Wednesday, December 17, 2014

Q&A - 17/12

Commentator

[Paraphrasing] Arabs messed up big time, Middle-East always in deep shit, they should do some naval gazing.. Etc..etc..

Do that, but notice it is an unlucky geography

Starting from the pharaohs, then Rome and until / including Ottomans, these people have been living under adverse conditions, blatant barbarism for very long time. The discovery of oil in the region made things worse - France, Britain then US basically caused a lot of mess in the region. There are many examples of this, I'll give the main ones.

Installing minority regimes in Syria, Lebanon, and Iraq: the idea was that the rulers of these countries hailing from minorities themselves, would always be scared and would depend on "outsiders" (France, Britain) to stay in power. It worked. Scared ruler, pissed-off street. Great dynamic right? The exact preconditions you need for development (not).

Until he became the leader of his country, Saddam was a regular thug; he was handpicked by US to become what he became. And he ruled his coutry like a thug. Not much development, but he knew war, so when mullahs came to power in Iran and executed all senior military officers, Saddam thought "aha here's my chance" bcz their military was gone, right, so aided (probably egged on as well) by US, he attacked Iran. Mayhem, squared.

CIA toppled the democratically elected leader of Iran (Mosaddeq). Which caused f--king mullahs to come to power in the first place.

Kuwait: I am convinced Saddam was fooled by US officials and was told "it's okay to attack this little country" and that US would support Saddam on that. Saddam did invade but was (of course) left out there by himself. His action furthermore legitimized the counter-attack on his regime and the US military/industrial complex had a field day. Great passing / pick-and-roll there between the underlings in US gov and the top dogs. The top only sees guy invading, so he can stay above the fray, give great speeches and order the military in, while the underlings, unbeknownst to him, did the dirty work to get the guy invade.

Then Iraq was invaded by US en masse under false pretenses. At this point it was like, why the hell not?

Unconditional support of Israel caused mayhem on Egypt and Syria (who were attacked preemptively by Israel).

Enough examples?

Actually it is a miracle the Middle East is not worse off today. Having said that however, ppl in the region must work twice hard because of all this bullshit, otherwise the conditions they find themselves in will never change.

Commentators

Middle East is part of Europe

Maybe

Some are trying to extend European cultural underpinnings to include all of Middle East. I read couple articles to this effect. That's fine as long as the narrative is that ME represents what Europe left behind, which is war, conflict, authoritarinism i.e. Rome whose continuation is the "Roman" Catholic Church (I see the new gumbah in there trying to improve things tho which is a good thing for sure). 

If the cultural mishmash goes too far, then things can get weird. I mean, some mixes are just not possible. You can have pizza, you can have chicken tikka masala, but you cant have chicken tikka pizza.

The Jerusalem Post

The cabinet voted in favor of the controversial Jewish state bill.

Ha ha..

So they did exactly the opposite of what we said here. Great job.

(Sarcasm comes through right?)

News

Taliban attacked a school in Peshawar

They must be scared

Afganistan and Pakistan have been working closer recently, which could have scared Taliban. They are trying to warn Pakistan, it looks like. I hope it backfires.

Oh, while we are on topic, let's not forget how Russians caused a mess in Afganistan. It was because of the dumb-ass Soviets (Putin's favorite empire in the world) attacking Afganistan this backward-ass donkeyhumper peasant Islam was sponsored, and the mess grew and grew..

Good job Russian rulers.

Investopedia

[T]he law of supply demonstrates the quantities that will be sold at a certain price [..] the supply relationship shows an upward slope. This means that the higher the price, the higher the quantity supplied. 

Hmm

The counter-example would be: ppl expect to pay a certain amount for certain things, for example burgers cost btw 1-4, dinner at a restaurant around 10-40, smartphone around 100-400, taking out the effect of inflation, would there be positive correlation for.. say, burger price and quantity produced?

I checked this with McDonald's burger data. Here is price, here is quantity (in millions) and inflation.

import pandas as pd
df = pd.read_csv('burgersold.csv',sep=' ',header=None,index_col=0,names=['sold'])
df['price'] = pd.read_csv('burgerprice.csv',sep=' ',header=None,index_col=0)
df['price'] = df['price'].interpolate()
df['inflation'] = pd.read_csv('usinf.csv',index_col=0,sep='\s*')
df['adjprice'] = df['price'] / (1 + (df['inflation'] / 100.)).cumprod()
print df.sold.corr(df.adjprice)


Boom. The correlation is 0.44, it is "medium" (this number is always between -1 and +1, the former meaning maximum negative correlation, latter meaning max positive correlation). It is positive for sure, but inflation adjusted price for burger is btw 16-23 cents, whereas the quantity produced is over billions, increasing madly over the years.

I also checked oil prices and production.

import pandas as pd, re
df = pd.read_csv('oilprice.csv')
df['year'] = df['date'].map(lambda x: int(re.search(r'(\d+)',x).groups(1)[0]))
df = df.drop('date',axis=1).groupby('year').mean()
df['inflation'] = pd.read_csv('usinf.csv',index_col=0,sep='\s*')
df['adjprice'] = df['price'] / (1 + (df['inflation'] / 100.)).cumprod()
df['production'] = pd.read_csv('world.csv',index_col=0,sep=' ')
print df.production.corr(df['adjprice'])


The correlation is 0.64 which is higher. Since oil production increased overall (we've only recently passed / or reached peak oil), the increase of price over decades causes this positive correlation.

Some interesting questions, does it make sense to take inflation out of oil price, because oil is such a basic quantity it probably is the thing that causes inflation, other prices hinges on it, rather than the other way around.

Would the correlation be even higher if oil producers acted according to market principles more, and less according to geostrategy, or trying to destroy one another, etc?

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