Friday, September 21, 2007

Surprising Study on How We Read

Thanks to Slashdot for this gem from the BBC News:
...the eyes often focussed on different letters in the same word, about two characters apart, he said.

"They could be uncrossed, in the sense that the two lines of sight are not crossed when you look at a word, or alternatively the two lines of sight may be crossed," he added.

Infographic of eye movement while reading
The team's results demonstrated that both eyes lock on to the same letter 53% of the time; for 39% of the time they see different letters with uncrossed eyes; and for 8% of the time the eyes are crossing to focus on different letters.

Perhaps this is the process behind this meme that has been making the rounds of the net for several years now:
Aoccdrnig to a rscheearch at Cmabrigde Uinervtisy, it deosn't mttaer in waht oredr the ltteers in a wrod are, the olny iprmoetnt tihng is taht the frist and lsat ltteer be at the rghit pclae. The rset can be a toatl mses and you can sitll raed it wouthit porbelm. Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the wrod as a wlohe.
Having trouble reading it? Just relax and let your eyes scan it.

More info on this meme here. (Don't be a victim, the "Cambridge research" part is misleading)

The BBC News article is here.

Cool Stuff

Thursday, September 20, 2007

CNN Spins Dollar News

The greenback has slid to the value of the Canadian dollar. Yes, it is true. Parity was reached today. And how did CNN spin it?

Canadian dollar catches up to U.S. dollar

Value of 'loonie' reaches that of American dollar for the first time in over 30 years.

TORONTO (AP) -- The Canadian dollar reached parity with the U.S. dollar on Thursday for the first time since November 1976.

(More here)

Please do not be fooled. The loonie did not climb to the value of the U.S. dollar; The U.S. dollar has plummeted to the value of the Canadian dollar.

Still not convinced? Check this out:

NOTE: Recent events do not show on this graph. Today the blue line slid off the bottom of the chart.

This is not a symptom of a strong US economy

More gin might be in order.

Tuesday, September 18, 2007

Rate Cut Euphoria Scares Me

I am not kidding.

To those Americans living solely between the oceans and the borders the rate cut was good news. In fact the Dow rallied to a multi-month high.


How can this be a bad thing?

Well, as regular readers will know, I am concerned with the state of the dollar. My simple point is that a weak dollar is a symptom of a weak economy.

Let me see if I explain. The USA is running budgetary deficits. That means that every day the US Government uses other countries money to pay it's bills. This Government treats China and Dubai the way many people treat Visa and Mastercard.

This is how it works. The US spends billions of dollars more than it collects in taxes and fees. In order to pay for that spending the government goes to China and Dubai (and others but those two are currently the main purchasers) and says, "Please purchase our bonds at 4ish% interest so that we can keep spending".

As long as there are buyers of debt at these prices the economy is safe; but, if those countries decide to buy even a little bit less than needed, the US government would be force to either immediately reduce spending (not likely), raise taxes (not on Dubya's watch) or raise the rate on the bond to make it more attractive (hurting home buyers and generally slowing the economy but perhaps avoiding a catastrophic economic event).

By lowering the rate (as happened today) the government is making those all important debt instruments less attractive. And what happened to the dollar today, when the rate was decreased and the Dow jumped? It fell --again.

I laughed out loud while listening to the Glenn Beck Show in CNN today. He had an admitted doomsday economist on that suggested if all goes wrong the dollar could see a drop in its valuation of as much as 50% !!!

Guess what? It has already happened.

In January 2002 one greenback was worth 1.61 Canadian dollars; today the close was 1.0146!!!

Does this make sense to you? What it means is that anything purchase from outside the walls of Bushdom is now forty percent more expensive than it would be if it were purchase with pre-Dubya dollars. People, this includes oil. Yes, Oil! The quirky result of the massive military spending (largely the reason for the current deficits) is that by paying for it with debt we have increased the price of the commodity that was at the core of the action: oil.

Am I making sense?

Let me lay out a likely bad case scenario. While the USA is lowering the interest offered on its debt instruments, countries such as Canada that do not run deficits and have little risk of dollar devaluation are keeping their interest rates stable. So Dubai and China can get over 5% from a Canada that is paying down its debt and is a good bet to not default by devaluing or they can get around 4% from the US. So, Dubai and China buy a bit less American debt. This is not unlike what Daddy Bush faced after his, "No new taxes" speech. Remember that?

So, to summarize. The US dollar is plummeting. US debt instruments are less attractive to those who would be bailing the Bushies out. And spending is up.

Folks, this is frightening.

And unless we have an administration that is willing to reduce spending to equal the record tax and fee revenue (here) that Bush has collected the outlook is terrifying.

Forget recession, this is a recipe for a depression. Now, that is depressing and frightening.


Time for a plymouth and a nap.

For a related rant click here.