Archive for May, 2005

Bowerbirds

Posted in Science on May 31st, 2005 by Chip Gibbons

NOVA on PBS ran a program about bowerbirds.

Male bowerbirds build elaborate displays of inanimate objects called bowers to attract females.

There are a few examples of bowers on this page, but they don’t do justice to the actual process that the males go through to build their bowers.

Not only are the bowers often sophisticated structurally, they can also show great attention to color coordination and pattern.

Building the best bower is not all that is required to attract the females, however. When the females come to check out the bower, some species of males do elaborate song and dance routines to impress the females.

The males are much more colorful than the females who look plain in comparison. After mating the females go off to by themselves to give birth and raise the young.

These are really extraordinary birds.

Housing Bubble Distorting Investment

Posted in Gold, Investing on May 30th, 2005 by Chip Gibbons

BusinessWeek Online explains how the housing bubble is helping low-tech sectors and pulling investment away from high-tech sectors.

Residential investment has become a black hole, absorbing a staggering 5.8% of gross domestic product. That’s the highest level since the late 1940s and early ’50s, when an entire generation of returning soldiers was setting up families and expanding into newly built suburbs. This time, Americans are building second homes and enlarging current ones at a record pace.

By comparison, the tech boom of the ’90s was at worst a baby bubble. Starting in 1991, business investment in information technology and communications gear began a steady climb, going from 3.1% to a peak of 4.8% in 2000 before collapsing.

Without much fanfare, residential construction basically followed the same path in the 1990s. Starting at 3.4% of GDP in 1991, it rose to 4.6% in 2000. But rather than turn down, as tech did, spending on housing just kept climbing, fueled by low interest rates. Measured by the increase in its share of GDP, the housing boom so far is about 40% larger than the tech boom.

One reason for this might be that so many people lost a lot of money in the tech bubble. Stocks that sold at premium prices suddenly became worthless.

At least with real estate, the property will always have some value. The secret is to not become overextended as so many people are these days with their 102% LTV interest-only mortgages.

What happens when the housing boom finally slows? The share of GDP going into housing construction will fall sharply, hurting construction workers, architects, and homebuilders. Homeowners will no longer be able to draw on rising home equity. And what about Americans who borrowed heavily to buy properties for investment, expecting prices to keep climbing? Much like the companies who built miles of now-unused fiber-optic cable during the 1990s, they will be in deep trouble.

The real mystery is why mortgage rates keep going down, when all the “experts” say they should be going up.

The Federal Reserve sets short-term interest rates which are not directly tied to mortgage interest rates. The mortgage rates are tied to long-term bonds like 10-year Treasury Notes. Interest rates on bonds move inversely to the prices of the bonds. As interest rates drop, the value of the bond goes up. As bond prices are bid up, the interest rates go down.

The fact that interest rates on 10-year notes keep going down suggests that at the current time, investors see the low interest rate currently paid on the bonds is a good investment relative to other options. They are only a good investment if interest rates stay the same or go lower in the future.

The evidence from the bond markets is that people don’t think the future of our economy is looking too good. Investors would not try to lock in a low rate of interest on a long-term bond, unless they believe the demand for bonds will stay strong and get stronger. That means the money to buy the bonds will have to come from other investments, which could be the sale of real estate, stocks, or gold, which does not bode well for those markets.

It’s almost like there is a bubble in bonds as well as a bubble in housing at this point, with sentiments in each market fueling the bubble in the other.

Red Dust

Posted in Film on May 30th, 2005 by Chip Gibbons

I had a chance to see a new feature film called Red Dust at the Seattle International Film Festival.

The movie stars two-time Academy Award winner Hilary Swank, Chiwetel Ejiofor, and Jamie Bartlett in a story based on the Truth and Reconciliation Commission, the process whereby people accused of crimes related to apartheid in South Africa could be given amnesty in exchange to telling the complete truth about their involvement in the crimes.

While I have heard of the Truth and Reconciliation Commission, I was not sure exactly how it worked and this film gave me a much better understanding of the process, as well as the power and limitations of forgiveness.

This film is hard to watch at times but well worth seeing. Swank is capable and competent in her role as Alex Mpondo’s lawyer, but the great performances were delivered by Ejiofor and Bartlett. Ejiofor plays Mpondo, a black South African who opposes the petition for amnesty by the policeman who beat and tortured him savagely for 31 days played by Bartlett.

Here’s another review which expresses an opinion similar to my own.

Vancouver: A City Worth Watching

Posted in Blogroll on May 28th, 2005 by Chip Gibbons

As I said before, it’s been a while since I was last in Vancouver, BC.

I left Seattle with my friend early on Tuesday morning. The first big event took place at the border where we were told by the guard at the drive-through booth that we would have to check in with the immigration office because my friend didn’t have any proof of citizenship. I had brought a certified copy of my birth certificate, but he only had his driver’s license which used to be sufficient to cross back and forth between the U.S. and Canada.

The Canadian immigration officials asked the usual questions like where were you born, how long are you planning to stay, what is the purpose of your visit and what kind of work do you do. We both noticed that they sometimes asked the same question more than once. We were not sure if that is some special tactic or if they just didn’t pay attention to the answer they were given the first time they’d asked.

The agent told us that by 2008 we would need to have a passport to travel between the U.S. and Canada; that even a birth certificate would no longer be sufficient proof of citizenship.

After they had made their point to my friend that he should have brought proof of citizenship and that we should be better prepared next time, they let us go.

Since we were the only ones in the immigration office, we wondered if they just needed something to do, so the crossing-booth agent sends somebody in once and a while to make it look like they have an important job.

As we approached the city, we were both struck by the number of tall glassy skyscrapers. I didn’t remember seeing them the last time I was there.

It was a little after noon and we decided to go straight to the hotel even though check-in time wasn’t until 3pm.

We had reservations at The Blue Horizon on Robson which I remembered from my previous visit. At that time, it seemed like a landmark, one of the most prominent buildings in the center of downtown, but this time it seemed almost inconspicuous among the many other towering buildings.

The hotel reservations clerk allowed us to check in early, assigning us to a room on the 14th floor of the 31 story building. The room was clean and comfortable but not four-star luxury. The best part about The Blue Horizon is that it is designed with eight corners so that all the rooms are corner rooms with two exposures. It makes the rooms very bright. They also have balconies and seem even larger than their already comfortable size.

Our room had two queen sized beds, a desk, a safe, a TV, and a comfortable chair with ottoman. All rooms have free high-speed Internet access through an Ethernet connection. It was great for checking e-mail as well as consulting the Internet as questions arose about any of the sites we had seen in Vancouver. We also used it to search for information on things to do.

Downtown Vancouver is not huge and it can be seen easily on foot, the best way to see and get the feel of a dense urban environment, that is unless you want to know what it feels like to drive around a dense urban environment.

Downtown Vancouver is densely packed. The construction of many new high-rise condominiums has brought many people back into the city. Ironically, as this article explains, it has reduced traffic.

Condominium towers are so popular that they’re sold out before they’re built. Some 25 percent of the units are designed for families with children and 20 percent for low-income residents. Vancouver is building its first inner-city elementary school in 30 years. Nearly 20,000 more people have moved downtown in the past six years, and, as they do, auto traffic is perversely declining as people give up a car.

“Vancouver is a counterintuitive city,” says Larry Beasley, the hard-bargaining planner of the city’s downtown development. More people, less congestion. Go figure.

The first evening we had dinner at The Fountainhead, a restaurant/bar with an enclosed patio next to the sidewalk on Davie Street which is the center of gay life life in downtown Vancouver. Good food, great service and reasonable prices. (And no, I did not pick it because of the name, in fact, didn’t even think about the name until my friend pointed it out.)

The next morning we returned to the Bread Basket located on Bute near Robson, were we had had a great lunch the day before. We drove over to North Vancouver and West Vancouver across the Lion’s Gate Bridge, then came back into downtown to walk. We did Robson, the shopping district, the courthouse park, and large shopping mall which I think was on Georgia. We headed over toward Chinatown and ended up in a very seedy part of the city. I was surprised that Canada, which has the reputation of providing for all of its citizens, would have so many bums in one place.

We walked through Gaston and then to the Convention Center area where we stopped to look at the construction site where they are filling in a portion of the harbor for the expansion. We saw these tall metal cylinders that looked 30-40′ long dangling from cranes. The cylinder looked like it was blowing air into the water. The crane was also holding a large bucket of gravel. While we were trying to figure out what they were doing, a man in a hard hat, who must have noticed from all our pointing that we were trying to understand what was going on, came up to us and explained exactly what they were doing.

He said that the long cylinders used air and water to blow cylindrical pillars into the harbor bottom. Then the gravel would be poured into a funnel shaped bin at the top of the metal cylinder to fill the underground pillar. They were doing this every meter, as a way to prevent liquifaction of the soil in the event of an earthquake.

The thing that surprised me the most was the presense of American businesses in Vancouver. They not only have Starbucks in many locations and McDonalds, but most of the shopping districts we saw had many signs advertising American brand names. I often felt as if I hadn’t even left the U.S.

In the afternoon we had lunch in Stanley Park at the Prospect Point Cafe. We walked through other parts of the park as well. The views from the park looking back toward the city are fantastic.

The second evening we had dinner at Moxie’s at the corner of Robson and Bute. They have an outdoor patio on the second floor. The food was excellent and very reasonable. The only annoyance is that you have to share the patio with smokers.

I thought it was kind of strange that when he entered we told the hostess we wanted to sit outside on the patio. We’re thinking sunshine and fresh air. Right behind us, a man and a woman come in and ask to be seated in “the smoking section,” which is ironically the same place were some of us go for fresh air.

The following morning we drove around the perimeter of the University of British Columbia on our way out of Vancouver. We were surprised by the number of large homes in the area. It looks like a lovely place to go to college.

The trip back to Seattle was uneventful, except for a rather long wait at the border. We were once again told to visit the immigration officials, who were downright obnoxious compared to their Canadian counterparts. They want to make the experience of trying to cross the border without proof of citizenship so unpleasant that you’ll get a passport before you attempt to cross again.

They’ll be making a lot of money between now and 2008 when passports will be required to cross the U.S./Canadian border as the cost to apply is now close to $100, not including the pictures.