Sunday, August 20, 2017

Traveling: Impressions From Santa Barbara

(Drivebycuriosity) - My wife and I are traveling again in the Southwest of the US. We stayed 4 days in Santa Barbara, a sleepy town @ the Pacific coast, about 90 miles north of Los Angeles. Santa Barbara is a real beauty. The city is sandwiched between steep mountains and the Pacific coast.

The place has a strange micro climate. In the morning the sky was grey, covered by a high fog, which also hid the mountains. It was a bit chilly with temperatures in the lower 60s F (about 15 Celsius). At noon the fog slowly dissolved and the sun arrived and in the afternoon we enjoyed a blue sky and temperatures in the mid 70s F ( low 20s C). Santa Barbara is much cooler then Las Vegas which had temperatures in the low 100s F (40 C). The micro climate reminds me of San Francisco which is also foggy. Apparently the relatively cold ocean is chilling the city.

Santa Barbara is very beautiful thanks to the vicinity of the ocean and the steep mountains and I found lots of motifs for my camera (iPhone 7 plus). The small city (population about 90,000) is very laid back - a kind of Californian dream.

I enjoyed the beautiful streets with plenty of palms and an interesting architecture.

Even the industrial parts are eye catchers. The structure above looks like a cement factory.

The place has a Spanish mission which was build in the 18th century.

Someday we might go back.

Wednesday, August 16, 2017

Economics: Don`t Call Bitcoin A Currency

(Drivebycuriosity) - Bitcoin gets a lot of attention these day. Its price shot up more than 700% since last October. The price explosion is the proof that bitcoin is not a currency and cannot be used as money as long it behaves so erratic. The extreme fluctuations would make accounting and business plans senseless.

Currencies are used as a means of payment. But paying with bitcoin is a game of chance because of the wild price fluctuations. Tomorrow`s value of any payment could be much higher or lower than expected. Neither seller or buyer can calculate the transaction.

Currencies are also used as a calculation basis. Prices, interest rates & debts are denominated in dollar, euro or an other currencies. If a company would mark their prices in bitcoin they would lose  customers when a sharp bitcoin rally makes their goods & services too expensive or they would suffer high losses when a bitcoin crash makes them too cheap.

If someone borrowed bitcoin last November - or made a debt calculated in bitcoin - his debt multiplied with the factor 8. Bitcoin borrowers could get bust because of sudden bitcoin price rise, lenders could get bankrupt, when the price of bitcoin crashes.

The sharp rise of the bitcoin price reduced prices of other assets & goods calculated in bitcoin about 80% since last November. A sharp general price drop is called deflation and could do a lot harm to the economy and could even create a depression

The amount of bitcoin is limited by its constructors (wikipedia). A growing economy needs a growing money supply to finance a rising amount of goods & services. Otherwise prices would have to fall constantly. If bitcoin would replace the dollar the US would experience constantly falling prices. Therefore a bitcoin economy would be a deflationary economy.

Bitcoin is a highly speculative asset & a toy for speculators, nothing else.

Sunday, August 13, 2017

Traveling: A Glance @ Las Vegas` Art Scene

(Drivebycuriosity) - Las Vegas is famous for the casinos and the magnificent hotel complexes, but the desert city has more attractions. There is also an art scene, albeit small. My wife and I used our recent stay in the Nevada metropolis for a hike from Downtown to the center, called "The Strip". On our way we passed the city`s art center.

There is a cluster of art galleries spread about at least 2 building complexes. The art work I spotted there is mixed, but I discovered some interesting works. Above you can see "Dahlia", who is offered for just $2,900 with the comment "you know, you want it". The beauty is a creation by Effie Loves, who has a studio & gallery @ the "Arts Factory" (

I also enjoyed the works by Christopher Wageman, who also has a gallery @ the "Arts Factory . Above you can see some examples.

There were more paintings which caught my eyes of course.

Las Vegas`art scene presents herself also with some interesting pieces of street art.


Thursday, August 10, 2017

Economics: Opec - Death By Tesla

(Drivebycuriosity) - Opec is dead. They just don`t know it. The cartel is already struggling. Even after several production cuts and noisy announcements oil cost more than 50% less than what we paid in 2014 and Saudi Arabia`s wealth has been shrinking rapidly.

Opec will get destroyed by the technological progress. We are at the ascent of the electrical car. The demand for these vehicles is already high & rising, even that these vehicles are still expensive. Tesla reports that the demand for their electric cars are fast climbing and they expect to produce about 500,000 units next year. Electric cars will get much more popular in the coming years. Traditional automakers, including Volkswagen, Honda, Toyota, Renault, Chevrolet, Mercedes and more, are already offering electric cars as well. And Apple plans to produce electric cars beginning in 2019.

These vehicles will get cheaper in the coming years thanks to technological progress, competition and mass production - and they will become common in the 2020s. Then the new car revolution will  curb the demand for gasoline considerably. Bad for Opec because crude oil is mainly used to produce gasoline. The chart below shows that oil is already irrelevant as power source for electricity production: Just one percent of the US electricity comes from petroleum.

It´s similar with heating (chart below: source Less than 20% of US households use oil for heating, the majority is heating with natural gas and electricity (produced mainly by coal & natural gas).

So, most of the oil - about 70% -  is used for transportation and around 30% for petrochemical products ( energy).

But it will get worse for Opec.  The cartel also has to fight against a rising competition. Technological progress is reducing the cost of oil exploration and is making more of the oil reserves in the ground accessible. The rise of US fracking since around 2006 is just the begin. Today the costs to extract an extra barrel of oil (break even point) in the US vary around $50. The productivity of fracking is rising swiftly which leads to shrinking costs (economics21  oilprice  econbrowser). A study by BP explains that fracking is "a standardized, repeated, manufacturing process" and "manufacturing productivity has led to a trend decline in the prices of goods relative to services" (forbes).

So the break even point for producing oil has been moving lower and will continue to fall in the coming years. Falling costs of fracking also raise the chance that in the coming years the US oil producers will  be accompanied by oil producers from China and other countries. In June 2013, the United States Energy Information Administration (EIA) released a world shale oil and gas reserve assessment that showed 32 countries outside the United States have substantial reserves locked up in 137 different formations - units that can be exploited using Bakken-like technology....The EIA placed China third behind Russia and the U.S. in tight shale (tribune ).

After 2020 oil prices could fall well below $20 thanks to sinking production costs and a shrinking gasoline demand. Saudi Arabia and other big producers, who are sitting on huge oil reserves that should last many decades, would be well advised to sell their oil now. Maybe the advent of electrical cars - in combination with the evolution of fracking - is the real reason for cheap oil and will destroy Opec soon.

Tuesday, August 8, 2017

New York City: Schiller`s R.I.P.

(Drivebycuriosity) - New York´s Lower East Side is losing another landmark: Schiller’s Liquor Bar on Rivington Street. According to media reports the bar/restaurant has reached the end of its lease and will close in August (eater).

The place was so popular that it`s front appeared regularly at the opening of the TV show "Saturday Night Live." The fame wasn`t based on the food.  Their menu was rather mediocre , there was not much food to choose and an uninspiring selection of beers & wines.  Their "Steak Frittes" were passable, but nothing to write home about.

People came for "the room".  As in many New York restaurants, the architect was more important then the chef. The bottles on the walls and the gorgeous lightning were the show. No wonder that Schiller´s got often booked for movie productions. And it was fun to spot the crowd there.

Schiller´s had it´s time as a popular hangout but it seemed the caravan had moved on. Bars & Restaurants come and go. Schiller`s R.I.P.

Monday, August 7, 2017

Contemporary Art: Abstract Portraits @ Gallery Artifact New York

(Drivebycuriosity) - I like contemporary art.  Therefore I am often visiting art galleries in my neighborhood, New York`s Lower East Side. Gallery Artifact  (84 Orchard Street artifactnyc) belongs to my favorite places, because the art trader has frequently changing art shows which are usually amazing.

At my recent visit there I enjoyed especially the portraits by Hue Kim. The paintings look almost like abstracts. I like the power and the colorful brush strokes