when the academy discovers politics

Bryan Caplan has a knack to talk about the unmentionable. He discovers the unsaid truth of democracy: the masses are evil morons. He poses the question about Arab democracy:

What exactly does the majority in Iraq want? If public opinion in Iraq resembles public opinion in other Muslim countries, it’s not pretty. It obviously varies from country to country, but overall it looks like a politician who wanted to win elections in the Muslim world would be pro-terrorist. It's a little harder to figure out the practical importance of the extreme anti-Semitism. If these countries contained significant numbers of Jews, democracy would almost certainly approve their expulsion or worse. As things stand, we can expect strong opposition to normal trading or diplomatic relations with Israel, and countries adjacent to Israel might attack Israel.

It is obvious to anybody with a bit of knowledge of the Arab street that any aggression (from accusing anyone of being an Israeli spy to unprovoked surprise attack) would be wildly popular. Any antiforeign policy, any redistribution of wealth, any public morality policy would be favored by the masses.

when all starts to unravel

CREDIT markets across the world are braced for trouble after Merrill Lynch abandoned efforts to save two Bear Stearns hedge funds, forcing the sale of $US850 million of sub-prime mortgage bonds and other assets for debt repayment. The mushrooming crisis's ramifications may be broad as the worsening property slump engulfs a large chunk of America's $US2000 billion sub-prime mortgage sector.

The two Bear Stearns funds, specialising in structured credit, borrowed $US20 billion to bet on risky bonds, though this has been cut by more than half. They targeted the lowest tranche of sub-prime mortgage debt, which can yield as much as 20 per cent but is highly vulnerable to rising default rates (Falkenstein adds: "I've read elsewhere it was a 1% edge, levered 10 times, but the point is similar" If I understand him, there was a difference of rate paid and rate received minus expenses = 1% and the fund did that 10 or 20 times for each dollar. When the bonds bought did not pay the + 1% interest, they were standing with a debt 20 times the money actually managed by the fund. It seems a very risky strategy to me).

when I discover the wheel

The fact that Bloomberg explains the rise of Brent crude price by regular operation of US refineries, while a day or two ago explained the rise of that day by repairs and down time of the same refineries - well, makes me think.

* refineries do not change their production from one day to the next
* the operation of refineries has little effect on crude demand
* the market is reacting to change, always by rising the price
* more exactly, the market is reacting to news of change, always with higher price
* the market is an idiot, rising prices to any news
* the market is an idiot computer program, rising prices to any news

G-d help us.

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Enigma: Crude Rises when refineries work and also when they are down

Please pronto somebody explain it to me! Yesterday crude prices were up because most refineries were hardly operational and were unable to satisfy gasoline demand. I wrote an erudite note about the difficulties of maintaining complex refineries and the permitting process that could take ten years. Today, Bloomberg informs that

crude prices climbed above $70 for the first time since September yesterday after an Energy Department report showed that U.S. gasoline supplies fell last week as refinery operations rose.

Kever Benjamin Modernizes Its Water Faucets

Kever Benjamin's water people, once more, erred. They installed ultramodern electronic optically operated water faucets in public parks and public pissoirs. Its was the SCANDAL of the shtetl.

What kind of godless people would cause Kever Benjamin's holy believers commit sins against the Shabbat? Say a Jewish child wants to drink water from a public fountain on the holy Shabbat, he would have to actuate a photoelectric sensor which in turn would operate an electric valve - causing him to interrupt an electric circuit and metaphorically make fire, which is considered work and forbidden on Shabbat. The innocent Jewish child would have sinned, when he only wanted to drink some water, and all because of the city's water people. The Major, after consulting the City's Chief Rabbi, gave immediately order to retire the sinful electric faucets and install traditional mechanical faucets which are turned by hand and whose operation (requiring sometimes the use of force) is not considered work and is therefore permitted to the faithful on Shabbat. I should inform the readers that Kever Benjamin is considered one of Israel's less religious cities (only 80 synagogues), and somewhat of a mini-Silicon Valley of the Sharon area, home of San Disk and other hi tech industries.

Godless Politician cuts Kever Benjamin Temples's Water

One of the side effects of privatization of the water supply in Israel is that the new for-profit organizations that are taking took over the water infrastructure are cutting the service to public institutions. Traditionally, schools and synagogues never were billed for their water supply, mainly for political reasons but also because they used almost no water. Now, the head of Kever Benjamin's Water Organization (pic left) decided to cut the supply to the shtetl's 80 houses of prayer. Ipso facto, 72 of them promised to pay retroactively the debt they never knew they had and their service was restored, but eight were left waterless. The Talmud establishes that those of the priestly tribe, the cohanim, must wash their hands before entering the temple. And we are in summer, in the Middle East, and the temperature in Kever Benjamin reaches 40 degrees Celsius, synagogues have no air conditioning, the faithful are thirsty while praying and studying the Talmud all day, they digest the Shabbat meal and the result is a place smelling like a latrine. The Talmud explicitly forbids praying in a place with bad odor, thus Kever Benjamin's poorest communities are left to pray on the street.

Some troublemaker could send a public question to the City's Rabbi: Is Kever Benjamin's water kosher? It may well be that the Water Organization needs a kashrut supervisor, paid by the organization and observing if the water workers and managers are observant Jews as they have to be if the water is to be drunk by the faithful.

Designing a Synagogue

I just finished designing the infrastructure for a synagogue in a moshav (cooperative village) near Jerusalem. I had to do it twice, as the faithful changed the site and also wanted more changes. It is said that a camel is a race horse designed by a committee, so this synagogue is a barnlike unoperable structure. The people didn't want to tackle upcoming issues like fire protection, air conditioning, the mikweh (ritual bath) and other previsible problems. I always liked a Jerusalem soft white stone covered patio רחבה before the temple, where people prays in hot summer evenings, or carries out open air ceremonies like the blessing of the new moon. Of course these people didnt want a clean white stone pavement before the entrance but a muddy garden that will never be properly maintained. I could spend some time to look up in the Talmud and in books of synagogue archeology how the ancients solved these problems, what are the ritual water and sewage requirements of Jewish holy building, to do something original and special, but I am just not in the mood in this project.

Squeezing Satan

Satan, the enemy, has made a mistake. President Mahmoud Ahmadinejad, may G-d erase his memory, decreed gasoline rationing in Iran, causing widespread unrest, with drivers lining up for miles, gas stations being set on fire and state-run banks and business centers coming under attack. Tehran police chief, Ismail Ahmadi Moghaddam, complained that the police had been caught unaware by the decision to ration fuel. The anger posed a keen threat to , who was elected two years ago on a platform of bringing income from oil to the nation's households. Instead, even though Iran is one of the world's largest producers of crude oil, it has been forced to import about 40 percent of its gasoline at an annual cost of $5 billion to make up for shortfalls in its archaic refining industry. Iran is buying foreign gasoline for $2 a gallon, and offering it for 34 cents a gallon. Parliament voted last month to increase the price of gasoline to 64 cents a gallon. But Ahmadinejad rejected the proposal and decided to proceed with rationing. Riots had erupted in Ilam on the eastern border and that people had attacked a gas station in Shiraz in the south.

Longstanding discount prices have encouraged gasoline consumption in Iran, where many people believe that the vast oil resources make cheap gasoline a basic right."There is no reason why we should pay the same price as people outside Iran do. We have all this oil beneath our feet and have to wait for hours in line to get our ration." This is good news for Israel, bad for my oil put speculation.

The Balak Affaire

This Shabbat we Jews read the portion of Balak in the Bible. Balak was the chief of the Moabite tribes, living on the Eastern, watered side of the Syrian African Rift. Exactly on the way of the Israelites in their way toward their Promised Land. Balak learned to his dismay that the Israelites, a mixed multitude of second generation Egyptian slaves, already had exterminated his neighbors of Sichon and Og. His intelligence reported to him that forty years 0f wanderings of these pitiful human refuse under the sun drenched desert had driven them delusional, and now they believed they were the Chosen People with a mission from G-d to establish his Kingdom of Saints. On Balak's land.

Balak knew that the strength as well the weakness of the would be Israelites was their illusion that they were fighting G-d's war, and therefore they were immune to human weapons and defeat. To instill a shadow of doubt in their souls and maybe even collapse their autistic self-righteous assurance, he hired the most famous sorcerer available: Bilam. Go and curse them, put the fear of death in their hearts. Everyone in the Middle East knew that there was no resisting to Bilam's magic, people cursed by him was panicked by terrible night monsters, they were felled by violent trembling and hide in the darkest corner of their huts. Bilam demanded very high fees for his exclusive services, and the Bible describes the negotiations between Bilak and Balam till they settled on half-a-million-dollar worth of silver shekalim. In his mind, Bilam had this easy job finished with no difficulty, in the eyes of his mind he had already seen those miserable escaped slaves turning back to where they came and begging the Pharaoh to renegotiate their servitude.

With great ceremony, Bilam selected a suitable high place where he could be seen from the Israelite camp, he dressed up in his fieriest monster mask and with the deafening, thunderous percussion background orchestra of 100 African drummers, he presented himself before the waiting public. Bilam had done this routine many times before and was used to watchthe panick and horror his mere presence caused in the observers, he felt in his own bones the stomach convulsions and vomiting caused by the waves of concentrated evil that were reaching them, he enjoyed the spectacle of their running for cover behind rocks and trees in their futile attempt to escape his ultra-high-tension rays of disease and bad luck.

But all his acting and cursing did nothing to the Israelites. He ordered the Africans to shout and jump like souls possessed by the devil, and himself declamed the most powerful curses of his repertoire, promising terrible fates to them, to their children and to their G-d.

Nothing.

The minds of these unfortunates had been dried out and hardened like a date palm stone. They knew for a fact that they were invulnerable to curses and magic, they were positive that Bilam was no prophet of the living G-d but a pathetic clown and as such, was laughed off the hilltop. Never but never have met Bilam with such a reception. His reputation as sorcerer as well as the issue of compensation for non-performance were on the table. He renewed his efforts once more. Nothing. Feeling ridiculed and in danger of losing his income source, he decided to change sides and blessed the invaders. It was a breach of his contract with Balak, but Balak's chances appeared somewhat uncertain and Bilam had a hard-earned reputation for effectiveness to protect. And lo!, his blessing of Israel was most effective, Balak and the Moabites soon became Bible subject matter and Bilam incorporated his magical castings business and signed a long-term contract with the proto-Zionist entity to do public relations work in the Egyptian capital. Among the achivements listed on the Bilam Corp's website is its successful lobbying in the Pharaoh's Court to increase the Egyptian military assistance budget to Joshua's ProActive Preventive Defense Forces.

Marriage by Telephone: Is it binding?

Among Jews, under certain conditions, it is. When Rabin's murderer was maintained in isolation in the prison, he got married. After the marriage was recognized, he started to enjoy marital visit privilege and got his wife pregnant (she is expecting a boy). (One interesting issue is if homosexual couples enjoy in Israel sex visit privileges: They do). The marriage was considered legal because the marriage was done with participation of Igal Amir's brother and father and through a rabbinic intermediary. Also our cousin religion, the Muslims, prefer face to face marriage but in certain conditions, accept intermediaries. The Fatwa Centre of the Islamic Network has declared that nikah rites (marriage agreement) through telephone is not permissible under Shariah law. “The presence of the parties - the future husband and wife - or their legally documented representatives like parents or brothers besides two adult witnesses is required,” it said. The Fatwa came in reply to a question raised by a Palestinian woman living in the US, who was engaged to her cousin through telephone. She said, the nikah rites were done in a nearby mosque where she lives in the US, but the state’s laws there indicate that the two parties of the marriage should face each other, therefore the document was not endorsed by the state where the girl lives. I tend to think that Jewish and Muslim religions are more humane, liberal and advanced than Christians in issued related to marriage and reproduction. They are certainly closer to my own instincts.

Target Peer Group

Merrill Lynch's “World Wealth Report” says that Israel had 7,200 persons in 2006 with net liquid assets in excess of $1 million, 12.9% more than in 2005. In addition, the number of Israeli multimillionaires - people with more than $30 million in liquid assets - rose by 15% in 2006, compared with 2005, to 87 persons, most of whose wealth is in the capital market.

איזהו עשיר The Talmud asks: Who is rich? and answers: The one who is happy with his condition.

A baby called Life

That's me. The provincial doctor who made my bris almost killed me (the pic show how these things were done during the Pharaonic times) so my parents changed my name to Life and never heard of my original name. We Ashkenazi folk may be most superstitious people on Earth. The supposedly close association between the name and the person led to the common belief that changing a name would prevent the evil spirit from harming the person. If the name were changed, the evil spirit (moloch hameyvos, the feared Angel of Death) would not recognize the person. This belief is embodied in the Talmud (Rosh Hashanah 16b): Four things will stop death: charity, supplication, change of name and change of action. These superstitions carried over in Eastern Europe to the naming of children. When several people have died in a family, a newֲ­born child is given a name that is never uttered, so as not to give the evil spirit any opportunity. Often, a nickname was given to the child, such as "Alte" (Old One), Chaim (Life), or Zaida (Grandfather). The idea was to deceive the angel of death. A similar practice was adopted for the ill. On the other hand, babies are given the names of deceased relatives, as a way of bringing back them to life. My Uncle Moshe from Meah Shearim used to ask my mother about names of relatives, because he had used all the names he remembered and new grandchildren were being born all the time. The favored name in my family seems to be Moyshe, that resuscitates some Moyshe sitting on a high branch of my genealogical tree.

Symmetry in Finance

Like all good teachers, Eric Falkenstein blogging on Mahalanobis seems to be talking about me (aka "some idiot"). Imagining in my mind the B&S equation and so on I can see there is a symmetry problem, but I have no time to think. Thinking is hard work and I am lazy and want to finish the water design promised to this morning to my friend E. Solomon. (*) And my out-of-money put option on Brent crude rised 15% today on TASE, as the crude's price is now under 70$ a barrel. He writes: "But also I was amused because Nassim Taleb likes to assert that people's preferences towards negative skew implies these assets have negative returns: the positive daily payoff is preferred to one that only makes money once a year, or once every 10 years. I think unlike the academics, Taleb comes at this as a trader, who has seen lots of traders make money day after day, and give it all up in a final blow out. His experience is colored by survivorship bias, where all too often some idiot is in a sense selling insurance, raking in daily money, and then when he has to pay off, realizes he doesn't have sufficient capital. This is often in the form of selling out of the money options, buying bonds (a long bond position is symmetrical to a short out-of-the-money put option on the equity)."

(*) Yeah, anybody can see how hard you are working on that urgent Abulafia project.

Alles gut, but why the Klimt? Was, you dont like Klimt?

Hungarian Jewish Swimmer

Hajos Alfred born Guttmann Arnold won his first world champion title winning an open sea swimming competition at the first modern Olympic games in Athens, and as typical Hungarian Jew, protested against the Austro-Hungarian Empire's hymn because he considered himself Hungarian. Of course he was betrayed, like all Jews, by his Hungarian compatriots and delivered to the Nazis to be poison gassed and cremated. He survived and worked in Hungary as design engineer and built several important structures till his death in 1955.



Hajós Alfréd mint Guttmann Arnoldként született egy budapesti zsidó családba, gyerekkorában apja a Dunába fulladt, ezután kezdett komolyan az úszással foglalkozni. 18 évesen, az 1896-ban az Athénban rendezett első újkori olimpián (már Hajós Alfréd néven) megnyerte a 100 méteres úszóversenyt 1 perc 22 másodperccel (egyébként jóval később, 1 percen belül elsőként a magyar származású, Tarzanként közismert Johnny Weismüller teljesítette ezt a távot). Akkoriban nem voltak úszásnemek, mindenki úgy úszott ahogy akart. Hajós a matróz úszással nyert, ami a mai gyorsúszás elődje volt. A győztesek érdekes módon ezüstérmet kaptak, a másodikok bronzérmet, a harmadikok semmit. Az úszóversenyt az Athén közelében lévő Zea öböl hullámos vizében rendezték, az indulók egy gőzös fedélzetéről ugrottak a vízbe. Hajós az 1200 méteres távot is megnyerte, az 500 méteresre az időbeosztás miatt nem ért oda. Mikor felhangzott a győztesnek szóló osztrák himnusz, Hajós leállíttatta azt, és kikövetelte a magyar himnusz eljátszását. Később bajnoki érmeket szerzett gátfutásban, síkfutásban és diszkoszvetésben is, de ez még mindig nem volt elég. Rövidesen a BTC focistája lett, és 1902-ben már a magyar válogatottban játszott. Egy év múlva már csapatkapitány lett, és 1904-ben ugyan abbahagyta az aktív sportolást, de előbb játékvezetőként, később a válogatott szövetségi kapitányaként folytatta tevékenységét. Végül az MLSZ (Magyar Labdarúgó Szövetség) elnökének választották. Ekkor már neves sportújságírónak is számított, számos cikke jelent meg lapokban, és az akkor népszerű Sport Világ című lap az ő szerkesztésében jelent meg. Mivel végzettsége építészmérnök volt, a tervezésben is jeleskedett. Legismertebb munkája a margitszigeti Sportuszoda épülete, de számos egyéb épület mellett ő tervezte a debreceni Arany Bika szállót, a debreceni színházat, a győri versenyuszodát, a Megyeri úti sporttelepet, és a pünkösdfürdői strandot. Sőt, 1924-ben Lauber Dezsővel közösen álmodták meg az Ideális stadion tervét, amivel a párizsi olimpia művészeti versenyén második díjat nyertek. Bár a zsidóüldözés őt sem kímélte, túlélte a második világháborút, és 1955-ben bekövetkezett haláláig aktívan dolgozott a Mezőgazdasági Tervező Iroda munkatársaként.

Mystery of the Saudi Man

I was thinking about Saudi society and the Saudi man. We Israelis have intimate knowledge of them as Negev beduins are close blood cousins of Saudi tribes that have migrated into the empty Southern desert during frontierless rule of the Turkish and British empires. Our Beduins have reproduced mightily and filled the desert with shantytowns. Israeli government makes a great effort to integrate them into society. 85 Bedouin engineers will be hired by Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) and Intel Corporation (Nasdaq: INTC). Under a special program, costing an estimated NIS 5 million and jointly promoted by the Office of the Vice Premier and the Ministry of Industry, Trade and Labor, 85 Bedouin engineers, 19 of them women, have been receiving specialist training in air conditioning systems and chemistry, with the aim of finding them work in high-tech companies, such as Teva and Intel. The "engineers" have been training in their respective specialties at a vocational training college in Beer Sheva for the past eighteen months. They have also been receiving extra tuition in math and English in order to improve their ability to work with global markets. The engineers have qualified for full scholarships for their entire period of training, with each participant receiving NIS 1,000 in reimbursement for costs, and transport to and from their respective villages in the Negev. Beduins are clearly a marginal group that has great difficulty in modern society, comparable to the Roma in Europe. Imagine these people becoming immensely wealthy without effort and there you have the typical Saudi man.

Unflattering View of the Saudi Man

People is waiting me to finish some urgent jobs, but here I am reading forbidden blogs of the Arab world. They are not very interesting, mostly deal with secret sex ("Is there any other kind?" asks one blogger), adolescent girls longing for male friendship or romance, hidden sectarian movements (Christians in a Muslim society - and there are many of them, many Copts and Nestorians as well as modern Western Reform and Catholic -), semi-underground communities that are known mostly to themselves and wish to conserve their culture and roots - like Zanzibarian African people in the UAE. There are also many political intrigues which are understood only by the people involved. And human rights and women rights movements.

A rather unflattering picture of the Saudi man is given in the clip
#1465 - Saudi Women's Rights Activist Wajiha Al-Huweidar: For Saudi Women, Every Day Is a Battle Al-Hurra TV (U.S.) - 5/26/2007 - 00:04:25 rescued by MEMRI. She says Saudi men are spoiled, they have assured employment and income, they have never had to compete for anything and are dead afraid of having to measure themselves against foreigners and women. They never had the experience of having a dream and striving to achieve it. An enviable life, but also soft and decadent. Ms Wajiha is very impressive. Her expression on the pic is sooooooo typically Arab female. She IS authentic.

Saudi Owned Citigroup likes Israel

"Israel", says Citigroup, "stands out as attractive in terms of earnings yield ratio trends. Here, inflation is practically nonexistent; interest rates are very low, and valuations have not stretched enough to negate the benefits of this low-interest-rate environment. We are overweight on Israeli equities." We like Citi too.

The Secret of Jewish Conspiracy Uncovered

A study of people forced into a "Prisoner's Dilemma" situation discovered that the probability of reaching a cooperative solution is directly related to the IQ of the participants. The Prisoner's Dilemma is a game where two prisoners receive different prizes or punishments: the best outcome for both of them is to cooperate (both receive small punishments and both are saved), and the worse is when one cooperates (he is beheaded) while the other betrays him (goes free). When both betray, both hang as they should. Stupid people are unable to establish a relationship of mutual confidence and are forced to the violent solution, intelligent people understands the intricacies of the situation and succeeds in solving it together.

Now, Ashkenazim Jews are in general one standard deviation more intelligent than the average run of the mill population, so Jew with Jew is able to cooperate and undertaking complicated enterprises that require complex coordination. From the outside, this certainly can be interpreted as a cabal, a conspiracy. Therefore, commercial cooperation appears like a conspiracy to steal the goy's goodies. The goodies in question generally pass into the hands of the Jews, but it is not a conspiracy in the any sense. Every time I wanted to do something and needed a partner, I found it easier to work with clever Jews and felt unsure with goyim. Japanese and Chinese people are very able to work in harmony and build enormous civil engineering projects, and Germans have a knack for forming well-oiled hierarchical fighting teams (it is a fact that they are world football champions as well in most team sports). Other peoples, like the Arabs and the Africans, have difficulties to work or fight together.

Source: Bryan Caplan, who writes: "Garett’s got another neat paper on intelligence and cooperation in Prisoners’ Dilemma experiments. By combining data from many previous experiments, and looking up the average SAT scores of the schools where the experiments were conducted, Garett answers a big question on the cheap. Result: “A meta-study of repeated prisoner’s dilemma experiments run at numerous universities suggests that students cooperate 5% more often for every 100 point increase in the school’s average SAT score.”

A Hungry Ghost stares at Petrodollar Mountain

A significant part of the petrodollar windfall (1,000 billion? 2,000 billion? Uncountable gazillions?) has been recycled through Middle Eastern stock markets. Public-sector companies have been listed on the stock market in offerings restricted to nationals at "under-valued" prices. In the Gulf countries, the recycling of petrodollars has sustained a kind of exuberance on local financial markets (with average annual gains of up to 100% before the bubble burst in 2006).
Infrastructure projects to meet the needs of growing populations constitutes a second way of getting rid of the inflow of petrodollars. Gulf countries have plans to spend USD 1,500 billion on infrastructure over the next five years. Most of the money will be misspent. For example, the six Gulf countries have all decided to invest in the development of financial districts.
Petrodollars allow rulers to avoid reforms and buy social peace. This spending leads to revolution.
Inflation is the final challenge. Petrodollars cause liquidity that feeds inflation. In Iran, inflation is running at between 15% and 20% a year.
Now, if I were a mosquito, how could I suck up a drop from this mighty flow of petrodollars?

Speculating on futures contracts. I am trying it. A month ago I bought 1000 options and it is 30% down. I dont like it, but it made me learn what oil was about. I still dont understand it. US crude reservoirs are full, supply is satisfying demand. Yet prices are historically high. The European Union asked OPEC to supply more crude to reduce prices, and they refused, since there is no scarcity and it would have made prices fall. Prices are high because OPEC has no spare supply capacity to regulate the market, so any trouble - turmoil in Nigeria, war in Iran, terrorism, etc. - will cause price go up very steeply. Demand is unflexible, people will not reduce consumption if price goes up or doubles. OPEC needs spare capacity and they are drilling but it takes time and many of the old fields are declining. If in its October meeting OPEC does not increase supply, its unability to do so may have been proved and the market will rise wildly. I shall lose all my investment. If it announces that will supply more, solving the mystery of its real production capacity, price will collapse and I will profit.

Infrastructures projects. In Israel and me have exactly the experience and the capability the Arabs need - in water supply, in maintainance and operation, in water recycling, in irrigation with wastewater. The market is open in Dubai and the UAE, but it is done very low key. The Saudis are not enforcing the boycott against Israelis, but I have heard little actual work there. And the market is fully dominated by the British and Americans. And now the British are boycotting Israel. I will study more this market.

Brent expected to hit 65$ on Nov.11th.

I am in Wingate where my daughter is participating in the HaPoel National Swimming Competition. It is noisy and quite boring so I am researching my Brent speculation prospects. Current price is 71 - 72 so my option is far out of the money. Why? Strike in Nigeria. The strike has no effect on oil shipments but "traders remain concerned about the possibility of supply disruptions." Traders are fightened old virgins, they see a carrot and panic seizes them.

Upward price pressure was dented in the middle of the week by a huge rise of 6.9m barrels in US crude stocks to a nine-year high. The Organisation of the Petroleum Exporting Countries’ insistence that oil supplies remain adequate was bolstered by the jump in crude stocks but analysts warn the market is actually tightening significantly.

Mike Wittner, global head of energy market research at Calyon said: “The most likely scenario is that Saudi and Opec crude production will not see a large increase until October,” The tightening supply/demand balance has led Calyon to revise its oil price forecasts higher with Brent expected to average $69.33 in the third quarter and $65.50 in the fourth quarter.

Summary: On November 11th., it may be all right. Not sure, because 70 - 65.5=4.5 $ = 18.50 shekel, and I paid 23.00 shekel. I shall lose 4,500 shekel (1,100 $ plus interest and risk premium). If I bought the option today, I would have paid 15 shekel and the prospective payoff would be 18.5 - 15 = 3.5 shekel, a 23% profit. B&S value is 16.8 shekel.

Moses Hits Water in the Wilderness and Is Punished

In our weekly portion of the Bible, Parshat Hukkat (Num. 20:1-11), we learn about water. The Israelites thirsted at Rephidim, which was their last station before Mount Horeb in the wilderness of Sinai (Ex. 19:2). G-d did not cause water to flow on the spot, but commanded Moses and the elders, "Pass before the people," (Ex. 17:5) - move proceed ahead before the people to the next station, to Mount Horeb, and there strike the rock before the eyes of the elders. For the elders, it sufficed to witness the relatively small miracle of striking the rock, which perhaps is not even an obvious miracle but only G-d's grace, showing Moses a hidden watercourse under a thin layer of stone. From there the water flowed down to the thirsty people at Rephidim, being the "brook that comes down from the mountain" (Deut. 9:21), described in Ps. 78:15-16 and 105:41. According to recent studies, the place is on the Egyptian border near Eilat. The Israelites were encamped at Kadesh in the wilderness of Zin, today the village of Kadesh Barnea, near the ICI factory in Zin. Moses hit the rock twice instead of just telling it to obey G-d's command to give water. Perhaps he was misled by G-d commanding him to take the staff with him, and perhaps, as the commentaries emphasize, his error was also due to his wrath at the people, who came to Moses with complaints (20:3-5); wrath which was manifest both in his harsh and misleading words, "Listen, you rebels, shall we get water for you out of this rock?" (v. 10). Moses and Aaron were punished for not properly sanctifying G-d as they had been commanded, yet nevertheless a miracle took place here before the eyes of the people, and they and their flocks had plenty of water. Now, it may be that the minor and imperfect sanctification of G-d which we see here is made more concrete towards the end of Parshat Hukkat in the song, "Spring up, O well--sing to it-- / The well which the chieftains dug, / Which the nobles of the people started / With maces, with their own staffs" (Num. 21:17-18). This song differs from all other songs of the Israelites in the Pentateuch and indeed in the entire Bible, in that all the other songs praise G-d, whereas this song praises "chieftains" glorifying mortal men. Now we understand what happened: Moses, and with him Aaron, struck the rock forcefully (twice!) and obtained water from it; and it was to them, to Moses and Aaron, that the people sang: chieftains dug us a well, with their maces and staff. They sang to men of flesh and blood, not to the Creator. God punished Moses but all the same, "He affirmed His sanctity" through this water."

The Mall: A Success

The mall whose infrastructure I designed is proving a success. The supermarket area has been sold/rented to the Ribua Ha Cahol chain, and the pizzeria is already taken and they just added two hot dog stands. I shall send my bill.

From Refineries to Brent Crude Prices

I became aware that there is a link between gasoline prices in the USA and the success if my Brent Crude Speculation. It is a moronic, psychological link, but it is real. High gas prices in the USA are ruining my speculation. Why gas is rising in the USA? Because refineries are breaking down at a record rate. Why?
First, they are old and poorly maintained. It is almost impossible to build a new refinery in the USA. The permitting process (Aha!) is onerous. A group in Arizona is trying to build a new refinery, and it took them 7 years just to get the permit. If they proceed and build the refinery, it will have taken 14 years from the time they started the process.
Second, refining is a very risky and low return business. The poor returns of the 1980s and 1990s have caused companies to neglect refining investment, culminating in BP’s Texas City disaster. Reduced investment has brought about a lack of qualified engineering, procurement and construction staff. The tightness of US refining capacity at this time is not because companies are unwilling to invest in more capacity, it is that they are unable. Refineries are complex.
Third, the impact of years of stringent environmental regulations. New regulations may redirect capital that might have gone into expanding refining facilities. They increase the costs of producing the fuel. Additional processing requirements, as in the case of ultra-low sulfur diesel (ULSD) and gasoline - reduces product yield. And additional equipment will increase the complexity of the refinery. The more complex, the less reliable. From 1994 to 2003, the refining industry spent $47.4 billion, not to build new refineries, but to bring existing ones into compliance with ever new and stringent environmental rules.
Summing up, the refining bottleneck will not be solved easily. Gasoline will be scarce this summer. The consumer will get used to pay more. No good for me.

Business sues Tel Aviv for delaying permit

The Israeli bureaucrat aka the pakid (in Hebrew, the one who gives the orders) is a direct spiritual descendant of the Turkish pasha. He or she works without procedures, can apply any rule from a vast collection of commandaments from the Turkish Empire, the British Mandate and the Israeli Knesset, as well as the Torah, Mozes's Laws proclaimed on Mount Sinai, and the Comments of Maimonides. This legendary figure (which I meet ten times a day) fears no God, no City Engineer, no elected official. He considers his birthright the limitless power, the fear he provokes, the submissive tone he is addressed. But see, a desperate businessman, after being tortured for seven years by Tel Aviv municipal bureaucrats, has sent his lawyers to sue the City. In the past, lawsuits tried to tackle this problem by accusing the bureaucrat of delaying the permit because of seeking shohad (corruption), and this is the first case that the lawsuit is against the City's normal practices.

The business, called The Artist 17, was started in the year 2000 and its building completed in 2005. All these seven years they have been running after the pakidim submitting plan after plan and maintaining meeting after meeting. They did everything to play according to the rules and even before buying the site they submitted several alternatives to the pakidim, till they decided on Abarbanel street 88 place. The document submitted to the Tribunal details the endless mmetings, demands for changes and new conditions by the City, how they were advised to submit for an industrial (workshop) permit and later to change to a discotheque. After completing all the requests, their solicitude has not been approved and they are now facing judicial action for illegal business activities. The lawyers maintain the City is unfair, its demands are not reasonable, the refusal of the permit is an excessive punishment, and it contravenes their right to conduct a legal business activity. In Hebrew, חוסר מידתיות, דרישות בלתי סבירותת פגחעה בחופש העיסוק

The lawyers go as far as to name the name of the Manager of the Environmental Department as tricking them into investing and building, then torturing them and finding all kind of delaying tactics that make impossible for them to work legally or to wrap up the business and leave Tel Aviv for good. As said, they are not accusing the man of taking bribes, - I am sure they would be happy to pay almost any bribe to receive the permit -, nor of breaking some bureaucratic rule or procedure. They are accusing him of doing what he and his fellow pakidim are doing every day to anybody who has the bad luck of needing something from the City.

More on the Engineering Tour

As noted below, I took the Environmental Engineering course to a professional tour that included the Waste water Treatment Plant of Barkan Industrial Zone near Ariel, in Samaria; to a large pumping station in Kever Benjamin, and another well equipped and managed SBR process WWTP in the area. I wanted to visit this time the Kibbutz Eyal's WWTP, which processes Ariel as well as Kalkiliya's wastewaters, but they demanded a permit by the Army. Bloody bureaucrats! The plant is near the separation wall but I think shooting would be out of the relative peace we are enjoying these days between Samaria and Kever Benjamin. Anyway, I had no time for permits and left that plant for the next semester. Above you can see the excellent settling of biomass and the separation of treated water: the water is very clear and the biomass is excellent. The Palestinian operator, Maher, proudly shows the water, which at this stage is not recycled (because Jewish settlements have no agricultural lands in the Shomron and the Palestinians don't accept Jewish waste water...) but let it flow into the Shilo stream into the breathtakingly beautiful Shilo River Natural Reserve. The Shomron, Samaria, the hill area, is the best part of Israel. You can click on the pic to see the fantastic blondies, that is, human element we have in our course.

Leo at 21

Conservatives in Kever Benjamin

This morning we attended a bar mitzva in Kever Benjamin's Conservative Synagogue, the largest in Israel. The boy's father was absent (relations are not good) and no blood relative was present, except a tall Haredi dressed in black. I liked the slow pace (the Orthodox ceremony has so much material that has to be read that it is always under pressure, accelerated, with the prayers read super fast), I liked the American rabbi who clearly explained each step - what he was doing and what we were going to do -; I liked the clarity of the prayers, which were in modern understandable Hebrew and not in meaningless Archaic Aramaic; I liked the parth when the bar mitzva boy had to take the collection box and make a round collecting money (familiarizing him with an important part of being a Jewish adult). I didn't like women with talitot and kipot, I didn't like the repeated assurances of loyalty to the country and its rulers and armed forces, I didn't like the emaciated and/or obese neurotic middle aged American women in the public.

The decoration is simple, modest and nice. There is only one vitrage donated by Reb Edelstein from the USA, originally from Szekszard, Hungary, with a story telling the deportation of the whole community to Auschwitz and its destruction. The aron ha kodesh contains the Torah scrolls but also a large shofar, a ram's horn. It is not habitually considered a sacred object. Everything is very American, clean and friendly. All in all, they add much value to Kever Benjamin.

Goyische Ways

Jacqueline Passey. She is against motherhood. I don't like that woman.


On no point there is a sharper difference between (believing) Jews and goyim, the nations. Our Prophets passionately hated the abominable Canaanite ritual of passing children through fire, that is, killing them as a sacrifice to their god Baal. Our Prophets destroyed the tophatot the ceremonial altars where the Canaanites killed their offspring. Near Jerusalem, in the Hinnon Creek, there was a such a tophet, in Gay (Valley, in Hebrew) of Hinnom, i.e. Gehenna - Hell. Phoenicians and Carthaginians were Canaanites, and in the ruins of Tzur and Carthage there are large cemeteries with thousands of clay vessels containing churned baby bones. Baal's priest put the child on the extended, slightly sloping arms of the bronze or gold Baal statue, and the helpless child slowly slipped into the fire. There was strong drumming to hide the child's desperate crying. Evil, evil, evil.

Greeks were no better. Greeks of the Antiquity felt nothing toward their children and if they did not like them or did not want to bother with bringing them up, they threw them down a precipice. Not only Sparta but all Greek cities had their designated killing rocks. When the pagans first met Jews, they were amazed that they raised all their children. Augustine called Judaism the cult of the flesh, while Christianism was the religion of the spirit. I think there is something in that, Judaism does not encourage living for the world of the spirit.

The feeling was awaken by Bryan Caplan's note on The Economist's blog. Bryan has family and takes up a pro-children position. He searches for economic reasons to have children, even if the profession of economy maintains that children reduce happiness. Happiness is the new God of Economy. Bryan feels so uneasy defending pro-child ideas that he offers a balancing link to Jacqueline Passey's post: "Yes, I think my mother would have been better off if she hadn't had children." This bad woman writes: "Raising happy, healthy (physically and mentally), responsible children is a more-than-full-time job – even more so in places like the US, where the public education system and most of popular culture are actively working against you to make your children unhappy, unhealthy, and irresponsible instead – and someone has to be willing to give up their life for 15-20 years to do that job. Maybe there are women out there that have so little going for them otherwise that the opportunity cost of giving up their life isn’t that much. But my mother could have done so much more with her life – and instead she wasted it by doing a not-so-great job raising kids. Yes, I think she’ll be pissed when she reads this, but I have the right to write about my life." There is good and evil, and she is no good.

Oil Speculation

Brent is over 72 $ per barrel but my out-of-the-money put option's price is going up. Maybe I am not the only speculator that knows that crude-oil market often follows gasoline during the summer driving season. U.S. gasoline demand peaks between the Memorial Day holiday in late May and Labor Day in early September. My option pays the difference between price and 70$ on November 11th. The fact is that the oil market is opaque, no one seems to know how much oil is being offered and how much is demanded. Bloomberg:

Analysts were split on whether crude-oil supplies rose or fell last week.

I am hopeful.

End of Semester Professional Tour

We are finishing the second semester and I took the students to visit three water-related facilities. It is a very hot summer day and the sewage pumping station had a strong smell and a Yamani student fainted. The grandmothers of two of the girls suddenly called that they are dead, so the girls had to leave for the respective funerals. The ten hardy souls that reached the last site had the privilege of a closed meeting in the wonderful air conditioned meeting room of Raanana Municipal WWTP, with colored shaded windows looking to the emerald green fields of Moshav Batzrah irrigated with recycled water. I gave them a round about of possible exam questions, and which of my exercises are an absolute must to receive a pass note. Many are already working as civil engineers.

Long Distance Occupation

While Israel is physically outside Gaza, it still completely controls our lives, all aspects of our lives: health, education, economy and freedom of movement. Life under occupation is degrading to human dignity. It has deprived us of our freedom, and only free people can make peace. It is most peculiar that we are forced to deal with the patterns of life under occupation as normal, well-established facts.

I am copying and pasting this from the blog of a Palestinian doctor in Gaza. We have left Gaza completely two years ago and since the Oslo agreements a generation ago, we have been trying to disentangle ourselves from their lives and put the largest distance possible from their physical personas. But they are still obsessed with us. We control... How on Earth we control their health? their education? their economy? Their freedom of movement? Children under 15 in Gaza have never met nor seen an Israeli. Still she says she is living under occupation? Are we phantoms in her sick mind that she feels controlled, occupied, unable to take free decisions?

I would understand that feeling of being unable to escape the fascination of the Israelis if instead the old hag she is, it had been a Palestinian boy. The pic shows one of our fashion models. Conquering. Occupying. Controlling. Enslaving. Impossible to escape the power rays emitted by certain parts of her body.

Sick Building - Cured

Yesterday I was urgently invited to visit a large office building near Tel Aviv. The west wing had strong sewage and chemical odor, the bosses had to send the secretaries and the office people home because working was impossible. They were desperate, they just had completed a large scale rebuilding and the impossible odors had not disappeared. Interrogated, they were unable to say if it came in from open windows, from the air conditions, or what. I spent two hours examining the building and my conclusions are clear and I am writing my report. I found, for example, two closets with no air conduits. I found the air conditioners water outlet connected into the sewage pipes, with no siphons (uppe left pic). I found a large obtrusion of the main sewage line (upper right)!! I found they had built two vertical air conduits to 2 m and they ended in front of windows (lower left)!! I found they had tried to solve the problem and installed a 6" ventilation pipe - the pipe was 1,5 m tall, exactly at the nose level (lower right) !! Air conditioners were dirty, the filters were full of solid dirt. Oh, boy, did I solve the problem !! But it is evident that someone before me had worked on the problem and made them spend lots of money and did not solve the problem. It may end in a confrontation with the unknown tradesman and end in a suit. I have to be careful, these people is very tricky.

Why oil prices will collapse

I am expecting Brent oil prices to collapse in August 2007. The price has rised to $ 72 but I am not worried. However, I shall count the reasons why oil is on its way to be almost worthless. Most of the following is from Gary's blog.

Oil consumption in the 30 OECD countries fell last year for the first time in over two decades. Global demand destruction is pervasive. Over the last three years, global oil demand is only up 2.4%, despite the strongest global growth in almost three decades, while global supplies have increased 5.0%. Worldwide oil inventories are poised to begin increasing at an accelerated rate. There is a very fine line in the crude oil market between perceptions of "significantly supply constrained" and "massive oversupply." One of the main reasons OPEC has been slow to actually meet their pledged cuts has been the fear of losing market share to non-OPEC countries. OPEC actually needs lower prices to prevent any further long-term demand destruction. Oil is priced at elevated levels on record speculation by investment funds, not the fundamentals. The Amaranth Advisors hedge fund blow-up last year was a prime example of the extent to which many investment funds have been speculating on ever higher energy prices through futures contracts, thus driving the price of the underlying commodity to absurd levels for consumers and businesses. This is considered “paper demand”, which is not real demand for the underlying commodity. Global crude oil storage capacity utilization is running around 98%. Falling demand in emerging markets, an explosion in alternatives, rising global spare production capacity, increasing global refining capacity, a firmer U.S. dollar, less demand for gas guzzling vehicles, accelerating non-OPEC production, a reversal of the "contango" in the futures market, a smaller risk premium and essentially full global storage should provide the catalysts for oil to fall to $40 per barrel to $45 per barrel later this year. Gary fully expects oil to test $20 per barrel to $25 per barrel within the next three years as the historic investment fund speculation in the commodity reverses course.

מהפה שלך לאלוהים

Invitation to Event June 19, 2007

Minister Yishay demands to cancel the event, since it is aimed to make Israel a sex tourism magnet. We certainly have the natural resources and inclination to develope that export industry.

Don Segundo Sombra

A la tarde Goyo me informó, aunque insuficientemente, a mi entender.
La tropa sería de quinientas cabezas y saldría de allí dos días para el sur, hacia otro campo de Don Leandro.
-¿Y quiénes son los reseros?
-Va de capataz Valerio, y de piones, Horacio, Don Segundo, Pedro Barrales y yo, a no ser que mandés otra cosa.
Don Segundo fue más parco aún en sus explicaciones, y yo no sabía por entonces a qué se debía ese silencio despreciativo que usan los que se van cuando hablan con los que quedan en las casas.
-¿Podré dir yo?
-Si te manda el patrón.
-¿Y si no me manda?
Don Segundo me miró de arriba abajo y sus ojos se detuvieron a la altura de mis tobillos.
-¿Qué es lo que busca? -pregunté fastidiado por su insistencia.
-Lamanea.
-¿Ande la tiene?
-Creiba que te la habías puesto.
Un momento tardé en darme cuenta de su decir. Cuando comprendí hice lo posible por reírme, aunque me sintiera burlado con justicia.
-No es que me haiga maniao, Don, pero tengo miedo qu'el patrón se me siente.
-Cuando yo tenía tu edad, le hacía el gusto al cuerpo sin pedir licencia a naides.

Don Segundo Sombra by Ricardo Guiraldes is the most influential book I ever read. It is the story of a bastard boy who attaches himself to Don Segundo, a respected itirenant gaucho of the pampas. Above, Don Segundo is contracted as peon in a party to drive 500 cattle to another estancia. The boy wants to go with him, but is afraid. Don Segundo looks him up and down, till uneasy, asks: "What are you looking for?" The manea (fetters). Gauchos show off by speaking in riddles. "At your age, I never asked permission from anybody."

Lifted by Convection

The pic shows an uplift hot air current creating convection clouds. Birds rise effortlessly on these invisible vertical currents. I have these currents in the markets and I am lifted to the clouds.

100.21 סה"כ תיק בש"ח

The above means that I (almost) doubled my original capital during the last two years (almost, because I shall pay 15% tax on profits when I sell). I made 400% on ICI, Israel Chemicals, a subsidiary of POT, a Canadian fertilizer company. POT's leader is a commercial genius and he organized a monopoly that forced the Chinese to pay through their nose. POT split recently and is still rising. I made some 100% with Makhteshim Agan, a pesticide company; I made 100% in six months with Israel Corporation, the Ofer (Herskovitch) Brothers's company; 80% with Anter Holdings financial house, and so on. My big disappointment is Teva Pharmaceuticals, it has stagnated in the last 2 - 3 years. I lost money on Tower Semiconductors, but I had sold most of it with some profit. I am losing 25% on my Brent Crude Futures Put Options, but it was expected as it is expected that Brent crude's price will collapse next August. The conclusion is that the most profitable use of my time is to think and manage my investments. Pity that my best neurons are gone and my IQ and my memory are faint shadows of what they used to be.

Dream

I dreamt that my Mother was struggling to give birth to me. She was enormous, formless. I woke up without being born.

The Less Refinining = Higher Crude Price Paradox

I have read many journalist and blog explanations why crude prices are higher, and they always include the argument that there are refining problems in the USA. I wondered why lack of refining capacity in the USA would drive crude oil prices up, instead of down, but I shut my mind's mouth in deference to the experts: they must know how this works. But once more, dear me, it is demonstrated that expets/schmexperts, one should put his faith in one's own brain. It is very difficult to accept that "The Tail that Wags the Dog of Oil Prices" explanation is just nonsense. But it must be, since the Financial Times is also scratching its head. FT writes:

Oil prices are being driven higher by a general dip in US petrol (gasoline in America) supplies, as Ed Crooks wrote yesterday. This is one of those counter-intuitive abnormalities that makes energy fun or frustrating, depending on your disposition. But it's true, even though you may be hesitant to believe Abdalla Salem El-Badri, Opec's secretary-general, because he has reason to want to downplay any blame attributable to the cartel, which has recently restricted its oil output to push prices up. See the AP story here. Instead, believe US refiners who are privately admitting to having trouble performing their regular scheduled maintenance on time, and for that matter on budget. What is interesting is the reason: The general lack of parts and labour in a market of high demand that is making it more difficult to do everything from drilling new wells to retooling refineries. Now if only someone would come up with a better explanation than 'psychology' as to why refining less crude into petrol should drive crude prices up, rather than down. If you do, please do send us a comment.

I certainly shall. And hope that Brent prices, as foretold by Gary, will collapse after August.

A Cynic

The most famous of the cynics was Diogenes (412-323), a student of Antisthenes (pic). He saw himself as a citizen of the world (a “cosmopolitan”), and lived in a discarded clay jar. There is a famous story that has Alexander the Great finding him sleeping in the sun and announcing “I am Alexander the great king!” Diogenes replied “I am Diogenes the dog!” Alexander asked if there was anything he could do for him. Diogenes just asked him to move out of the sun.

Putin Donates Salary to Jewish Museum

President Vladimir Putin promised on Tuesday to contribute one month's salary to the construction of a Jewish museum of tolerance. "That's a good idea and, as the first step, I will contribute one monthly salary to the museum's construction fund," Putin told the Russia's Chief Rabbi. The Kremlin could not immediately say how much Putin earned but it is estimated as 70,000 roubles ($2,700). "There are people today who want to re-write history," he said. "The museum will help to show what it was in reality." Viva Dear Vladimir Vladimirovich!

Lessons of Qom, 1980

In 1980, the Iranian revolutionaries were convinced that a satanic CIA was conspiring from the American Embassy in Teheran to overthrow the new regime. The idea had some basis since the CIA had toppled governments in the past. They would have been surprised to know that under Carter, an idealistic do-gooder, the CIA had only four agents in Teheran and these didnt speak Farsi. But misguided students invaded the Embassy and jailed its personnel, thinking they were saving the Revolution. Carter hated the undemocratic Shah Reza Pahlavi, a ludicrous operetta Emperor, and romanced the revolution that displaced him, thus his reaction was to conquer the heart of the Ayatollah Khomeini with shows of true love. During 154 days he showered the Ayatollah with love letters and emissaries of good will. The Ayatollah had other things in his mind: “We will destroy you all, even if we ourselves die in the process.” Later, he would go so far as explicitly to reject the primacy of national interests. “We do not worship Iran, we worship Allah,” he declared in a speech in 1980 in Qom. “For patriotism is another name for paganism. I say let this land [Iran] burn. I say let this land go up in smoke, provided Islam emerges triumphant in the rest of the world.” Ahmedinijad, a 23 years old revolutionary, was listening and learning.

Is Snedecor a Hungarian Jewish Made-Up Name?

The name Snedecor is deeply embedded in my mind; very long ago, I spent nights studying his book of Statistics. I wondered who Snedecor may be, no one ever heard of him and the name didnt sound English nor Jewish like other Math textbook authors. It sounded like an invented name as Student or Burbakis, or one of those fantastic names Jews (specially Hungarian Jews like Kaldor, Szilard ("Solid"), Raoul Bott ("Stick"), Arthur Erdelyi ("from the Woods"), Paul Erdős ("Wooden"), Lipót Fejér ("White"), Paul Halmos ("Solid State"), Cornelius Lanczos ("Chained"), George Pólya ("Bundled"), Rózsa Péter ("Rose"), Paul Turán (Turan is the mythological homeland of the Magyar tribes !), Gábor Szegö ("Cutter"), Endres Szekeres ("Carter") or Von Neumann (the aristocratic German von was invented)) love to assume to make less obvious their obstrusive Jewishness? In this very moment the whole University is waiting for me to write the semester exam, but I cannot avoid but solve this conundrum in my mind. Who is or was Snedecor?

George Waddell Snedecor was born in Memphis, Tennessee. He studied mathematics and physics at the Universities of Alabama and Michigan and became a professor of mathematics at Iowa State University. While there, he offered the first statistics course and began a famous collaboration with Henry A. Wallace, then editor of Wallace's Farmer in Des Moines, but later vice-president of the United States. They were interested in agricultural research, organized a seminar to study multiple regression, and did pioneering work in the use of punch cards and punch card machines. Jointly, they published Correlation and Machine Calculation in 1925, established a Mathematical Statistical Service in 1927, and the now famous Iowa Statistical Laboratory in 1933. In 1931, Snedecor had invited Ronald A Fisher (Biography 13.1) to Ames and this meeting set in motion developments that produced many of the techniques that are discussed in this chapter. Among the visible signs of this development was the founding, at Iowa State, of the first Department of Statistics in the United States, Snedecor's presidency of the American Statistical Association, and the publication by Snedecor of two famous works: Calculation and Interpretation of Analysis of Variance and Covariance (1934) and my love, Statistical Methods (1937). Snedecor is a variant of the Dutch Snedekker. The Snedekers are all descendants of Jan Gerritsz Snedeker and Annetje Ruys, who immigrated to New Amsterdam before 1640. Jan was a German, born in Oldenburg, who lived for several years in Amsterdam before emigrating to New Netherland. Annetje was born in Roermond, Limburg Province, the Netherlands. They had only one son, Gerrit Janse Snedeker, to carry on the family name. After living in New Amsterdam for a number of years, Jan Snedeker received a patent from Peter Stuyvesant in what was then Midwout (later Flatbush, New York), and he and his family took up residence there probably between 1651 and 1655. He later served as schepen (magistrate), and was, along with Jan Stryker and Johannes Megapolensis, pastor of the Reformed church in New Amsterdam, commissioned by Stuyvesant to oversee the construction of the first Reformed Dutch church there. A bona fide Math genius, but definitely not of my tribe.

Futurology

China's 17% annual growth in industrial product is unsustainable. The world's money is flowing into China. The massive industrial overcapacity that they are building will kill manufacture all over the world, and in the first slowdown, it will drive prices down and create strong anti-inflationary forces. And political tensions. In the 16th Century all the silver mined from Potosi ended in China, killing Spanish industry. By the 17th Century the silver was gone but the English hit on the drug smuggling countertrade concept. In the nineteen thirties, the Chinese and Japanese export drive destroyed Manchester's textile and tool industries, causing widespread unemployment and misery. The situation solved itself thanks to the Manchurian war and then WWII. Can world economy absorb Chinese exports at this rate? According to Marxist theory (no, not THAT Marx of the pic), the result will be war that (1) will create demand for industrial products, and (2) will destroy manufacturing capacity, restoring world economic equilibrium. Somehow, however, there is full employment in America and Europe. Manufacturing is less important these days. America's main industry is finance, education, scientific research and innovation (patents and intellectual property).

Kadoorie - Ghengis Collectors of Real Estate

Robert Tchenguiz and his brother Vincent, founded Rotch, a real estate company of 800 buildings, with assets of £4 billion under management. His father, Victor Tchenguiz, 80 and living in Israel, traded his original surname of Kedorie for Tchenguiz, Persian for 'Genghis', the great Mongol warlord. A Baghdadi Jew, he was made a penniless refugee in 1948, landing in Iran and swiftly becoming a favourite of the Shah. By the Seventies he was jeweller to Iran's royal family and in charge of the royal mint. When the Shah was deposed in 1979, he fled to London with his fortune. The Tchenguiz family's business is mostly buying and selling debt. The company seldom builds or develops its buildings: rather, they are treated as financial commodities. Nice.

Brent over 71 $. What, me worry?

Brent Crude contract is over 71$. My Put Option is worth nothing at $ 70 and I start profiting if the price is under 64 - 65 $. Technically, my Puts are now "out-of-money", that is, worth zero. I have remind myself that I am mentally prepared for this coyuncture, knowing that June-August is driving season, cyclone season and air conditioner season when demand rises. However, the economic journalists (FT, Bloomberg, etc.) give all kind of imbecile reasons: one wrote that the rise is due to Turkey invading Iraqi Kurdistan, another one said that it was because of the unrest in Gaza. Unavoidable conclusion: journalists's understanding of what is going on is wanting. I hope I know better and around mid November the price will fall to 40 $.

Change is Coming to the Vaadot Tichnun

Israeli Police Chief Danino said that the Police uncovered more cases of public corruption in the past year than in any preceding year and indictments are expected at 11 of Israel’s 63 regional planning and building boards. That means that many city and regional engineers posts will be vacated, that more plans will be required and the bureaucratic procedures to receive building permits will become even more lenghty. Leviev is on the record that the average permit requires ten years.

Latin American Index Fund

I bought Kesem Latin America Index Fund with some spare money I had. I am now 105% invested. Latin America is undervalued due to the fear provoked by Chavez and Evo Morales's rethoric. But the region is growing, its economy is balanced and is politically stable.

Joy overwhelms Palestinian citizens in Gaza

The Voice of Palestine informs that "Palestinian citizens in Al-Nasr and Sheikh Redwan suburbs in Gaza city broke into the streets amidst waves of overwhelming jubilance prevailing in the suburbs after Qassam Brigades fighters took control of the Makoosi towers Wednesday. The towers were previously controlled by elements of the mutiny trend under the command of Fatah spokesman in Gaza Strip Maher Mikdad, who is widely believed to be one of the mutineers’ leaders. It was used as dens to torture and murder Palestinian citizens. The sources added that leaders of the mutineers were searching for a way to escape and evade being captured by the QB fighters. The sources also asserted that a number of leaders of the PA presidential guards were contacting QB leaders to assure them safety. According to leaders of the PA PG, mutiny leader Sameeh Al-Madhoun threatened to kill them if they refused to participate in torching homes of innocent Palestinian citizens west of Gaza city.
Moreover, the sources revealed a deep rift between Nabil Tammos, one of Dahalan’s close associates, and Sami Abu Samahdana on who is to lead the “suspicious” Fatah executive force. However, reports suggested that Tammos was isolated and fled to Egypt."

Interesting. The "Israeli street" is ignoring Gaza. In the Bank, the usual circle of speculators was concentrated on Tower Semiconductors (it was dropping). I mentioned Gaza, and an ancient Teimani speculator said: I dont care about them. We had them there for a very long time." Then the Teimani gentleman explained to me his system of selling and buying the same security. When the stock was going down, he sells it and buys it back cheaper, so when it goes up, his profit is larger. I must be losing neurons because I didnt understand the advantages of his system.

Who Are These People?

Al-Ikhwan (The Muslim Brotherhood Movement) has branches in over 70 countries all over the world. The movement is flexible enough to allow working under the "Ikhwan" name, under other names, or working according to every country's circumstances. However, all Ikhwan groups, in all countries are characterized by the following with respect to their method:

1- Following the Salaf: Rejecting any action or principle which contradicts the Quran or Sunna, and inviting people to nothing but them both.
2- Establishing the Sunna: Working -as much as possible- to spread the Sunna in every aspect of life.
3- Increasing the Iman: By concentrating on the purity of hearts, loving Muslims in the sake of Allah, and remembrance (plus being away of any Sufi mistakes).
4- Political Activism: By putting political programs for "Islamising" government in different countries (after realistic studies), and establishing these programs through convenient ways which do not conflict with Islam.
5- Stressing Physical Health: By forming sports clubs and committing members to regular exercises.
6- Enriching Scientific Study: By enhancing the knowledge of members and others about Islam. Members with "Shari'a" major have special study programs.
7- Establishing a Sound Economic Infrastructure: By supporting and/or sponsoring any Islamic project and facing its "fiqh" problems. By the way, the ONLY accepted source of money to the Ikhwan is its members' OWN money.
8- Fostering Social ties: By maintaining brotherhood links among the members of the Islamic society.


Al-Ikhwan believe that ruling a government should be the step which follows preparing the society for accepting the Islamic laws. The Ikhwan don't demand the rule for themselves; they welcome any leader who wants to establish a TRUE Islamic government to have all the Ikhwanic support and help.

The Ikhwan were the main motivators behind setting up experiments in Islamic financing on a nationally and internationally viable scale. The theory and practical requirements needed to set up an Islamic banking system came from amongst the ranks of the Ikhwan. From the earliest years, establishing an Islamic Economic system was a priority for the Ikhwan. Hassan al-Banna, Sayed Qutb, Yusuf al-Qaradhawi and numerous other scholars laid down some of the groundwork for practical theories of Islamic finance. Further specialized writers such as provided the practical basis for Islamic Financial Institutions, a number of which were developed in Muslim countries. So this is what is behind Islamic finance? The calligraphy above is Bismillah - In the Name of God.

First Muslim Brotherhood Country is Born

Except the Hebrew papers, the world is ignoring the creation of an Islamic Brotherhood entity in Gaza. Fatah, the secular (originally socialist, now aburguesado) Palestinian movement, is giving up Gaza as ungovernable. The intended Palestinian state has split into two separate entities even before its creation: one is in the road towards regional integration and prosperity, the other is Islamic, violent and isolated. Egypt, deadly afraid of Muslim Brotherhood contamination, has closed its border with Gaza. Israel's government is undergoing a political rearrengement, and no decisions will be taken till Ehud Barak takes over the Ministry of Defense. The neo-pagan secular world, like the Roman Empire under Titus, does not care to understand and instinctively dislikes religious fanatism. They will let them ferment in their own juice till they rot. In other words, till all the BOD in this sludge is consumed and it becomes odorless and inert.

The pic shows Hassan Al Banna, founder of the Muslim Brotherhood.

The DOSADI Experiment

The book describes a prison like planet called Dosadi, fenced in by God's Wall, where the inhabitants live a poisonous environment in very harsh conditions. They reproduce like rabbits and form a militarized society masquerading as democracy. To escape the planet, the heroine Jedrik provokes an all out suicidal war, calculating that she will force the creators of Dosadi to lift God's Wall and give them freedom. It is religious madness, like Hony HaMe'agel's tracing a circle in the sand and menacing to stay there till God is forced to end the drought. Gaza has certain Dosadi-like elements, the miniature strip (70 sq km) is one of the densely inhabited plot on Earth, its population is growing at 4 - 5% per year, they grow nothing, export nothing, receive their water and electricity from Israel free of charge, and half of the population survives thanks food donated by the UNRWA, that is, by America.

In this case, the unknown Gazan Jedrik has started a chain of events that will cause the destruction of Gaza as we know it today. Hamas, in a suicidal mania, has been killing United Nations Relief and Works Agency (UNRWA) staff, which has caused the evacuation of its expatriate staff and suspending most of its activities, including the distribution of food to the 30 - 50 percent of the Gaza Strip residents who rely on international food aid.

Other acts of irrational sadism, like firing into a peaceful demonstration asking for "peace", throwing individuals from high buildings, indiscriminate mass killings of children and other non-combatants, have the apparent purpose of causing a reaction by the "world". Gaza's Jedrik has decided to provoke the outside world to put an end to Gaza's suffering, no matter if it means the sacrifice of a part or all the population. The greater the massacre, she calculates, faster and surer the reaction.

But the process may end differently. The world may become tired and indifferent, and let them suffer indefinitely in their Dosadi planet. Making Dosadi dangerous and a de facto forbidden zone for foreigners, the world may forget Dosadi. In which way may Gaza endanger the rest of the world? The only power Gaza had over the world was its moral claim of hunger and misery, a moral capital that the current bestiality is fast consuming. Maybe the hypothetical danger of ideological epidemic, that an extremist hamasnik Gaza may become a focus of world fanaticism and jihad, is feared by Europe and the USA. But that reaction of the Islam is nothing new, and the West easily dealt with it in the last 500 years. The Mahdi in Sudan comes to my mind. A disciplined English regiment stood in front of thousands of ululating fanatics, and soon the Mahdi's harem was being fought over the Egyptian auxiliary forces.

Battle flag of the Mahdi's forces. The Arabic inscription reads: "Oh Allah! Oh Merciful! Oh Compassionate! Oh Living! Oh Unchanging! Oh Lord of Majesty and Liberality! There is no God but Allah, and Mohammed is the Prophet of Allah. Mohammed the Mahdi is the Successor of the Prophet of Allah. Upon him be Blessings and Peace of Allah!.