Elsewhere

Sure, maybe you or I or we really do want the poor to have more. That means we’ve got to tax ourselves so that we can give them more money. Messing with markets through price fixing just means there’s none for anyone, not more for the poor.

No wonder he thinks demand curves slope upwards

Quite stunning really

To which is appended the comment:

In 2000 there was one company for every 37 people (near enough) in the UK.

Now the number is one for just under 17 people. The number of companies per head of population has doubled this century.

Corporatisation is rampant.

Data is from Companies House and the ONS.

Note that this is excerpted from academic research by someone called a Professor in a modern British university.

He’s got it the wrong way around of course.

Now, anyone can be in error, Lord Knows I’ve been known to make the occasional or more booboo. But it was actually pointed out to him:

dave rigden says:
May 14 2018 at 7:40 am
respectful suggestion- think your title should be heads/company ie reversed

Reply
Richard Murphy says:
May 14 2018 at 8:26 am
No

The number of companies has doubled

Reply

Sigh.

So why are there warning balls on electric power lines?

Driving around here in Sunny Portugal we’ve become a little puzzled.

So, high energy – voltage? – power lines have little balls on them. Different colours, red and white perhaps. OK, that’s fine, it’s obviously a warning. “Here be high voltage power lines.”

And it’s on the top strand of the set going from pylon to pylon. That’s fine.

Could be for birds I guess, something that scares them. Maybe planes? Dunno, but that’s not the question.

Observation (two incidences, you can tell we’re doing science here) says that these balls are only on that line when the lines cross a road. But they’re far too high up to have anything to do with the road. The spans away from the road don’t have the reflectors/birdscarers/whatever on.

So, err, why?

So, who do we believe?

Ritchie told us, at length, that UK stock markets are over valued and about to crash.

Citi tells us something different:

The unpopularity of British shares has driven prices down and dividend yields up. The FTSE All Share index has gone nowhere this year and now yields close to 4pc.

The gap between the dividend yield from the FTSE All Share and the yield available from 10-year government bonds (gilts) – known as the “yield gap” – is a popular valuation metric.

A small gap or negative figure (when gilts yield more than shares) may indicate that the stock market is overvalued, as investors are not being adequately compensated with dividends for the additional risk they are taking by investing in shares.

If shares yield appreciably more than bonds, it is an indication that shares may be undervalued. This carries particular weight during times of high inflation, or when there is the threat of rising inflation, when investors are less willing to accept low bond yields.

The yield gap between British shares and gilts has been increasing since 2013 and is currently at 2.2 percentage points, after a peak of 2.4 points in 2017. The only other years on record in which it has been higher than this were during the First World War, two of the interwar years and during the Second World War, according to data compiled by Citigroup, the bank.

Not that I’d wholly buy the Citi story there. But it’s an interesting valuation metric so why the difference? The Senior Lecturer getting such a different answer?

Ah, yes, that’s it. Back in that Pensions for the Future paper with Colin Hines they showed us the return from gilts against the returns from shares. A calculation where they left out dividend income but included interest income.

A 4% yield makes no difference because they don’t include it.

Sorry, don’t believe it

Researchers have called for an urgent investigation to find an explanation for more than 20,000 ‘additional deaths’ so far this year, amid severe pressure on the NHS.

Figures from the Office for National Statistics (ONS) show that in the first sixteen weeks of the year, there were 20,215 more deaths in England and Wales compared to the previous five years.

Not that I particularly know anything about this subject but, don’t believe it.

The editorial was authored by Professor Danny Dorling of the University of Oxford

Whenever Dorling has pronounced upon something I do know about it’s been bullshit.

So, no, I don’t believe it.

A Department for Health and Social Care spokesperson said: “We keep all research in this area under review, but the ‘age standardised mortality rate’ – which had been broadly stable in recent years – is considered a much more reliable measure, as this type of research doesn’t take into account fluctuations in population numbers and the ageing population.”

My best guess is he’s looking at the wrong numbers so that he can shout “Austerity!”

Stock markets are how you get out of an investment

The reality is that the stock markets do not do the job of supplying businesses with capital anymore. So why are they used as savings mediums when they serve no further social or economic purpose?

Imagine there was no stock market. Any investment must thus be held forever. Anyone who invested in IBM back in the day would still hold those IBM shares. They’d be hugely wealthy of course, but couldn’t sell off some portion of their IBM stock because there is no market in secondary stock.

Well, no, not really, because anyone who invested in IBM back in the day, directly with new stock issues, is now dead. Their estate could not pay any tax upon that stock value, because the stock could not be liquidated to pay the value. Actually, contrary to the above para, they’d not be rich and there would be no inheritance tax to pay either. For there is no secondary market. It’s not possible to sell IBM stock thus there is no value to it.

Given this world what is the required return to invest in a new stock issue? Higher than today’s perhaps? The cost of capital is higher, society is poorer.

Hmm.

This is even before we get to the idea that perhaps savers would like to diversify their portfolios. Or that there are people for whom a stream of income in the form of dividends is a good idea.

Or, even, the basic savings problem itself. I – to use I to mean the rational human being – know that I will work for some portion of my life. I damn well hope that I’ll have some decades of Golden Years in which I will be consuming those savings. I want to be able to consume the capital of those savings of course, not just the income from them. As the lifetime savings hypothesis insists, I want to smooth my income over my life,. That does mean being able to consume the saved capital in my retirement. But how can I consume the capital if I cannot sell any portion of it? There is no secondary market? I would only be able to consume the income from my savings. At death, my total savings would be whatever my peak amount of savings was.

For I’d not have been able to, in the absence of a market in secondary savings, sell any of my capital.

Hey, pretty good for my inheritors, obviously. But then as the Senior Lecturer would insist, we shouldn’t be allowed to pass on capital anyway, should we?

Sigh. The fool still can’t grasp that the point of a stock market is to allow people to sell investments.

And so I ask myself

This is a mistake. A closer look at the arguments being made by these two camps reveals a deeper, more serious intellectual rift. What’s really at play is that feminism has come to contain two distinct understandings of sexism, and two wildly different, often incompatible ideas of how that problem should be solved. One approach is individualist, hard-headed, grounded in ideals of pragmatism, realism and self-sufficiency. The other is expansive, communal, idealistic and premised on the ideals of mutual interest and solidarity. The clash between these two kinds of feminism has been starkly exposed by #MeToo, but the crisis is the result of shifts in feminist thought that have been decades in the making.

Do I actually care?

Umm, no, no I don’t.

As with some of the Senior Lecturer’s output, it reeks of pinheads dancing upon angels.

We can see how this will go, can’t we?

Leave.EU has been fined £70,000 and its chief officer has been referred to the Metropolitan police after the Electoral Commission found it had breached multiple counts of electoral law during the referendum to leave the European Union.

Therefore Brexit shouldn’t happen.

And I’m really not sure that the Remoaners realise quite the rage that such an action would bring about.

Elsewhere

It’s also something that really shouldn’t be happening. For we – and it’s us, in tech, driving it – are in the middle of a technological revolution. The two things simply aren’t consistent with each other, and one of them must be wrong.

We cannot be having lovely new ways of doing things, and also have low productivity growth and low real wage growth. It’s like saying we’re going down uply, something that only happens in Escher drawings – and economics is weird but not that weird.

Sigh

Rod Hull says:
May 9 2018 at 3:38 pm
In round numbers how much money is due to be printed ( using QE ) this financial year by the BoE?

Reply
Richard Murphy says:
May 9 2018 at 4:21 pm
The amount rolled over

I have not checked

It will exceed £20 billion

If it’s rolled over then it’s not printed anew, is it?

That’s lucky then, eh?

Australia’s oldest scientist, David Goodall, has ended his own life, surrounded by family at a clinic in Switzerland.

The British-born 104-year-old was forced to travel on a one-way ticket from his home in Western Australia to Switzerland

As he wasn’t intending to use the return leg of it, was he?

Nice arithmetic here

Chair of the BMA’s General Practitioners’ Committee between 2007 and 2013, Dr Buckman said it is common for GPs to see approximately 36 patients each day, not including walk-in “emergencies” and those seen in out-visits.

This can amount to around 12 hours of face-to-face time with patients and another two hours’ paperwork.

The BMJ article argues the standard 10-minute consultation is too short to examine adequately and treat many patients and that the increased pressure is “now dangerous for doctors and patients”.

If it’s 6 patients an hour then how can it take 12 hours to see 36?

Mentee

Telegraph, you mean mentee here:

Mahathir Mohamad is set to become the world’s oldest prime minster after his opposition party was declared the winner of a fractious general election on Thursday.

After a short and bitter campaign marred by corruption allegations, Mr Mohamad, 92, defeated his former mentor in a major political upset that overturns the government’s 60-year rule, official results showed.

So, a normal part of childhood and growing up then, eh?

Pupils caught drinking from plastic bottles will be treated like smokers behind the bike sheds, the headmaster of a leading private schools has said.

Any students or teachers who brings plastic straws and non-biodegradable cups onto school premises could be punished if necessary, according to Richard Cairns who is head of Brighton College.

Sadly, that’s not what he means.

Very well done from the Spudda here

I cannot stress this appreciation enough. Money is, in our fiat world, cost free for a government. And I think this appreciation is now becoming more commonplace. As I argued:

This new cost-free money supply has meant the effective near elimination of official interest rates as governments can no longer charge for what they can create for free, and at will. In other words, what Keynes could not have foreseen was the ending of interest rate policy as a mechanism for controlling the economy, although that is what has actually happened.

We’re right in hte middle of one of the most successful pieces of monetary policy ever, QE. This is used as proof that monetary policy does not work.

Very well done there, vry wll dne.

Sigh

Gilts

The value of gilts has been distorted by QE; that was its intention. The return has been suppressed but as a result their value has been inflated, these having an inverse relationship with each other.

Corporate bonds

The rate of return on corporate gilts has been distorted by central bank measures to suppress interest rates. This was not the intention, maybe, but by increasing demand for these bonds yields have fallen.

The intention of QE was the effect on corporate bonds. The effect on gilts was the method of creating that desired effect.

Jeepers, this guy teaches, right?

The Professor Of Practice simply does not understand

One of the things its fairly important to get to grips with is costs and benefits. The Senior Lecturer fails:

Costs are costs and benefits are benefits

For he tells us that:

And you wonder why I say I think we need investment in infrastructure? Look at the company we keep in Europe:

read that chart again

That is pretty embarrassing and a damning indictment of UK government policy.

Here’s how Ritchie is reading it. We’ve got public capital like Greece. Spend more!

Here’s how it should be read. Being the richer and further to the right is winning. Being poorer and further to the left is losing.

For what is this chart? The stock of public capital per capita, expressed as a gap from EU average.

That is, this is a chart of the cost of investing in public infrastructure etc. The Professor of Practice insisting that it is shameful, shameful, that the UK keeps company with Greece on such things.

Hmm. But what we should actually be interested in is how rich are we? Not how much we spend, but how rich are we? The UK is richer than all those to the right. But it’s also significantly richer than several of those to the left. Meaning that we’re producing more wealth, more GDP, from less public capital stock. We are, therefore, more efficient at converting capital stock into income.

I dunno, PFI maybe?

But the why isn’t as important, the message of the chart is. The UK produces more, does better, from each unit of its capital stock than poorer countries like Greece, Portugal, Romania and so on do. This is good news for the UK.

Not an insistence that we must SPEND MOAR!

And so the RNLI dies

He said he suspected he was targeted as he struggled with the new form-filling regime, adding: ‘Thirty-four years of service with not one disciplinary mark against my name, and skill, experience, knowledge and the sacrifices that I’ve made count for nothing.’

Darren Lewis, RNLI regional lifesaving manager, defended the charity’s decision to sack Mr Clark. He said it was down to a ‘number of breaches of our policies and procedures’ and followed a ‘lengthy investigation’.

Asked if there was a change in culture at the charity, he said a new management structure meant paid managers were able to keep a closer eye on the activities of volunteer crews at lifeboat stations. He added: ‘Any actions we do take are not taken lightly.’

No, no, the forms are the important thing, aren’t they?