EclectEcon

I Guess Many Clouds Have Silver Linings:Crocs bankrupt?

I never understood the Crocs fad. And the very fact that it seems to have been a fad that is now dying in the recession exhilarates Alan Adamson. From Maclean's,

Crocs, the empire behind the candy-coloured microbial foam clogs worn by toddlers, granny gardeners and Aerosmith’s Steven Tyler is gasping for life, the Washington Post reports. ...The global growth of the company founded in 2002 based in made-in-Canada technology “mirrors the country’s tale of economic expansion and contraction,” the paper reports. Part of its downfall was the shoes’ durability: “Who needs a second pair of Crocs in a recession, particularly when the first pair is holding up just fine?” Crocs executives are hoping for a rebound in sales but industry watchers are doubtful: “The company’s toast,” said one investment fund manager. “They’re zombie-ish. They’re dead and they don’t know it.”

Corn Futures

 The corn crop in this part of midwestern Ontario still looks pathetic compared with crops in previous years. And recent local news stories have featured farmers worrying that they will lose hundreds of thousands of dollars as a result (and begging for gubmnt bailouts, of course; but I digress). A friend sent me the following message after my previous posting on this topic:

I know a fairly well-respected analyst that has been talking about the corn crop for a while.  It is apparently doing astoundingly well in the US.  From a recent [mid-July] Gartman Letter:

COMMODITY PRICES ARE MOVING HIGHER AGAIN and we can lay the blame for that strength directly upon the weakness of the US dollar, for the fundamentals of the grain market are overtly bearish given the crop’s growing conditions. ProFarmer is now guess-timating that the corn crop is going to average 155 bushels/acre nationally, and that is 7-8 bushels/acre above recent USDA figures. Even with acreage down from last year, the crop this year is going to be huge, and although it may not make it to 13 billion bushels, it is going to be 12 billion +. The soybean crop too is getting better and better each day, a circumstance we almost certainly will see later today when the USDA releases its weekly crop progress reports and shows that the “Good/excellent” rating for both major crops are holding higher than that of the average of the past five years by material sums. There are and have been any number of reports in the market in Chicago about Chinese buying and of Chinese selling, with both sides credible. We are left to surmise that there is simply a good deal of Chinese “business” being done, and that buying, selling, reserve additions and reserve deletions are the and shall be the norms for years into the future.

Therefore, Ontario farmers are likely to produce less corn at lower prices this year.  I guess they will have to hope that the USD keeps strengthening.

To see what market specialists and investors think is happening on the world corn market, check out this graph from the Chicago Board of Trade [CBOT]. Prices fell by about a third from their highs in early June.

Acting in Controlled Chaos: Extreme Forensics Films a Re-enactment of the Steven Truscott Case

As I posted last week, during the past weekend I was a part of the filming of a re-enactment of the Steven Truscott case involving the 1959 rape and murder of a young teen girl, Lynne Harper in an area near Clinton, Ontario. 14-year-old Truscott was found guilty and sentenced to death for the crime, but his sentence was commuted to life in prison, and he was released on parole many years later. After his release, it came to light that he was probably convicted on the basis of faulty forensics, and there is a strong suspicion that the crime was committed  by a known pedophile who lived at the RCAF radar-training base (where the Truscotts and Harpers also lived).

I learned of the availability of roles for the show at 11pm on Tuesday evening and immediately e-fired off headshots and a copy of my acting resume to the people in NYC who were in charge of casting the re-enactment; filming was set to begin on Friday, and while I have been involved in some hairy, late-minute productions in the past, this seemed awfully late to be sending out a call for actors. It turned out that some of the actors who had been cast live in Toronto and thought the "shoot" would be in that area. When they found out they would have to drive several hours each way, with no provision for overnight accommodations, they backed out (the pay for the actors was a token honorarium).

The next morning, Wednesday, about 11am, I received a call from the person casting the show saying they wanted to cast me as the pathologist (the one who likely committed serious errors and who wrote a letter to the prosecutor saying so, but the letter was not shown to the defence team). I was delighted to be cast in the show.

Then at lunch an hour later with my son, David Ricardo Palmer, I received a telephone call from the casting person, asking if I knew any men age 30-50 who could play a police officer. I said "Sure, I'm having lunch with my son right now. He is in his late 30s, and he has some acting experience."

We snapped a photo of him using my iPhone and sent it off by e-mail, and within a half hour, he, too, was cast in the show. At first, his co-workers refused to believe him when he asked for Friday afternoon off to be in a tv episode of Extreme Forensics. I gather it took quite some talking on his part.

- - - - - - -

Our plan was that he would come up with his two daughters on Friday at noon, and Ms. Eclectic and I would look after them that afternoon and evening, since I wasn't to be on "the set" until Saturday. Meanwhile, neither he nor I received anything from the production company confirming that we had been cast, telling us when and where to show up, or anything about script, storyboard, or whatever.

More signs of chaos: the casting person called me late Thursday afternoon, desperate because the person they had cast to play Lynne Harper's father had backed out. He, too, had accepted the role not knowing he'd have to drive a couple of hours to be in the show, which really wasn't worth it for the very minor honoraria we expect to receive. Did I know anyone around here who could play the role.

Of course I do, having been involved with local theatre groups for over a decade. I provided the names of several guys who could be stars if they lived in a major media market, and they cast one of them in the role that night. It was great working with him again. And another plus was that the woman cast as his wife was an actress I have loved working with in London often in the past.

Finally, my son e-mailed the show producers on Friday morning, asking for more details. They replied that they had wanted him on the set at 10am that day. Fat chance, since they had said earlier that they wouldn't need him until sometime in the afternoon. Also, they gave him an address, telling him it was in Clinton, where I live. But it turned out the address was for a house in Vanastra, a town a couple of miles south of Clinton, formed from the old RCAF radar-training base that was considered part of Clinton back in the 1950s. Much of the Friday filming took place at that house, which was where the Harper family had lived in 1959.

To save him some time, I drove to the house to meet him and the girls so he wouldn't have to bring them to our house. While I was there waiting for them to arrive, I learned that the young girl cast to play the role of Lynne Harper couldn't do it after all because she wears braces and Lynne Harper didn't wear braces. So they quickly re-cast another young girl to play Lynne Harper but needed some more girls to act as friends for Lynne. So guess what: my two granddaughters were also cast for roles in the show, too!

As is usually the case with these types of filming "shoots", nothing happened on time. By 2pm or so, someone took orders and went to Kate's Station, the quintessential Huron County diner, to pick up lunch. Finally about 6pm or so, they shot a scene with my son in it. There were no scripts for any of the scenes. Before a scene, the directors (a team of two very nice and pleasantly patient people) would just tell people their approximate lines.

My son, the cop
(No, he didn't wear the sunglasses for the shoot)

After that scene was shot, one of the directors told me they couldn't use me as the pathologist because I don't look at all like the original pathologist in the case (in part because of my beard, in part because I'm bald). I was pretty upset (though I hope I didn't show it much) and wondered out loud why I had been cast for the role in the first place if that was a problem. Upon reflection, I figured the casting was done by someone who thought, "Ah, this guy looks enough like a scientist or pathologist, maybe even a bit like the pathologist on the original CSI. Let's use him." So they said they'd use me as the killer. My face wouldn't show, though, because there is no clear evidence for sure about who the actual killer was; when you see the episode, you might see my feet, legs, hands, and arms, but that's all.

The last scene filmed that evening was of Lynne and a group of her friends (including my son's daughters) at the playground, where she met Steven Truscott and got him to give her a ride to the highway.

The girls and my son were told to arrive at Kate's Station at 10am the following morning. I wouldn't have to be on set until Saturday afternoon. Then about 11:30 Friday night, I received a form-letter-type e-mail from the company congratulating on my being cast as the pathologist. Huh?

So just to be sure, I showed up at 10am on Saturday with my son and granddaughters, where I learned that no, I wouldn't be the pathologist, I'd be the killer. They had located an actor who looked more like the original pathologist. Oh well....

By 10:30am, we all left to go to a bridge where Truscott and Harper had last been seen together. There were lots of shoots of Steven giving Lynne a ride on his bike past the bridge to the highway. And there were hours of film shot with other young people fishing and playing around the river and bridge. One pair was my son's younger daughter, standing on the bridge with a boy about the same age, discussing the fish and turtles in the river:

And just over her head, you can barely make out two other children playing, one of whom is her sister.

After that scene was filmed, it was time to shoot the scene of Lynne getting into "a late model white Chevy", probably with the killer, at the highway stop sign near the bridge. For that scene, I was forced, yes absolutely forced, to drive a white '57 Chevy Bel Air:

But of course they won't be showing my face during the show. Instead, if they use anything from those scenes, you'll be more likely to see shots like these:

Unfortunately, the car was a pig that stalled every time the driver slowed down or turned, no matter who was driving it. It was a fun experience, but frustrating, too.

The shoot finally wrapped (i.e. ended) about 8pm that evening with me dragging the poor victim through the woods. She was an amazingly good actress with a great, positive attitude. And her mother was a very wise, careful chaperon.

The four-person crew that was on site was very professional, though somewhat unprepared and disorganized, if that makes sense. They dealt with all contingencies that arose in a calm fashion and were very positive and understanding with all the actors. Also, they had considerable detailed knowledge of the case at their fingertips. But the casting inconsistencies put everyone in awkward positions, unfortunately.

In the end, it was a great experience for my son and granddaughters, and I was happy to be a part of their enjoyment. The girls have informed us that they intend to save their earnings so they can eventually buy netbooks. Well, when they told us that, my son said they could have his earnings, too, and Ms. Eclectic and I said we'd top up to cover the rest.

What an exciting weekend! We've been told that the show might air on The Discovery Channel [Correction: it airs on Investigation Discovery network, which is owned by The Discovery Channel] sometime in March. Of course I'll post the details as we learn them.

.

Photos courtesy of my son and his cell phone.

Some Facts about the Evictions in East Jerusalem

Do not accept what the mainstream media write or say about the recent evictions of some Palestinian families from their homes in East Jerusalem without reading this. A crucial excerpt:

[T]he belief that Israel has turfed out the rightful Arab inhabitants of Sheikh Jarrah could not be further from the truth. What actually happened here was that, after a protracted series of legal battles over a long disputed claim to properties in this area, the Israeli Supreme Court ruled that the titles properly belonged to Jewish families and that the Arabs living there were illegal squatters. Moreover, although the Arabs claimed the Jewish families had forged their ownership documents, the Supreme Court ruled that it was in fact the Arab documents which had been forged while the Jewish deeds were legitimate.

If you want more information about the situation and its history, follow the above link, where there are many more details and counter-arguments to the messages promulgated by the pro-Palestinian media. And please note that the Israeli Supreme Court is not exclusively pro-Jewish and anti-Arab, having made many decisions that go the other way in the past.

A Question about Tranches and Collateralized Debt Obligations

Three years ago, I had never heard of collateralized debt obligations. Now that I've heard of them and read about them, I have to wonder: Why did anyone buy any of the junior tranches of these things during the year or two leading up to the Bear-Sterns/Lehman Brothers incidents? Couldn't they see that a whole bunch of the sub-prime, ninja, and variable rate mortgages would soon be in default and that, as a result, the equity and junior interests in the CDOs would be unlikely to pay off?

Forget for now the problems created when ratings agencies let the issuers of CDOs sell off too many bonds in the AAA category. Why did anyone buy any of the junior tranches after the Northern Rock bust?? And if no one wanted the junior tranches, how could the creators of the CDOs create the tranches? Or did the creators of the tranches end up keeping the junior and mezzanine tranches?

I'm sure I'm missing a lot on how these things worked. Comments and suggestions greatly appreciated.

How Would You Negotiate with a Killer?

I was prompted to ask this question after reading this column by Melanie Phillips, where she says,

[A] few days ago, the Foreign Affairs Select Committee — in an incoherent report which condemned Hamas but bashed Israel for fighting it — reiterated its call to negotiate with Hamas.

My understanding is that the Hamas charter calls for the eradication of Israel. So what's to negotiate, then? And why doesn't the British Foreign Office understand this problem?

Natural Gas Prices:Supply, Demand, and Cobwebs

Natural Gas prices have been all over the place for the past couple of years, ranging from just over $2 per million British Thermal Units (MMBtus) to over $13/MMBtu. Peter Hall effectively uses supply and demand to explain the wild swings:

So far, a classic case of elementary economics: tight supplies boost prices, high prices boost investment, increased production brings prices back to equilibrium. But are today’s sagging prices actually in equilibrium? Not exactly. Unfortunately for the industry, increased supply coincided with the largest economic contraction in six decades. As such, demand for gas has swooned by 5% to date this year, on a 13% drop in industrial demand. For the moment, prices are abnormally low.

Prices are expected to remain subdued while the world economy works through the current period of weakness. In response to soaring inventories, gas producers have scaled back activity, but are expected to ramp up again as the recovery takes hold. As we march through 2010, prices are expected to climb back to the US $5-6/MMBtu level, enough to kick-start production again.

The bottom line? Surging supply and stifled demand have pummelled natural gas prices. Consumers will enjoy the brief hiatus, but producers can look forward to more normal pricing in 2010.

In the above explanation, Peter Hall is assuming that decision-makers have somewhat myopic expectations (or what are typically referred to as adaptive expectations). In the first paragraph, he assumes that investors expect prices to remain high and hence overinvest; there is no anticipation on the part of the investors that other people will be expanding capacity as well and that prices will fall. I.e., there is a systematic error in the expectations. Rational expectations are out the window.

And then, again, when the price is low, investor-producers do not invest on the basis that they expect the price to rise to $5-$6/MMbtu. Instead, they wait to see if the price actually does rise that far.

These cycles remind me of the old myopic-theory of agricultural prices for the corn-hog cycle and that was (and perhaps still is) taught as the cobweb theory. [note: this Wikipaedia explanation is very good]

I tend to like adaptive expectations models, given my own inability to formulate rational expectations in many instances. And this is probably a fairly good example of that application.

Addendum: James Hamilton has an equation here that captures this adaptive expectations model with a simple lag structure. For those who are interested, note the alternating signs on the lagged variables, which seem consistent with a cobweb model.

Update: it is really clear that these clowns do not understand the cobweb (adaptive expectations) model. Contrary to their assertion, it involves continued overshooting.

The Source(s) of Obama's Anti-Israel Positions

Bishop E. W. Jackson has had a somewhat similar background to Obama's and writes about the sources of Obama's Anti-Israel positions:

In Chicago, the anti-Jewish sentiment among black people is even more pronounced because of the direct influence of Farrakhan and the Nation of Islam. Most African Americans are not followers of “The Nation”, but many have a quiet respect for its leader because, they say, “he speaks the truth” and “stands up for the black man”. What they mean of course is that he viciously attacks the perceived “enemies” of the black community white people and Jews. Even some self-described Christians buy into his demagoguery.

... He was comfortable enough with Farrakhan, Wright’s friend, to attend and help organize his “Million Man March”. I was on C-Span the morning of the march arguing that we must never legitimize a racist and anti-Semite, no matter what “good” he claims to be doing. Yet a future President was in the crowd giving Farrakhan his enthusiastic support.

The classic left wing view is that Israel is the oppressive occupier, and the Palestinians are Israel’s victims. Obama is clearly sympathetic to this view. In speaking to the “Muslim World,” he did not address the widespread Islamic hatred of Jews. Instead he attacked Israel over the growth of West Bank settlements. Surely he knows that settlements are not the crux of the problem. The absolute refusal of the Palestinians to accept Israel’s right to exist as a Jewish state is the insurmountable obstacle. That’s where the pressure needs to be placed, but this President sees it differently. [Emphasis added]

Viewing a Vocanic Eruption from Outer Space

Intriguing photos from the International Space Station (via the Daily Mail).

Are Men Passe?

Are men about to be evolved or selected out of existence? What good will they be in the future?

George Jonas reports [h/t Jack]:

British scientists reported this week that they're close to creating artificial sperm. Needless to say, the news is getting everyone very excited. If true, it will be possible to do away completely with that vestigial gender -- I hesitate to call it "sex" -- known as "men."

Not a day too soon, I say. Large, hairy creatures, with a knack for tracking dirt into the house, men tend to strut, slouch or snore, depending on whether they're trying to walk, dine, or attend a concert. They prance like princes, weave in and out of traffic, then congeal into lumps when they get home. On weekends they pull themselves together long enough to watch the ballgame on TV or sneak out of the house for a game of golf. Mostly they're underfoot in the kitchen, where they scratch, munch, hitch up their pants, and fail to notice important things, such as people's new hairdos. They scrounge for bottles of beer to wash down enormous quantities of greasy food they keep demanding in booming voices. Calling them a nuisance is an understatement.