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November 2008

So much for the Indian Navy then

The "pirate mothership" destroyed by the Indian Navy in the Gulf of Aden last week was actually a Thai fishing boat that was itself being hijacked and whose crew was tied up below decks.

The sunken vessel, which was destroyed by INS Tabar, an Indian frigate, on the night of November 18, was the Ekawat Nava 5, a deep sea trawler – not a floating pirate armoury loaded to the gunnels with supplies of ammunition and explosives as India had claimed.

Wicharn Sirichaiekawat, manager of the Bangkok-based Sirichai Fisheries, the ship\’s owner, said that the true story emerged when one of his crew was found alive, adrift in the Indian Ocean, but that 14 others were still missing and at least one dead.

The story was confirmed by the International Maritime Bureau, the marine watchdog.

Sigh.

Weird, just weird

Sir James Crosby, a former chief executive of HBOS, told ministers that for the first time since records began, banks and building societies are likely to take in more in mortgage repayments next year than they give out in new loans. Such negative net lending could push house prices into a new “self-feeding” downward phase, he said.

This development is said to warrant even the possible nationalisation of all the banks. Certainly, it\’s being used as an argument that banks must open up their books to the Government.

However, I\’m not sure that there\’s actually anything odd here at all.

Imagine that the banks were funding exactly the same number of mortgages this year as they were last (they\’re not, we know, but just imagine). House prices are steeply down this year from last. Imagine that this drop was 10%.

OK, so last year the banks financed (imagine) 100,000 transactions at £100,000 each. That\’s £10 billion isn\’t it? (or is it 100 billion….not very mathematical this morning). Prices have fallen so now they\’re financing 100,000 transactions at £90,000….meaning that there\’s been a fall in mortgage lending but no fall in market activity.

No, I know this isn\’t what is actually happening….but it is part of what is happening. The volume of money lent on mortgages has, in part, fallen simply because house prices hjave fallen.

 

The French Agriculture Minister speaks out!

Here.

It\’s the usual hogwash.

But Europe\’s focus must be on encouraging the development of local agriculture. Doing so is the only way to achieve greater global food security and reduce poverty. It will also make it possible to ensure that today\’s high prices for agricultural products are transformed into opportunity for poor farmers. This is vital because, according to the World Bank, growth in farming eliminates poverty twice as much as growth in any other economic sector. Indeed, agriculture remains the primary productive sector in the world\’s poorest countries, employing 65% of the working population and, on average, contributing more than 25% to GDP.

Twat. If agriculture is such an important part of poor country economies then the one thing we don\’t want to do is encourage localism. We want to encourage trade, so as to grow the value added in that important part of the economy.

Further liberalisation of farm trade will not ensure food security.

Cretin. Of course more trade will increase food security. By sourcing food from multiple sources, from different parts of the world, we\’ll be free of the effects of purely local phenomena like drought, floods and so on that destroy crops.

But, in a world where productivity differentials can be as great as one to 1,000, it would be unwise to rely on markets alone to enable the poorest countries to expand their economies.

Moron. It is precisely because there are such variations in productivity that we want to have trade. If, to use entirely made up numbers, one hour of human labour will produce 1 kg of rice in one place and 1 tonne of rice in another then of course we want to grow the rice in the latter place and trade it for whatever can be done with that 999 hours of net labour saved. That\’s what trade is for, it\’s the very definition of wealth creation to do such things.

Nor is it likely that much economic expansion will result from competition between multinational food distributors and producers in countries where famine still stalks the land.

Idiot. Food will be in greater supply and cheaper if the more productive producers and distributors get involved. Isn\’t that actually what we want?

Instead, bringing together outside expertise and local knowledge of the geography and environmental and economic constraints in order to spread risks and share the management of resources and projects is far more likely to help poor countries achieve food independence.

Flaphead. We don\’t want countries to achieve "food independence". Just as we don\’t want cities, towns, villages, families or individuals to do so. We want people to trade with each other for it is this division of labour and specialisation which makes us all so stinking rich. Even a Frog might have noticed the connection between not being crouched over a hoe in the fields and being wealthy.

It was such an approach that, in less than 20 years, helped postwar Europe achieve food sovereignty.

Twit. As above, we don\’t actually want food sovereignty, just as we don\’t want car sovereignty, wine sovereignty or iPod sovereignty.

Countries that have protected their agricultural development from the threats posed by international markets – such as India or Vietnam – have achieved substantial reductions in agricultural poverty.

Blatherer. Countries which have not so protected their agricultural development, like, say, Canada and Australia, have abolished agricultural poverty.

The time has also come to prioritise agriculture in order to ensure growth with a more human face. At the heart of the EU, France wants to play its part in a collective effort that is fast becoming a major issue for us all.

And that\’s a Frenchman talking to you. Give us your money so that we can pay off our tiresome peasantry.

No. Michel, please do just fuck off.

Quite

But we ought to uphold the right of the British National Party to express its views, however vile, after Merseyside Police arrested 13 of its members for distributing leaflets. I\’m afraid that free speech means freedom for fools and scumbags, too.

Umm, George?

The effects of melting permafrost are not incorporated in any global climate models.

That\’s a bit of a surprise actually

Dramatic changes to the lives and livelihoods of Arctic-living communities are being forecast unless urgent action is taken to reduce greenhouse gases, according to the Intergovernmental Panel on Climate Change (IPCC).Its Working Group II predicts wide-ranging thawing of the Arctic permafrost which is likely to have significant implications for infrastructure including houses, buildings, roads, railways and pipelines. A combination of reduced sea ice, thawing permafrost and storm surges also threatens erosion of Arctic coastlines with impacts on coastal communities, culturally important sites and industrial facilities.

Errrm….

To get an ID card, people will have their faces scanned and will have to give 10 fingerprints.

Campaigners fear that this will put off celebrities like American singer Madonna from setting up home here and so damage the cultural life of the nation.

Now I give way to no one in my hatred of ID cards but really, Madonna not being here would be a benefit to the cultural life of the nation, no?

Memes

Apparently this one is doing the rounds again.

"Editor: Steve Harvey".

Any five of you bored enough to carry this on can consider yourselves tagged.

This bit…

From 2011, if Labour win the next election, earnings above £150,000 will be taxed at a new higher rate of 45 per cent. The new higher rate of tax – the first income tax increase in decades – will raise £670m a year.

Trivial….the politics of envy, no more. At current rates of spending this is something like 0.1% (yes, one tenth of one percent) of the total tax take. Meat for the success hating classes, nothing else.

Mr Darling\’s tax increases will begin in 2010 – before the expected date of the next election – with changes to the tax-free personal allowance. At the moment, no taxpayer has to pay income tax on the first £6,035 of their earnings – a tax saving worth £1,207 per person.

However, from 2010, those earning more than £100,000 will lose half their personal allowance – adding more than £600 to their annual tax bill. Those earning more than £140,000 will not get any tax-free allowance.

This creates a couple of oddities in the marginal rate that (some) people face. But not important ones I think. Dependent upon the details those earning £139,999 and getting a £1 pay rise will see a reduction in take home income. But at that level I don\’t think that anyone does get a £1 pay rise, so I doubt that it\’s of any importance.

 

 

Honeymoon disappointments

This really sounds rather bizarre:

Around 10 per cent of newly-married women are seeking counselling to cope with their "secret sadness", according to psychologists.

Many are turning to marriage guidance websites for reassurance about what they should expect after the excitement of their big day wears off.

Did anyone really ever believe the "get married, live happily ever after" bit?

Still provides an opportunity to retell an old joke, from back in the day when sex was something that happened after marriage rather than before.

Niagara Falls has been the second biggest disappointment for many a newly wed bride……

Cable\’s logic

Seems rather illogical actually. The bankers weren\’t creating value but were getting high pay. So we should tax them more.

Instead, he suggests cutting taxes immediately for those on lower incomes, balancing this out by raising those for the wealthier. Although in the LibDems\’ proposals this is gained through clampdowns on capital gains tax and tax avoidance schemes, Cable is also theoretically in favour of higher tax rates for the bigger earners instead.

It is a traditional LibDem policy, but one which is becoming ever more popular in the wake of the financial crisis.

Says Cable: "I think we are living in a world which has moved further to the left than a year ago, and it\’s probably caused by the meltdown in the financial system; by the realisation that people who were being paid extraordinarily high bonuses in the City were not actually wealth creating at all, but were creating a vast pyramid selling scheme that has caused gross financial stability. This was not reward for wealth creation; it was reward for excessive risk-taking and ultimately for failure – and that has fundamentally changed peoples\’ attitudes."

Except, you see, those bankers ain\’t gonna be making those high incomes any more, because there ain\’t no profits to pay them from. So what he\’s actually suggesting is that we should raise taxes on those who are still creating value, those with high incomes not in the banking sector.

Which really doesn\’t sound all that sensible. Punish those who didn\’t contribute to the mess as a way of punishing those who did?

Yes, Harry Harperson should perhaps have done this.

He had an unerring eye for the approach which would rankle most with his recipients. Writing to Harriet Harman, then of "The National Council for so-called Civil Liberties", he began: "I saw you on television the other night… Why should an attractive lass like you want to confuse her pretty little head with complicated matters of politics, jurisprudence, sociology and the so-called rights of man? Leave such considerations to us men, that\’s my advice to you. A pretty girl like you should have settled down by now with a husband and a couple of kiddies." If she must work, he continued, she should consider a career such as "that of model, actress, ballroom dancing instructor or newsreader", before enclosing a pound for her to buy a pretty dress and urging the future MP to get in touch with "my friend Lord Delfont".

Cutting VAT (might not) won\’t work

Wish I\’d thought of this myself. But I didn\’t.

Between businesses of course the VAT rate doesn\’t matter, unless you want to argue minor points like cashflow.

In order to work, to provide a fiscal boost, VAT needs to change the prices paid by consumers in the shops.

But prices aren\’t determined by anything so logical as taking costs, adding a margin and then adding VAT. For almost all products, prices are set at "price points" which roughly approximate to what you would get if you did indeed do that calculation.

If by calculation you end up with a price of £1.03 then you\’ll probably have a retail price of 99p and take the lower margin. Ditto calculation to 96p and take the higher margin at 99p. Or £410 and £399 and £370 and £399.

So if items are priced at these price points, at £0.49, £0.99, £4.99, £49.99 and £499.99….how much difference is 2.5% off the 17.5% rate of VAT going to have?

Other than to widen retailer\’s margins, of course?

In other words, will the consumer see anything other than the most marginal benefit?

Further, let\’s say that it is indeed retail margins which will benefit from this. That will indeed turn up in their profit margins. Which we\’ll all be seeing the reports of in 14-18 months time.

Errm, that\’s quite a long time to be waiting for the visible effects of a fiscal boost, isn\’t it?

I guess the real measure of the effectiveness of this, umm, measure, depends on how much of consumer spending is subject to pricing at price points. Anyone know?

Civil servant stupidity

Then his South African friends asked him how he did it. He typed up some sample multiple-choice questions for them, all based on his swotting-up of Life in the United Kingdom, the Home Office text on which the official exam is based. They passed. So he put his questions and some coaching notes on his blog and lots of people started using them. They passed. So he published a book that now outsells a Clarkson. Damned successful foreigners. With their brains. And their ingenious ideas.

His books, he tells me, are not popular with the Home Office. If candidates turn up at an exam clutching a Red Squirrel publication, they are informed that they have been using the wrong material. Clearly, the civil servants are unhappy that someone is attempting to make sense of their test. Until Dillon came along, they had refused to publish any sample exam papers. When he published 400 of his own questions, which proved uncannily prescient, their shroud of mystery was lifted.

Essentially, this bloke has published a crammer to help you pass the citizenship test.

You\’d think that this was actually a good thing, something to be welcomed by those administering the tests, no?

Apparently not. I can\’t for the life of me work out why though.

The purpose of the test is to make sure that those who gain citizenship know about the country they are gaining citizenship of, no? So teaching them about the country they are gaining citizenship of sounds like a very good idea really.

The opposite argument is absurd, akin to demanding that those taking A levels should be those who have never been to school.

So what are the bureaucrats up to?