premium parking program.

At Florida International, valet service started this spring as a way for visitors to find convenient parking. The valet stand was set up on a busy part of campus -- one where a lot of visitors arrive, according to Bill Foster, executive director of parking and transportation. The service was meant for visitors, but students, faculty, and staff were not precluded from using the service, and commuter students had a particular demand for it.

I can see this going over very well in the UAE. University administrators, are you listening?

The power of crowds

2009-06-22T18:06:00.001+04:00

From Dailymotion:

Battle w/ Police - Tehran, Iran - June 20th 2009
Uploaded by mightier-than. - News videos from around the world.

But you can't throw back bullets.

Paris Hilton depression recovery plan

2009-06-08T18:06:00.001+04:00

It worked for me.

The expat's brain and other links I liked

2009-06-07T16:45:00.002+04:00

Being an expat in good for your brain.
The big floating storage debate
"Peru’s extraordinary performance in financial markets was founded on its credible commitment to service its debt with guano"
Can't take of your parents? Send them to India. They really like older people there.

Plus-sized women are more sensitive?

2009-06-06T08:50:00.002+04:00

I didn't go looking for it, but at The Economist I found another story on the economics of plus-sized ladies' clothing. (Earlier DD post here where it is also relates the fact that it costs more to make plus-sized clothing.)

From The Economist FreeeXchange blog:

In this [recessionary] market, the relationship has deteriorated further. Recently, several fashion lines and department stores have downsized or eliminated their plus-size collections. It's not personal. Plus-size clothes are more expensive to make because they require more fabric, and different models and patterns. Also, plus-size women tend to be more price sensitive. That suggests smaller profits.
"They’re really bargain shoppers," says Catherine Schuller, a plus-size expert and former editor at Mode, a magazine for larger women. “Many are homemakers who can’t spend considerable amounts on clothes and are willing to sacrifice their own spending for their families, especially now”.

With people cutting back on consumption you’d expect women spending less on clothes, but the declines have been much larger in the plus-size market. Regular-size women’s-clothes sales have fallen by only 2%, while plus-size sales have fallen 8%.
It is curious that plus-size women are more price sensitive. Overweight women tend to earn less, so they have even less disposable income.

Emphasis added. Why "curious"? Even if they do tend earn less that doesn't make it immediately less likely they would more price sensitive about clothing. Indeed, if they tend to earn less then that could be channel of commonality that explains why they are more price sensitive.

UPDATE, June 28: Virginia Postrel explains why large sizes are disappearing from the stores, and much more (graphs here):

Because they require more fabric, larger sizes are more expensive to manufacture. “The cost of clothing is disproportionately in the materials and not the labor, due to the shift in production to low-wage countries, which means that it is going to be more expensive to produce clothing for large-sized women, and more resources will be tied up in garments on the racks,” notes Susan Ashdown, a professor in the Department of Fiber Science & Apparel Design at Cornell and a leading researcher on improving apparel fit. Imagine the fury that would greet prices that went up with dress size.

Much easier publicity-wise just to eliminate larger sizes. And,

The most common weight—130 pounds for women under 25 and 140 pounds for those 26 to 35—is well below the average, which is raised by all those women spread out in the distribution’s fat upper tail on the right. (The distribution looks similar for other age groups, though the specifics differ.) There really are a lot of larger women, but “larger” covers a lot of different weights. ... Translated into clothes, that means a lot of different sizes. ... The statistics also explain why plus-size clothes tend to be less tailored, even though larger women often look more attractive in body-skimming clothes.

Time lapse of Dubai urbanization

2009-06-06T07:53:00.002+04:00

See it happen. I saw it live - although from ground level.

Watch several times. The first time you'll focus so much on The Palm you won't see anything else.

Thanks to UAE Community blog for the link.

Does the UAE need a statistics czar?

2009-06-06T02:30:00.002+04:00

WSJ Numbers Guy blog:

Spurred by alarmingly low public confidence in official figures, Parliament authorized the creation of the U.K. Statistics Authority, tasked with overseeing government numbers, monitoring their use and auditing all 1,200 national statistics over the next five years. The new organization is well funded, at five million pounds per year, with about three times the budget for monitoring of its predecessor, the Statistics Commission. That funding level is exempt from the usual review process, to reduce political pressure via the pocketbook.
“Statistics have potential value, but it’s only realized when they’re used in a way that delivers some value to the public,” said Richard Alldritt, head of assessment for the authority. “That use could be in government itself, in formulating policy, but it could be equally in decisions about allocating money, or decisions in commercial sector.”
To unlock that value, the authority will continue monitoring the use of government stats, as it has already done with high-profile critiques of releases of knife-crime and migration numbers.

In answer to my headline question, I'd say yes the UAE needs a statistics ombudsman, too. But the larger question is, where are the government stats collected by the UAE? Where do you, um, pull them from?

Wal-Mart and obesity

2009-06-06T00:54:00.001+04:00

Wal-Mart may attract fat people, but it does not make you fat.

Forbes:

In our first round of statistical analysis we [Art Carden and Charles Courtemanche] found that greater consumer access to a Wal-Mart store was associated with lower body-mass indexes and a lower probability of being obese.

As we gathered more data on Wal-Mart discount stores, Wal-Mart Supercenters, warehouse clubs like Sam's Club, Costco and BJ's Wholesale Club, and other outlets, we found that the correlation holds up under a variety of different circumstances, with a clear relationship between warehouse clubs and better eating habits emerging over time. Further, we found that Wal-Mart's effect on weight is largest for women, the poor, African-Americans and people who live in urban areas.
...
We found the largest and most identifiable link between Wal-Mart's presence in a community and that community's weight is for its discount stores, which carry few groceries. So Wal-Mart's effect on obesity works mostly through an income effect, not a substitution effect. We also found a clear relationship between better eating habits and warehouse club presence, suggesting that people might be taking advantage of bulk buying to stock up on healthier foods.

Our data suggest that we buy healthier food when our purchasing power increases.

So why is Chicago's mayor so opposed to a Wal-Mart in the Southside of Chicago? Who would lose?

Marks & Spencer had it right the first time

2009-06-05T15:49:00.003+04:00

Why should smaller ladies pay the same as larger ladies when larger bras cost more to make? That's what Marks & Spencer thought when it ended its uniform pricing practice. But then larger ladies complained. The result?

An M&S spokesman announced: “We’ve heard what our customers are telling us — that they are unhappy with the pricing on our DD-plus bras and that basically we’ve boobed.

“So from tomorrow, no matter what size you buy, the price will be the same.

Read it all here.

I'm waiting for the smaller ladies to complain that M&S is not giving them enough support.

Thanks to Harlette for the pointer.

Sentence of the day

2009-05-30T18:54:00.002+04:00

But then again, if it weren't for the FED, I'd be hunting deer on Park Avenue instead of writing this article. - Charles Davi.

Link-o-rama

2009-05-28T18:55:00.003+04:00

Obama's argument for education vouchers

2009-05-27T05:42:00.002+04:00

From his remarks in nominating Sonia Sotomayor for Supreme Court of the United States:

When Sonia was 9, her father passed away, and her mother worked six days a week as a nurse to provide for Sonia and her brother — who's also here today, is a doctor, and a terrific success in his own right — but Sonia's mom bought the only set of encyclopedias in the neighborhood, sent her children to a Catholic school called Cardinal Spellman, out of the belief that with a good education here in America all things are possible.

With the support of family, friends and teachers, Sonia earned scholarships to Princeton, where she graduated at the top of her class, and Yale Law School, where she was an editor of the Yale Law Journal, stepping onto the path that led her here today.

Oh, but one person's life experience is anecdotal. What does evidence tell us?

Citigroup stock price anomaly

2009-05-27T05:34:00.003+04:00

Given that Abu Dhabi owns a great deal of Citigroup, this post may be of interest to followers of the UAE economy:

When the markets closed last Friday, the cost of buying 1,000 shares of Citigroup in these three ways were (using price quotes from Yahoo and ignoring transaction costs):
Method Cost

Simple $3,670

Preferred $3,052

Synthetic $3,160
Note: The preferred calculation is based on the Series F; other preferreds give slightly different values. The synthetic is based on options that mature in September 2009 with a strike price of $4.

What’s going on here? Why does it appear that investors in the common stock are overpaying by as much as 20%?

Dumb, Dumber, Dumbest

2009-05-26T23:29:00.005+04:00

For those Americans who think biofuels is a good idea:

Forcing the market to produce large amounts of renewable fuel will harm consumers in two ways: it will increase prices at the pump, because biofuels are more costly than gasoline, and it will drive up the price of food, because it diverts crops into fuel. The impact of food price inflation will weigh most heavily in developing countries where food purchases comprise larger shares of consumption. Food expenditures account for as much as 70 percent of household consumption among lower income groups in the developing world.
...
Right now, Congress is considering the Waxman-Markey bill, which would establish an economy-wide cap on greenhouse gases. With a firm cap in place, a law that mandates different fuel mixes will increase the cap’s compliance costs and will not achieve any further reductions. Indeed, to the extent that land use changes are not captured by the cap, the biofuels mandate may actually lead to emission increases. Unfortunately, not only does the Waxman-Markey bill keep the biofuels mandate in place; it goes one step further by creating a renewable electricity standard that mandates different fuel types for electricity generation.

That's Ted Gayer writing at The American.

And then you have the fuel economy standards just agreed to. Heaven forbid we should do something sensible like introduce a carbon tax. Or, at least, cap-and-trade.

Does the New York Times need a Hal Varian?

2009-05-26T18:23:00.004+04:00

Wired has a great story on how google uses auctions to sell advertising, a story that focuses on the economist Hal Varian. From the Wired story:

Google had already developed the basics of AdWords, but there was still plenty of tweaking to do, and Varian was uniquely qualified to "take a look." As head of the information school at UC Berkeley and coauthor (with Carl Shapiro) of a popular book called Information Rules: A Strategic Guide to the Network Economy, he was already the go-to economist on ecommerce.

At the time, most online companies were still selling advertising the way it was done in the days of Mad Men. But Varian saw immediately that Google's ad business was less like buying traditional spots and more like computer dating. "The theory was Google as yenta—matchmaker," he says. He also realized there was another old idea underlying the new approach: A 1983 paper by Harvard economist Herman Leonard described using marketplace mechanisms to assign job candidates to slots in a corporation, or students to dorm rooms. It was called a two-sided matching market. "The mathematical structure of the Google auction," Varian says, "is the same as those two-sided matching markets."

Varian tried to understand the process better by applying game theory. "I think I was the first person to do that," he says. After just a few weeks at Google, he went back to Schmidt. "It's amazing!" Varian said. "You've managed to design an auction perfectly."

To Schmidt, who had been at Google barely a year, this was an incredible relief. "Remember, this was when the company had 200 employees and no cash," he says. "All of a sudden we realized we were in the auction business."

Would the New York Times need a Varian? The reason I ask is, NYT ranks search terms, but it doesn't seem to know much about why they are important -- and, by extension, if there's a way to make the most out of what their readers are looking for. Listen to the NPR story here. (My wife realized United Health Care was a search term because Elizabeth Edwards mentioned it on Jon Stewart. But why is "May 4, 2009" highly ranked -- because of swine flu?")

Should your economics department pay a premium for to attract female faculty?

2009-05-17T04:40:00.001+04:00

Suppose the goal of your department or university is to increase the number female majors in economics, math, engineering and science. Consider these results:

This paper begins to shed light on this issue by exploiting a unique dataset of college students who have been randomly assigned to professors over a wide variety of mandatory standardized courses. ... Our results suggest that while professor gender has little impact on male students, it has a powerful effect on female students’ performance in math and science classes, their likelihood of taking future math and science courses, and their likelihood of graduating with a [science, technology, engineering, and math] degree. The estimates are largest for female students with very strong math skills, who are arguably the students who are most suited to careers in science. Indeed, the gender gap in course grades and STEM majors is eradicated when high performing female students’ introductory math and science classes are taught by female professors.

High IQ goes hand in hand with patience, calculated risk-taking and interpersonal judgment

2009-05-17T01:35:00.002+04:00

Tim Harford on recent research by Aldo Rustichini, Stephen Burks, Jeffrey Carpenter and Lorenz Goette:

An intriguing pattern emerged. The truckers who scored highest on the IQ test were also more patient and more willing to take calculated risks, rejecting unfair gambles and accepting favourable ones. Their choices revealed a more consistent attitude to risk and a more consistent level of patience, too.

The high-IQ truckers were also better at predicting what other players would do in the trust game, and secured more money overall. When they played second, they were more discriminating, rewarding co-operation and punishing those who would not trust them.

High IQ goes hand in hand with patience, calculated risk-taking and interpersonal judgment, it seems – and this is true after statistically adjusting for age and race.

Nor is any of this limited to the laboratory. Many trainee truckers drop out before completing their first year of work, even though this means they must repay the trucking company their training costs, which run into thousands of dollars. This indicates a lack of patience, an inability to appreciate how much money is at stake or a serious miscalculation in the initial plan to be a truck driver. Whatever the reason, dropping out is correlated with Rustichini’s experimental tests of low IQ, impatience and bad judgment of risk or of other people.

Rustichini puts this in a far more striking way: that the ingredients for prospering in a capitalist society all seem to be present together, or absent together.

Read it all.