The Ten Things Everyone Should Know About Science Part III

• You may be able to quote Shakespeare, but what are you like on Big Bang theory?
• The Financial Times gives non-scientifically minded readers a leg up the tree of knowledge.

  Relativity

• If Charles Darwin and his theory of evolution have become the great symbols of 19th-century science, Albert Einstein and relativity play a similar role for the 20th century. Einstein's theory of relativity was published in two parts, both of which have had an immense influence on the subsequent development of physics and cosmology.
• ''Special relativity'' (1905) showed that time and distance are not absolute but depend on the observer's motion. Key to special relativity is the famous formula e=mc2, where e is energy, m mass and c the speed of light. The formula implies that mass and energy can be converted into one another, that the speed of light in a vacuum is the same for all observers under all circumstances, and that nothing can travel faster than light (300,000km per second).
• ''General relativity'' (1915) brought gravity into the theory, showing that heavy objects distort the fabric of space and time through their gravitational fields. General relativity passed its first public test during a solar eclipse in 1919, when telescopes showed light from distant stars ''bent'' by the sun's gravity, exactly as the theory predicted. Another prediction, confirmed much more recently, is the existence within galaxies of ''black holes'' from which no matter or light can escape because the force of gravity is so strong.

  Why does it matter?

• Like cosmology and the Big Bang, relativity underpins the intellectual framework of science.
• But it has practical applications in space technology; for example, satellite navigation works because the Global Positioning System (GPS) takes account of relativity. And science-fiction writers need to invoke relativistic effects to make time travel possible.

  What next?

• No one knows. The great unmet challenge of theoretical physics is to combine relativity with quantum mechanics. The two theories still co-exist uneasily without a common base. One day another Einstein will come up with a grand theory to unite them.

  Fear factor: palpitations

What's next? - Quantum mechanics

Source: Financial Times, London, 2007

• The Federal Open Market Committee
• The FOMC lowered the federal funds rate by 25 basis points to 4.25% and also lowered the discount rate by 25 basis points to 4.75%. The committee cited weakening economic growth, concern in financial markets and slowing core inflation. The FOMC did not indicate a bias for future monetary policy; there was no discussion of future policy actions, with the FOMC noting that uncertainty has increased in recent months. One member voted to cut the fed funds rate target by 50 basis points.

• Treasury Budget - (-$98.2 B)
• The unified deficit for November was $98 billion, slightly below the CBO's preliminary estimate of a $101 billion deficit. The federal government has run a deficit of $154 billion through the first two months of FY2008; this is 26% larger than the deficit at the same point in FY2007. After a few years of improvement, the federal budget deficit is set to widen in the current fiscal year.

• International Business Confidence
• Businesses are very nervous. Confidence edged a bit higher during the first week of December, but is consistent with an economy that is contracting. Expectations regarding the outlook over the next six months are eroding and have never been weaker in the five years of the survey. Responses regarding sales strength, inventory investment, and office space are all soft. Businesses are more positive when responding to questions regarding payrolls and equipment investment. Confidence is stronger outside the U.S., but it has notably weakened most everywhere across the globe during the past month.

• International Trade (FT900)
• The nominal U.S. trade deficit in goods and services widened by 1.2% in October. The U.S. trade deficit came in at $57.8 billion, $0.7 billion more than September's revised $57.1 billion, according to the Bureau of Economic Analysis. In October, both exports and imports increased, though imports increased more than exports. The goods deficit with China, however, widened to $25.9 billion, increasing 6.3% compared to a year ago. Crude oil prices increased in October, which in turn increased the nation's total import bill for energy-related petroleum products to $30.1 billion.

• Import and Export Prices
• The U.S. Import Price Index increased 2.7% in November. The increase was the largest monthly advance since October 1990 and was led by a 9.8% rise in petroleum prices. Export prices rose 0.9% in November, after rising by 0.8% in the previous month.

• PPI
• Producer prices for finished goods soared 3.2% in November, the second highest reading since the inception of the series in April 1947. The increase was driven almost entirely by energy prices, which rose 14.1%. The core producer price index posted an above-trend 0.4% gain.

• Quarterly Services Survey
• In the third quarter of 2007, the information industry reported 5.8% year-to-year revenue growth. Professional services revenues are up 6.2%. Administrative and support and waste management and remediation services revenue posted 2.5% growth. Revenue in hospitals, nursing and residential care facilities is up 7.0%. The aggregate of services revenue increased 5.8% from the third quarter of 2006.

• Manpower Employment Outlook Survey - Canada, United States & Western Europe
• According to the Manpower Employment Outlook Survey, employers in all of the 27 countries and territories surveyed expect to add staff during the first quarter in 2008. Nevertheless, hiring intentions continue to soften in the U.S., with the net employment outlook indicating that 10% (not seasonally adjusted) of employers expect to add staff compared to 18% in the previous quarter. The employment outlook is looking up in the euro area, however, in the U.K. and Ireland employment demand will soften. In Asia Pacific, demand for new workers will weaken slightly but remain strong.

• Wholesale Trade (MWTR)
• Wholesale inventories were unchanged in October, falling well below consensus expectations of a 0.5% gain. September's large increase in inventories was revised lower from 0.8% to 0.6%. Sales rose by 0.7% over the prior month in October as compared to September's upwardly revised 1.4% increase. The inventory-to-sales ratio edged down to 1.09 in October.

• Pending Home Sales
• The pending home sales index declined by 18.4% in October on a year-ago basis. At 87.2, the index was up by 0.58% from September. September's index was revised upward to 86.7 from 85.7. The index's large fall from a year ago suggests that home sales will slow further over the next several months in light of continued weakness in the nation's housing market.

• MBA Mortgage Applications Survey
• Mortgage demand increased 2.5% in the week ending December 7. Purchase applications increased 1.7% and refinance applications increased 4.3%. A second consecutive increase in mortgage applications is a positive sign that could signal improving conditions in the mortgage market.

• Chain Store Sales
• Chain store sales rose 0.2% in the week ending December 8, but year-over-year growth fell to 2.3%, as comparisons were difficult. The ICSC reported that consumers continue to delay their purchases relative to recent holiday seasons.

• Retail Sales (MARTS)
• Total retail sales soared 1.2% in November, accelerating from 0.2% in October. Non-auto sales grew an even stronger 1.8% as auto sales fell. Sales at gasoline stations led growth but core sales grew a surprisingly strong 1.1%. Growth was strong across virtually all non-auto retail segments. Year-over-year growth rose to 6.3% in total and 7.4% excluding autos. October growth was not revised in aggregate.

• Oil and Gas Inventories
• Crude oil inventories fell by 0.7 million barrels for the week ending December 7, according to the Energy Information Administration, below expectations of a 0.1 million barrel build. Distillate supplies fell by 0.8 million barrels, below expectations of a 0.5 million barrel build. Gasoline supplies rose by 1.6 million barrels, above expectations of a 1.3 million barrel build. Refinery capacity utilization fell by 0.6 percentage points to 88.8%. Today's report supports higher oil prices.

Source: Economy.com 2007