Posts Tagged ‘Charts’

Another Encouraging Chart From Goldman Sachs:

Another Encouraging Chart From Goldman Sachs


In the past, when stock returns have been as crappy as they have been over the past 10 years, it has been a great time to buy. History never repeats itself exactly, so this time could be different, but Goldman offers yet another exhibit suggesting that the market’s collapse has likely created a nice opportunity for long-term investors.


Crude Oil Drops After $25 Gain on Final Day of October Contract

By Margot Habiby

Sept. 23 (Bloomberg) — Crude oil for November delivery fell as the dollar rebounded from a one-month low and after the October contract climbed more than $25 a barrel in its final trading day yesterday, a record one-day gain.

Oil rose to its highest since Aug. 21 yesterday as traders scrambled to unwind positions on the October contract, the dollar declined the most against the euro since January 2001 and on speculation a proposed $700 billion U.S. bailout package for the finance industry may bolster the economy and shore up demand.

“The dollar will be the focal variable in the coming days because the Treasury proposition and the bailout plan could have a significant impact on the dollar,” said Christopher Edmonds, the managing principal of FIG Partners Energy Research & Capital Group in Atlanta.

Crude oil for November delivery fell 74 cents, or 0.7 percent, to $108.63 a barrel at 9:13 a.m. Sydney time on the New York Mercantile Exchange. Yesterday, the contract rose $6.62, or 6.4 percent, to $109.37 a barrel.

Oil has risen 20 percent since Sept. 16 as lawmakers pledged fast consideration of the Treasury’s plan to buy devalued mortgage-related securities.

The October contract rose $16.37, or 17 percent, to expire at $120.92 a barrel yesterday on the Nymex. It touched $130 in intraday trading, as traders who sold the October contract last week, when oil dipped close to $90, had to buy the futures back.

Traders `Squeezed’

In a squeeze, a trader has gone short by selling contracts betting that the price will decline. In the last days before the contract expires the trader must buy back the same number of futures or be forced to deliver the underlying oil.

The Commodity Futures Trading Commission is “closely monitoring” yesterday’s gain in oil prices on Nymex for potential manipulation, the agency’s acting chairman said.

“We are working closely with Nymex compliance staff to ensure that no one is taking advantage of the current stresses facing our financial marketplace for their own manipulative gain,” Acting Chairman Walter Lukken said in a statement.

The dollar was little changed at $1.4793 per euro at 8:35 a.m. Sydney time, from $1.4774 yesterday. It has rebounded since dropping 2.1 percent yesterday to $1.4866, the weakest level since Aug. 22, on concern the U.S. bailout package, which would buy assets from financial firms, would inflate the budget deficit.

“Traders are trying to figure out what this bailout and stimulus package is and what it means,” Edmonds said. “To say that it means the consumer is alive and well and energy demand is going to pick up to pre-dip levels is way, way premature. At some point in the not-too-distant future, this package has to be paid for, and the economic repercussions are pretty significant for the taxpayer.”

`Economic Slowdown’

Crude oil prices are “too high” because the global economic slowdown may spread and cut consumption, the International Energy Agency’s deputy executive director said yesterday.

“The economic slowdown in the U.S., Europe hasn’t gotten into China, India much, but at some point you have to presume it will,” William Ramsay said in an interview in Bangkok yesterday.

The Paris-based IEA, which advises 27 developed nations on energy policy, was set up in 1974 in response to the Arab oil embargo.

Brent crude oil for November settlement rose $6.43, or 6.5 percent, to settle at $106.04 a barrel on London’s ICE Futures Europe exchange yesterday.

Gasoline for October delivery fell 0.38 cent to $2.70 a gallon in New York. Yesterday, it increased 10.41 cents, or 4 percent, to settle at $2.7038 a gallon in New York. Regular gasoline, averaged nationwide, declined 1.8 cents to $3.739 a gallon, AAA, the nation’s largest motorist organization, said today on its Web site. Pump prices reached a record $4.114 a gallon on July 17.

To contact the reporter on this story: Margot Habiby in Dallas at

Last Updated: September 22, 2008 19:17 EDT

China's Reserves

China has increased its foreign currency reserves nearly tenfold in the last eight years, amassing U.S. dollars at an incredible rate. Unlike historical strategies for building reserves, China’s foreign currency accumulation is not intended to strengthen their currency. Rather, China’s stated aim is to protect U.S. purchasing power. China presents itself as the friendly trading partner, saying it will gladly keep buying dollars so that the U.S. may keep buying Chinese products. But these massive U.S. dollar holdings also give China the ability to influence the U.S. currency. The Chinese have a keen understanding of the concept of leverage, and can use these reserves to maintain their current trade advantages. Any attempt to make China revalue the renminbi will surely be met by more threats from Beijing to diversify their reserves away from the U.S. dollar. Meanwhile, the United States has remained complacent about growing its foreign currency reserves, leaving the U.S. government powerless to curb the dollar’s recent plunge in value.
May 28, 2008


Worth a thousand words

Dec 19th 2007

A good graphic can tell a story, bring a lump to the throat, even change policies. Here are three of history’s best

IT WAS at a dinner party in 1856 that Florence Nightingale met William Farr. The Lady of the Lamp was already famous for nursing British soldiers wounded in the Crimea; Farr, the Compiler of Abstracts in the General Registry Office, was widely recognised as an innovative statistician. Both cared deeply about improving the world through sanitation; both understood the importance of meticulous records in providing the evidence needed to bring about change.

Graphic News
Graphic News

Farr was the first to compile “mortality tables”, listing causes of death in the general population; Nightingale compared his numbers with her own on the deaths of soldiers to great effect. By showing that even in peacetime a soldier faced twice the risk of dying in a given year as a civilian, she campaigned successfully for better conditions in barracks. The pair were instrumental in setting up a royal commission of inquiry into sanitary conditions during the Crimean war.

Although remembered as the mother of modern nursing, Nightingale was an accomplished statistician too. She was particularly innovative in presenting data visually. The example above, of a type now known as “Nightingale’s Rose” or “Nightingale’s Coxcomb”, comes from her monograph, “Notes on matters affecting the health, efficiency and hospital administration of the British army” published in 1858. In the same year she became the first female fellow of the Statistical Society of London (now Royal Statistical Society).

The chart displays the causes of the deaths of soldiers during the Crimean war, divided into three categories: “Preventible or Mitigable Zymotic Diseases” (infectious diseases, including cholera and dysentery, coloured in blue), “wounds” (red) and “all other causes” (black). As with today’s pie charts, the area of each wedge is proportional to the figure it stands for, but it is the radius of each slice (the distance from the common centre to the outer edge) rather than the angle that is altered to achieve this. Her principal message—that even during periods of heavy fighting, such as November 1854, far more soldiers died from infection than from wounds—can be seen at a glance. She sent the chart to the War Office; and it is a fair assumption that it contributed to the improvements in military hospitals that she brought about.

Nightingale’s chart is a beautiful and persuasive call to action, but it is not perfect. The red, black and blue wedges are all measured from the centre, so some areas mask parts of others. The numbers of deaths from the various causes are not stated—although, to be fair, it was their relative size that Nightingale wished to show.

Graphic News
Graphic News

The chart to the left also tells the story of a war: Napoleon’s Russian campaign of 1812. It was drawn half a century afterwards by Charles Joseph Minard, a French civil engineer who worked on dams, canals and bridges. He was 80 years old and long retired when, in 1861, he called on the innovative techniques he had invented for the purpose of displaying flows of people, in order to tell the tragic tale in a single image. Edward Tufte, whose book, “The Visual Display of Quantitative Information” is a bible to statisticians, calls it “the best statistical graphic ever drawn”.

Minard’s chart shows six types of information: geography, time, temperature, the course and direction of the army’s movement, and the number of troops remaining. The widths of the gold (outward) and black (returning) paths represent the size of the force, one millimetre to 10,000 men. Geographical features and major battles are marked and named, and plummeting temperatures on the return journey are shown along the bottom.

The chart tells the dreadful story with painful clarity: in 1812, the Grand Army set out from Poland with a force of 422,000; only 100,000 reached Moscow; and only 10,000 returned. The detail and understatement with which such horrifying loss is represented combine to bring a lump to the throat. As men tried, and mostly failed, to cross the Bérézina river under heavy attack, the width of the black line halves: another 20,000 or so gone. The French now use the expression “C’est la Bérézina” to describe a total disaster.

In 1871, the year after Minard died, his obituarist cited particularly his graphical innovations: “For the dry and complicated columns of statistical data, of which the analysis and the discussion always require a great sustained mental effort, he had substituted images mathematically proportioned, that the first glance takes in and knows without fatigue, and which manifest immediately the natural consequences or the comparisons unforeseen.” The chart shown here is singled out for special mention: it “inspires bitter reflections on the cost to humanity of the madnesses of conquerors and the merciless thirst of military glory”.

Graphic News
Graphic News

The chart to the left is the earliest of our three. It was published in 1821 by William Playfair, a Scottish engineer, political economist and scoundrel: he was convicted of libel in England and swindling in France. Alongside these many and varied skills he was also an engraver (he produced some of James Watt’s engineering drawings), which explains this image’s handsomeness, with its delicate shading and ornate attribution.

Playfair liked controversial topics. He drew a chart comparing tax levels in various countries in order to show that Britain’s was too high. He was the first to show imports and exports on one chart, shading the area between the two to indicate the balance of trade and explaining that the intersection of the lines showed a shift in favour of one country or the other.

This chart, his most famous, shows the “weekly wages of a good mechanic” and the “price of a quarter of wheat”, with the reigns of monarchs displayed along the top. It is a little difficult to see the point Playfair wished to make: “that never at any former period was wheat so cheap, in proportion to mechanical labour as it is at the present time”. Presumably he was not familiar with the idea of combining two variables—prices and wages—to make a third—affordability. Still, he should not be overly criticised for this. For a start, his conclusion was correct. Statisticians have used his data to plot wages divided by prices (showing how much wheat a week’s wages would buy) against time, and the point becomes clear—as, incidentally, does a more subtle one: the increase in buying power was slowing down.

And Playfair was already making a leap of abstraction that few of his contemporaries could follow. Using the horizontal and vertical axes to represent time and money was such a novelty that he had to explain it painstakingly in accompanying text. “This method has struck several persons as being fallacious”, he wrote, “because geometrical measurement has not any relation to money or to time; yet here it is made to represent both.”

He was the first in a series of economists, statisticians and social reformers who wanted to use data not only to inform but also to persuade and even campaign—and who understood that when the eye comprehends, the heart often follows. Nightingale hoped her charts would liven up her publications; the queen, she thought, might look at the pictures, even if she did not read the words.

Not everyone thought it was right to include such fripperies in a sober publication. “We do not want impressions, we want facts,” Farr wrote to her in 1861. “You complain that your report would be dry. The dryer the better. Statistics should be the dryest of all reading.” Fortunately, she ignored him.

Copyright © 2007 The Economist Newspaper and The Economist Group. All rights reserved.

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