Wednesday, April 17, 2013
Tuesday, April 16, 2013
Monday, April 15, 2013
First Quarter Petroleum Usage Charts: Total Distillates, Gasoline, Jet Fuel, Fuel Oil
Here are some first quarter 2013 petroleum usage charts from Tim Wallace. The charts all show first quarter usage in 2013 as compared to first quarter usage in prior years.
click on any chart for sharper image
Petroleum Usage Q1 2013
Gasoline Usage Q1 2013
Jet Fuel Usage Q1 2013
Fuel Oil Usage Q1 2013
Residual Fuel Oil Usage Q1 2013
Tim Wallace writes …
Hello MishHere are separate charts for Total Distillates, Gasoline, Kerosene Jet Fuel, Fuel Oil (diesel, etc.) and Residual Oils.
Total distillates usage is at a level seen in 1998, and not much higher than 1996.
Gasoline usage is at a 2002 level. The drop from the peak year of 2007 is now 8.3%, quite dramatic.
Kerosene Type Jet Fuel is now lower in demand than 1992 and is 21.9% lower than the peak in 2001.
Distillate Fuel Oil usage which include such things as diesel and heating oils is now all the way back to 1996 levels, down 17.6% from the 2007 peak.
Once again that there can be little proof of major economic recovery, and more importantly, although we have apparently reached a bottom it is well off of historical levels.
Recall that president Obama said he would reduce our carbon emissions 15% by 2015. He may succeed, not because of “alternative” methods, but rather from demand destruction.
Tim
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Mish’s Global Economic Trend Analysis
First Quarter Petroleum Usage Charts: Total Distillates, Gasoline, Jet Fuel, Fuel Oil
Sunday, April 14, 2013
Tuesday, April 9, 2013
Soul Sequester - the First Family Gets Down!
US Media: Can Pope Francis possibly clear up Vatican bureaucracy and banking without blaming the previous administration?
Michelle Obama praises weekend rampage by Chicago teens as good way to burn calories and stay healthy
White House to American children: Sequester causes layoffs among hens that lay Easter eggs; union-wage Easter Bunnies to be replaced by Mexican Chupacabras
Time Mag names Hugo Chavez world’s sexiest corpse
Boy, 8, pretends banana is gun, makes daring escape from school
Oscars 2013: Michelle Obama announces long-awaited merger of Hollywood and the State
Joe Salazar defends the right of women to be raped in gun-free environment: ‘rapists and rapees should work together to prevent gun violence for the common good’
Dept. of Health and Human Services eliminates rape by reclassifying assailants as ‘undocumented sex partners’
Deeming football too violent, Obama moves to introduce Super Drone Sundays instead
Japan offers to extend nuclear umbrella to cover U.S. should America suffer devastating attack on its own defense spending
Feminists organize one billion women to protest male oppression with one billion lap dances
Urban community protests Mayor Bloomberg’s ban on extra-large pop singers owning assault weapons
Concerned with mounting death toll, Taliban offers to send peacekeeping advisers to Chicago
Karl Rove puts an end to Tea Party with new ‘Republicans For Democrats’ strategy aimed at losing elections
Answering public skepticism, President Obama authorizes unlimited drone attacks on all skeet targets throughout the country
Skeet Ulrich denies claims he had been shot by President but considers changing his name to ‘Traps’
New York Times hacked by Chinese government, Paul Krugman’s economic policies stolen
White House: when President shoots skeet, he donates the meat to food banks that feed the middle class
To prove he is serious, Obama eliminates armed guard protection for President, Vice-President, and their families; establishes Gun-Free Zones around them instead
State Dept to send 100,000 American college students to China as security for US debt obligations
Jay Carney: Al Qaeda is on the run, they’re just running forward
Fearing the worst, Obama Administration outlaws the fan to prevent it from being hit by certain objects
World ends; S&P soars
Riddle of universe solved; answer not understood
Greece abandons Euro; accountants find Greece has no Euros anyway
Wheel finally reinvented; axles to be gradually reinvented in 3rd quarter of 2013
As Santa’s workshop files for bankruptcy, Fed offers bailout in exchange for control of ‘naughty and nice’ list
Freak flying pig accident causes bacon to fly off shelves
Report: President Obama to visit the United States in the near future
Obama promises to create thousands more economically neutral jobs
Imam Rauf’s peaceful solution: ‘Move Ground Zero a few blocks away from the mosque and no one gets hurt’
Study: Obama’s threat to burn tax money in Washington ‘recruitment bonanza’ for Tea Parties
Study: no Social Security reform will be needed if gov’t raises retirement age to at least 814 years
Vice President Biden: criticizing Egypt is un-pharaoh
Israelis to Egyptian rioters: “don’t damage the pyramids, we will not rebuild”
Lake Superior renamed Lake Inferior in spirit of tolerance and inclusiveness
Michael Moore: As long as there is anyone with money to shake down, this country is not broke
Obama’s teleprompters unionize, demand collective bargaining rights
Obama calls new taxes ‘spending reductions in tax code.’ Elsewhere rapists tout ‘consent reductions in sexual intercourse’
Obama’s Regulation Reduction committee finds US Constitution to be expensive outdated framework inefficiently regulating federal gov’t
Taking a page from the Reagan years, Obama announces new era of Perestroika and Glasnost
White House to impose Chimney tax on Santa Claus
Obama decrees the economy is not soaring as much as previously decreeed
Conservative think tank introduces children to capitalism with pop-up picture book “The Road to Smurfdom”
Obama refutes charges of him being unresponsive to people’s suffering: “When you pray to God, do you always hear a response?”
Fluke to Congress: drill, baby, drill!
Planned Parenthood introduces Frequent Flucker reward card: ‘Come again soon!’
Obama to tornado victims: ‘We inherited this weather from the previous administration’
People’s Cube gives itself Hero of Socialist Labor medal in recognition of continued expert advice provided to the Obama Administration helping to shape its foreign and domestic policies
Hamas: Israeli air defense unfair to 99% of our missiles, “only 1% allowed to reach Israel”
Voters Without Borders oppose Texas new voter ID law
Enraged by accusation that they are doing Obama’s bidding, media leaders demand instructions from White House on how to respond
Official: China plans to land on Moon or at least on cheap knockoff thereof
Koran-Contra: Obama secretly arms Syrian rebels
Poll: Progressive slogan ‘We should be more like Europe’ most popular with members of American Nazi Party
May Day: Anarchists plan, schedule, synchronize, and execute a coordinated campaign against all of the above
Midwestern farmers hooked on new erotic novel “50 Shades of Hay”
Study: 99% of Liberals give the rest a bad name
Obama meets with Jewish leaders, proposes deeper circumcisions for the rich
Cancer once again fails to cure Venezuela of its “President for Life”
Tragic spelling error causes Muslim protesters to burn local boob-tube factory
White House: “Let them eat statistics”
Special Ops: if Benedict Arnold had a son, he would look like Barack Obama
I Own The World
Supercommissar Maksim
It’s Big Fur Hat
Blur-Brain
Terry Colon
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Sad Hill News
Professor Kurgman
kathy blog
FAQster
AWOL Civilization
BestObamaFacts.com
Looking at the Left
Red Planet Cartoons
Julia Gorin
Brain Terminal
Death By 1000 Papercuts
Zombietime
Soul Sequester - the First Family Gets Down!
Sunday, February 17, 2013
Biases, Biases Everywhere
Look around the investing world and biases are pervasive, from clustering estimates around company guidance (anchoring) to avoiding a stock that has already outperformed (mental accounts). And these biases make a difference.
Via Goldman Sachs,
Biases creep into the investment process at two important stages.
First, when forming estimates. The starting point (baseline) is key, and rather than using industry dynamics (an outside view), estimates may be influenced by company guidance (vulnerable to vested interests and dated industry dynamics given complex reporting lines), consensus estimates (themselves vulnerable to bias) or an emphasis on well-known newspaper articles. Adding detail to a scenario may make it more memorable, but the detail itself will reduce its likelihood (more is more fallacy). Data may be selected to support a pre-supposed thesis (confirmation bias) and presented as such (positive framing). And expectations may be altered by share price performance on the day of an announcement
(causal thinking).
Second, biases find their way into the investment decision. Even a bias-free upside calculation may be ignored and over-ridden when the share price is falling (herding with other fearful investors) or the company has been subject to a recent negative press story (recency bias, availability bias). Stocks may be held rather than sold because they’re in negative territory (loss aversion), the evidence for change doesn’t seem strong enough (status quo bias) or we think we knew it all along (hindsight bias). Low-growth segments of a business may look attractive when presented by a strong management team (halo effect) and the question ‘is the stock fairly valued’ may be interpreted as ‘do I like the stock’ when forming the investment case (substitution effect).
These biases really matter. Overcoming them and applying systematic rules can enable significant alpha creation, from creating a ‘quality control’ check on additions to a portfolio, to applying a stop-loss when stocks underperform.
From bias to error
These biases aren’t just interesting observations. They lead to estimate errors (garbage in, garbage out) and inappropriate stock recommendations. While many errors are analyst-specific, and hidden beneath the surface when aggregated within consensus, some persist from analyst to analyst and quarter to quarter. And we can measure them. We make three key observations:
Clustering at mediocrity
First, top-line variability is consistently underestimated. Consensus revenue growth forecasts will typically start in the 5%-6% range for the market at large, but the true outcome almost always turns out to be a significantly higher or lower level. While nine of the last ten years’ consensus revenue growth forecasts have been initially in the 5%-6% range, no year saw actual growth within that range. Analysts are reluctant to take a significant view on growth ahead of the date (conservatism, risk aversion), and/or are anchoring to economists who themselves are making the same mistake.
Put another way, over the last decade analysts have typically expected 50% of companies to report sales growth in a 2%-8% range, yet only 23% have actually delivered sales within this range.
Conservative in cash-use
Second, analysts will typically underestimate the extent of reinvestment via capex or M&A. Net debt used to fund this reinvestment has been revised upwards in seven of the last ten years, irrespective of the market environment. This may reflect conservatism and a lack of incentive to take a view on lumpy investment. It may also reflect anchoring to company guidance, which itself is disincentivised to announce investment plans early (take a look at the consensus 2013 and 2014 deleveraging assumption. In an environment of ageing assets and rising visibility, are companies really going to buck the trend and de-lever rather than reinvest?).
The wood from the trees
Third, analysts will frequently revise estimates post company results, but will less commonly revise estimates in the intervening period. As such, analysts will over-weight information presented by the company, but under-weight data on the broader market (GDP, inflation, unemployment) or the company’s position within it (pricing power, barriers to entry etc, potentially sourced via primary research). Analysts can miss out on the full picture, or the representative dataset, which can distort estimates.
The consequence… bifurcation underestimation…
The demonstrable biases above are probably just the tip of the iceberg. But, each one will have a meaningful impact on long-term earnings estimates, and these will discriminate from company to company. One group of stocks standing to benefit is those with profitable growth opportunities. Company managements will rarely disclose the full extent of future capex plans (conservatism, lack of incentive) and yet their commentary can be disproportionately weighted (manifestation #3 above) and as such the extent of reinvestment and releveraging will be underestimated (manifestation #2).
Who cares?
All this focus on estimates, but do they really matter? Can’t we just rely on average estimates but decent models? Unfortunately we can’t. Just as the conclusions of classical economic theory have been challenged, because the assumption of human rationality is unrealistic, so recommendations taken from inaccurate estimates (irrespective of models) can yield underperformance. To provide an example, buying Stoxx 600 companies on low P/E multiples (and selling high) would have generated c.25% annual alpha over the last decade using 12-month forward actual reported earnings, but would have lost c.3% per annum using consensus estimates. Interestingly, you would lose less money applying historical earnings (-2% alpha pa) than by using consensus estimates.
Simply put, biases make consensus estimates worthless.
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Biases, Biases Everywhere