Someone suggested to me that Olympus shareholders should sue the company in view of recent events. (search Olympus, fraud). I will get back to Olympus, but first some general background on companies in general.
Who Pays?
If a law suit is filed and against a company...who is actually being sued and why?
It is the shareholders (in terms of people) who are actually being sued when a claim is made against a company. The wealth of the company is all owned by the shareholders, and if some of this wealth is paid out as a result of legal action, it is the shareholders who as a result, become less wealthy.
This may not seem fair, as whatever the company did that was wrong was done by people who work at the company, not by the shareholders. However office holders (CEOs, Presidents, Vice Presidents, Boards, are not the company, even though it often seems that way. These people operate the company on behalf of the shareholders. Ok- sometimes these same people are also shareholders, but the important point is that if action is sought against a company, the people who work in any capacity at the company will only be 'paying' as a result of the claim to the extent that they are shareholders, and made to 'pay' exactly in the same manner as all other shareholders. Of course the 'payment' of each shareholder is limited, at most, to the value of the shares they hold.
Ok, so if it is officers of the company who make the companies decisions, why is it that shareholders are the ones to pay out? In the end, there are two available arguments as to why this can make sense:
1) If the company actually made financial gain from whatever wrong doing took place, it is in theory the shareholders, as the company owners, who have profited from that gain.
2) The shareholders are responsible for appointing the board, who in turn appoint the other officers of the company. So in the end, 'the buck stops' with the shareholders as far as choosing the people who made the bad decisions of the company.
Who is really to blame?
If it is the company who is the subject of a lawsuit, then it will effectively be the shareholders who pay any damages. But what if it really isn't the shareholders fault or the shareholders gain?
While in theory every action of a company is done under guidance of a shareholder elected board for outcomes to the benefit of shareholders, in practice the shareholders or the board may be deceived. If there was no negligence by the shareholders or board then it should not really be the company that is the subject of legal action, but rather the officers of the company or individuals within the company who caused the problems who are the subject of legal action. Of course, such individuals are a less attractive target as the capacity to pay damages is less, so it will generally be argued that no only are the individuals at fault, but the framework provided by the company should have prevented the problem, so, in the end, the shareholders also should pay.
A further reality is that senior staff of public companies are almost always covered by professional indemnity insurance which protects against unintended transgressions so there are cases where action against the company officers can call on insurance the achieve substantial payouts. Of course, the shareholders also lose in this case as it is the company paying for the insurance of these officers and premiums will rise substantially following any payout!
What about Olympus?
In the case of Olympus, there appear to be no other victims that the shareholders. Shareholders suing the company makes no sense as the shareholders are the ones funding any payout. They would have to pay themselves!
It also seems a strange case in that so far it has not emerged that the people employed by Olympus who were responsible have actually profited themselves, beyond delaying a loss of face. It may emerge that bonuses and even tenure were protected but there is little to suggest the funds were siphoned out of Olympus for personal gain.
Friday, November 25, 2011
Tuesday, November 8, 2011
XX billions dollars slashed from the stock market! Is this real?
You will quite often hear that either across the entire stock market, XX billion dollars has been slashed from value of the stock market in a single day!
Or it can also happen with one individual stock, where the share price has fallen, for example, 25% in a single day. The headlines report that the company value has thus fallen by 25% in that day!
This is really a distortion. This often can take place with no such change in real value has occurring at all.
Common practice is to speak of company 'market value' by taking the price a share last sold for, and multiplying this by the number of shares.
This can give a very distorted view when things change.
Imagine a company with a share price of $100. If I own one share and sell it for $1, then by this same calculation, I have caused all investors to lose 99% of the value of the asset they hold. Of course these other shareholders have only really lost all this if they also sell their shares for $1 because I sold my share for $1.
In reality the price will only stay depressed if others also decide to sell, but all it takes is a small percentage of shareholders to decide to dump their stock to force a much lower price. If most shareholders still have a view the price is closer to original price, then nothing much has really changed apart from the 'market cap' figure. Every sale requires not just a seller, but a buyer. On a day of bad news buyers may be scarce and can offer really low prices in the hope that someone will need the money and be forced to sell. It is possible for the price to move a very significant amount on the sentiment of a very small amount of people. Sometimes in these situations the company will still be paying a dividend just as before so while there can be very few buyers for a while if you keep the stock nothing has changed. Note that those who do buy, buy because they also think the stock is worth more than the price they are paying.
Note also that the company itself is not really affected by the share price, unless they are in the rare situation of planning to offer more shares, or planning to issue shares, using them as currency to buy another company. In normal day to day business, share price has no impact on the company itself.
Further, a change in the share price may have little or no impact on the cost of buying the company. Certainly a lower price means some shareholders were prepared to sell for less, but how many shareholders? In a negative mood some will sell shares at any price (and without a buyer who conversely feels the price is good no sale will occur) but at this point all you are learning is the price the most negative of all stockholders will sell for, not the price the vast majority will sell
at. Even the person who bought this 'last trade' clearly expects a profit so now will only sell for a higher price.
Next time I am on this topic I will look at some the triggers for misleading falls (and rises) in share prices.
Or it can also happen with one individual stock, where the share price has fallen, for example, 25% in a single day. The headlines report that the company value has thus fallen by 25% in that day!
This is really a distortion. This often can take place with no such change in real value has occurring at all.
Common practice is to speak of company 'market value' by taking the price a share last sold for, and multiplying this by the number of shares.
This can give a very distorted view when things change.
Imagine a company with a share price of $100. If I own one share and sell it for $1, then by this same calculation, I have caused all investors to lose 99% of the value of the asset they hold. Of course these other shareholders have only really lost all this if they also sell their shares for $1 because I sold my share for $1.
In reality the price will only stay depressed if others also decide to sell, but all it takes is a small percentage of shareholders to decide to dump their stock to force a much lower price. If most shareholders still have a view the price is closer to original price, then nothing much has really changed apart from the 'market cap' figure. Every sale requires not just a seller, but a buyer. On a day of bad news buyers may be scarce and can offer really low prices in the hope that someone will need the money and be forced to sell. It is possible for the price to move a very significant amount on the sentiment of a very small amount of people. Sometimes in these situations the company will still be paying a dividend just as before so while there can be very few buyers for a while if you keep the stock nothing has changed. Note that those who do buy, buy because they also think the stock is worth more than the price they are paying.
Note also that the company itself is not really affected by the share price, unless they are in the rare situation of planning to offer more shares, or planning to issue shares, using them as currency to buy another company. In normal day to day business, share price has no impact on the company itself.
Further, a change in the share price may have little or no impact on the cost of buying the company. Certainly a lower price means some shareholders were prepared to sell for less, but how many shareholders? In a negative mood some will sell shares at any price (and without a buyer who conversely feels the price is good no sale will occur) but at this point all you are learning is the price the most negative of all stockholders will sell for, not the price the vast majority will sell
at. Even the person who bought this 'last trade' clearly expects a profit so now will only sell for a higher price.
Next time I am on this topic I will look at some the triggers for misleading falls (and rises) in share prices.
Monday, November 7, 2011
Introducing duoculturalism
I would like to introduce the concept of 'duoculturalism'.
I use this term to describe a society where individuals identify with a both a traditional culture (as in multiculturalism) and also a common shared cultural of the current overall society in which they currently reside.
The concept of duoculturalism is that each individual has both one (or more) traditional cultural heritage, and in additional a modern contemporary culture. The further step is that celebration of culture should include both the traditional culture, and a more widely inclusive contemporary culture that extends at least to a national level.
The difference from Multiculturalism.
Modern societies consist of people of diverse ethnic, religious and cultural backgrounds. Multiculturalism focuses on celebrating and embracing those traditional backgrounds. Multiculturalism celebrates the diversity. The difference with duoculturalism is to still celebrate the diversity, but to additionally celebrate the new common culture of today's world that binds across all traditional cultures. Duoculturalism is making an additional statement that the world is rapidly changing and we all on a journey together. We celebrate our past and the cultures that made us and make us diverse, but we celebrate together with the common future we face together.
For example, consider modern Britain. Today's multicultural British society include a large number of sub cultures, but lets consider a 'British Indian' (see Wikipedia for perspective of another author). This is a widely accepted term, and I would suggest a term already reflecting the reality of 'duoculturalism'. It is important not just hat the 'British Indian' has an Indian heritage, but also that they are part of modern Britain. The point of duoculturalism is to keep this duality in mind for all groups. If in (for example) Britain, an area with a high concentration of immigrants from, for example, Poland, is not a 'Polish area', but a 'British Polish' area. The people chose, and were accepted, to live in Britain and that becomes part of their identity.
What about the 'Natives'?
Staying with Britain for now, where does this idea leave the traditional 'British'? The question arises that, if all your ancestors have lived in Britain, does that mean you miss out and only have one culture?
Once the concept is understood correctly, the answer becomes clearly 'no, no one misses out'. A key concept of duoculturalism is that the world of today is different from the world of anyone's heritage. Today's Britain has the internet, mobile phones, twitter, reality TV and a vastly different mix of people people than the Britain of only 50 years ago. A person who's heritage is solely in Britain can rest assured that their ancestors lived in a very different world, and it is still a world worthy of celebration. The concept of duoculturalism is that every one now lives and a new and different world than any one in the past lived in, and that produces a new and unique culture we all share. But everyone also has a heritage and a past and in every case their heritage is a world different than the world we share today.
Why 'Duo'? Why stop at two cultures?
An objection could be raised that many people already have more than one ancestral background, with for example, living in New York with a Chinese mother and an African American father? The answer is again to understand that the concept is 'a heritage, and a today'. The heritage may be a complex mixture, but it is still a heritage. Everyone has a heritage, which may be very diverse, and everyone has a today that we all share. Celebrate the diversity of the heritage, and be bound together in sharing the common today.
Culture as a product of Environment
Cultures will normally reflect not only customs that were simply adopted by society without reason. Far more often customs will reflect the environment where the culture emerged. Clothes of a culture reflect local weather, terrain and conditions. Foods associated with a culture will normally reflect the foods that were available and styles of cooking will suit climate and other needs of the original environment. But consider how different the environment of traditional cultures are to the needs of today. Modern transport gives us access to foods from all over the world no matter where we are. Modern refrigeration eliminates the need for curries or other methods as food preservation.
An important concept is to recognise that the modern world has changed so much, that the human environment of the last 100 years has produced a greater change than the change of moving from culture to culture 100 years ago. Consider the Europeans discovering Japan or China. They were amazed, but nothing like the amazement someone from 100 years ago would experience moving to the world of today. All cultures 100 years ago had more in common with each other, than any of them has with the world of today.
Today's world would eventually give rise to a whole new culture, if it does not change before the new culture has a chance to become established. New differences between countries would emerge again, which is why a 'British Indian' is different from 'German Indian' or an 'Australian Indian'. Each of these has both a new and an old culture to celebrate. Just as a person of Indian descent living in India has both a modern culture and a traditional culture to celebrate.
How does Duoculturalism improve on Multiculturalism?
1. Inclusion
Multiculturalism tends not to automatically recognise difference between the past and today. This can easily create and 'us an them' mentality between immigrants seen as bringing a new culture, and long term inhabitants who see their traditions as under threat. Duoculturalism attempts to recognise that there is change, from technology and from other sources, and that no one is living in the world of their heritage. I suggest that while multiculturalism preaches tolerance and celebration of diversity, in failing to recognise what we all have in common it can lead to division and by appearing to exclude those seen under multiculturalism as having a different culture, can at the same time foster misunderstandings and leaving some people feel excluded. The lack of a concept of a separation of 'tradition' and 'today' can actually further divisions while instructing in tolerance.
2. The lack of unity
People are by nature tribal. Multiculturalism seems to say 'rise above your tribal nature', where as duoculturalism is saying yes we are all different, but also look at how we are now the same. By also celebrating the modern society we all share, there is a focus on celebrating how today we are part of one diverse tribe. Each nation with a common team at the Olympics, not a team for each subculture. The unity of celebrating this common 'today' is additional element to celebrating difference.
I use this term to describe a society where individuals identify with a both a traditional culture (as in multiculturalism) and also a common shared cultural of the current overall society in which they currently reside.
The concept of duoculturalism is that each individual has both one (or more) traditional cultural heritage, and in additional a modern contemporary culture. The further step is that celebration of culture should include both the traditional culture, and a more widely inclusive contemporary culture that extends at least to a national level.
The difference from Multiculturalism.
Modern societies consist of people of diverse ethnic, religious and cultural backgrounds. Multiculturalism focuses on celebrating and embracing those traditional backgrounds. Multiculturalism celebrates the diversity. The difference with duoculturalism is to still celebrate the diversity, but to additionally celebrate the new common culture of today's world that binds across all traditional cultures. Duoculturalism is making an additional statement that the world is rapidly changing and we all on a journey together. We celebrate our past and the cultures that made us and make us diverse, but we celebrate together with the common future we face together.
For example, consider modern Britain. Today's multicultural British society include a large number of sub cultures, but lets consider a 'British Indian' (see Wikipedia for perspective of another author). This is a widely accepted term, and I would suggest a term already reflecting the reality of 'duoculturalism'. It is important not just hat the 'British Indian' has an Indian heritage, but also that they are part of modern Britain. The point of duoculturalism is to keep this duality in mind for all groups. If in (for example) Britain, an area with a high concentration of immigrants from, for example, Poland, is not a 'Polish area', but a 'British Polish' area. The people chose, and were accepted, to live in Britain and that becomes part of their identity.
What about the 'Natives'?
Staying with Britain for now, where does this idea leave the traditional 'British'? The question arises that, if all your ancestors have lived in Britain, does that mean you miss out and only have one culture?
Once the concept is understood correctly, the answer becomes clearly 'no, no one misses out'. A key concept of duoculturalism is that the world of today is different from the world of anyone's heritage. Today's Britain has the internet, mobile phones, twitter, reality TV and a vastly different mix of people people than the Britain of only 50 years ago. A person who's heritage is solely in Britain can rest assured that their ancestors lived in a very different world, and it is still a world worthy of celebration. The concept of duoculturalism is that every one now lives and a new and different world than any one in the past lived in, and that produces a new and unique culture we all share. But everyone also has a heritage and a past and in every case their heritage is a world different than the world we share today.
Why 'Duo'? Why stop at two cultures?
An objection could be raised that many people already have more than one ancestral background, with for example, living in New York with a Chinese mother and an African American father? The answer is again to understand that the concept is 'a heritage, and a today'. The heritage may be a complex mixture, but it is still a heritage. Everyone has a heritage, which may be very diverse, and everyone has a today that we all share. Celebrate the diversity of the heritage, and be bound together in sharing the common today.
Culture as a product of Environment
Cultures will normally reflect not only customs that were simply adopted by society without reason. Far more often customs will reflect the environment where the culture emerged. Clothes of a culture reflect local weather, terrain and conditions. Foods associated with a culture will normally reflect the foods that were available and styles of cooking will suit climate and other needs of the original environment. But consider how different the environment of traditional cultures are to the needs of today. Modern transport gives us access to foods from all over the world no matter where we are. Modern refrigeration eliminates the need for curries or other methods as food preservation.
An important concept is to recognise that the modern world has changed so much, that the human environment of the last 100 years has produced a greater change than the change of moving from culture to culture 100 years ago. Consider the Europeans discovering Japan or China. They were amazed, but nothing like the amazement someone from 100 years ago would experience moving to the world of today. All cultures 100 years ago had more in common with each other, than any of them has with the world of today.
Today's world would eventually give rise to a whole new culture, if it does not change before the new culture has a chance to become established. New differences between countries would emerge again, which is why a 'British Indian' is different from 'German Indian' or an 'Australian Indian'. Each of these has both a new and an old culture to celebrate. Just as a person of Indian descent living in India has both a modern culture and a traditional culture to celebrate.
How does Duoculturalism improve on Multiculturalism?
1. Inclusion
Multiculturalism tends not to automatically recognise difference between the past and today. This can easily create and 'us an them' mentality between immigrants seen as bringing a new culture, and long term inhabitants who see their traditions as under threat. Duoculturalism attempts to recognise that there is change, from technology and from other sources, and that no one is living in the world of their heritage. I suggest that while multiculturalism preaches tolerance and celebration of diversity, in failing to recognise what we all have in common it can lead to division and by appearing to exclude those seen under multiculturalism as having a different culture, can at the same time foster misunderstandings and leaving some people feel excluded. The lack of a concept of a separation of 'tradition' and 'today' can actually further divisions while instructing in tolerance.
2. The lack of unity
People are by nature tribal. Multiculturalism seems to say 'rise above your tribal nature', where as duoculturalism is saying yes we are all different, but also look at how we are now the same. By also celebrating the modern society we all share, there is a focus on celebrating how today we are part of one diverse tribe. Each nation with a common team at the Olympics, not a team for each subculture. The unity of celebrating this common 'today' is additional element to celebrating difference.
Sunday, October 23, 2011
How do corporate takeovers work?
When an entity, either individual, company, or group, wishes to takeover a public company, how does this work?
There are two levels of takeover. a) Taking a controlling interest in a company and b) buy all shares in the company so the company is fully owned. The difference will be fully discuss later, but both involve buying a large number of shares.
'Market Cap' vs 'large parcel' share price.
Both taking a controlling share and buying all shares require buying a large number of shares, which is not as simple as it seems, nor as inexpensive as one would think.
For all companies, there is a 'share price', which when multiplied by the number of shares, gives a total value of the company which is called a 'market capitalisation'. But the company cannot normally be purchased for this market capitalisation figure. In fact no significant percentage of the company (or 'large parcel' of shares) can normally be obtained for the relevant percentage of the market capitalisation. So why not?
For any publicly listed share, there is a 'last sale price' (used for the market capitalisation calculation) as well as a 'buy price' and a 'sell price'. However if buying or selling a large number of shares, it becomes apparent that the 'buy price' and 'sell price' are valid only for a limited number of shares. Lets just consider buying shares for now, although a similar principle applies to trying to sell shares.
Consider a hypothetical share. A detailed 'seller list' would look something like this:
Selling price, Qty
$25.30 ....50,000
$25.50 ....40,000
$25.75 ....60,000
$25.80 ....25,000
etc
In this case 150,000 shares could be bought by first offering to buy 50,000 at $25.30, then offering to buy 40,000 at $25.50, then offering to buy another 60,000 at $25.65. This would result in an average buy price of around $25.53, even though the shares initially would have shown a buy price of $25.30.
The greater the proportion of shares to be bought, the higher the average actual buy price will rise.
Note, in the above example, since these shares were already on offer for the prices listed, offering to buy 150,000 for $25,75 or even $30.00, would successful purchase those shares at their listed prices. Of course the danger in offering $30.00 for the 150,000 is that if someone else bought the shares on the list first, as long as other people are offering shares for $30.00 or less, the purchase would still proceed and the average purchase price could be as high as $30.00.
At a certain point, the shares already offered for sale might all be purchased, still without reaching the target percentage. Not only are the shares actually on offer at a variety of prices, progressively higher and higher than the price used to calculate 'market capitalisation', but insufficient shares may be on offer to achieve the desired number of shares. In this case other shareholders have to be persuaded to sell.
Since potential sellers have seen the price of each transaction increase as the offered shares are progressively purchased, expectations of any new sellers will be higher. Some sellers simply may not desire to sell. The equation could become like trying to buy a house not being offered for sale.
The reality is a price 25% or even 50% higher than the initial price may have to be offered to persuade a sufficient number of new sellers.
Two extra factors also come into play: 'compulsory acquisition' and 'general offer'.
General Offer.
Company by-laws will usually have a 'general offer' provision. A general offer provision recognises that someone wishing to buy a large number of shares will be seeking control of the company and may make fundamental changes to the company. In order to protect existing shareholders, once the threshold of share purchase of the general offer is reached, the offer must be extended to ALL shareholders. For example, if the general offer provision is set to trigger at 40% of shares, then any shareholder who reaches an ownership level of 40%, must extend the offer which was accepted by the sellers who's shares trigger the 40% owner ship to all other shareholders. So for example, if a buyer holding 35% of all shares, secured an extra 4%, nothing special happens. However if they instead secure an extra 5% of shares, then they are required to offer to buy all the remaining 60% of shares so a much larger bank balance is required! The nature of a general offer is such that is must be offered to all remaining shareholders on the same terms and conditions, however the general offer can be conditional on a certain number of shares being secured. So the offer can be made, for example. with the provision that 75% of shares (more commonly 100%) are will transfer as a result of the offer. If more than the required number accept, all those who accept get to sell. If less than the number accept, then no deal at all.
Compulsory Acquisition.
Shares in a company, depending on the company by laws, will usually have a 'compulsory acquisition' rule. Under such a rule, once a general offer is made, and a acceptance of the general offer will result in the buyer owning more that a certain percentage of the company (e.g for 95% of shares) then the small percentage of shareholders not electing to accept the general offer are deemed to accept even if they do not wish to accept. This is designed to prevent one or two shareholder trying to extort a premium for the last few shares, and as a result blocking a deal that shareholders generally desire.
Summary.
While potential buyers of a company can buy a small number of shares 'on the market' for some small premium above the initial share price, this will usually all be a waste of money if a 'general offer' is not accepted subsequently by the vast majority of shareholders. Since buying the 'on market' shares will raise the share price and lift expectations, resulting in the need to make a higher general offer, buying the on market shares is usually ill advised. The general offer will still usually need to substantially exceed the initial share price.
Buying any large parcel of shares requires paying a price per share significantly higher than current share price applicable at the time.
The reverse applies if selling a large parcel of shares- then the price will be quickly drop.
There are two levels of takeover. a) Taking a controlling interest in a company and b) buy all shares in the company so the company is fully owned. The difference will be fully discuss later, but both involve buying a large number of shares.
'Market Cap' vs 'large parcel' share price.
Both taking a controlling share and buying all shares require buying a large number of shares, which is not as simple as it seems, nor as inexpensive as one would think.
For all companies, there is a 'share price', which when multiplied by the number of shares, gives a total value of the company which is called a 'market capitalisation'. But the company cannot normally be purchased for this market capitalisation figure. In fact no significant percentage of the company (or 'large parcel' of shares) can normally be obtained for the relevant percentage of the market capitalisation. So why not?
For any publicly listed share, there is a 'last sale price' (used for the market capitalisation calculation) as well as a 'buy price' and a 'sell price'. However if buying or selling a large number of shares, it becomes apparent that the 'buy price' and 'sell price' are valid only for a limited number of shares. Lets just consider buying shares for now, although a similar principle applies to trying to sell shares.
Consider a hypothetical share. A detailed 'seller list' would look something like this:
Selling price, Qty
$25.30 ....50,000
$25.50 ....40,000
$25.75 ....60,000
$25.80 ....25,000
etc
In this case 150,000 shares could be bought by first offering to buy 50,000 at $25.30, then offering to buy 40,000 at $25.50, then offering to buy another 60,000 at $25.65. This would result in an average buy price of around $25.53, even though the shares initially would have shown a buy price of $25.30.
The greater the proportion of shares to be bought, the higher the average actual buy price will rise.
Note, in the above example, since these shares were already on offer for the prices listed, offering to buy 150,000 for $25,75 or even $30.00, would successful purchase those shares at their listed prices. Of course the danger in offering $30.00 for the 150,000 is that if someone else bought the shares on the list first, as long as other people are offering shares for $30.00 or less, the purchase would still proceed and the average purchase price could be as high as $30.00.
At a certain point, the shares already offered for sale might all be purchased, still without reaching the target percentage. Not only are the shares actually on offer at a variety of prices, progressively higher and higher than the price used to calculate 'market capitalisation', but insufficient shares may be on offer to achieve the desired number of shares. In this case other shareholders have to be persuaded to sell.
Since potential sellers have seen the price of each transaction increase as the offered shares are progressively purchased, expectations of any new sellers will be higher. Some sellers simply may not desire to sell. The equation could become like trying to buy a house not being offered for sale.
The reality is a price 25% or even 50% higher than the initial price may have to be offered to persuade a sufficient number of new sellers.
Two extra factors also come into play: 'compulsory acquisition' and 'general offer'.
General Offer.
Company by-laws will usually have a 'general offer' provision. A general offer provision recognises that someone wishing to buy a large number of shares will be seeking control of the company and may make fundamental changes to the company. In order to protect existing shareholders, once the threshold of share purchase of the general offer is reached, the offer must be extended to ALL shareholders. For example, if the general offer provision is set to trigger at 40% of shares, then any shareholder who reaches an ownership level of 40%, must extend the offer which was accepted by the sellers who's shares trigger the 40% owner ship to all other shareholders. So for example, if a buyer holding 35% of all shares, secured an extra 4%, nothing special happens. However if they instead secure an extra 5% of shares, then they are required to offer to buy all the remaining 60% of shares so a much larger bank balance is required! The nature of a general offer is such that is must be offered to all remaining shareholders on the same terms and conditions, however the general offer can be conditional on a certain number of shares being secured. So the offer can be made, for example. with the provision that 75% of shares (more commonly 100%) are will transfer as a result of the offer. If more than the required number accept, all those who accept get to sell. If less than the number accept, then no deal at all.
Compulsory Acquisition.
Shares in a company, depending on the company by laws, will usually have a 'compulsory acquisition' rule. Under such a rule, once a general offer is made, and a acceptance of the general offer will result in the buyer owning more that a certain percentage of the company (e.g for 95% of shares) then the small percentage of shareholders not electing to accept the general offer are deemed to accept even if they do not wish to accept. This is designed to prevent one or two shareholder trying to extort a premium for the last few shares, and as a result blocking a deal that shareholders generally desire.
Summary.
While potential buyers of a company can buy a small number of shares 'on the market' for some small premium above the initial share price, this will usually all be a waste of money if a 'general offer' is not accepted subsequently by the vast majority of shareholders. Since buying the 'on market' shares will raise the share price and lift expectations, resulting in the need to make a higher general offer, buying the on market shares is usually ill advised. The general offer will still usually need to substantially exceed the initial share price.
Buying any large parcel of shares requires paying a price per share significantly higher than current share price applicable at the time.
The reverse applies if selling a large parcel of shares- then the price will be quickly drop.
Wednesday, October 19, 2011
Are there really aliens out there? Then where are the aliens?
The simple answer is 'Yes'. Statistically, it is inconceivable that there is no other life in the universe is just too improbable. In our galaxy there are between 200-400 billion stars in our galaxy. There are over 200 billion galaxies in the universe.
The two big real questions are, how frequently does life occur, and how frequently does intelligent life appear?
To calculate the frequency of intelligent life we should be able to detect, we have the drake equation. To calculate how many aliens we should discover, a number of constants must be plugged into the drake equation and the challenge lies in determining the value of these constants. However the constants are calculated, the fact is there are clearly less intelligent aliens out there then we would expect. This surprising lack of evidence of intelligent alien life is referred to as the Fermi paradox.
There is solid evidence that the building blocks for life exist in space. There is ambiguous evidence that remains of actual life have been found on meteorites, but this is not conclusive. But when it comes to intelligent civilisations, we should be able to at least detect their radio signals from thousands of light years away yet a very intensive search, SETI, has found nothing.
So we are left with one of two conclusions. Either life itself is remarkably rare, or the evolution of life sufficiently intelligent to transmit radio signals in the manner we do from Earth is extremely rare.
Why do we have a rare intelligent civilisation here on Earth?
The question arises, that if intelligent civilisations are so rare, how did we manage to get one on Earth.
Here are some of the theories:
1) The 'rare earth' theory. This theory proposes that Earth enjoys a set of conditions necessary for life that are extremely rare in the universe.
2) The 'low probability of intelligence' theory, which proposes that even on Earth the probability of intelligent civilisation are very low.
3) The 'self destruction theory' which proposes that intelligent civilisations may normally self destruct so quickly that they are a fleeting existence.
Any others?
I will discuss these alternatives soon.
The two big real questions are, how frequently does life occur, and how frequently does intelligent life appear?
To calculate the frequency of intelligent life we should be able to detect, we have the drake equation. To calculate how many aliens we should discover, a number of constants must be plugged into the drake equation and the challenge lies in determining the value of these constants. However the constants are calculated, the fact is there are clearly less intelligent aliens out there then we would expect. This surprising lack of evidence of intelligent alien life is referred to as the Fermi paradox.
There is solid evidence that the building blocks for life exist in space. There is ambiguous evidence that remains of actual life have been found on meteorites, but this is not conclusive. But when it comes to intelligent civilisations, we should be able to at least detect their radio signals from thousands of light years away yet a very intensive search, SETI, has found nothing.
So we are left with one of two conclusions. Either life itself is remarkably rare, or the evolution of life sufficiently intelligent to transmit radio signals in the manner we do from Earth is extremely rare.
Why do we have a rare intelligent civilisation here on Earth?
The question arises, that if intelligent civilisations are so rare, how did we manage to get one on Earth.
Here are some of the theories:
1) The 'rare earth' theory. This theory proposes that Earth enjoys a set of conditions necessary for life that are extremely rare in the universe.
2) The 'low probability of intelligence' theory, which proposes that even on Earth the probability of intelligent civilisation are very low.
3) The 'self destruction theory' which proposes that intelligent civilisations may normally self destruct so quickly that they are a fleeting existence.
Any others?
I will discuss these alternatives soon.
Wednesday, October 12, 2011
How do tennis rankings work?
In response to a player climbing the rankings, I was asked 'why would a tennis player care if they are not number 1 or something?'
Well, the reality is ranking really do matter to players. To enter tournaments with the big prize money, you need a good 'ranking', as entry to tournaments is decided purely by this ranking.
For every tournament, players earn 'rankings points', and the cumulative 'ranking points' earned over the previous 12 months, determines a players ranking. The player with the most points is number 1, right down to players ranked well over 1,000.
Different tournaments, different points.
A good Ranking earns entry to the biggest prize-money tournaments!
Overall, there are ATP (Association of Tour Professionals) tournaments, 'challenger' tournaments, and 'futures' tournaments, each delivering decreasing points, with the main tennis tour being the ATP tournaments. But to gain entry to ATP tournaments, you need a ranking, which when you don't already have a ranking, must be earned at the 'challengers' and 'futures'. The higher the ranking you have the greater your opportunity to earn a higher ranking, and prize-money!
For men's tournaments, currently in 2011, there are four 'grand slam' tournaments with 2,000 points for the winner. Lesser points are awarded for reaching earlier stages of tournament with some points available just for being invited. Below the 'grand slams' are ATP 1,000 tournaments with 1,000 points for the winner and 500 and 250 tournaments with, of course, 500 or 250 points respectively for the winner.
What Ranking is Required to play in which tournaments?
Once ranking reaches around 200 in the world, you may be eligible to enter some ATP tournaments 'qualifying' competitions. Here is a list (incomplete) of what reaching various world rankings enable.
Rank. Tournament Entry/Benefit
Below the top 200 - futures and challenger tournaments
200 Some Qualifier competitions prior to main tournaments
100 Direct Entry to Grand Slam Tournaments
90 Direct entry to '1000' series tournaments in Miami and Indian Wells
50-60 Direct entry to '500' series tournaments, and '250' tournaments
50 Direct entry to remaining '1000' series tournaments, and all other ATP tournaments
32 Seeded player in grand slams
16 Seeded player in 1000 series tournaments
8 Seeded player with direct entry to 2nd round in 1000 series tournaments
Additionally, a ranking of 8 or below at year end.....exclusive entry to year end tournament open only to top 8 players.
So how does it work? - The boring details
Competitions are played in 'rounds'. Only the winners of each round progress to the next round, so each round has half the number of players of the previous round. This means there are 2 players in the final round, 4 players for the 'semi-final', 8 players for the 'quarter-final', and a round prior to the quarter final with 16 players. A five round tournament can have 32 players in a round prior to the round with 16, and a 6 round tournament can have 64 players in the first round, while a 7 round tournament can have 128 players in the first round.
The 'Grand Slams' and 1000 series tournaments are compulsory for all registered players and they are automatically entered if their ranking is high enough. The smaller 500 and 250 tournaments are not compulsory, and at least two tournaments are held at the same time.
Grand Slams
There are four 'Grand slams'. These are played over 7 rounds, and there are 128 players in a 'grand slam' competition. However 16 places go to players entering through the qualifying tournament. This leaves 112 places, but of these 8 places are given to 'wild cards' who are given entry even though their ranking would not normally allow them to play. So 104 places are filled directly from the points ranking system. Of course at any given time their will be some some players who are injured so up to as high as 110 ranked player may gain entry.
Special ATP 1,000 tournaments:Miami and Indian Wells.
These two tournaments are played over 7 rounds as the grand slams are, but 32 places are 'byes' or empty places, allowing 32 players to have no opponent in the first round. This means there are 96 places in these tournaments, and with 12 places going to qualifiers and 4 places going to wild cards, leaving 8o places for direct entry to the tournament. The top 32 players having byes in the first round allows for both round 1 and 2 to have 32 matches.
Other 1000 series Tournaments
These 7 other 1000 tournaments, are played with 6 rounds, and with 8 players having byes in the first round, there are 56 places in the tournaments. Of these, 7 are allocated to the qualifying tournament and usually 4 wild cards, leaving 45 places for direct entry. This can allow for up to approximately a ranking of 50 if as many as 5 players are injured.
500 Series tournaments
Just as 1000 tournaments can be either 6 or 7 rounds, 500 tournaments can be 5 or 6 rounds.
The 6 round tournaments (currently Barcelona, Washington and Hamburg) have either 56 places (using 8 byes in round 1) or 48 places (with 16 byes in round 1). With around 8 places going to qualifying and wild cards, there are around 48-42 direct places.
The other 8 tournaments have 5 rounds and have 32 places, as currently none have any byes. Allowing 4 qualifiers and 3 wild cards leaves 25 direct places, but these smaller tournaments are always held at the same time as either another 500 tournament or two 250 tournaments, so players down to at least ranking of 50 can get a direct place into a tournament. In fact, since these tournaments are not compulsory, some higher ranked players may take a break and normally it is possible to get entry to tournament with a rank of around 60.
ATP 250 Tournaments
With even less points and prize money available, some of the best players may skip some of the these tournaments. Also, there is more than one at a time, so of those very top players who do enter, there are shared amoung tournaments. Currently there are two 250 tournaments with 6 rounds being London (56 players) and Winston Salem (48 players) while all the 39 other 250 tournaments have 5 rounds and either 32 players or more often 28 places with 4 byes available to highest four ranking players that enter. Despite the 28 being reduced by 4 qualifiers and up to 3 'wild cards' the fact that there can be as many as three tournaments at once can mean players ranked as low as 70 can often find a direct entry available.
Appendixes
Tournament combinations:
56 places (8 byes for highest ranked)
48 places
32 places. 3 wild cards, 4 qualifiers
rotterdam (32)/250s
memphis(32)/250s
dubai(32)/acapulco(28)
bacelona (56)
hamburg(48)
washington(48)
china(32)/tokyo(32)
valencia(32)/basel(32)
250
48
32
28
Qualifying Tournaments
Grand Slam: 128 for 16 places
Miami/Indian Wells: 48 for 12 places
Remaining 1000 tournaments:28 for 7 places
500 Tournaments: 16 for 4 places
250 Tournaments: 16 for 4 places
Well, the reality is ranking really do matter to players. To enter tournaments with the big prize money, you need a good 'ranking', as entry to tournaments is decided purely by this ranking.
For every tournament, players earn 'rankings points', and the cumulative 'ranking points' earned over the previous 12 months, determines a players ranking. The player with the most points is number 1, right down to players ranked well over 1,000.
Different tournaments, different points.
A good Ranking earns entry to the biggest prize-money tournaments!
Overall, there are ATP (Association of Tour Professionals) tournaments, 'challenger' tournaments, and 'futures' tournaments, each delivering decreasing points, with the main tennis tour being the ATP tournaments. But to gain entry to ATP tournaments, you need a ranking, which when you don't already have a ranking, must be earned at the 'challengers' and 'futures'. The higher the ranking you have the greater your opportunity to earn a higher ranking, and prize-money!
For men's tournaments, currently in 2011, there are four 'grand slam' tournaments with 2,000 points for the winner. Lesser points are awarded for reaching earlier stages of tournament with some points available just for being invited. Below the 'grand slams' are ATP 1,000 tournaments with 1,000 points for the winner and 500 and 250 tournaments with, of course, 500 or 250 points respectively for the winner.
What Ranking is Required to play in which tournaments?
Once ranking reaches around 200 in the world, you may be eligible to enter some ATP tournaments 'qualifying' competitions. Here is a list (incomplete) of what reaching various world rankings enable.
Rank. Tournament Entry/Benefit
Below the top 200 - futures and challenger tournaments
200 Some Qualifier competitions prior to main tournaments
100 Direct Entry to Grand Slam Tournaments
90 Direct entry to '1000' series tournaments in Miami and Indian Wells
50-60 Direct entry to '500' series tournaments, and '250' tournaments
50 Direct entry to remaining '1000' series tournaments, and all other ATP tournaments
32 Seeded player in grand slams
16 Seeded player in 1000 series tournaments
8 Seeded player with direct entry to 2nd round in 1000 series tournaments
Additionally, a ranking of 8 or below at year end.....exclusive entry to year end tournament open only to top 8 players.
So how does it work? - The boring details
Competitions are played in 'rounds'. Only the winners of each round progress to the next round, so each round has half the number of players of the previous round. This means there are 2 players in the final round, 4 players for the 'semi-final', 8 players for the 'quarter-final', and a round prior to the quarter final with 16 players. A five round tournament can have 32 players in a round prior to the round with 16, and a 6 round tournament can have 64 players in the first round, while a 7 round tournament can have 128 players in the first round.
The 'Grand Slams' and 1000 series tournaments are compulsory for all registered players and they are automatically entered if their ranking is high enough. The smaller 500 and 250 tournaments are not compulsory, and at least two tournaments are held at the same time.
Grand Slams
There are four 'Grand slams'. These are played over 7 rounds, and there are 128 players in a 'grand slam' competition. However 16 places go to players entering through the qualifying tournament. This leaves 112 places, but of these 8 places are given to 'wild cards' who are given entry even though their ranking would not normally allow them to play. So 104 places are filled directly from the points ranking system. Of course at any given time their will be some some players who are injured so up to as high as 110 ranked player may gain entry.
Special ATP 1,000 tournaments:Miami and Indian Wells.
These two tournaments are played over 7 rounds as the grand slams are, but 32 places are 'byes' or empty places, allowing 32 players to have no opponent in the first round. This means there are 96 places in these tournaments, and with 12 places going to qualifiers and 4 places going to wild cards, leaving 8o places for direct entry to the tournament. The top 32 players having byes in the first round allows for both round 1 and 2 to have 32 matches.
Other 1000 series Tournaments
These 7 other 1000 tournaments, are played with 6 rounds, and with 8 players having byes in the first round, there are 56 places in the tournaments. Of these, 7 are allocated to the qualifying tournament and usually 4 wild cards, leaving 45 places for direct entry. This can allow for up to approximately a ranking of 50 if as many as 5 players are injured.
500 Series tournaments
Just as 1000 tournaments can be either 6 or 7 rounds, 500 tournaments can be 5 or 6 rounds.
The 6 round tournaments (currently Barcelona, Washington and Hamburg) have either 56 places (using 8 byes in round 1) or 48 places (with 16 byes in round 1). With around 8 places going to qualifying and wild cards, there are around 48-42 direct places.
The other 8 tournaments have 5 rounds and have 32 places, as currently none have any byes. Allowing 4 qualifiers and 3 wild cards leaves 25 direct places, but these smaller tournaments are always held at the same time as either another 500 tournament or two 250 tournaments, so players down to at least ranking of 50 can get a direct place into a tournament. In fact, since these tournaments are not compulsory, some higher ranked players may take a break and normally it is possible to get entry to tournament with a rank of around 60.
ATP 250 Tournaments
With even less points and prize money available, some of the best players may skip some of the these tournaments. Also, there is more than one at a time, so of those very top players who do enter, there are shared amoung tournaments. Currently there are two 250 tournaments with 6 rounds being London (56 players) and Winston Salem (48 players) while all the 39 other 250 tournaments have 5 rounds and either 32 players or more often 28 places with 4 byes available to highest four ranking players that enter. Despite the 28 being reduced by 4 qualifiers and up to 3 'wild cards' the fact that there can be as many as three tournaments at once can mean players ranked as low as 70 can often find a direct entry available.
Appendixes
Tournament combinations:
56 places (8 byes for highest ranked)
48 places
32 places. 3 wild cards, 4 qualifiers
rotterdam (32)/250s
memphis(32)/250s
dubai(32)/acapulco(28)
bacelona (56)
hamburg(48)
washington(48)
china(32)/tokyo(32)
valencia(32)/basel(32)
250
48
32
28
Qualifying Tournaments
Grand Slam: 128 for 16 places
Miami/Indian Wells: 48 for 12 places
Remaining 1000 tournaments:28 for 7 places
500 Tournaments: 16 for 4 places
250 Tournaments: 16 for 4 places
Tuesday, October 11, 2011
Tennis trivia - part 1
A comment was made about Bernard Tomic reaching possibly reaching the top 10 in tennis rankings while still 19 yrs old.
It occured to me to look at the history for current grand slam winners
Name- age when first reached top 10
Nadal - 18
Djokovic - 19
Roger Federer - 21
Juan Martin Del Potro -20 ( missed reaching top 10 at 19 by 1 month)
Andy Roddick - 19
LLeyton Hewitt - 19
Andy Murray has not won a slam, and he also took 1 month too long reaching to top 10 to be 19years old at the time. But he was also very close at 20yrs, 1month, 3 days.
So if Bernard Tomic does not reach the top 10 next year (at the end of the year he will be 20yrs and 2 months), he will be already getting old reaching the top 10 to be a future grand slam winner.
Previous great players that come to mind, and I can find the data:
Bjorn Borg: 18
Jimmy Connors: Turned pro at 19- definitely was top 10 by 20 but not data prior to age 20
John McEnroe: 19
Pete Sampras: 19 (missed being ranking at 18 by 1 month)
Ivan Lendl: 20
Boris Becker: 17
Jim Courier: 20
Mats Wilander: 18
Stephan Edberg: 19 (missed 18 by 1 month)
So, historically, a standout player will reach the top 10 by around 19 years
It occured to me to look at the history for current grand slam winners
Name- age when first reached top 10
Nadal - 18
Djokovic - 19
Roger Federer - 21
Juan Martin Del Potro -20 ( missed reaching top 10 at 19 by 1 month)
Andy Roddick - 19
LLeyton Hewitt - 19
Andy Murray has not won a slam, and he also took 1 month too long reaching to top 10 to be 19years old at the time. But he was also very close at 20yrs, 1month, 3 days.
So if Bernard Tomic does not reach the top 10 next year (at the end of the year he will be 20yrs and 2 months), he will be already getting old reaching the top 10 to be a future grand slam winner.
Previous great players that come to mind, and I can find the data:
Bjorn Borg: 18
Jimmy Connors: Turned pro at 19- definitely was top 10 by 20 but not data prior to age 20
John McEnroe: 19
Pete Sampras: 19 (missed being ranking at 18 by 1 month)
Ivan Lendl: 20
Boris Becker: 17
Jim Courier: 20
Mats Wilander: 18
Stephan Edberg: 19 (missed 18 by 1 month)
So, historically, a standout player will reach the top 10 by around 19 years
Saturday, October 1, 2011
nikon's giant stride on the march to 'mirrorless cameras'
Recently I saw a camera forum topic entitled 'is the future mirrorless?'
For some time there has been changes to the enthusiast and professional photography market which is still dominated by 'DSLRs' which use a mirror or prism.
All new 'DSLR' systems now allow dispensing with the mirror (or Prism) for some photographs, and some of systems now do not even include a mirror or prism in the camera at all! The change to eliminate the mirror mechanism all together is often refereed to as mirrorless.
Dispensing with the mirror brings the following changes and advantages.
1) Removes a complex mechanical system, allowing smaller and ideally simpler cameras
2) Allows use of a screen to frame photos
3) Prohibits use of an optical viewfinder, forcing use of a screen or electronic viewfinder
4) Requires a new focusing system
5) Allows capture of video images
6) Allows for higher speed frame rates when capturing multiple images
Points 2 and 5 can be provided by simply not using the mirror in when these features are desired, and this has proved so compelling that all DSLRs have now added this capability.
Point (6) has so far been a potential benefit, not yet realised.
Whilst points (1) is a clear benefit of going further and actually removing the mirror mechanism, points (3) and (4) have been so far seen as counterbalancing negatives, as there have been limitations to electronic view finders and new focusing systems.
Whilst for some uses it can already be argued that new focusing systems are actually an improvement, Nikon has recently released the 1 series, which so far represents a significant step forward in new focussing systems. For the first time, one of the two largest DSLR companies, is claiming best auto focusing results without the mirror. At the same time, Nikon has started to realise point (6), faster frame rates.
This further changes the equation of when a mirror system will be preferred. As this system new auto focus system is introduced in Nikon DSLRs, using the mirror will change.
Pre new auto-focus system:
Use mirror if : using optical view finder or requiring best focus system
Do not use mirror if: taking video footage or using screen to frame photos
Now, with new Nikon technology:
Use mirror if: requiring optical viewfinder
Do not use mirror for: best auto-focus technology, fastest frame rate, shooting video, using electronic live image for framing
Clearly, the cases for using the mirror are dramatically reduced. Whilst impact of this new technology is yet to be experienced in a DSLR, it is clear that the occasions the mirror is used will significantly be reduced, and the case for the final step of removing the mirror altogether will be compelling for a larger percentage of camera buyers.
In fact, if most photos are now taken without the using the mirror, cameras will either need to add an electronic viewfinder in addition to the optical viewfinder for any photographer who prefers a viewfinder and desires optimum auto focus results. The case for keeping the mirror, and the optical viewfinder will become increasingly weak, particularly in cameras which have very good low light capabilities and can therefore deliver best results through an electronic viewfinder.
For some time there has been changes to the enthusiast and professional photography market which is still dominated by 'DSLRs' which use a mirror or prism.
All new 'DSLR' systems now allow dispensing with the mirror (or Prism) for some photographs, and some of systems now do not even include a mirror or prism in the camera at all! The change to eliminate the mirror mechanism all together is often refereed to as mirrorless.
Dispensing with the mirror brings the following changes and advantages.
1) Removes a complex mechanical system, allowing smaller and ideally simpler cameras
2) Allows use of a screen to frame photos
3) Prohibits use of an optical viewfinder, forcing use of a screen or electronic viewfinder
4) Requires a new focusing system
5) Allows capture of video images
6) Allows for higher speed frame rates when capturing multiple images
Points 2 and 5 can be provided by simply not using the mirror in when these features are desired, and this has proved so compelling that all DSLRs have now added this capability.
Point (6) has so far been a potential benefit, not yet realised.
Whilst points (1) is a clear benefit of going further and actually removing the mirror mechanism, points (3) and (4) have been so far seen as counterbalancing negatives, as there have been limitations to electronic view finders and new focusing systems.
Whilst for some uses it can already be argued that new focusing systems are actually an improvement, Nikon has recently released the 1 series, which so far represents a significant step forward in new focussing systems. For the first time, one of the two largest DSLR companies, is claiming best auto focusing results without the mirror. At the same time, Nikon has started to realise point (6), faster frame rates.
This further changes the equation of when a mirror system will be preferred. As this system new auto focus system is introduced in Nikon DSLRs, using the mirror will change.
Pre new auto-focus system:
Use mirror if : using optical view finder or requiring best focus system
Do not use mirror if: taking video footage or using screen to frame photos
Now, with new Nikon technology:
Use mirror if: requiring optical viewfinder
Do not use mirror for: best auto-focus technology, fastest frame rate, shooting video, using electronic live image for framing
Clearly, the cases for using the mirror are dramatically reduced. Whilst impact of this new technology is yet to be experienced in a DSLR, it is clear that the occasions the mirror is used will significantly be reduced, and the case for the final step of removing the mirror altogether will be compelling for a larger percentage of camera buyers.
In fact, if most photos are now taken without the using the mirror, cameras will either need to add an electronic viewfinder in addition to the optical viewfinder for any photographer who prefers a viewfinder and desires optimum auto focus results. The case for keeping the mirror, and the optical viewfinder will become increasingly weak, particularly in cameras which have very good low light capabilities and can therefore deliver best results through an electronic viewfinder.
Monday, September 19, 2011
Population growth as a strategy?
There are arguments for a large population, arguments for a small population, and arguments for an increasing population.
Today, I want to examine the arguments for an increasing population. These arguments are not about how large the population is, but that it should increase.
The three arguments I have heard in favour of an increasing population are:
1) Population growth is necessary to secure essential economic growth
2) Population growth is necessary to maintain a sufficiently high ratio of younger people to elderly people
3) Population growth in a specific country is required to ease overcrowding in some other country or countries.
All of these sound reasonable, but lets first look at the argument against continued population growth. These are:
1) There is a limit to growth, sooner or later it must stop
2) Too many people inevitably must damage the earth to the detriment of all life on Earth
Is there a Limit to Growth?
Yes, demonstrably. One simply proof is to consider that people are made of atoms, and the number of atoms on earth is finite. Eventually you get to a point that there are not enough atoms to build each person. So growth must stop eventually, but is this 'eventually' so far away that it is completely hypothetical, or can we manage to colonise space before we reach maximum population on earth?
We have established that there clearly is a limit to the number of people we can have here on Earth, now the question becomes, 'What is the Limit?'.
Overpopulation does not depend only on the size or density of the population, but on the ratio of population to available sustainable resources. For every additional person, there is a decrease in resources per capita. This would not matter if every resource had an unlimited untapped supply, but clearly some resources are very finite. Consider beaches. Would it be ok if the average beach had twice as many people? Four times as many people? Eight times as many people? Does it matter if it is not realistic to expect our children to be ever able to visit a beach? Each doubling of the population currently occurs every forty years, how many doubling can we handle?
This is very subjective, but answer I get from many people is we could handle another doubling...maybe. Which, if correct, means we could maintain another forty years of a population growth strategy before we would need to stop.
When do too many people start to harm the Earth?
It is quite clear people are already damaging the planet, and for other species the earth is experiencing mass extinctions as a result. How much of this is due to bad practices as opposed to too many people is arguable, but a clear consequence of the need to produce food for people is habitat loss for other animals. Currently there are an estimated 7 billion people living on a planet that, without farming, is estimated could sustain an estimated population of 15million people.
(Luc-Normand Tellier (2009). "Urban world history: an economic and geographical perspective". PUQ. p.26. ISBN 2760515885)
There are currently debates about just how many people we are able to feed with currently available technology, with estimates ranging from clearly not everyone, through to there is a little to spare if we work at it. However it is clear we need to grow even more food, which would require even more farming land. This makes it difficult for significant parts of the globe to exist free of being transformed by human activity, which in turn means more species face extinction.
We are already down to 'it is us or them' will respect to allowing many of the other species we currently share our planet with to continue to exist outside zoos.
The Benefits: 1. Economic Growth.
There is a simple formulae: Maintain GDP per capita while increasing population and you have economic growth. However, there is another simple formulae: Share a fixed resource amongst a growing population and each share gets smaller. This means that as resources reach a limit the individuals must make sacrifices. A clear message is that economic growth through population growth is only realised by those who address the entire population, i.e. large companies and governments.
This is the underlying message. Big business and government wins with population growth, individuals pay the price. A far better path to economic growth is to increase GDP per capita since this works for everybody. Big business and government will still argue for the higher growth of complimenting any growth in GDP per capita with population growth, but individuals should not be misled as to the motives.
Benefit 2: Provide for the Ageing Population.Yes, this does work as long as the population continues to increase over the longer term, as it has since 1900. The truth is that we have only had today's long life expectancy in a world with a rapidly growing population. Throughout most of history, where population growth was far lower, life expectancy was shorter. However, is it even realistic that the population will grow over the longer term? Almost all estimates are that growth will decline over the next forty years, which corresponds to the population growing beyond what most see as sustainable or desirable anyway.
(See: Wikipedia overpopulation)
At best this will solve the problem for one generation, and our children will need a new solution? Is it a good idea to push the problem back ensuring it is even more difficult for our children, or should we start searching for a better, long term solution to this problem now?
At the current point, it is clear that the price of the population growth is already to increase food prices, which will only make life difficult for the ageing population anyway.
Benefit 3: Sharing the burden through Immigration.
There is a strong argument that some countries need to allow their population to grow to relieve the burden faced by people in overpopulated countries. This argument is valid, but it concedes that the problems of overpopulation are real and immediate. The country which is the source of the immigration provides a clear demonstration of just how real the problem is, the countries which realistically act as a destination for such immigration without very soon reaching their own crisis point are very limited.
Conclusion.
Some people already are living in overpopulated areas, and globally if the Earth is not already overpopulated, it is very close to that point. Any policy of ever increasing population now has a very limited life which can achieve short terms goals, but with a risk for the longer term. This means that short term economic growth can delay solving some problems, but only at the risk that the actual solution will be more difficult and result in even greater suffering. Delaying addressing the challenges that come from abandoning population growth as a problem for our children and not our generation is a shameful legacy that increases the problems our children will suffer in their lives. The challenge is to minimise the degree to which we pass on the problem over population to future generations.
Today, I want to examine the arguments for an increasing population. These arguments are not about how large the population is, but that it should increase.
The three arguments I have heard in favour of an increasing population are:
1) Population growth is necessary to secure essential economic growth
2) Population growth is necessary to maintain a sufficiently high ratio of younger people to elderly people
3) Population growth in a specific country is required to ease overcrowding in some other country or countries.
All of these sound reasonable, but lets first look at the argument against continued population growth. These are:
1) There is a limit to growth, sooner or later it must stop
2) Too many people inevitably must damage the earth to the detriment of all life on Earth
Is there a Limit to Growth?
Yes, demonstrably. One simply proof is to consider that people are made of atoms, and the number of atoms on earth is finite. Eventually you get to a point that there are not enough atoms to build each person. So growth must stop eventually, but is this 'eventually' so far away that it is completely hypothetical, or can we manage to colonise space before we reach maximum population on earth?
We have established that there clearly is a limit to the number of people we can have here on Earth, now the question becomes, 'What is the Limit?'.
Overpopulation does not depend only on the size or density of the population, but on the ratio of population to available sustainable resources. For every additional person, there is a decrease in resources per capita. This would not matter if every resource had an unlimited untapped supply, but clearly some resources are very finite. Consider beaches. Would it be ok if the average beach had twice as many people? Four times as many people? Eight times as many people? Does it matter if it is not realistic to expect our children to be ever able to visit a beach? Each doubling of the population currently occurs every forty years, how many doubling can we handle?
This is very subjective, but answer I get from many people is we could handle another doubling...maybe. Which, if correct, means we could maintain another forty years of a population growth strategy before we would need to stop.
When do too many people start to harm the Earth?
It is quite clear people are already damaging the planet, and for other species the earth is experiencing mass extinctions as a result. How much of this is due to bad practices as opposed to too many people is arguable, but a clear consequence of the need to produce food for people is habitat loss for other animals. Currently there are an estimated 7 billion people living on a planet that, without farming, is estimated could sustain an estimated population of 15million people.
(Luc-Normand Tellier (2009). "Urban world history: an economic and geographical perspective". PUQ. p.26. ISBN 2760515885)
There are currently debates about just how many people we are able to feed with currently available technology, with estimates ranging from clearly not everyone, through to there is a little to spare if we work at it. However it is clear we need to grow even more food, which would require even more farming land. This makes it difficult for significant parts of the globe to exist free of being transformed by human activity, which in turn means more species face extinction.
We are already down to 'it is us or them' will respect to allowing many of the other species we currently share our planet with to continue to exist outside zoos.
The Benefits: 1. Economic Growth.
There is a simple formulae: Maintain GDP per capita while increasing population and you have economic growth. However, there is another simple formulae: Share a fixed resource amongst a growing population and each share gets smaller. This means that as resources reach a limit the individuals must make sacrifices. A clear message is that economic growth through population growth is only realised by those who address the entire population, i.e. large companies and governments.
This is the underlying message. Big business and government wins with population growth, individuals pay the price. A far better path to economic growth is to increase GDP per capita since this works for everybody. Big business and government will still argue for the higher growth of complimenting any growth in GDP per capita with population growth, but individuals should not be misled as to the motives.
Benefit 2: Provide for the Ageing Population.Yes, this does work as long as the population continues to increase over the longer term, as it has since 1900. The truth is that we have only had today's long life expectancy in a world with a rapidly growing population. Throughout most of history, where population growth was far lower, life expectancy was shorter. However, is it even realistic that the population will grow over the longer term? Almost all estimates are that growth will decline over the next forty years, which corresponds to the population growing beyond what most see as sustainable or desirable anyway.
(See: Wikipedia overpopulation)
At best this will solve the problem for one generation, and our children will need a new solution? Is it a good idea to push the problem back ensuring it is even more difficult for our children, or should we start searching for a better, long term solution to this problem now?
At the current point, it is clear that the price of the population growth is already to increase food prices, which will only make life difficult for the ageing population anyway.
Benefit 3: Sharing the burden through Immigration.
There is a strong argument that some countries need to allow their population to grow to relieve the burden faced by people in overpopulated countries. This argument is valid, but it concedes that the problems of overpopulation are real and immediate. The country which is the source of the immigration provides a clear demonstration of just how real the problem is, the countries which realistically act as a destination for such immigration without very soon reaching their own crisis point are very limited.
Conclusion.
Some people already are living in overpopulated areas, and globally if the Earth is not already overpopulated, it is very close to that point. Any policy of ever increasing population now has a very limited life which can achieve short terms goals, but with a risk for the longer term. This means that short term economic growth can delay solving some problems, but only at the risk that the actual solution will be more difficult and result in even greater suffering. Delaying addressing the challenges that come from abandoning population growth as a problem for our children and not our generation is a shameful legacy that increases the problems our children will suffer in their lives. The challenge is to minimise the degree to which we pass on the problem over population to future generations.
Tuesday, September 13, 2011
The gas station: closing down forever?
Today, I read an preview of the Mercedes Benz vision for the future.
Link- Road and Track
Second link- Drive.
The car is appears to be a plug in hybrid driven by in wheel electric motors. The electricity comes from a hydrogen fuel cell and a lithium sulfur battery, with inductive charging to charge the battery. 100km can be traveled on battery power alone.
This appears an extremely viable vision of future motoring.
Electric propulsion and inductive battery charging seem to be inevitable. Hydrogen power to replace today's internal combustion engines as a way to deliver long range makes real sense too. So is this future car a hydrogen fuel cell car with additional 'plug in' hybrid power, or an electric car with hydrogen fuel cell range extension?
Well, either, depending on your perspective. Which refueling is more convenient? If you have a garage or other dedicated car space, then the car will automatically top recharge the battery whenever the car is parked. If you drive less than 100km per day, then you never need visit a refilling station, and never use any hydrogen. However on a long journey only 10% of the range comes from the battery. In reality for most people, I suspect the over 100km days will be the exception and over a year the car will be more than 90% battery powered, which is good because this is the greatest efficiency.
But it started a thought process.... if cars may actually use battery power for over 90% of power, then you need way, way less fuel stations!
At least this will make the challenge of creating the hydrogen refilling stations that much easier, but we may have to travel further to find one.
The interim step to this 'plug in' hydrogen car, is the the 'plug in' diesel of gasoline car. The same rules of usage can apply and again and if cars get to drive mostly on battery power then a whole range of fuel stations will convert to apartment blocks. Now this process somehow seems to have started already, but it could really accelerate!
Link- Road and Track
Second link- Drive.
The car is appears to be a plug in hybrid driven by in wheel electric motors. The electricity comes from a hydrogen fuel cell and a lithium sulfur battery, with inductive charging to charge the battery. 100km can be traveled on battery power alone.
This appears an extremely viable vision of future motoring.
Electric propulsion and inductive battery charging seem to be inevitable. Hydrogen power to replace today's internal combustion engines as a way to deliver long range makes real sense too. So is this future car a hydrogen fuel cell car with additional 'plug in' hybrid power, or an electric car with hydrogen fuel cell range extension?
Well, either, depending on your perspective. Which refueling is more convenient? If you have a garage or other dedicated car space, then the car will automatically top recharge the battery whenever the car is parked. If you drive less than 100km per day, then you never need visit a refilling station, and never use any hydrogen. However on a long journey only 10% of the range comes from the battery. In reality for most people, I suspect the over 100km days will be the exception and over a year the car will be more than 90% battery powered, which is good because this is the greatest efficiency.
But it started a thought process.... if cars may actually use battery power for over 90% of power, then you need way, way less fuel stations!
At least this will make the challenge of creating the hydrogen refilling stations that much easier, but we may have to travel further to find one.
The interim step to this 'plug in' hydrogen car, is the the 'plug in' diesel of gasoline car. The same rules of usage can apply and again and if cars get to drive mostly on battery power then a whole range of fuel stations will convert to apartment blocks. Now this process somehow seems to have started already, but it could really accelerate!
Tuesday, August 9, 2011
Hydrogen vs Electric Cars? No contest!
Some say Electric Cars are the future, others say Hydrogen. Who is right? Well there is no contest really, here is the explanation.
I recently watched a top gear episode which reviewed two electric vehicles, and clearly demonstrated that there were tasks for which these cars were clearly unsuited. Now it could be said the episode was a trifle unfair, since it did not look at other tasks for which the vehicles would be suited.
(The episode screen July 31 I believe and had a Nissan Leaf and a Peugeot iOn if you wish to search for it.)
The test cars ran out of power, and with recharging both taking time and no recharge points established in the area of the test the result was most inconvenient. The program did demonstrate neither of these cars was a good choice for a weekend away. The reality is those same cars might well be suitable for a regular commute, where the distance to be traveled is both known and typically quite short, and recharging can be planned.
The conclusion of the show suggested that Hydrogen power cars, as tested once on a previous occasion, provide the perfect answer.
The arguments I heard put forward for the hydrogen car are:
1) With power coming from combustion, the car would feel like current cars.
2) The only tailpipe pollution is water!
3) Hydrogen is the most abundant substance in the universe, so it will never run out!
This all sounds compelling, but looking lets look at the claims.
1) We can make powered by combustion. This can actually be true, but I would suggest having combustion in a car is not actually a good thing. Even the potential for combustion means carrying fuel that burns and thus is a safety hazard. As we will see, in truth, the inefficiency of the combustion process is the Achilles heel of the whole idea. So instead hydrogen cars produce electricity via a fuel cell, and we then use the electricity to drive electric motors. Search for the Honda Clarity and you will find this is how this car, and all other proposals work.
2) The only tailpipe pollution is water. Again this is true, but it is because, like all electric cars, the pollution is moved to elsewhere, not eliminated. Remember, conventional battery electric cars have no tailpipe pollution at all.
3) Hydrogen is the most abundant substance in the universe. Again true, however with a large 'but'. Here on earth Hydrogen floats away and does not stay on the ground, or even in the atmosphere. I refer to the article on Wikipedia 'Atmospheric escape', but in summary, Hydrogen is so light if eventually floats away from a planet the size of the Earth. To get hydrogen to use to power cars, we have to extract it from compounds, We can extract if from fossil fuels, particularly natural gas, but we can be truly sustainable and extract hydrogen from water. This means no reliance on fossil fuels, and a closed loop since burning the hydrogen produces water again. Any other source than water and we are changing the world and making more water, so in the long run creating an imbalance. If we really need more water we could melt the ice caps a little....or did someone already think of that?
So our cycle becomes, put energy in to extract the hydrogen, transport the hydrogen both to the car an in the car, then burn the hydrogen to get back the energy we put in. The hydrogen is not a source of energy, since we have to put energy in to extract it. If we use water to extract hydrogen, we need at least the exact same amount of energy in the extraction as we get back. Going from fossils fuels gives only a slight gain, more than offset by other problems in the long term, but workable while we are digging up the fossil fuels anyway. Overall, hydrogen becomes a way to carry energy, not a source of energy.
But it is not easy to carry energy in the form of hydrogen. As the smallest atom it escapes very easy and is very light, so to carry hydrogen you need highly compress it. Transferring, refueling and transport are all expensive using hydrogen. All to get back the electricity we started with.
But the biggest problem is that to get our energy back, we use combustion. With combustion we produce heat and every bit of heat that is not turned into motion is lost energy. Think how hot our current engines get. All that heat is lost energy and we produce so much we need to power a cooling system to get heat away from the energy. When you had to add the energy in the fist place, you really notice that you lose most of it to heat in the engine.
This is why all proposed hydrogen cars do not combust the hydrogen. They use an alternative method called a fuel cell, which is far more efficient than combustion and produces not heat, but electricity. All proposed hydrogen cars use fuel cells and are, in effect, an electric car with a hydrogen fuel cell in place of a battery. So the comparison becomes a battery electric car vs a fuel cell electric car.
Since now we are comparing two types of electric car, the drive system is identical. The choice is charging by refilling plugging in, or charging by refilling hydrogen.
The 'refilling hydrogen' is like conventional refuelling, the conventional battery takes hours. The conventional battery is efficient and easily provides adequate range for most driving requirement, the hydrogen fuel cell is a more complex inefficient system but can more easily provide a much greater range.
So hydrogen fuel cell to produce electric = long driving range but reduced efficiency.
The most logical answer is a plug in hydrogen 'hybrid'. It is really only two sources of electric power, so can have less total bulk than a plug in hybrid gasoline/diesel vehicle. This gives the ultimate efficiency from the battery direct electrical storage,
and the additional range on demand from the fuel cell. The best of both worlds.
Such a car could in theory be an improvement on the cars of today for refuelling. If we have can refuel the hydrogen as we today refuel gasoline or diesel, isn't the same? Well... no! Since we can also drive on plug in power, and in fact on most daily trips only need 'plug in' power. We can go far, far longer without a refuel stop. An important step is that 'plug in' can mean just leaving the car in the garage, and charging by induction with no actual plug in at all.
While fuel cells are expensive and hydrogen refuelling uncommon, the plug in hybrid gasoline/diesel makes a great interim step and achieves are large percentage of the gains- if not all while we still get hydrogen from fossil fuel.
So there is no hydrogen vs electric - it is just conventional battery vs fuel cell with an electric car in both cases. And a combination of both power sources is probably the ultimate solution. In the interim, the plug in internal combustion engine hybrid is a great solution.
I recently watched a top gear episode which reviewed two electric vehicles, and clearly demonstrated that there were tasks for which these cars were clearly unsuited. Now it could be said the episode was a trifle unfair, since it did not look at other tasks for which the vehicles would be suited.
(The episode screen July 31 I believe and had a Nissan Leaf and a Peugeot iOn if you wish to search for it.)
The test cars ran out of power, and with recharging both taking time and no recharge points established in the area of the test the result was most inconvenient. The program did demonstrate neither of these cars was a good choice for a weekend away. The reality is those same cars might well be suitable for a regular commute, where the distance to be traveled is both known and typically quite short, and recharging can be planned.
The conclusion of the show suggested that Hydrogen power cars, as tested once on a previous occasion, provide the perfect answer.
The arguments I heard put forward for the hydrogen car are:
1) With power coming from combustion, the car would feel like current cars.
2) The only tailpipe pollution is water!
3) Hydrogen is the most abundant substance in the universe, so it will never run out!
This all sounds compelling, but looking lets look at the claims.
1) We can make powered by combustion. This can actually be true, but I would suggest having combustion in a car is not actually a good thing. Even the potential for combustion means carrying fuel that burns and thus is a safety hazard. As we will see, in truth, the inefficiency of the combustion process is the Achilles heel of the whole idea. So instead hydrogen cars produce electricity via a fuel cell, and we then use the electricity to drive electric motors. Search for the Honda Clarity and you will find this is how this car, and all other proposals work.
2) The only tailpipe pollution is water. Again this is true, but it is because, like all electric cars, the pollution is moved to elsewhere, not eliminated. Remember, conventional battery electric cars have no tailpipe pollution at all.
3) Hydrogen is the most abundant substance in the universe. Again true, however with a large 'but'. Here on earth Hydrogen floats away and does not stay on the ground, or even in the atmosphere. I refer to the article on Wikipedia 'Atmospheric escape', but in summary, Hydrogen is so light if eventually floats away from a planet the size of the Earth. To get hydrogen to use to power cars, we have to extract it from compounds, We can extract if from fossil fuels, particularly natural gas, but we can be truly sustainable and extract hydrogen from water. This means no reliance on fossil fuels, and a closed loop since burning the hydrogen produces water again. Any other source than water and we are changing the world and making more water, so in the long run creating an imbalance. If we really need more water we could melt the ice caps a little....or did someone already think of that?
So our cycle becomes, put energy in to extract the hydrogen, transport the hydrogen both to the car an in the car, then burn the hydrogen to get back the energy we put in. The hydrogen is not a source of energy, since we have to put energy in to extract it. If we use water to extract hydrogen, we need at least the exact same amount of energy in the extraction as we get back. Going from fossils fuels gives only a slight gain, more than offset by other problems in the long term, but workable while we are digging up the fossil fuels anyway. Overall, hydrogen becomes a way to carry energy, not a source of energy.
But it is not easy to carry energy in the form of hydrogen. As the smallest atom it escapes very easy and is very light, so to carry hydrogen you need highly compress it. Transferring, refueling and transport are all expensive using hydrogen. All to get back the electricity we started with.
But the biggest problem is that to get our energy back, we use combustion. With combustion we produce heat and every bit of heat that is not turned into motion is lost energy. Think how hot our current engines get. All that heat is lost energy and we produce so much we need to power a cooling system to get heat away from the energy. When you had to add the energy in the fist place, you really notice that you lose most of it to heat in the engine.
This is why all proposed hydrogen cars do not combust the hydrogen. They use an alternative method called a fuel cell, which is far more efficient than combustion and produces not heat, but electricity. All proposed hydrogen cars use fuel cells and are, in effect, an electric car with a hydrogen fuel cell in place of a battery. So the comparison becomes a battery electric car vs a fuel cell electric car.
Since now we are comparing two types of electric car, the drive system is identical. The choice is charging by refilling plugging in, or charging by refilling hydrogen.
The 'refilling hydrogen' is like conventional refuelling, the conventional battery takes hours. The conventional battery is efficient and easily provides adequate range for most driving requirement, the hydrogen fuel cell is a more complex inefficient system but can more easily provide a much greater range.
So hydrogen fuel cell to produce electric = long driving range but reduced efficiency.
The most logical answer is a plug in hydrogen 'hybrid'. It is really only two sources of electric power, so can have less total bulk than a plug in hybrid gasoline/diesel vehicle. This gives the ultimate efficiency from the battery direct electrical storage,
and the additional range on demand from the fuel cell. The best of both worlds.
Such a car could in theory be an improvement on the cars of today for refuelling. If we have can refuel the hydrogen as we today refuel gasoline or diesel, isn't the same? Well... no! Since we can also drive on plug in power, and in fact on most daily trips only need 'plug in' power. We can go far, far longer without a refuel stop. An important step is that 'plug in' can mean just leaving the car in the garage, and charging by induction with no actual plug in at all.
While fuel cells are expensive and hydrogen refuelling uncommon, the plug in hybrid gasoline/diesel makes a great interim step and achieves are large percentage of the gains- if not all while we still get hydrogen from fossil fuel.
So there is no hydrogen vs electric - it is just conventional battery vs fuel cell with an electric car in both cases. And a combination of both power sources is probably the ultimate solution. In the interim, the plug in internal combustion engine hybrid is a great solution.
Saturday, February 12, 2011
Why I don't like current hybrids: Misplaced moral superiority!
Actually, they are both good and bad.
First, let me start with the bad.
http://www.blogger.com/img/blank.gif
The worst part is that they are not the 'silver http://www.blogger.com/img/blank.gifbullet' for an environmentally sound car. The fact is they actually do not buy that much in terms of fuel economy. The hero of the hybrid cars is so far the Toyota Prius, which granted is an economical car. But if it was not a hybrid it would still be economical. Actually, under some conditions, it would more if they took out the hybrid system.
See:
The London Times test against a BMW 5 series 520D
Hyundai I30 beats Toyota Prius in fuel economy / low emissions race.
In stop start traffic, the Prius is quite competitive, but on a long run it is not. Generally, with a mix of stop start traffic, whahttp://www.blogger.com/img/blank.gift would have otherwise been a very economical car, is even more economical. But is it not economical because it is a hybrid, it is just slightly more economical because it is a hybrid.
But what about cars like the Lexus, LS600h, whihttp://www.blogger.com/img/blank.gifch is not an economical car before it gets the hybrid treatment? Well, the answer is, even though it is a hybrid, it not economical.
See:
Comparison by Lexus enthusiast, Audi goes 50% further each gallon.
Audi A8: 31.5 MPG on test vs Lexus LS600h: 19.4 MPG.
Despite the rather woeful fuel economy, the LS600h actually qualifies for special concessions as an economical car! Not because it is actually economic, which it clearly is not, but simply because it is a hybrid.
So the negative is, these 'regenerative hybrids' as simply not that economical, and can even be very uneconomical. The technology is not 'game changing' as in the end all of the power, even the electrical power, is still generated as a result of gasoline in an internal combustion engine.
It has been pointed out that the production of the batteries can make these cars a very unsound environmental proposition, but this is somewhat an implementation problem rather that a fault of the idea. The problem is the idea is just not that good.
So why do people buy these cars?
Answer: Misplaced moral superiority.
Even if the car is really not that economical, you would think that hybrids alone could save the planet. People driving hybrids sometimes seem to feel they are doing their bit for the planet that everyone else is destroying.
OK- so is there anything good about these cars?
Answer: Yes, environmental consciousness!
Even if the whole 'superiority' thing is a bit annoying (especially when it can be completely misplaced) at least the whole question of economy and emissions has been taken to a whole new level and been made into a selling feature.
First, let me start with the bad.
http://www.blogger.com/img/blank.gif
The worst part is that they are not the 'silver http://www.blogger.com/img/blank.gifbullet' for an environmentally sound car. The fact is they actually do not buy that much in terms of fuel economy. The hero of the hybrid cars is so far the Toyota Prius, which granted is an economical car. But if it was not a hybrid it would still be economical. Actually, under some conditions, it would more if they took out the hybrid system.
See:
The London Times test against a BMW 5 series 520D
Hyundai I30 beats Toyota Prius in fuel economy / low emissions race.
In stop start traffic, the Prius is quite competitive, but on a long run it is not. Generally, with a mix of stop start traffic, whahttp://www.blogger.com/img/blank.gift would have otherwise been a very economical car, is even more economical. But is it not economical because it is a hybrid, it is just slightly more economical because it is a hybrid.
But what about cars like the Lexus, LS600h, whihttp://www.blogger.com/img/blank.gifch is not an economical car before it gets the hybrid treatment? Well, the answer is, even though it is a hybrid, it not economical.
See:
Comparison by Lexus enthusiast, Audi goes 50% further each gallon.
Audi A8: 31.5 MPG on test vs Lexus LS600h: 19.4 MPG.
Despite the rather woeful fuel economy, the LS600h actually qualifies for special concessions as an economical car! Not because it is actually economic, which it clearly is not, but simply because it is a hybrid.
So the negative is, these 'regenerative hybrids' as simply not that economical, and can even be very uneconomical. The technology is not 'game changing' as in the end all of the power, even the electrical power, is still generated as a result of gasoline in an internal combustion engine.
It has been pointed out that the production of the batteries can make these cars a very unsound environmental proposition, but this is somewhat an implementation problem rather that a fault of the idea. The problem is the idea is just not that good.
So why do people buy these cars?
Answer: Misplaced moral superiority.
Even if the car is really not that economical, you would think that hybrids alone could save the planet. People driving hybrids sometimes seem to feel they are doing their bit for the planet that everyone else is destroying.
OK- so is there anything good about these cars?
Answer: Yes, environmental consciousness!
Even if the whole 'superiority' thing is a bit annoying (especially when it can be completely misplaced) at least the whole question of economy and emissions has been taken to a whole new level and been made into a selling feature.
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