Realignement Against the Dollar

The American Government is printing money (budget deficit, stimulus, war cost, bank bail out). The amount is not trivial and all these money has to be absorbed by global economy. But it simply can't. Not even the european and chinese economy can absorb them all after 3-9% inflation respectively.

American interest rate is negative, at 2%. At 3-5% inflation, no fool is going to put his money in bank.

International savers are dumping the dollar and putting their money in commodities.

People is not investing in real estate because that market is depressed and no one is putting money in the stock exchange because it is not protecting against inflation.

The nightmare scenario:

1. The banking system finally collapse.

2. Congress steps in and assumes the debt. The budget deficit grows from $400 to 700B/year.

3. The global market starts dumping dollar. (It doesn't take much, $100-200B out of the 4T are released, and the dollar is toast. Dollar devaluation by 20%)

4. Americans pay $8/gallon as Israelis are doing. Americans are way richer, they can afford it.

5. Ahmedinijad is hanged from Teheran's Azadi Monument. The Shah Jr. takes over.

Ugly Thoughts: Speculating against the US Dollar

Some Zurich gnomes have been heard saying that

the U.S. dollar's depreciation against other major currencies has so far been "remarkably orderly," that might not continue to be the case. "Foreign investors in U.S. dollar assets have seen big losses," it said. "While unlikely ... a sudden rush for the exits cannot be ruled out completely."

Warren Buffett has been speculating against the dollar two years ago (on the basis of macroeconomics - growing foreign trade deficit surely must lead to depreciation of the currency) but lost. I wonder what is he doing now? If speculating against the dollar, he sure is very quiet about it. Because the thing is now too serious.

The Gnomes of Zürich are, Wiki dixit, the Swiss bankers. Swiss bankers have extremely secretive policies, while gnomes live underground counting their gold.

Colors

Am I the only one to think that Zimbabwe's flag looks like the Homosexual Rainbow?

Water Scarcity in Ecuador

I remember the planning work we did in the Canal Campana - Malacatos pictured above. Now I read that it has deteriorated for lack of maintenance, and its management has been transferred from PREDESUR to a newly created national level institute. Ecuador must have the world record in institutional instability.

Thinking the Unthinkable

Bryan Caplan has the knack to think where no one dared to think before - he can think the unthinkable. I knew only one other person who could do it: Edward Teller. The New York Times article on humanity's falling fertility is resonating strongly along the corridors of the blogosphere and Bryan brought up a scenario no one before has explored seriously: What if fertility falls to ... nothing? It appears that even the pessimistic projections of international organizations are in fact... optimistic. Let me quote him:

Now notice: The most obvious projection - one in which the decline in CD purchases (Caplanspeak for babies) continues - is conspicuously absent! And at least for CDs, isn't that the most reasonable projection? CD sales per person will fall to near-zero, and the world stock of CDs will slowly do the same.

Are people like CDs? At least for the near-term, there's every reason to think so. If fertility has been declining for decades, it's strange to assume that fertility coincidentally bottom out yesterday. So Constant-Fertility Projections are actually probably on the high side.

In the longer-run, though, evolution will almost surely save us (J says: Note the royal "us". Caplan believes he is surely among the saved. But few assimilated Jews will be. Sorry.) If the average woman has one child, population size shrinks by 50% per generation. But if 10% of women have three kids, and if family size (like virtually every trait) is partly heritable, the proportion of the population that wants 3 kids will exceed 50% in a few generations. In a century or two the desolate villages of Italy will be reclaimed by the descendants of those of us who think that life is a chain worth continuing.

The illustration shows the San Francisco Corps of Ballet representing the explosion of Trinity.

Barrenness Epidemy Firing History

History will not stay quiet nor it is ending. Fukuyama was wrong. Native cultures continue to be affected by epidemies of barrennes and a strange lack of interest in the future. They will not be part of the future. Some parts of Europe are reporting that people is not reproducing, they are refusing to have children. Overrall fertility rate in Italy is about 1.3, and for some towns it is less than 1. The NYT has a long article on this. But barrennes is not an European racial feature, the same process is hitting Eastern Asia and even Southern Asia (Thailand).

The combination of what I call the barrenness epidemy and possibly some other factors is rapidly destabilizing nations and communities across the Middle East as well as everywhere. Lebanon was one of the first signs of the incoming storm when its Christian community was swept away by the demographic explosion that consumed the world of Islam a few decades ago. Lebanon had been carefully engineered to have an Europeanized Christian majority and a passive, rural Muslim minority. The structure worked for one hundred years, till the demographic balance shifted and the country collapsed. Yugoslavia was destroyed by differential fertility between the South Slav majority and Muslim minority in Bosnia Herczegovina. In Israel we have four different ethnic groups competing, although the balance is maintained thanks to the demographic transition of Israeli Arabs and the strenghtening of the ultra-religious Jews.

What about Italy? It will be taken over once again by the Barbarians? So it seems to me. Old people needs help, and help is cheaply available in Third World countries. They cannot renounce to foreign caregivers and street sweepers. Israel wanted to avoid the foreign temporary worker phenomenon, and it largely succeeded except in one sector: the Phillippine caregivers. Consequence: we have a fast growing Phillippine community in Israel, girls who give birth, girls and boys who marry locals, illegal children protected by humanitarian volunteer organizations, etc.

There are two alternatives: (1) general miscegenation, like in Brazil, (2) settling into castes, like India. All over the world I am seeing increasingly mixed societies, not societies structured in castes. But the tide may reverse itself. This struggle will go on till genetic engineering makes irrelevant the whole ethnic thingie. Then we will have some other thingie.

Quotable Quotations

"Give a fish to a man and he will eat for a day. Teach him to fish, and he will sit in a boat and drink beer all day." (Carlin)

Le Chaim! To Your Health!

We Jews are a Mediterranean race and Mediterranean peoples like the French, the Italian, the Spanish, tend to drink but little. We are definitely not like the Russians, the Irish, the Swedish who are always thisty. We are a people in need of encouragement to drink more steadily. The Bible specifically orders us to drink, and in the case of Megillat Esther, we are ordered to drink to insensibility. I dont like to drink because the next day it makes me vomit and my head aches and cannot work. So hear, Drink because is good to you!

Alcohol improves one's cardiovascular health. Specifically, moderate consumption prevents heart disease (Mayo Clinic Staff, 2006). Stanton Peele states, in a 1995 essay, that "In 1992 Il Suh and colleagues found a 40% reduction in coronary mortality among men drinking three and more drinks daily. The 11,700 male subjects were in the upper 10 to 15 percent of risk for coronary heart disease based on their cholesterol, blood pressure and smoking status". Alcohol is capable of this feat due to it causing a rise in the production of high-density lipoprotein or "good cholesterol" which assists with the regulation of blood pressure (Harvard School of Public Health, 2007). HDL prevents clotting thus enabling one's heart to run less of a risk of heart attack (Harvard School of Public Health, 2007).

Alcohol can help prevent the risk of a stroke (Mayo Clinic Staff, 2006). A stroke is caused by the clogging of an artery any where in the body. Because alcohol raises HDL levels, risk of such clogging is cut down thus presenting a means for a person to prevent ailments as severe as aneurisms simply by consuming an alcoholic beverage. Specifically, alcohol particularly helps prevent ischemic strokes (Mayo Clinic Staff, 2006).

Studies seem to have come to the conclusion that those who consume alcohol actually outlive those who abstain (as cited in Barbour et al., 1998). In various separate studies by Fuchs, Gronbaek, Doll, Boffetta and Garfinkel, and finally Klatsky, as outlined by Peele, it was found that women who drank up to two drinks a day, and wine drinkers who drank three to five glasses a day, had a lower mortality than those who abstained.

Environmental Terrorism in Kever Benjamin

Due to a poorly designed sewage system, Kever Benjamin's "Golda" school suffers from bad odors. The municipality installed an expensive air filter based on conventional activated carbon. The neighborhood committee did not give up and hired Ecotest, an environmental firm, to produce a damning report, which it faithfully did.

חברת אקוטסט בע"מ, הוציאה השבוע חוות דעת ראשונית בגין מטרדי ריח ברחוב השלום בכפר סבא. על פי חוות הדעת, שנעשתה לאחר בדיקת החברה במקום, בנוכחות נציגי וועד תושבי השכונה, אבישי מתיה, עו"ד גיא אופיר ועמי אברהם "הצבת המיתקן לסינון גזים בתחומי בית הספר "גולדה", מהווה סיכון בטיחותי, בריאותי וסביבתי חמור ביותר", כותב מנכ"ל חברת "אקוטסט". לטענתו, "הגזים הכלואים במתקן שהציבה העירייה במקום כגון: מימן גפרי, מתאן, אמוניה ועוד, מהווים פצצת זמן אשר חום גבוה, להבה, ניצוץ, חשמל סטטי ועוד, עלולים לגרום להתלקחות ופיצוץ המתקן תוך סיכון הסביבה". עוד נכתב בחוות הדעת כי "הגז האופייני ביותר למערכות הביוב הינו מימן גפרי (H2S). "ללא נוכחות חמצן, הוא רעיל מאוד, דליק מאוד ונפיץ ביותר. בריכוזים נמוכים ביותר (1ppb) ניתן להבחין בו באמצעות חוש הריח. בריכוזים גבוהים יותר (סדרי גודל של חלקים למיליון-ppm) הגז מכהה את חוש הריח ולא ניתן להבחין בו אלא אך ורק על ידי מכשירי מדידה (גלאים) מיוחדים". מתוך חוות הדעת:" יש לדרוש מעיריית כפר סבא לסלק לאלתר את מתקן הסינון מתחומי בית הספר גולדה". כותב מנכ"ל החברה קרול אברהם.

A carbon filter removes molecules from an air stream by the process of adsorption, trapping molecules in the pores of the carbon granules. Typically, the pores in highly activated carbon have a total surface area of over 1,000 square meters per gram. But they are worried by the H2S sulfhydric acid accummulating on the surface of the carbon, which - so they write - may cause explosions and/or mass poisoning. For starters, H2S never explodes and certainly not in the parts per million concentrations we are talking about. To terrorize dumb but innocent neighbors with a environmental report is an act of environmentalist terror. Such terrorist act has been committed in my village, the common sense being the first victim.

Los Españoles Me Hacen Cagar de Risa

A comment on a Spanish antisemite website (there are few, dealing valiantly with having to hate the Jews without being able to identify one Jewish entertainer or businessman) almost caused me to lose control of my sphincter:

Mi pregunta es... ¿Como sabe un español de a pie, sin documentos ancestrales, con una família que ha estado durante generaciones en España, ahora, en pleno 2008, si es de etnia/ascendencia judía?

Porque, si nos dejamos llevar por el cuento de todo aquel que en España lleve "apellidos sefarditas", que adoptaron los judíos en la inquisición, donde se incluyen apellidos tan típicamente españoles como Guerra, Martínez, Pérez, Cruz, de la Cruz, Nadal, Blanco, Pardo, Rubio, etc, el 99% o más de los españoles seríamos completamente judaicos. Y que yo sepa, no es así, al menos en España.

Seriamos todos judíos según esos farsantes.

Que alguien me diga, por favor. Estoy preocupado por mi ascendencia completamente judía, ya que ya que provengo de Málaga (donde se supone que estaban las mayores juderías) y todos mis apellidos castellanos y catalanes figuran en esa dichosa lista de sefarads

Soy judío? Debo volarme la cabeza?

The stamp shows Lope de Vega, a Jew-hater poetastro.

Koor 10% Down Today

I bought more.

The World According to The CIA

The World (from CIA's Factbook)

Administrative divisions: 266 nations, dependent areas, and other entities

Economy - overview: Global output rose by 5.2% in 2007.

Oil - production: 78.9 million bbl/day (2005 est.)

Oil - consumption: 80.29 million bbl/day (2005 est.)

Hmmm...?

Budapest Jewish Quarter

The Hungarian Ministry of Interior´s Official Map of the Budapest Ghetto. It housed about 200,000 Jews, of which about 70,000 were liberated by the Red Army in January 1945. About 30,000 survived the war hiding with false papers outside the ghetto, like the family of George Soros. My uncle Joska (my Father´s big brother) was arrested a few days before the liberation and shot by Hungarian Arrow Party criminals into the frozen Danube. He was an escaped MUSZos (forced labor) and was hiding in Budapest. There is commemorative plaque near the bridge and among the names you can see his.

"Vengeance is mine; I will repay, saith the Lord" (Romans 12:19, King James Version). I am not a Christian, but share St. Paul's wishful hope: May G-d exact tenfold revenge for his innocent blood. To the seventh generation.



I used to live in Almásy Tér 8 third floor. The old tall apartment houses built around a central court are all still there. Average age must be a hundred years. The roofs are blackened by age and dirt. We used to go down with my father to fetch coal from the enormous underground cellars. All the basements are inter-connected soone can walk from one house to the other, from one street to the other, without ever emerging to street level. There is movement to conserve the Jewish quarter´s main synagogues, schools and buildings. There are still Jewish life there.

Modest Prosperity

Fish is the Chinese symbol of prosperity. At the entrance of the cities there are large stylized sculptures of a water sprouting fish. We in Israel have fish. The number of millionaires in Israel increased by 1,000 persons - to a total of 8,200 by the end of last year. The number of multi-millionaires grew by 12%, to 97. The report defines a millionaire as an individual with liquid assets of at least $1 million, excluding primary residence and consumables. The definition of a multimillionaire is a person who has at least $30 million in the bank. Obvious conclusion: People did it, I can do it.

Oil Supply and Demand Function

Prof. Hamilton is a genius. We in the old barrio held as true that the primordial marker of a genius is to be bald/balding. He has the marker. I feel privileged to read his work

http://dss.ucsd.edu/~jhamilto/understand_oil.pdf

In spite of being a professor of economics, he actually understands how markets work. There is an oil demand curve, price in one side and demand on the other, at lower price demand should go up. Since price is going up, demand is demanding but supply cannot supply. The price is the point where demand and supply meet. Simple and elegant. Then he calculated the income elasticity of the curve and it is 0.5. So with every 1% of increase in world GNP, oil demand should grow 0.5%. Since supply has hit a top, the price will rise to force down demand 0.5%. If I am not wrong, world GNP grew 2% in 2007 so oil demand should have grown 1%. Since supply is inelastic, price gave in and rised to maintain demand in the same level. The rise was from 70 to 130 dollars, aproximately 50% in real values. We got a new equilibrium, a new spot price, 130 $. If world GNP keeps growing, as it does, another 1% demand is on the way, so which will be the new equilibrium price? Prof. Hamilton, help!

How is that the current oil price took everybody by surprise? Actually a year ago I shorted oil. Are we all stupid? In retrospective, yes. Conclusion: We are probably all wrong also now. Why is that? Because there is not enough information. The only true and solid information is the spot price, which reflects actual physical supply and actual physical demand. Futures are figments of the fevery imagination of sick people, and are bound to be wrong as it were a year ago. In that spirit, I extrapolate the world GNP and it seems that it is still growing, and no recession is in view. I move on my Excel the demand 1% to the right, and the equilibrium point moves along the price axis and it stops at about 180 $ in current dollars. Should I long oil as everybody and his dog (see illustration) seems to be doing? The usual conclusion: G-d knows. I dont.

Gój Motorosok

Among the Hungarian neo Nazis we count the Gój Motorosok (Goy Bikers) union, which is some kind of Eastern European, antisemitic version of the American bike gangs. From Israel, I find them a bit ridiculous. But they are not.

Their banner says: Go to your country. Agreed. Below: Hungary, where some people still thinks.. Yet to be proved.

The Red-Dead Sea Canal Project

One of the disadvantages of being old is having experienced things ab ovo, that is, when they were born. Having known a woman when she was young and fresh gives a different perspective, sometimes for good (I see her not as she is but as I remember her) and sometimes for worse (she is now too ugly for me, as in my own eyes, I am always the same 21 years old long-haired waterpolo player). It happens that I participated in a small way in the first feasibility study of the project headed by Dr. Igal Danin, when he was a TAHAL economist. He analysed three alternative routes between the Mediterranean and the Dead seas, and his conclusions were negative (a very strange conclusion for TAHAL, as its studies invariably were feasible and of need of further study), meaning that the project was discontinued. I remember talking to him that he was the first to conclude that a project was not worth to working on, but he was a rigid, square type of person, who believed that economy was a science. He soon left TAHAL and returned to the Hebrew University in Rehovot.

The study (in the late seventies and financed by the World Bank, if I am not wrong) concluded that at the then current interest rates, the large investment required by the project will not be able to pay itself. Another reason was the (then) low price of energy, which was the only benefit of the project.

Nowadays capital is cheap and energy is expensive, so the project is feasible. It has been kept alive by Shimon Peres and is now being formulated as an international "private" project. The greens are already mobilizing against it, as the massive inflow of sea water will mean the end of the Dead Sea ecology (there is one, a very unique one - see the cute birdie) and its occupation by common Mediterranean or Red sea species.

Change is Coming

Free Exchange has become in short time the best blog around. It writes:

If high oil prices persist, we could be seeing a large drop in world trade.

People must be already thinking out who will profit and which companies are doomed.

A Pause in Globalization

Apparently cheap oil has ended for good and the oil economy has ended. Till a new form of energy is developed, mass air transport of heavy good is out of question, and also bulk ocean transport of iron ore, sand, etc. is becoming impossible. Colombia will not be able to supply by air flowers to Dutch markets. The transition will be faster than it is expected, as seen from the projection above.

On living too long

I filled one of those internet questioמnaires about how long I have to live and it says I have thirty to fifty years to go. Taking into account my already excessive, prodigious, improbable age, it is far more than I expected. What shall I do in this time? Oro y mujeres, was the motto of my admired conquistadores. But mujeres is not anymore a realistic option for me. Regarding oro, no one counts real gold coins, and a figure in my bank statement excites me even less than a woman of my age. I see myself sliding to the typical old age life of Israeli Hungarian Jews, I see myself in the future walking to the shil in the Hungarian Jewish neighborhood of Bney Brak, then sitting around a table with other Hungarian Jews learning some complicated text till lunch. Bney Brak food is sweet, greasy, truly disgusting, and to crown it, I was never able enjoy a meal with csámcsogó Hungarian Jews around, so there is no danger of me adding weight. The sweet red wine they drink is nauseating, and I never could pass down the watered 98 degree industrial ethanol they call vodka, so in my declining years I shall never enjoy the joy of getting drunk in good company (that is a good thing Germans have in life and we dont). In the evening, I shall sit in a cool dark corner and attend my luftgescheft business, say dealing in some exotic intangible good such as diamond derivatives, in order "to be all what I can be", as in the Marines. I have met people in Bney Brak who talked about K.und-K. Hungary as it was yesterday. They live to legendary ages and no one ever gets Alzheimer.

Krugman Sharp as a Knife

I was reading one Masters´s testimony in the Senate accusing oil futures speculation for the persistent rise in oil prices. Krugman, on the other hand, arguments that futures speculation has no effect on spot prices. His mind is like a laser knife.

Two questions: Are speculators mainly, or even largely, responsible for high oil prices? And if they aren’t, why have so many commentators insisted, year after year, that there’s an oil bubble?

Now, speculators do sometimes push commodity prices far above the level justified by fundamentals. But when that happens, there are telltale signs that just aren’t there in today’s oil market.

Imagine what would happen if the oil market were humming along, with supply and demand balanced at a price of $25 a barrel, and a bunch of speculators came in and drove the price up to $100.

Even if this were purely a financial play on the part of the speculators, it would have major consequences in the material world. Faced with higher prices, drivers would cut back on their driving; homeowners would turn down their thermostats; owners of marginal oil wells would put them back into production.

As a result, the initial balance between supply and demand would be broken, replaced with a situation in which supply exceeded demand. This excess supply would, in turn, drive prices back down again — unless someone were willing to buy up the excess and take it off the market.

The only way speculation can have a persistent effect on oil prices, then, is if it leads to physical hoarding — an increase in private inventories of black gunk. This actually happened in the late 1970s, when the effects of disrupted Iranian supply were amplified by widespread panic stockpiling.

But it hasn’t happened this time: all through the period of the alleged bubble, inventories have remained at more or less normal levels. This tells us that the rise in oil prices isn’t the result of runaway speculation; it’s the result of fundamental factors, mainly the growing difficulty of finding oil and the rapid growth of emerging economies like China. The rise in oil prices these past few years had to happen to keep demand growth from exceeding supply growth.

Saying that high-priced oil isn’t a bubble doesn’t mean that oil prices will never decline. I wouldn’t be shocked if a pullback in demand, driven by delayed effects of high prices, sends the price of crude back below $100 for a while. But it does mean that speculators aren’t at the heart of the story.

Why, then, do we keep hearing assertions that they are?

Part of the answer may be the undoubted fact that many people are now investing in oil futures — which feeds suspicion that speculators are running the show, even though there’s no good evidence that prices have gotten out of line.

But there’s also a political component.

Traditionally, denunciations of speculators come from the left of the political spectrum. In the case of oil prices, however, the most vociferous proponents of the view that it’s all the speculators’ fault have been conservatives — people whom you wouldn’t normally expect to see warning about the nefarious activities of investment banks and hedge funds.

The explanation of this seeming paradox is that wishful thinking has trumped pro-market ideology.

After all, a realistic view of what’s happened over the past few years suggests that we’re heading into an era of increasingly scarce, costly oil.

The consequences of that scarcity probably won’t be apocalyptic: France consumes only half as much oil per capita as America, yet the last time I looked, Paris wasn’t a howling wasteland. But the odds are that we’re looking at a future in which energy conservation becomes increasingly important, in which many people may even — gasp — take public transit to work.

I don’t find that vision particularly abhorrent, but a lot of people, especially on the right, do. And so they want to believe that if only Goldman Sachs would stop having such a negative attitude, we’d quickly return to the good old days of abundant oil.

Update from Krugman's NYT blog: Update: Some correspondents have asked me what I think about the Congressional testimony of Michael Masters, who told a Senate subcommittee that “index speculators” — institutions that buy commodity futures as an investment — are responsible for the price surge.

The short answer is that I think his testimony is just stupid. Here’s what he says: Index Speculators’ trading strategies amount to virtual hoarding via the commodities futures markets. Institutional Investors are buying up essential items that exist in limited quantities for the sole purpose of reaping speculative profits.

That quote pretty much epitomizes what’s wrong with a lot of what people say about speculation. Buying a futures contract for oil does not reduce the quantity of oil available for consumption; there’s no such thing as “virtual hoarding”. And Masters really is confused about the difference between paper contracts and physical stuff. He compares the growth in the futures market with increased consumption from China, and says The increase in demand from Index Speculators is almost equal to the increase in demand from China!Again, the fact that someone bought a futures contract (which means that someone else sold one) doesn’t reduce the amount of oil available to consume. I’m willing to listen to serious arguments about how speculation might be affecting the price, but you do see a lot of dumb stuff. And this is really, really dumb.

What I think?

Presuming speculators are in for the money, they buy oil futures with the idea that prices will be higher than their contracts. Others sell futures because they think prices will be lower. This is a market of expectations, and if futures are high it is because the market decided that supply will be tight. High future prices may motivate actual producers of the liquid to reduce current supply and market it in the future. Viceversa, if the futures market decides that prices will fall, current production will increase and spot prices will fall. Market expectations of future events does impact current prices and re-inforces the trend. Markets behave like that, as documented many times from the Dutch tulip bulb craze. If history is relevant, then oil prices should keep inflating and then collapse by itself. Shooting speculators will only cause shortages.

Since inventories are normal, apparently there is no speculation going on with actual liquid. Are some consumers over-consuming now instead of the future? Are producers doing their best to supply the market or they are under-producing in the expectation that prices will improve in the future? Is it feasible to advance or to postpone consumption? Are producers (say the Saudis) producing less than they can? If they are not, then shooting speculators will not help to reduce oil price. But shooting speculators and burning witches are surefire and tried remedies to calm public anger. I may be wrong, but some people with Jewish sounding names should lower profile and try to become invisible.

Could it be that the American government is hoarding oil? It could sell some strategic reserve and stabilize the market. Could it be that the Chinese (too) are hoarding oil instead of buying American debt? In their place, I would do exactly that.

BAZAN broke the down trend

BAZAN, the Haifa Refinery, raised today a bit but I am still losing on it. The refining business has been unprofitable since oil prices went up. But now insiders are starting to buy refiners stock. Leuthold, began buying refiner shares this month on speculation oil will drop to about $110 a barrel. Irl Engelhardt, chairman of the Federal Reserve Bank of St. Louis, bought $509,000 worth of Valero shares last month, his first purchase since becoming a director of the largest U.S. refiner in 2006. In the same month, Tesoro director John Bookout III boosted his stake by 58 percent in the third-largest U.S. refiner. Valero and Tesoro, both based in San Antonio, have declined 39 percent and 57 percent this year.Bruce Smith (pic) is Tesoro's CEO. He is a biologist.

Dr. Hannibal Lecter´s Cookbook

Dr. Hannibal Lecter is a criminally psychotic cannibal, and a genius of extremely refined tastes. In the famous tete-a-tete dinner with the love of his life, Clarice, he uses as seasoning capers. What are capers? Living in the Eastern Mediterranean, I should know but I dont. Since I am very late with my work and feel a great stress only by thinking about it, I shall now avoid anything related to work and research this thing. It appears that there are true capers and also false capers - Euphorbia lathyris, common name caper spurge, is a poisonous plant with buds that are often confused as capers. Ingestion of caper spurge buds can cause burning of the mouth, nausea, paleness, irregular pulse, dizziness, delirium and fainting. Maybe I should stop writing now and visit Kever Benjamin's open market. What is the name of capers in Hebrew? צלף - tzalaf, a titheable crop in the Bible.

Dr Lecter took a goodly knob of Charante butter in a copper fait-tout, swirling the melting butter and browning the butterfat to make beurre-noisette. When brown of a hazelnut, he put the butter aside on a trivet.

At this point, Dr. Lecter asked the meal (Inspector Krendler - Clarice's boss) to say grace. (Is there a broche for human meat? No, it is not kosher. Dr Lecter, obviously, had long ago forsaken his father's ways.) Then he asked Krendler to have some broth. Krendler made a face: "The soup is not good."

"Actually, it's more of a parsley and thyme infusion," the doctor said, "and more for our sake than yours. Have another few swallows, and let it circulate."

Dr Lecter added shallots to his hot browned butter and at the instant their perfume rose, he put in minced caper berries. Then he set the saucepan off the fire, and set his saute pan on the heat.

Definitely treyff.

Refinery Shares a Steal

Valero is being valued at less than half the replacement cost for its refinery assets, it is shifting production away from gasoline and toward high margin diesel, and its refineries are among the best in the world in terms of the lower grade sour and heavy oil they can process. The margin squeeze in crack spreads won't last. Either the oil price comes down or gasoline prices go up. And when they do Valero goes up 30% or more quickly.

Valero's homologue in Israel is BAZAN, which has lost 30% of its worth in the last six months. I dont like to leave a stock losing so much.

A blogger writes: The Bush administration and some members of Congress blame environmental rules for causing strains on refining capacity, prompting shortages and driving up prices. But in reality, it is uncompetitive actions by a handful of companies with large control over our nation’s gas markets that is directly causing these high prices. Myth 1: Oil refineries are not being built in the U.S. because environmental regulations, particularly the Clean Air Act, are so bureaucratic and burdensome that refiners cannot get permits. Fact: Environmental regulations are not preventing new refineries from being built in the U.S. From 1975 to 2000, the U.S. Environmental Protection Agency (EPA) received only one permit request for a new refinery. And in March, EPA approved Arizona Clean Fuels’ application for an air permit for a proposed refinery in Arizona. In addition, oil companies are regularly applying for – and receiving – permits to modify and expand their existing refineries.[1] Myth 2: The U.S. oil refinery market is competitive. Fact: Actually, industry consolidation is limiting competition in oil refining sector. The largest five oil refiners in the United States (ExxonMobil, ConocoPhillips, BP, Valero and Royal Dutch Shell) now control over half (56.3%) of domestic oil refinery capacity; the top ten refiners control 83%. Only ten years ago, these top five oil companies only controlled about one-third (34.5%) of domestic refinery capacity; the top ten controlled 55.6%. This dramatic increase in the control of just the top five companies makes it easier for oil companies to manipulate gasoline supplies by intentionally withholding supplies in order to drive up prices. Indeed, the U.S. Federal Trade Commission (FTC) concluded in March 2001 that oil companies had intentionally withheld supplies of gasoline from the market as a tactic to drive up prices—all as a “profit-maximizing strategy.” A May 2004 U.S. Governmental Accountability Office (GAO) report also found that mergers in the oil industry directly led to higher prices—and this report did not even include the large mergers after the year 2000, such as ChevronTexaco and ConocoPhillips. Yet, just one week after Hurricane Katrina, the FTC approved yet another merger of refinery giants—Valero Energy and Premcor—giving Valero 13% of the national market share. These actions, while costing consumers billions of dollars in overcharges, have not been challenged by the U.S. government. Myth 3: The United States has maxed out its oil refining capability. Fact: Oil companies have exploited their strong market position to intentionally restrict refining capacity by driving smaller, independent refiners out of business. A congressional investigation uncovered internal memos written by the major oil companies operating in the U.S. discussing their successful strategies to maximize profits by forcing independent refineries out of business, resulting in tighter refinery capacity. From 1995-2002, 97% of the more than 920,000 barrels of oil per day of capacity that have been shut down were owned and operated by smaller, independent refiners. Were this capacity to be in operation today, refiners could use it to better meet today’s reformulated gasoline blend needs. Profit margins for oil refiners have been at record highs. In 1999, for every gallon of gasoline refined from crude oil, U.S. oil refiners made a profit of 22.8 cents. By 2004, the profits jumped 80% to 40.8 cents per gallon of gasoline refined. Between 2001 and mid-2005, the combined profits for the biggest five refiners was $228 billion.

According to the above, VALERO should be swimming in money. But it is not. It is even selling refineries. What is happening?

Next day update:

Refinery executives are buying more of their own stock than at any time since 2000, prompting investors to bet that a retreat in oil will boost profits and reverse the biggest share decline in a decade. Executives at 10 refining companies snapped up $2 million of their shares last month, twice what they sold, which helped raise the average level of purchases to the highest in eight years. Caxton Associates, Citadel Investment Group and Renaissance Technologies, which oversee $64 billion in hedge-fund assets, also boosted bets that the shares will rebound. “Anyone right now buying the refiners would have to be banking on a pullback in oil prices,” said Jack Ablin, who oversees $65 billion as chief investment officer at Harris Private Bank in Chicago.

Forcing the Hand of the Big Boys

Israel cannot live with Iran having atomic power and it has decided to force the hand of the big boys in the neighborhood. We are going to make life difficult for everybody if they let us face this danger alone. For starters, an off-hand sentence by the Minster for Transportation made the price of oil to jump vertically. A minuscule military exercise, interpreted as simulation of an air strike of Iran, caused panic in the oil markets.

"The New York Times" quotes two senior administration officials as saying that barring a move by Israel, which one characterized as “the wild card” on the Iranian issue, the Bush administration would not be likely to pursue military strikes against Iranian nuclear targets. However, foreign policy analysts and diplomats said that there remains the possibility that Israel could force the hand of the Bush administration. Israel carried out a three-day military exercise this month that American intelligence officials say appeared to have been a rehearsal for a potential strike on nuclear targets in Iran.

Israeli Ambassador to the US Sallai Meridor told "The New York Times", "Israel prefers this threat be dealt with peacefully, by dramatically increasing sanctions and maintaining a credible resolve to keep all options on the table. But time is running out. Iran should understand that under no circumstances will the world allow it to obtain a nuclear capability.”

This is not good, the big boys may become angry at having to act against their will, but what is the alternative?

Dr. Hannibal Lecter Desenmascarado

The Hannibal Lecter story maintains that he was born into an aristocratic family in Lithuania in 1933. He lived in Lecter Castle, which has been the family seat of the Lecters since the time of Hannibal the Grim (1365-1428). When the Nazis arrive, count Lecter instead of joining the Germans as Lithuanians did en masse, hides in a remote hunting lodge in the woods. The Nazis catch up with him and kill everybody except Hannibal, although we are led to believe that something in his soul, too, has perished, as a result of seeing Mischa killed and eaten. It remains possible, though unconfirmed, that he unwittingly drank hot soup made from her bones. Lecter´s mother, improbably, was an Italian contess, a Visconti. The Visconti shield, above, shows a legendary serpent devoring a man, supposed to be a Sarracen.

The story of Dr. Lecter´s identity is, transparently, a myth. There are no 800 years old aristocratic landowning families in Lituania, but Baltic German Junkers. They certainly welcomed the Nazis and the Nazis adored them as the highest representatives of the Teutonic race. Their children did not wander around unprotected in the forests. Most probably, the young Lecter, having found refuge in America, mythified his genetic origin and transformed his pennyless schreiber father into a Count, like many European refugees did. But blood is stronger than fiction. Lecter´s yiddische kopf reveals unmistakeably generations of Poylische yeschive-boychers, as does his attraction to the uneducated full corn blonde schikse Clarice Starling.

The Sand and Gravel Recycling Industry

Reading the Ministry of Environment literature one gets the impression that one of their worries is the construction materials illegal dumping. They have light airplanes that follow lorries with refuse material and the persecute them. In Germany I met a Japanese gentleman who operated a recycling business, and wonder why there is no similar operations in Israel. A pricelist from a Escondido (Calif.) operation:

Broken Concrete and Asphalt
Dump Fees Pick-up $50.00
Flatbed $75.00
Bobtail $100.00
10 Wheeler $150.00
Semi End Dump $150.00
T & T $150.00
Boosters $30.00

China-made Hammer Crusher machines, they dont seem very expensive.

Sleep, The Best Remedy

Wednesday morning I volunteered to guide a group of Brasilian water professionals doing a course in Israel to visit some recycling facilities. They are all managers of the large Rio Sao Francisco Irrigation Project in the North East. The smiling bearded black man on the extreme left is an important big man of Sergipe State. The other pic shows a drinking water purification system in Raanana: The aquifer is contaminated and the water is filtered with activated coal before supplying it to the population. Thursday they asked me to give a lecture, then the professor who was scheduled to continue called he had a problem so I had to go on lecturing all day. I ended speaking non stop eight hours and then I had to escort wife and girls to a marriage ceremony till midnight. Fight with wife because she insisted in formal black suit. I was right, no one came formally dressed, most wore sandals and kafkafim (slippers) and one man was barefoot. Only the Russian-born father of the bride wore a grey necktie, the rest black T shirts and Nehru style white cotton shirts. A refreshing change, this was not a mixed marriage, all beautiful thirtyish Ashkenazi girls and boys, and no wailing Oriental music. I ended so tired that took off 24 hours to sleep. I did not drink there but at home had a glass (100 cc) of vodka that made me feel horribly. I cannot hold alcohol anymore, but still feel I have to drink to degrease my veins (prevents 30% of coronary diseases). I am reading Primo Levi's If not now, when.

Numbers

The world construction activity can be seen through the above graph. Most is taking place in China. They are driving us to insignificance.

The greening of the Valley of Shilo

I took this pic of the valley with a green patch of Jewish wineyard from the pumping station. We have come back to our land! Muslims dont drink wine and for hundreds of years there were no grapes grown in Shilo. I have yet to visit the ruins of the ancient city of Shilo which are nearby.

"And they said: There is a feast for God in Shilo, like ever since, which is north to Beit-El, east to the path going up from Beit-El to Shchem, and south to Levona." (Judges 21, 19).

Shilo (Sailun) is north of Beth El (Beitin) and to the south of Levona (Luben A-Sharkiya). The Shilo Valley is called by the Palestinians Marg El-I'd, which is the valey of the feast! And the valley across is called - Baka'at El-Banat (valley of the girls!).

"And he ordered the people of Benjamin: Go and hide in the vineyard. And look: if the girls of Shilo will go out dancing in the dance, get out of the vineyard and kidnap each one his girl from the girsl of Shilo, and return to the land of Benjamin..." (Judges 21, 20).

Striking Iran

The world is getting used to the idea that nothing is being done to stop Iran developing atomic weapons delivered by long range missiles. How will the French live with their capital targeted by Iran's madman? And Russia? And India? They seem unworried. Iran, they dream, wants to harm Israel, not them. Let Israel deal with it.

Out of sheer necessity, we are accepting the task of taking charge of Iran. We have carried out a large military training exercise simulating an air strike in Iran. The price of oil jumped. In the present situation Israel has acquired a powerful influence on oil prices, and second, on the military situation in the European - Middle East theater. It is on the Europeans to find out how this development will affect them. I am afraid but I am more afraid of inactivity. The pic shows a large Apache attack group near Iran.

Parasha Shelach (Chapter: Send)

In our weekly reading of the Bible, we Jews have arrived to the chapter where the People of Israel is encamped in the wilderness of Paran, a deep canyon with a good spring in the Syrian African Fault, and are preparing their ascent of the Judean mountains to conquer the Promised Land. Moses, their leader, appoints young leaders of the twelve tribes to reconnaitre the land and return with a campaign plan. Their report:

We came to the land to which you sent us, and it is flowing with milk and honey, and this is its fruit. However, the people who inhabit the land are mighty, and the cities are extremely huge and fortified, and there we saw even the offspring of the giant. The Amalekites (bitter blood enemies of the Israelites) dwell in the south land, while the Hittites, the Jebusites, and the Amorites dwell in the mountainous region. The Canaanites dwell on the coast and alongside the Jordan. Caleb said "We can surely go up and take possession of it, for we can indeed overcome it." But the men who went up with him said "We are unable to go up against the people, for they are stronger than we."

Their disunity convinced Moses that they were still unmature for the coming war, that the people grown up as slaves should not be allowed to fight only to be defeated. He led the people back to the desert, walked them till the old generation died off and he returned to the war with a generation raised to fight and win.

TASE the World's Best Stock Echange

In 2008 the best bourse of all the world was our little Tel Aviv Stock Exchange (see graph). Foreign investors extracted large amounts of profits from here. I know of one, Fidelity, who invested in Makhteshim and recently sold its holdings with a large profit. Also those invested in Israel Chemicals doubled their money. Of course, we the local savers did mostly well. People is starting to dream of TASE turning into a world-class financial center.

Have I met Dr Hannibal Lecter?

The book about the cannibal genius Hannibal Lecter I am reading has a HAPPY END. His legs are about to be devoured by giant tusked pigs when Special Agent Clarice S. breaks in, kills his sadist torturers and saves him. The he psychoanalyses Clarice and makes her relive under hypnosis her relation with the absent father, and cures her. Then, in turn, she cures him of his sick obsession with his little sister Masha, of the unsolved trauma of watching her consumed by starving deserters. Then, in a seudat metim ritual, a kind of funeral banquet, they consume small pieces of the brain of Clarice's boss extracted in vivo, after grilling it in hot butter and aromatic herbs. Who has no fantasies of revenge against his boss? But this is the most refined of all: the boss keeps talking and singing nursery rhymes after his lobotomy, watching his brain being prepared and eaten.

The "and they lived happily ever after..." is the best: the Lecter couple spends their days visiting art events all over the world, in an endless cultural tour. They were last seen in the Teatro Colon of Buenos Aires, a magnificent theater built by Italian masters around the century, when Argentina was the world wealthiest country. Being a student, I had a low price abono to the high galleries of the Colon, so it is not impossible that I have met the aged, very distinguished looking Dr. Lecter couple among the grey-haired European crowd that used to congregate in the luxurious lobby.

The Shomron (Samaria)

The Shilo Valley is in the high Samarian hills, at about 600 m over sea level. We had a Siur Kablanim, an on-site meeting contractors, in one of my water recycling projects. It is mid June, the beginning of summer. The early Gramineae like wild oats are already yellow and papery, and it is the turn of the Mediterranean herbs like wild oregano to flower. Only strongly smelling herbs can survive in the Mediterranean area, and the air is full of their perfumes and the insects are busy among them. Religious Jewish farmers are irrigating the grapes although this is Shnat Shmittah, a Jubilee Year, when the land is left untilled and allowed to rest. Nice.

The Jew Smeller

Dienekes Pontikos, a race scientist, has built and published a computer program that will guess a person's origin. Guess what it is for? Right, for smoking out hidden racial Jews. He explains:

This is not an admixture test, but a "guess his/her origin out of these three groups" test, a classifier. Here is a way to look at it: the classifier compares these three events:

How likely is this genotype to be NW European?
How likely is this genotype to be SE European?
How likely is this genotype to be Ashkenazi Jewish?

An admixture test compares the likelihood of all possible events:

How likely is this genotype to be (x% NWE, y% SEE, z% AJ), for all x,y,z>0 such as x+y+z=100

There are about 7 billion persons alive today, from which maybe 15% are European and a maximum of 0.1% are Ashkenazi Jews. But Dienekes and his kin are obsessed with this 0.1%, they want to define this tribe, they want to analyze their characteristics, they want to be able to identify them, they want to be able to classify humanity into two neat groups: Jews and everybody else. What for? An example will make it clear. At first sight, I can guess that the big nosed fellow above is 40.7% Ashkenazi Jew and 52.4% SE European, probably Greek, and 6.9% NW European (very blond facial hair). Now, thanks to Dr. Dienekes's magic machine, we can refine that estimate to the third decimal point.

TEVA is again a BUY

Merrill Lynch is excited by Azilect, and has upgraded its recommendation for Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) to "Buy" from "Neutral" following ADAGIO study, which indicates that Azilect could be the first product shown to slow the progression of Parkinson’s disease. Merrill Lynch also raised its target price to $54 from $50 based on higher Azilect sales and a modestly higher multiple. Teva closed at $44.73 on Nasdaq yesterday.

My board friends are investing in miniature startup medical research companies. They say that the upside is tremendous. One good product and they are extreemely profitable. Maybe TEVA is still such a company? I dont own TEVA.

My Horses Changed to Gallop

ALL my shares in TASE are running and gallopping. The pic shows Abolengo. Wonders to watch.

Commercial Building

J inside (plumbing design).

Wonders

Under pressure from oil-importing nations, and perhaps concerned about larger than anticipated demand response to high oil prices, Saudi Arabia announced its intention to increase production by 500,000 barrels per day. The market's response? A new record high price, near $140 per barrel. (The Economist blog)

Gore Vidal Against The Gas&Oil Crooks

Gore Vidal is always interesting to read:

On June 9, 2008, a counterrevolution began on the floor of the House of Representatives against the gas and oil crooks who had seized control of the federal government. I wish to draw the attention of the blog world to Rep. Dennis Kucinich’s articles of impeachment presented to the House in order that two faithless public servants be removed from office for crimes against the American people. Although this is the most important motion made in Congress in the 21st century, it was also the most significant plea for a restoration of the republic, which had been swept to one side by the mad antics of a president bent on great crime. And as I listened with awe to Kucinich, I realized that no newspaper in the U.S., no broadcast or cable network, would pay much notice to the fact that a highly respected member of Congress was asking for the president and vice president to be tried for crimes which were carefully listed by Kucinich in his articles requesting impeachment.

But then I have known for a long time that the media of the U.S. and too many of its elected officials give not a flying fuck for the welfare of this republic, and so I turned, as I often do, to the foreign press for a clear report of what has been going on in Congress. As for TV? Well, there wasn’t much—you see, we dare not be divisive because it upsets our masters who know that this is a perfect country, and the fact that so many in it don’t like it means that they have been terribly spoiled by the greatest health service on Earth, the greatest justice system, the greatest number of occupied prisons—two and a half million Americans are prisoners—what a great tribute to our penal passions!

Naturally, I do not want to sound hard, but let me point out that even a banana Republican would be distressed to discover how much of our nation’s treasury has been siphoned off by our vice president in the interest of his Cosa Nostra company, Halliburton, the lawless gang of mercenaries set loose by this administration in the Middle East.

Naturally!

Out of respect for old age, the pic shows Gore Vidal as he was 60 years ago.

Shekel Inflation Alert

The fact that the dollar is so cheap masks Israeli inflation. Prices rose 5.4 percent from a year earlier, and rose 0.7 percent in May 2008 from the previous month. The basic Bank of Israel interest rate is 3.5% and I get about 6.5%, which means that my real interest rate is in the Japanese yen level. In theory, I could think of making some carry trade operations. I never did one and dont know how to enter that business. Fishman lost hundreds of millions playing with the Turkish lira. Think.

Orcadian Cat (XII)

Dr.Hannibal Lecter

I was bored to read always the same books and asked my daughter to bring me new ones from Tel Aviv used book shops. So I am reading about the psychotic monster Hannibal Lecter. I dont believe that horrors suffered as a child can turn a man into a cannibal, on the contrary, the more intelligent he is, he has more resources to overcome childhood experiences. Criminals and perverts always hit me as infantile, they got stuck in some childish fantasy. Anyway, I have nothing else to read and I am not in the mood to work.

Arab villages that once blended organically into the landscape

The Economist, maybe the best magazine around, writes about Mr Shahade´s Walking in Palestine book. Instead of Arab villages that once blended organically into the landscape Mr Shahade finds "ugly" asphalt roads and "ugly" red roofed settlements. Knowing something about the subject, I say: Bullshit. Miserable Arab villages, focuses of dysentery and cholera, there people defecated into the water they were drinking, where each summer dysentery and cholera culled excess children? They blended into the landscape? What landscape? The deforested, desertized, ruined terraces, built by Jews two thousand years ago? All Palestine is full of unkept ancient agricultural terraces, of ruined water channels and iriigation systems hewn in the stone, thousands of underground cisterns, thousands of olive oil mills and grape pressing pools in the mother rock, thousands of Hirb's (ruins) of abandoned Jewish villages and synagogues. The Arabs are newcomers in Palestine, they are unadapted to the landscape, their agricultural methods are those of Egypt, their goat pastoralism from the Saudi desert, their folklore from the Caucasus. These people have contaminated the landscape, their goats have overgrazed the vegetal cover, their hunting sports have exterminated local fauna and birds, their excrement have defiled the rivers and streams. The best witnesses are the English and American peregrines such as Mark Twain who came looking for the "land flowing milk and honey" described in the Bible and found to their horror only treeless desert, miserable goats and diseased natives, and of course the filthy, insistent plague of beggars everywhere. The nostalgic romanticism of an imagined past that never existed is the Palestinian narrative, never noticing the ugly reality of misery and disease. For them, it is asphalt roads, the white houses, the green gardens and forests that are ugly. The French, who were the first modern Europeans in the Middle East, called this feature Levantine imagination. They imagine things and they believe it is true. The pic shows a terebint tree's inflorescence.

Back to Subsistance Agriculture

My first years as water engineer were spent on Latin American and African agricultural development projects, most financed by the World Bank and the InterAmerican Development Bank (BID). Our objective was to transform subsistance non-market agriculture into advanced, mechanized, irrigated, commercial market production. Therefore I read on the net with sincere astonishment that the World Bank and other international development organizations have turned 180 degrees in their approach, and now are promoting subsistance agriculture. They have given up trying to create a prosperous, productive, mid-scale commercial agriculture and are into trying to improve those hopeless, miserable, subsistence plots. Let me quote:

Agricultural research in Zimbabwe has been almost entirely directed to the problems of the large scale commercial farmers. The government of Zimbabwe would like to improve farming productivity in the small holding areas by establishing a breeding program to produce improved varieties of pearl millet and sorghum, subsistance crops for small farmers. It is therefore the general objective of this project to develop and provide to small holders improved varieties of pearl millet and sorghum. Researchers will develop varieties capable of giving stable yields under conditions of variable rainfall and low soil fertility.

Rhodesia used to be Africa's breadbasket, exporting corn at low prices and large quantities. To those who dont know, sorghum and millet are the poor man's corn, very difficult to process into a digestible (eatable) form. Sorghum and millet were considered in my time as forrage, animal feed, unfit for human consumption.

What next? To transform South Africa's mining economy into Kung! lifestyle wild-plant gathering economy? The pic shows !Kung women gathering together with children in slings (Shostak 1981). The gathering of the females provides up to 85% of the diet and the meat of hunting (by the males) only 15%.

Time Premium in Options

Why the price of an out of the money option is above zero? It has no intrinsic value, but has time premium. The more time remaining on an option, the higher its time premium. The reasoning behind this is that the more time you have on an option, the better chance you have for the underlying futures contract to move in your direction. More volatile markets will normally have higher time premium than less volatile futures or commodities markets.

Commodity futures should have lower time premium than more volatile NASDAQ futures? The contrary seems true. Why?

Failure

Today was the last day of class. The tried to compare USA's 1990 Clean Air Act parameters with Israel's 1992 Air Pollution Law. They use different units: ppm and mg/cu.m. And the measuring times are different. Apart from that, there are difficult conceptual differences. The students were not in a learning mood. A pervert in shorts started a drag striptease act. (Except one heroic girl, the rest of the class is male. We are civil engineering.) It was chaos. What a mistake trying to teach in the last hour of the last day of the semester.

Racist-Specieist Bad Joke

Mamá, si vos sos china y papá es negro, yo por que soy blanco?

Mira nene, con el quilombo que hubo en aquella orgia, es un milagro que no hayas salido ladrando!"

Orcadian Depopulation (XII)

Wiki reveals that Orcadians's mutation of blue or light colored eyes may be also considered a genetic disease. Those with lighter iris color have been found to have a higher prevalence of age-related macular degeneration (ARMD) than those with darker iris color; lighter eye color is also associated with an increased risk of ARMD progression. Uveal melanoma (see pic) is not rare among those whom cruel Nature punished with blue, green or gray iris color. It is known that Orcadians de-pigmented skin does not protect them against the sun's ultraviolet rays, causing them melanomas and other horrible cancers that kills them in short time. In fact, Orcadians cannot survive for several generations except in the misty, cloudy forests of the North, when taken away from their habitat to sunny Caribbean, they tend to disappear to give way to sturdier races. Thus, notwithstanding centuries of migrations to tropical Africa, Central and South America, the Orcadian phenotype cannot be found in any numbers in these environments. In Haiti, Cuba and other Caribbean islands they have practically disappeared. 500 years of migration to North America and to Australia have yet to produce a predominantly Orcadian population. Apparently, Orcadians fail in natural competition with other races, the purer types die off in one or two generations, while mixed types may survive longer on the margins. Since historical times, stronger, sturdier races have been colonizing Orcadian homelands, always advancing towards the north. A notable turning point was the Southern Italian general Julius Caesar´s conquest of France and South Germany, exterminating by the way about a million pure Orcadians and establishing Roman military colonies (like Cologne) in the Rhine frontier. This advance of the Southern peoples definitely and irreversibly pushed the Orcadians toward the Baltic seashore, to a narrow strip of uncultivable bad lands in the north-eastern margin of the European continent. Successive advances expulsed the Orcadians from southern England (which has been peopled, since then, by mixed dark-eyed populations, see map) till Emperor Hadrian enclosed them with a wall in a reservation in the remote Northern wastelands. As of today, this process is quite advanced and non-Orcadian types are dominant all over the world including the very Orcadian heartland, the natives having been displaced and replaced.

One feature that strikes the visitor in the reservations is the native male's unsatiable thirst for alcohol and drugs. These terrible degenerative vices have veritably decimated the natives. It has been imagined that evil dark-eyed colonists had promoted the vice in the past, setting up friendly pubs, but it is not true. Simply, Orcadians failed to evolve physiological or behavioural defenses against alcohol or other addictive substances, and they are defenseless against them. Many explorers and missionaries have described the self-destructive behaviour, including an astonishingly high rate of suicides, displayed by the natives, having attributed it to the boundless despair, hopelessness and depression that seizes them when in contact with stronger, more evolved humans. Pitt-Rivers writes on the subject of depopulation: “An examination of causes alleged by different observers to be responsible for a decrease in population will show that the unanimous reason given is the contact with a more advanced civilization.".

The reader should be warned that the PC (politically correct) social rules of our day forbid mentioning the subject of racial differences, and its corollary, the natural competition among different human types. Hereditary diseases like "blue-eye mutation and skin depigmentation" are never mentioned in the same breath with "incurable health conditions", but are celebrated in Hollywood as "beauty". It is not difficult to understand the development of this taboo: it springs from the lofty aspiration of avoiding hurting people already so heavily burdened by natural evolution. Just as when talking to a person disfigured by a skin disease, polite conversation will never, ever, refer to our interlocutor's condition, we avoid mentioning his blue eyes or white skin, or if the subject is too salient and unavoidable, we affect that it is a point of beauty and attractiveness. The pic illustrates this PC taboo issue.