Saturday, March 5, 2011

Hayward's Tips for graduating Seniors as they prepare for their first semester of college---the advice is free and worth what you pay for it...

Below are 5 basic recommendations I give to graduating Seniors that I believe will help them succeed in their first semester of college. They are by no means inclusive of everything that they should do, but I believe can form an excellent foudation for success.  Whether you are shy and tend to cocoon in your dorm room and not get out, or you have the opposite problem and are too social and don't stay focused enough, I think these can help you.  It is free advice and worth what you paid for it...

1. The first month of school join the "___Society" or club that goes with your major...i.e. Economics Society, Math Society, Computer Science Society, etc.  Find out where and when they meet. Go to the meetings and participate or just sit in the back of the room and absorb.  It is important to make connections with your "own kind", meaning people with the same academic interest as you do.  You will meet peers who are ahead of you and you can be important contacts that may pay off for you later.  At the minimum, you may meet a friend or two.  Also, the professors in your department who may attend these meetings will at least see your face from time to time. This will help you as you progress in your department. You never know what opportunities may open up for you.  If the professors see you as interested and ambitious, they will help you out with opportunities that are not well publicized or utilized. 

2.  Join ANOTHER group that is service/educational orientated and not connected to your major. Most colleges have a zillion of these clubs/groups (This also includes getting involved with a church, if that is your thing).  This will expand your circle of friends and acquaintances.  If service is not your thing, then intramural sports or some other activity will suffice--just get OUT of your dorm room!

3.  Find or start a QUALITY study group.  Many times this starts the first day of class.  Some students take the initiative and make it known they are starting one. Be careful of the ones you join! Be an active participant and not a distraction. If you get into a study group and they spend the first 30 minutes goofing off, then find another one.  Staying on top of your studies is the most important task you have your first semester.

4. Treat college like a job. Do it from 9 to 5 (or 8 to 4, or 10 to 6, etc) 5 days a week.  This includes class time. Find a place where you can focus with no distractions.  DO NOT GO BACK TO YOUR DORM ROOM!  For some students, this works, but I believe for most this is a BAD move--naps are too easy and the internet/gaming is too close at hand.  Take an hour lunch break.  Don't get into the habit of saying "hey, class just started, I have plenty of time in the semester to get things done".  Stay current on your work and even get ahead.  What is wrong with going above and beyond in your class and supplementing with additional reading/research in the class you are taking?  It IS called "education", after all.  If you can maintain this discipline, I believe you will not have to stay up ANY night OR weekends to study. Of course, as with any "job", there may be exceptions when you have to do more at times.  You friends will wonder why you never seem to study or cram---you did it while they were napping or otherwise wasting time. 

5.  DO NOT PROCRASTINATE in getting help with a class you are stuggling with! All colleges have resources to help you keep up, i.e. math labs, orgainized tutorial sessions, help with finding tutors, etc. All professors have Teaching Assistants (TA's) whose primary job is to help students with homework or tutorials. Locate your TA immediately and use them.  Most professors are available too, some more than others.  Don't be shy about this! You are paying big bucks for your education and this is not high school any more. Where I have to call your parents and give you a gazillion chances, college is different. You are responsible for yourself 100%. 

Remember, these are only suggestions.  I understand there are exceptions and "what if's".  Do one, two, three or all five.  In any combination I hope this will be helpful as you start from scratch as a Freshman again...

Attention college students: Are you just "checking the boxes" on your way to getting a degree or are you actually getting an education? Yes, there is a difference...Nice opinion piece on this subject enclosed...

Attention college students: Are you just "checking the boxes" on your way to getting a degree or are you actually getting an education, as defined below.  I seldom agree with Bob Hebert of the NYTIMES, but I think he nails this one on the head. I am sure many of you will disagree! Tell me what you think...

College the Easy Way

The cost of college has skyrocketed and a four-year degree has become an ever more essential cornerstone to a middle-class standard of living. But what are America’s kids actually learning in college?

For an awful lot of students, the answer appears to be not much.
A provocative new book, “Academically Adrift: Limited Learning on College Campuses,” makes a strong case that for a large portion of the nation’s seemingly successful undergraduates the years in college barely improve their skills in critical thinking, complex reasoning and writing.

Intellectual effort and academic rigor, in the minds of many of the nation’s college students, is becoming increasingly less important. According to the authors, Professors Richard Arum of New York University and Josipa Roksa of the University of Virginia: “Many students come to college not only poorly prepared by prior schooling for highly demanding academic tasks that ideally lie in front of them, but — more troubling still — they enter college with attitudes, norms, values, and behaviors that are often at odds with academic commitment.”

Students are hitting the books less and partying more. Easier courses and easier majors have become more and more popular. Perhaps more now than ever, the point of the college experience is to have a good time and walk away with a valuable credential after putting in the least effort possible.

What many of those students are not walking away with is something that has long been recognized as invaluable — higher order thinking and reasoning skills. They can get their degrees without putting in more of an effort because in far too many instances the colleges and universities are not demanding more of them.

Friday, March 4, 2011

How much does crude oil factor into the price of gasoline? Two nice graphics break it down for you...We GOTTA get off this stuff!!

These two graphics show the significance of crude oil as an input into the productlon of a gallon of gasoline...We GOTTA get off this stuff...
Source of both graphs HERE:

Thursday, March 3, 2011

Physics/Math, Economics Majors Ace the LSAT; Criminal Justice, Prelaw Majors Bomb the Test

Want to increase your chances of getting a high score on the test required to get into Law School?  Well, if you don't like physics or math, then Economics appears to be the major that best prepares you...LSAT tests your ability to think outside the box and economics sure does that...
""Michael Nieswiadomy (University of North Texas, Department of Economics) has posted LSAT Scores of Economics Majors: The 2008-2009 Class Update on SSRN. Here is the abstract:
Using 1994-1995 and 2002-2003 data, Nieswiadomy (1998, 2006) found that economics majors scored well on the LSAT. These results are frequently posted on university web sites by Economics and other departments. This note, which updates the prior studies using current 2007-2008 data for the 2008-2009 class of students entering law school, finds that Economics majors still perform at or near the top of all majors taking the test. Economics majors (LSAT score of 157.4) are tied for first (with Philosophy) of the 12 largest disciplines (those with more than 1,900 students entering law school). Economics is tied for second (with Philosophy/Religion (157.4)) behind Physics/Math (160.0) in a set of 29 discipline groupings that are created to yield at least 450 students with similar majors.""
Source HERE

HT: Meaghan Nowell---AWESOME former student!!! :)

Is King Dollar Dead? Nice graphic showing the decline of the dollar as the currency of record for international transactions.

Source: WSJ

Wednesday, March 2, 2011

Governments try to suspend the laws of supply and demand by imposing Price Controls---Even Dictators cannot dictate that...

As inflation rears its ugly head in many parts of the world, governments are responding in ways that are proven to hurt economies in the medium to long run.  One measure is Price Controls. When market prices rise quickly they impose economic pain, especially in lower income countries.  A populist "fix" is for governments to not allow prices to rise at the retail level. Price Ceilings are imposed. That is to say, prices are fixed and are not allowed to rise above the government set price.

Inflation Prompts a Flurry of Subsidies:  Moves to Soften Blow Could Backfire On Asian Countries, Economists Argue.

""As prices for food and energy climb, a growing number of governments—most recently in Asia—are expanding subsidies, imposing price controls or embracing other short-term fixes to protect consumers that many economists fear will prove counterproductive and lead to higher inflation in the end.""

""But over the long haul, economists warn, the programs may help drive prices higher by encouraging consumers to spend. Price controls, meanwhile, discourage farmers and manufacturers from producing more food and other goods—which is needed to help bring prices down—and can create other distortions.""

Graphically, it looks like this:

The market equilibrium price wants to be at "Pe" and where market quantity demanded equals quantity supplied at "Qe", but the government impose a ceiling at "Pceiling". This is below the market price/quantity at Point "A".  At "Pceiling" the quantity supplied is  "Qs" and the quantity demanded is at "Qd". Both conform to the laws of supply and demand and move along their respective demand and supply curves. We now have a dis-equilibrium where the quantity demanded is greater than the quantity supplied---there will soon be a shortage of this good in the marketplace. 

What policy makers choose to ignore, is inflation hits the producer as well. As input prices increase, so does the total cost of producing a good. If they are not allowed to pass this cost on to the consumer, they will not stay in business.  Producers hold back and decrease their collective quantity supplied.

Policy makers also ignore consumer behavior. People know the price control sets the price below what it should be.  They don't know how long the price control will last AND they also know how their neighbor will react.  At the lower price, the collective quantity demanded will increase.

With a simultaneous decrease in quantity supplied and an increase in quantity demanded, a shortage will soon arise and people will get even MORE angry.  The only saving grace for the government is that the shortage will not immediately appear. As inventories are worked through, the shortages will start to show up in the re-ordering of the good to re-stock the shelves---there won't be any, or there will be much less.  This will encourage black market activity and trade of the good will become less transparent. 

Suspend the laws of supply and demand at your own peril, Mr/Mrs. Policy-maker.

Are Auto Parts bought at Auto Zone Inferior Goods??...It is not as bad as it sounds...Or is it?

Are auto parts sold in Auto-Zone or O'Reilly's "inferior goods"? This does not mean they are of poor quality. In economic terms inferior goods are goods whose demand decreases as incomes increase (an inverse relationship between income and demand). This article suggests that as new car sales increase and pass the 14 million mark, the sale of auto parts to maintain used cars will decrease significantly.

For auto parts to be classified as an inferior good, we have to link the increase in new car sales to increased incomes.  This may not be so clear at this point.  Perhaps many people who have put off buying a new car because of the recession, must finally pull the trigger and purchase because their cars are simply worn out and due to be replaced.

A sign that this might be the case would be to look at the average miles of trade-in vehicles. If it is higher than in the past, then this might be the compelling reason for the new car sales burst of recent.  If it is, then it will be short-lived. A sustained increase in incomes across the board will prompt people to trade-in their vehicles sooner and keep the momentum in new car sales moving forward.

Extra-Credit:  If an increase in income is not cause of a decrease in demand for auto parts, then how else could we categorize auto parts in relation to the car market, new and/or old?  Too easy? Give it a shot!

Auto-Parts Stores Watch New Cars Fly By
This spring, high-flying auto-parts retailers may be in for a fall.

The sector has been one of the brightest spots in retail the past year. The three big chains—AutoZone, O'Reilly Automotive and Advance Auto Parts—have expanded aggressively, snapped up smaller competitors and benefited from consumers' propensity to fix up cars rather than buy new ones.

But the times they are a-changing. Auto makers on Tuesday will post February sales figures expected to total about 12.6 million units at an annualized pace, up from 10.5 million a year ago.

While a far cry from the peak 17 million sales pace of 2000, the rebound so far has still proven stronger than expected.

That may be good news for the U.S. economy, but not for auto-parts chains.
New-car sales above the 14 million mark are seen as a tipping point for a significant slowdown in replacement-parts demand. That may be a ways off—and the three big parts retailers may have room still to expand given that they have only a combined 20% share of the national market.

Still, the inflection point may be closer than investors had expected, especially if banks continue to ramp up auto lending.

The spike in oil prices only makes matters worse. "Very simply, when gas prices spike, people drive less," says Stifel Nicolaus retail analyst David Schick. "And when people drive less, parts break less."
It is a "double-whammy" for the retailers, he adds, when people are more willing and able to trade in fixer-uppers for new cars offering better mileage.

New-car sales above the 14 million mark are seen as a tipping point for a significant slowdown in replacement-parts demand. That could mean trouble for chains such as AutoZone. estimates the average fuel economy for vehicles sold by U.S. manufacturers in February was 20.5 miles a gallon, up from 19.4 a year ago. Deutsche Bank notes that, by next year, more than 130 hybrid and electric vehicles will be on the market, up from a dozen during the oil-price spike in 2008. At current levels, oil prices are more likely to support car-buying than to suppress it.

After a 72% run in 2010, auto-retailer shares are already showing weakness. Shares of Auto-Zone, which releases fiscal second-quarter results Tuesday, are down about 7% this year. The S&P 500, meanwhile, is up some 5%.

Better times for auto makers may come at the expense of auto-parts retailers

A VERY nice interactive graphic comparing state tax rates on various items---very informative!

A terrific interactive to compare states by some vital statistics...I always love to see the comparisons with taxes. It can explain alot in terms of the retail price of various goods. 

Free Tax Filing at

Monday, February 28, 2011

What do we export? What do we import? Who are our biggest trading partners? So many questions...the answers are just a click away...

A couple of useful graphics on International trade. The first one is a brief look at our top goods that we exported and imported in 2010.  The elephant in the room is our import of oil.  The only good in double digits by a significant margin.

Source: WSJ

The second one shows the changes in trade patterns with major trading partners since 1990...The change in TOTAL trade (exports PLUS imports) with China has been remarkable in just 20 years.  However, the elephant in the room with this metric is the excess of imports over exports. 

Source: WSJ

How to get rich nickel-and-diming...No, REALLY! Get rich with nickels and dimes!!

If a nickel has 7 cents worth of metals and you melted it down and sold it at that maket value, you would have a rate of return of 40%! (.07 minus .05 divided my .05 times 100).  If you found some pre-1965 dimes, at the rate quoted below, you would do very well.  Excuse me while I flip the cushions of my sofa over...I will be right back...

Hoarding Nickels, Collecting stamps? Is this the best investment for America's working poor?

""US five cent coins contain over 7 cents worth of raw material as of this afternoon, mostly copper and of course, nickel. If there is inflation, the prices of metal will increase, and the coin will have 8, 9, 10 cents worth of metal. Pre-1965 dimes contain over $2.42 of metal today, while pre-1965 quarters have over $6 worth of metal. (
If there is deflation, the coins are still currency at face value. They will always be nickels. There is also no transaction cost for "buying" these coins. Just save them as you get them from change, or pick up $2 rolls at local banks. ""

Sunday, February 27, 2011

Warning: Economics Humor involving the Phillips Curve is enclosed---It is REALLY is!!

The Phillips Curve is a Macroeconomic model that illustrates the trade-off between Inflation and Unemployment that occurs as Aggregate Demand increases or decreases along the Short-Run Aggregate Supply Curve.  In AP Macro, we show the trade-off results in an inverse relationship between the two varibles.  Japan, with its never-ending  bout with deflation, appears to be an exception to the rule.  It is just a coincidence, but the graph matches the shape of the country.  This is funny to economists---it really is!  :)

Japan's Phillips Curve Looks Like Japan

This is what a traditional Phillips Curve looks like...NOW do you get the joke??? :)

Source HERE

What does a professional baseball player volunteering in Zambia have in common with Social Entrepreneurs in Rwanda? Not enough, I am afraid...

This quote comes from a professional baseball player in today's NYTIMES.  He is talking about his trip to help orphans in Zambia:
The people, as long as their basic needs are met — they’re not starving and they have shelter — are such a joyful culture,” Kershaw said. (emphasis mine)

“You come home and you see people striving to get more money, more cars, bigger houses and more possessions, thinking that will make them happier. You go to Zambia, it helps put things in perspective. You realize where happiness comes from, and it’s not from material goods..." Source NYTIMES
I know his (along with his wife) heart is in the right place, but I am afraid this streotypical attitude about Africa is prevalent and is harmful. With his wealth (apparently in surplus as he admits) he could he better serve the children of Zambia today and tomorrow? Could he pool his money with other baseball players and invest in a joint partnership with Zambian entrepreneurs TODAY that would put people to work so the generation he is helping today will not need to have his (or any other westerners) help in the future?  In addition to seeing him in a picture like the one to the left I would PREFER to see him in a picture touting the opening of a new factory owned and operated by Zambians that employs lots of Zambian citizens.  Admittedly, this is harder work and the emotional payoff is not as immediate, but is what is needed.  I suppose he can call the good people at INDEGO AFRICA for advice on Social Entrepreneurship.  They are already doing this day in and day out---I am sure they would be glad to help...

***Additional comment: Perhaps the founders of INDEGOAFRICA in exchange for instruction on how to throw a curveball would show Mr Kershaw how to develop a sustainable business in Zambia...Sounds like a win-win deal to me... :)

Seeds of all types are preserved in an underground vault in Norway. I am glad someone is thinking about this. Informative article and short video clip enclosed...

A stock of seeds of most vegetation grown on the planet is maintained in a secure underground facility in the deep recesses of Norway.  This is done in case of eradication of the plant through environmental catastrophe or nuclear war.  A student mentioned this in class the other day and it was something I had forgotten about. Coincidently here is a current article about this facility.  Below is a video clip. Kinda cool that this goes on!

Rare, Unique Seeds Arrive at Svalbard Vault, as Crises Threaten World Crop Collections
The Svalbard Global Seed Vault (SGSV) celebrated its third anniversary February 24 with the arrival of seeds for rare lima beans, blight-resistant cantaloupe, and progenitors of antioxidant-rich red tomatoes from Peru and the Galapagos Islands. The arrival of these collections, including many drought- and flood-resistant varieties, comes at a time when natural and human-made risks to agriculture have reinforced the critical need to secure all the world's food crop varieties. 
The seeds arriving for safekeeping in the depths of an Arctic Mountain on Norway's remote Svalbard Archipelago included major deposits from genebanks maintained by the Consultative Group on International Agricultural Research (CGIAR), which is the largest single contributor of seeds to the Seed Vault.
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