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Money matters: Oil gushes higher, continued
High oil prices and heightened political risk likely to remain a feature – The views of one of our analysts
Graham Macdonald
MBMG International Ltd.
In Summary
Reports that oil has never been higher priced are true in a
strict sense, but they are heavily biased and not really accurate. Oil prices
are hitting all time highs, but in inflation adjusted terms oil is no where near
to eclipsing its all time highs witnessed 25 years ago.
It is not correct to attribute the current oil price to
terrorism. While these geopolitical tensions are definitely bullish for oil they
are not the whole story. When the current oil bull started in late 1998, George
W. Bush wasn’t president yet, September 11th was 33 months away and the second
war on Iraq was 51 months into the future.
Oil is not in a bull market today simply because of
terrorism, but because of a fundamental supply and demand shift. The great
nations of Asia, primarily the giants of China and India, are growing rapidly
and need to vastly increase their energy consumption. Since much of the world
has already been explored for crude, there is not enough new oil coming online
to feed both the industrialised West and the industrialising East. This demand
increase could be tempered by a global slowdown or recession, which would cause
a sudden dramatic spike down in oil prices, however previous recessions have
shown that in such circumstances demand tends to level rather than fall
significantly and any price fall will ultimately be followed by a subsequent
price recovery as the supply demand imbalances remain in the system.
Thanks to the US fed’s inflation of the US dollar, the
nominal prices of goods and energy is rising. Long term commodities markets can
only be really understood through the true strategic perspective of monetary
inflation.
Oil first hit $40 a barrel in today’s dollars in early
1974. It then meandered near $40 for a half a decade before shooting up with
most other commodities in the great commodities bubble of 1979. Oil’s real
all-time monthly high in constant 2004 dollars was $92 per barrel witnessed in
April 1980. $92 per barrel makes today’s $41 level look relatively cheap by
past decades standards.
Global oil demand is growing far faster than global supply,
so oil prices have to rise clear the market. This is how the free markets always
work to remedy a chronic supply/demand imbalance.
Important information
Past performance is not necessarily a guide to future performance. The value
of any investment and the income from it can fall as well as rise as a result of
market and currency fluctuations and you may not get back the amount originally
invested. This information is only a summary and may be subject to change
without notice. It was obtained from what we believe to be reliable sources.
However, its accuracy and completeness cannot be guaranteed. You should note
that investing in some of these markets could result in the possibility of large
and sudden falls in the price of shares. The shortfalls on cancellation or loss
on realisation could be considerable. You could get back nothing at all. Nothing
contained in this report should be construed as an offer to invest. Anyone
considering investing in these markets should seek professional guidance.
The above data and research was compiled from sources believed to be
reliable. However, neither MBMG International Ltd nor its officers can
accept any liability for any errors or omissions in the above article nor
bear any responsibility for any losses achieved as a result of any actions
taken or not taken as a consequence of reading the above article. For more
information please contact Graham Macdonald on [email protected]
Snap Shots: Painting with light
by Harry Flashman
The accepted definition of ‘photography’ is
‘painting with light’. To be honest, I do not know who originally
coined the phrase (or if I did know, I have forgotten), but it is a good
starting off point - especially the ‘painting’ concept.
 Another
quote from the savants is “There is art and there is photography. They
are not the same.” This I can go along with, for some types of
photography - but not all. The style of picture which I call ‘record’
photography, is not art. These photographs ‘record’ what is in front
of the lens and that is all. The photographer has precious little input
into the image recorded on film. The person who sets up a camera with an
automatic exposure and photographs the Niagara Falls with a 50 mm lens has
just made a ‘record’ shot. The resulting photograph will show the
Niagara Falls, no more, no less and no ‘art’.
The person who goes to the Niagara Falls and gets as
close as they can to the base, and photographs upwards at the water
cascading down with a 24 mm lens with several neutral density filters
allowing a two second exposure to blur the water has put ‘something’
into the picture. That something might be called creativity. That
‘something’ might even be called art! This is not a record shot. In
fact, Richard Avedon, who died last month said, “All photographs are
accurate. None of them is the truth.” Now we are getting closer to an
artistic input concept.
Recording what is ‘there’ without interpreting it
in some way is never art, but the camera can be a very powerful tool for
the artistic soul. However, sometimes you have to work hard to get it.
Take a look at the picture this week. Unfortunately, in
the newspaper it is in black and white reproduction, while in the original
this was very brightly coloured. Taken by an amateur, Ernie Kuhnelt, it
was produced by a photographic technique that Ernie has been experimenting
with for a while. Taken originally on slide film with a speed rating of 50
ASA, the photographer was looking for an effect, rather than for an image
of any subject in particular. The effect that was wanted was one by which
the viewer looked and said firstly “How did the photographer produce
that?” followed by “What is it?”
I am not usually enamoured of ‘modern art’, but I
have to admit that I was very taken with Ernie’s photograph - and
believe me, it is a photograph, being a rendition (rather than a
‘record’ shot) of a sacred tree in Pattaya, festooned with coloured
ribbons around the trunk. Again I apologize for the B&W printing (more
accurately grey and grey), but use your imagination and look deeply into
it. Suddenly you can see the image, and you can also sense something else.
This image is ‘alive’. It has movement.
The original image was taken on ASA 50 and with a very
small aperture to require a slow shutter speed. During the photograph, the
camera was moved, as if ‘panning’ to shoot a moving object. Different
shutter speeds were tried, as were different angles, as with this type of
experimental photography, it is almost impossible to predict the result.
From his images on the one roll, Ernie selected two for
enlargement, this being the better of the two, in my opinion. He is going
to continue experimentation, as this has given his personal photography a
new dimension and impetus.
The moral in this week’s column is to stop taking ‘record’ shots,
no matter how ‘pretty’ they might be. If I had $10 for every
photograph I have ever seen in competitions of fungi, I would be a rich
man. Whilst all very fascinating, the photographer did nothing to get
those shots - just be there and press the button. Instead, start trying
something new. Be it a new film stock, speed rating, filter, movement -
the list is endless. Just try something wild and you too might have
produced a personal piece of art.
Modern Medicine: Capsules with ‘eyes’ report on your inner self
by Dr. Iain Corness, Consultant
Soon it will no longer be a case of your
doctor asking, “How are you feeling after taking the capsules?” it will be a
case of your doctor telling you what your insides look like, after taking the
capsules!
Yes, the stuff of science fiction is here now - small guided
robots that can sail through your gastro-intestinal system (from top to bottom)
and report on how things are looking deep down inside.
In some ways the technology is similar to the current
endoscopic examinations, where we insert long flexible tubes with a ‘seeing
eye’ at the tip into the gut. Usually this is done as an ‘upper’ endoscopy
working from the top down, or a ‘lower’ one working from the bottom
(literally) upwards.
The advance is now that we will not need the flexible tubes.
There is a ‘seeing eye’ you can swallow, which will beam the pictures out of
your body, without being physically attached to the monitoring system.
This fantastic journey in medicine follows the recent
advances in miniaturization by Japanese company RF System Laboratory. They have
produced the Norika 3 RF Endoscopic Robot Capsule which can deliver a live video
of the patient’s gastrointestinal system.
The Norika robot capsule uses an incredibly small colour
camera which is placed inside a micro capsule that is swallowed by the patient.
Image technology allows for magnetic variable focus, so the operator can look
carefully at significant areas.
The capsule camera travels through the digestive system and
its position can be controlled by using a joystick. The amount of light can also
be adjusted and even switched to the infrared spectrum for multiple analyses.
To receive the signals and send pictures back, a special vest
has to be worn by the patient to provide wireless transmission. Digital
technology allows the communication with the capsule.
It does not even need to be driven manually, as automatic
operation is possible as sequential programs can be easily transferred to the
CPU inside the camera capsule.
The magic capsule is 9 mm in diameter and 23 mm in length,
which is larger than most capsules, but still possible to swallow. The case is
made of resin. Around the camera lens are four white LEDs and magnetic coils for
focus adjustment. Two tanks with air valves are in the centre and a there is a
capacitor to store electric power and a microwave video signal transmitter. 40
percent of the capsule is free space, which can be used for surgical purposes
such as medication sprays, laser treatment, and pH estimations.
Now if you think that one is small, the same company has
another of these little whizzers called the Norika Jr Endoscopic Robot Capsule
which performs most of the operations of the first capsule but is even smaller
in size being 5.8 mm in diameter and 15mm in length. To do this, they had to
ditch the internal controlling units, but being so small it can be used for
babies and the elderly.
This ‘space age’ technology actually came from the RF
System Laboratory’s work with the Japanese Experimental Module Project,
initiated by the National Space Development Agency of Japan in 1997. It was
important to measure information from within the body in no-gravity situations
but scientists wanted to obtain data directly from the gastrointestinal system
by using non-invasive techniques.
It has taken several years to get to this far with the
device, but it certainly will not be a bitter pill for the patients to swallow
in the near future!
Learn to Live to Learn: What kind of people are ‘IB’ people?
by George BenediktI
have met and worked with IB students from all over the world and over a period
of time, one is struck by a marvellous realisation. They invariably have a
wonderfully insightful, compassionate global perspective, combined with burning
intellect and a great sense of humour, united by a common educational
experience.
If I had to create the ideal profile for a young person, then
they would be IB diploma graduates. Culturally sensitive, politically aware,
generous, kind and the sort of person you would definitely want as a son or
daughter-in-law.
When schools, organisations and businesses talk about
creating ‘Tomorrow’s leaders today’ and advertise that ‘Anything is
possible’ using much over-used kinds of homily, the difference with the IB
diploma programme is that it really is true – or at least we hope so!
Now that the diploma is in its thirties, we should be seeing
the results soon. And the teachers? So much, as in all schools, depends on the
quality and nature of teachers but with the IB programmes, even more so. The
curriculum demands teachers of daring, initiative, imagination and creative
้lan, committed to their students whatever happens to themselves.
They need (and the IBO authorization recognises this as well)
to be believers in the IB doctrine and examples and role models for their
charges. Great IB teachers will become great friends with their students and
bridge the gap of distrust created by a hundred and fifty years of intransigent
and insular educational thinking.
Instead of basing their approach on fear and distance, your
ideal IB teacher will demonstrate love, bravery, compassion and above all,
integrity.
Schools flying the IB World School flag will be proud to do
so and will celebrate and encourage excellence in their staff and faculty and
cherish their parent body. In an IB school, people aren’t afraid of telling
each other, “Hey, well done!” or even sharing their own good practice with
others. ‘Showing off’ - that ancient idea - doesn’t come into it.
As Pele the magician was once asked by the journeyman
footballer, Peter Storey, “Why do you show off?” “Because I can!”
replied the master.
You should see the IB philosophy shining through all aspects
of an ‘IB world school’ culture. The school’s own mission statement should
reflect the IB mission statement and there should be a sense of unity and
understanding from the earliest years to junior high school and senior high.
If a school’s new to the IB there is room for patience. If
there’s in-school resistance to any of what I’ve just written, well I’m
afraid that they’re probably not really serious about it. Now that’s
ideology for you.
In this region, the school to offer the IB diploma programme
most recently is ISE, the International School of the Eastern Seaboard. There is
no question that starting the diploma is a challenge, but talking to the
superintendent, Ron Schultz, there is no doubt that they are ready and prepared
for what lies ahead.
Nonetheless, they have some way to go to emulate The Regents
School (even if they wanted to), which is established as our region’s major
academically high achieving international school and with good reason. Quality,
highly motivated staff help create the ideal conditions for success.
Other growing schools in the region are considering which
pre-university route to take - and it is important to realise that the IB
diploma, ‘A’ levels and ‘APs’ are not mutually exclusive. Indeed, good
planning might very well involve providing a course of some description whilst
preparing for another some way down the line.
Typically, the adoption of ‘A’ levels fits such a bill.
Classically, a small school will want to offer something ‘manageable’ for a
small number of students, whilst looking ahead to a time when the number of
students is sufficient and level of academic persuasion is such that the school
as a whole, in consultation with parents, students and faculty (i.e. all
interested parties) can decide to chart a different course (pun intended).
The underlying and essential aspect to all of this is
planning, vision and communication. Schools that ignore any or all of these
essential aspects to 21st century international education
are drastically under nourishing their interest groups.
Schools recognize that building a pre-university programme
has whole-school implications financially, philosophically and otherwise.
However, it is absolutely crucial that schools consider the “big picture”.
Once a well-keep secret, the letters ‘IB’ have got out
and whilst I am reasonably sure that the IBO don’t see themselves as existing
in a competitive market – winners often don’t – you can be certain that
any school that is authorized will automatically find their reputation enhanced,
their numbers increased and the dead wood of the faculty discarded. How on earth
then, are the ‘A’ levels and the ‘AP’ going to compete with this? We
shall see.
 Heart to Heart with Hillary
Dear Hillary,
Do you think it is a good idea to be seeing one girl over here, but have a
little one on the side as well? I know the Thais do it, as all the rich ones
seem to keep a ‘mia noy’ tucked away somewhere. I have a nice girl, but
just need a little extra now and again.
Tim
Dear (two timing) Tim,
You say you know the Thais well, Tim my philandering Petal, but your letter
shows that you don’t know them well at all. The Mia Noi situation that you
describe with the rich Thais is one that is tolerated by the number 1 wife
to keep the peace (and the money) in the marital home. In the farang
situation, you are treading on very dangerous ground. Jai yen yen (a cool
heart) is not always the case here, and retribution for straying can be very
cutting, including the famous Bobbit procedure. So if you don’t want to be
‘bobbed’, stick with your ‘nice girl’.
Dear Hillary,
I would like to respond to the subject from your recent
column. Unlike the person you answered, I did marry, provided mobiles (2),
watches (1 for every day), cars (2), motorcycles (2) and houses (2). After
all these, my lovely Thai wife still has no concept of time. When we need to
go somewhere and I ask how long it will take; her answer is either going to
be: “not long” or “long time”. Of course her answer depends on her
mood and can change depending on her mood (so not long can become very long
and vice versa). Even going to a gold shop does not work. Since I’m a
time-freak, calculating in seconds, this can be rather frustrating, what can
I do? (Besides changing myself?)
Time-freak
Dear Time-freak,
Petal, you have one great big problem on your hands here.
Despite watches (one for every day of the week), phones and cars and houses,
your Thai wife apparently remains a timeless jewel in your life. You have
already played the final ace - the gold shop, so you are really wound up.
However, I would recommend that it is really time that you have to drop your
time-driven nature and look at ways to adjust your time-frame. What can you
do other than changing yourself, you ask, but you don’t suggest in your
letter what it is you want change yourself into. (The local hospital can
arrange all sorts of wonderful plastic surgery, adding bits here, snipping
off bits there - the choice is yours!) If you don’t change physically or
mentally, there’s only one further change that can be made. Time for a new
wife? Sorry Petal, Hillary can’t help!
Dear Hillary,
Are there no rules of the road here? Just today I saw a
young girl on a step through motorcycle, she couldn’t have been more than
twelve, wobbling her way into the traffic outside Tesco Lotus. She had no
crash helmet and neither did any of her two passengers. Isn’t there a
minimum age for driving and why aren’t car safety belts and motorcycle
crash helmets enforced for all passengers? I don’t scare easy, having
driven lorries in Europe, believe me they are crazy there, but it seems to
me most Thai drivers and passengers have a death wish. They continually cut
down the inside of you on motorbikes and rush in front of you into the
minimal gap you kept for safe driving distance, stop dead in front with no
warning, and sit or stand on the open tailgate of an overloaded pick up.
Don’t they have any regard for their own life and safety? What is more I
believe that in an accident the foreigner is always in the wrong. Can you
explain this?
Craig
Dear Craig,
Yes of course there are road rules here but no-one
enforces them very much. This is Thailand, and isn’t that why you came
here in the first place? As far as the minimum driving age here, looking at
the drivers and riders, I think it is aged eight up-country and aged ten on
the highway. I agree with you that driving or riding here is a hazard for
the unwary. The answer is, “beware”. Thais do value life, but you have
to realize they have a different perspective on it. They also believe they
get another go at it, so easy come easy go, from their point of view. The
old one about the farang always being in the wrong is simple to explain from
a Thai viewpoint, “If you weren’t there in the first place you
wouldn’t have been there for me to run into.” However, this is really
just an old apocryphal tale, I believe the local police do try to apply the
law equally and equitably.
Dear Hillary,
Sorry to go back to the Vitamin V subject again, but
while previous letters have all been full of taking it till it drops off,
kind of riding the horse till it can’t go no further, has anyone done any
study on just how much can you take? This is a serious subject, so a serious
answer please.
Victor
Dear Victor,
Hillary give a serious answer? Just who do you think I
am, Petal. This is a column for the lovelorn, not a kiss and tell in the
pharmacy.
PC Blues - News and Views:
VoIP - a briefing
I recently came across a good article describing the
present state of VoIP. What is this? Telephone calls through the
internet!
This is something like the tail biting the dog.
In the beginning, all telephony was analogue. That
is, you spoke into a microphone, and your voice was converted into a
varying voltage which went down the wire to the receiver, amplified here
and there when the signal became weak. Some decades ago now, this
inefficient system was digitised: at the telephone exchange, the signal
was turned into noughts and ones, like the noughts and ones in a
computer, and this stream was sent to the receiving exchange, where it
was turned back into an analogue signal for the receiver’s phone. Such
a system is much less susceptible to noise, and makes more efficient use
of the wire: you can carry more traffic between exchanges using the
existing wires.
Your computer’s dial-up connection uses this system
through its modem. The computer makes noughts and ones, and gives them
to the modem. The modem turns them into an analogue signal of tones,
which go to the exchange, only to be turned back into noughts and ones.
And so on, to the destination. Such awkwardness!
Several years ago, someone realised that you could
connect a microphone to a computer, and send the voice input over the
internet. One step further and you could make a ‘phone call’ from
computer to computer over the internet. Another step, and you could make
a phone call from a computer to an ordinary phone. This technology
gathered pace because it was cheaper to do this internationally than it
was to make international calls.
The economics here need some explanation. In an
ordinary phone call, you establish a circuit from caller to receiver,
and pay for this circuit even when neither party is talking: the circuit
carries ‘silence’, and uses what is called ‘bandwidth’. You pay
for bandwidth. An internet connection, however, operates in packets. If
you monitor your dial-up connection, you will see that the data flows in
fits and starts. When there is a packet to be sent, or received, that is
the only data that is moved. There is no data sent for ‘silence’,
and so the bandwidth used is less than for an ordinary phone call. [The
connection to the exchange is still an ‘ordinary’ phone call! The
bandwidth saved is between exchanges.]
Another feature of the internet is that packets sift
through the internet along a variety of routes: there is no single
circuit between source and destination. Whether that affects the
economics, or not, I cannot say. It does, however, mean that if there is
a broken connection at some point, the packets will merely take a
different route: for a voice call, the call would be lost, with
consequent irritation.
VoIP is now big business. Major companies have
switched their phone systems over to using it internally, and soon the
telephone companies will do likewise. The last step will be to digitise
the ‘last mile’ - the link between the exchange and the subscriber.
For those who have broadband installed, that is already done. Those who
have broadband should use it for phone calls, otherwise they will be
paying over the odds. [I suppose this depends on how reliable your
broadband connection is! But most people round here have a mobile - also
digitised!]
A second commercial consideration here is the
computer you use to connect to the internet. Modern computers use a lot
of power. If you are going to have a computer which is always on, to
handle the broadband phone/data/fax connection, you really need a
low-powered computer, otherwise you are going to get very high
electricity bills. You are also going to want an uninterruptible power
supply (UPS). With a low power computer, you can use a cheaper UPS. And
finally, this computer should run your firewall, to protect you from
viruses and other creepy-crawlies. There is a potentially large market
for such boxes, fitted with a broadband interface and network card,
preloaded with the best in firewall protection, phone book, dialler,
answer phone and fax software, and sold as a package with a good USP
unit.
Psychological Perspectives: Understanding terrorism: A role for the behavioral sciences
by Michael Catalanello,
Ph.D.
I had occasion to visit New York City
during the summer after the terror attacks on the World Trade Center and
the American Pentagon. Like many tourists in the city during the months
following the attacks I found myself at the site in lower Manhattan where
the twin towers once stood. Onlookers and groups of tourists from many
countries were filing past the site, occasionally stopping to look, offer a
prayer, or shed a tear.
As I stood outside a page fence surrounding the
perimeter, and surveyed the huge vacant area of destruction euphemistically
known as “ground zero,” I remember having two thoughts. First, I was
struck by the immensity of the area that was affected by the attack. My
prior impression of the area formed from images on my TV screen had not
prepared me for the huge, sprawling acreage that lay before me.
My other thought was an awareness that this tragic,
watershed event was the product of the psychology of a few, that was having
a profound effect upon the psychology of many around the world.
Terrorism, it seems, is different from war and
traditional military conflict. Terrorists strike suddenly and unexpectedly.
Acts of terror, by their nature, occur indiscriminately, killing and
injuring civilian men, women, and children. Unlike conventional war,
terrorism can seemingly strike anyone, anywhere, at any time. And terrorism
has an indirect effect on many others, like you and me. It can reduce our
feelings of security. It impacts upon our emotions. It can elicit intense
feelings of anxiety, confusion, helplessness and vulnerability.
Writing about the psychology of terrorism, psychologist
Philip Zimbardo observed, “Terrorism is about imagining the monster under
our beds or lurking in dark closets - the faceless, omnipotent enemy who
might be the friendly candy man, our neighbor, or some horrible creature of
our imagination. It has no one place, time, space or face. The power of
terrorism lies precisely in its pervasive ambiguity, in its invasion of our
minds.”
It seems fashionable and politically expedient for
politicians and demagogic leaders to talk tough about terrorism. They
portray terrorists as wildly irrational, evil monsters intent upon wreaking
havoc and murdering innocents. This perspective is reinforced by the
terrorist declaration, “You love life, but we love death.”
According to Zimbardo, the view of terrorism as the work
of madmen “…fails to adopt the perspective of the perpetrators, as an
act with a clearly defined purpose that we must understand to challenge it
most effectively. And such negative labeling lulls us into thinking it is
random, not comparable to anything we do understand, and is making us
disrespectful of the high level of reasoned intellect behind these deeds,
however distorted or diabolical it may be.”
A strong military response to terrorism is the popular
political prescription. In the aftermath of 9/11 Bush vowed to track down
the terrorists and kill them. His opponent, Kerry mirrored this rhetoric,
but added that his methods would be “smarter.” For a politician, the
suggestion that terrorism can not be wholly eliminated is usually
interpreted as a sign of weakness, to be exploited by one’s political
opponents.
Can terrorism be eliminated through military means? Can
we be sure that killing a terrorist, killing a hundred terrorists, killing
a thousand terrorists, or bringing them all to justice would bring us any
closer to eliminating this unfortunate scourge?
“Unlikely,” in Zimbardo’s view, “…unless we
know what are the root causes of the hatred against America, unless the
ideological, political and social bases of the mentalities of the next
generation of potential terrorists are more fully appreciated and efforts
to change them are engaged.”
I suppose if a candidate were ever to suggest trying to
better understand terrorists, it would amount to political suicide.
Nevertheless, psychology, as the scientific study of human behavior and
mental processes, is well equipped to investigate terrorism, and has
already begun to shed light upon this phenomenon.
Perhaps, as we begin to better understand the social backgrounds,
worldviews, motivations, and impulses of the people attracted to this form
of behavior, our understanding will suggest more effective means of
controlling this scourge than through traditional violent means. Such
methods might include, for example, efforts toward reducing the root causes
of terrorism, promoting feelings of solidarity and cooperation among the
diverse groups populating our world, creating constructive means for groups
to meaningfully air grievances against more powerful nations of the world.
Dr. Catalanello is a licensed psychologist in his home
State of Louisiana, USA. He is a member of the Faculty of Liberal Arts at
Asian University, Chonburi. Address questions and comments to him at [email protected]
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