Why Expensive Oil is Good for your Mortgage

Here is an analysis of US Income, thanks to Gapminder , another company acquired by Google Inc http://preview.tinyurl.com/37n6qe

us-incomes.GIF

US Income has risen steadily ,despite the Korean War,Vietnam War ,Cold War,Iraq War(s),Oil Shock(s),Japanese Imports, Chinese Imports, Indian Outsourcing.

The simple reason is that a flexible economy is more efficient at using capital than any other economy and the US continues to show the maximum readiness to deal with crisis urgently and with flexibility . Take the sub prime crisis in which the Fed is effectively financing the mortgage debts by its revenues (by sale of Treasuries) to the rest of the World.

Now ,coming back to the title- Why expensive oil is good for you ?

Well ,one thing, Arab terrorists don’t get even a fraction of Oil money. In 50 years of continuous oil revenue, hundreds of billions have been invested by Arab countries in the US financial system , which continues to be the safest and most reliable system in the world. The 9/11 attacks cost only 1 million dollars, and money to terrorists is not an issue because of the much less cost in buying truck bombs, etc..

Well , if Oil rises to 104 Dollars a barrel, where do you think the Arabs will invest those dollars- estimated to be 1-2 trillion of additional global liquidity. Would you prefer Arab countries to have enough money to feed and educate their populations or would you want them to be unstable , with lesser money. Same is the effect of extra money on Russia. Well fed populations are less likely to be frustrated and resort to desperate attacks.

The answer is those dollars are likely to flow back into the US financial system giving Wall street more liquidity than the Fed can give, Arabs and Russians more pride and less frustration, and the banks are less likely to foreclose if they themselves have money in the bank.

Remember banks want to make profits and that can happen if you pay their loans for longer tenures.

Thus expect banks to reduce mortgage payments by increasing tenure, rather than foreclose too eagerly and invite political scrutinies and backlash.

And the Arabs may just save the day for the US financial system.

This is an example of Adam Smith’s invisible hand… Think about that.

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Politicians with pants down

How many politicians do you want to see

Cheating on their wives and then apologizing on TV

Making excuses and being sorry for what they do

Caught with pants down and then appealing to you

There was Bill , and he is now trying to get back to White house again

and Larry Craig apologized when he got caught in turn

Apparently paying for it, and getting caught

is worse than  toilet  knocks ,or having cigars with the intern

Bring back the golden days

When people had affairs discretely

Media minded their ways.

When police didnt leak,

cases like that on TV

This is getting too familiar

or is just me

Getting a man in trouble With his wife and kids

Is not enough , you have to take his job too

Daily assault on senses

Of hapless me and you.

Does the world run out of problems on those days

When politicians  get caught with the pants down

Maybe politicians should get some operations done.

Make them impotent before their tenure has begun.

The Nastiness Index

Reading about the latest back and forth and then back again rounds between not that conservative Republicans, conservative Republicans, liberal Democrats, not so liberal Democrats makes you wonder if there is some way of quantifying the daily dose of political news. If we can quantify the level of terror threat in color coding, can we create a blue and red nastiness index for quantifying the political debates in a country.

The Nastiness Index can be used to decribe political equilibrium in a country. eg in USA if the Index shows high blue , and less red it means the Democrats are pummeling the Republicans. If the Index shows low blue and low red, it means all is quiet. If it shows high red, and low blue , it means the opposition is down and the administration is up.Stock markets can use this index to quantify the level of political activity, inactivity and stability of elected governments.

If the nastiness index shows high blue and high red, it means its election time folks.

Model Presentation

Presenting a model is different from making a model, as the end audience is non technical and business minded. These are some thumb rules I use for making model presentation templates

1) Model Lift- How good is the model vs current effort.This is best shown by lift curves or KS statistics where you plot % Responders on X Axis and % Population on Y axis. Maximum separation between goods and bads is the KS statistic.

2) Model Robustness- What facts back up statistical validity of model output/equation ? Is there a way to test the model without executing it fully?

3) Model Assumptions- This deals with historical assumptions like which event is the model based on, data assumptions for validation and missing value treatment, capping of outliers.

The best way to convince business audiences is splitting the dataset into three random samples of 60 %,30 % and 10 % for model building, validation and testing again.

Then rerun the model equation on another random sample ,using a different seed in the RANUNI function. The KS should be similar and so should be the stats.

Ultimately models get validated or battered in the marketplace. A 1 % difference in response rates can make or lose hundreds of thousands of dollars especially in mass marketing or credit modeling. Business perspective and buy in is thus essential and so is continuous model performance feedback to avoid deterioration of  model, as it will eventually deteriorate over a period of time.

Jodha Akbar (Movie review) 2008 -Bollywood Movie

The Oscar nominated director , Ashutosh G (for best Foreign language Movie Lagaan ) casts Hrithik Roshan (one of India’s most beautiful actors) and ex-Miss World Aishwarya Rai Bacchan in this love story of Mughal Emperor Akbar the Great.

jodhaaakbar.jpg

First things first – the movie is as historically true as you can expect entertainment movies to be.   So much for history.Hrithik and Aishwarya  and the other actors more than compensate for the historical in accuracies . Akbar didn’t win all battles by negotiation, but as a descendant of Mongals did use massacres selectively for shock, awe and deft political manouevering.

But the songs are good , the people are lovely and the movie sets sparkle with mughal grandeur . Lots of Bollywood masala, and some inspiration from Troy ,the Hollywood movie. Which is sad actually. Why borrow the climax from the famous Eric Bana /Hector and Brad pitt/achilles contest.

Hrithik and Aishwarya might as well act in a Hollywood movie rather than copy one. their chemistry makes the movie tick, and you might get to see one of the slowest sensual love songs created in the new generation Bollywood.

Watch Jodha Akbar……..good time pass and well worth your ticket money…… but forget the history of both Akbar and Troy and go with lowered expectations…and you will have a reasonably good time.