Your guide to The Economist: Week of June 02, 2007


Climate Change: A Stairway to Heaven?…
electric conveyor belt above the arctic to funnel the carbon out of the atmosphere, no we’re not making this up…
Climate Change: Trading Thin Air…
pig effluent = carbon credits…
Climate Change: Irrational Incandescence…turn off your lights and drive your car…
Luxury goods in India: Maharajahs in the shopping mall…India’s middle class discovers Louis Vuitton…
Is there a God? To believe or not to believe…
two sides, two books…
Uncertainty: The Perils of Prediction…
the magazine reviews Taleb’s new book…
Hedge fundraising…
the boys and their charities…

Climate Change: A Stairway to Heaven?
Tired of conserving energy? Feeling guilty about standing in front of the refrigerator? Well, then get ready to support Alfred Wong. The geophysicist from UCLA wants to build an electrical conveyor belt above the arctic in order to funnel our carbon into the universal ether. His plan includes: zapping dust with powerful lasers, nudging ions with radio waves, and depending on auroras to make the whole thing work. According to the magazine, “Dr. Wong has only rough calculations of the energy needs of his scheme.” The idea sounds sketchy to me.

Climate Change: Trading Thin Air
The author does everything short of explicitly telling you to buy Bunge (NYSE: BG). (S)he writes,
Bunge, an agricultural-commodities business based in America, builds lined and enclosed pools to collect the [pig] effluent and captures the methane it emits. The farmer can use the gas to generate electricity. By preventing methane from escaping into the atmosphere, Bunge creates a credit which it can sell on the carbon market.” The excitement was overwhelming, I had to stop reading.

Climate Change: Irrational Incandescence
The author highlights a study by Swedish power utility, Vattenfall, done on efficient methods of carbon abatement. It found that lighting conservation is one of the most efficient methods (ha, vindication for my habit of sitting in the dark, well it’s mostly just laziness) of carbon abatement, while the methods the western world focuses most on (ethanol, wind, solar) are least efficient.

Luxury goods in India: Maharajahs in the shopping mall
Global luxury brand boutiques have been trickling into India, as demand for such consumer goods grows. The Economist writes, “
India is an attractive market for luxury goods because, unlike China, it does not have a flourishing counterfeit industry. Credit is becoming more easily available. And later this year Vogue, a fashion magazine, will launch an Indian edition.” The real worry here is that according to McKinsey, India’s middle class is expected to grow more than tenfold (read: more cars, quickly depleting oil reserves, and carbon polluting) to 583m -to put that in perspective, there are a little over 300m people in the U.S., according to the census. In all seriousness, this is going to make global carbon abatement a colossal task (even for Mr. Wong, see above). Your LVMH position, however (barring pending customer service issues), should be fine.

Is there a God? To believe or not to believe
No, not like Pascal’s Wager. The title, unfortunately, is far more interesting than the actual article. The author contrasts two books on religion: Christopher Hitchens, the nonbeliever, calls for a world without religion, while Francis Collins, the believer, calls for one with (surprise) -only Collins’ notion of God and religion incorporate evolution (again, surprise: Collins is a scientist). According to the author, “Belief in God and subscription to a religion are not quite the same thing [Duh], although both books treat them as if they were.” Most interesting line comes from the author, on the believer: “Mr. Collins has no time for intelligent design but conceives God to be…a kind of divine CCTV camera.” 

Uncertainty: The Perils of Prediction
Another book review (sorry, but Taleb is a hero in our wet with tears eyes, and deserves at least a line in this unworthy post): The Economist takes a look at Nassim Nicholas Taleb’s new book Black Swan, which we haven’t yet read (’s fault). The review goes through the usual routine: overconfidence, probabilistic ignorance, yadda, yadda… You get the sense that Black Swan reads almost, if not exactly, like its predecessor Fooled by Randomness. This is disappointing, if the case; with Black Swan we were hoping for an evolution, not a reiteration.

Hedge fundraising
Hedge fund managers are giving some of that windfall (earned, mind you) back to those in need.


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