December 2009

Mishcon de Reya, libel law, blogs and Dr. Pachauri

Well, and newspapers too.

In my opinion this is just Dr. Pachauri being a tad sensitive about all of his business links.

I mean, really, how could anyone even think, let alone accuse him of, an international bureaucrat feathering his own nest?

No, no, all these fees and payments from people with an interest in carbon trading and so on are simply the minimum due to hte head of the IPCC: after all, we do have to save the world, don\’t we?

It\’s absolutely correct that his lawyers should send a letter to those presumptuous enough to peek into his dealings.

Wouldn\’t have thought that there\’d be all that much atremblin\’ and ashakin\’ going on though. Christopher Booker\’s been at Private Eye right from the start after all. Seen more than one generation of lawyer off.


I had a fantasy in which the Fed and the TSA (Transportation Security Administration) switched roles.

If a bank failed at 9 a.m. one morning and shut its doors, the TSA would announce that all banks henceforth begin their business day at 10 a.m.

And, if a terrorist managed to get on board a plane between Stockholm and Washington, the Fed would increase the number of flights between the cities.

Absolutely fascinating

Both Ritchie and the TUC are excited by this new IMF paper.

Those financial institutions which spent more on lobbying in the US issued more dodgy mortgages and required more help after the crash.


Now that is a surprise: when a sector is regulated then those being regulated will spend money on politicians to try and amend that regulation. And it\’ll be the dodgier characters that struggle the most to amend the regulations their way.

Of course, our two intellectual heavyweights think that this should lead to more regulation: not noting that this will of course mean more lobbying. And no, you cannot ban lobbying, not in the US. It\’s a constitutional right to be able to petition the lawmakers……as of course it should be.

However, there\’s also one interesting detail that all three, yes including the IMF, have managed to entirely overlook.

Who were the largest financial sector lobbyists? Who spent, by far and away, the most on attempting to bend the law to their will?


Fannie Mae and Freddie Mac spent $7.4 million on lobbying in the first six months this year — $2.9 million by Fannie Mae and $4.5 million by Freddie Mac. Their $174 million in combined lobbying expenses since 1998 put the two companies just behind the U.S. Chamber of Commerce and the American Medical Association and ahead of General Electric Co., according to the Center for Responsive Politics, a nonpartisan Washington-based group that tracks money in politics.

You mean that the Government Sponsored Enterprises, the ones that went bust with such a resounding smash, are the ones that lobbied most for changes in legislation? (Note that this lobbying expenditure was an order of magnitude larger than that by Countrywide, a company that the IMF report tuts at.)

You mean that it was at the nexus, the collusion point, between government and finance that the real problem occured? You mean that the structures entirely dependent upon the politician\’s will shoveled the most money to the politicians?

Colour me unsurprised quite frankly.

Also colour me unsurprised that neither Ritchie nor the TUC see fit to mention this point: and the IMF are very naughty boys indeed for not making it clear whether they have included the GSEs in their calculations or not (and lord alone knows what the figures would be if we included Sallie Mae and the rest of the alphabet soup).

Public education for thee but not for me

A very catty yet interesting line:

As I’ve said before, what always struck me about Obama’s appointment of Duncan to run the nation’s schools — and he is actually moving to do just that, more so than any previous federal administration — is that Arne Duncan ran the Chicago schools for seven years, and in that time he didn’t manage to produce a single school that the Obamas chose to send their own children to.

Ah, Americans

A USian friend has emailed in perplexity about my use earlier of the phrase \”whippet flange mills\”.


He tried to look it up on Google. Along with Ecky Bah Thump as a comestible and flat cap emporiums.

I told him to think Jeff Foxworthy on rednecks to get an idea of the meanings.

Anyone do better as definitions?

More on that PETN bomb

The WaPo reports:

But preliminary conclusions indicate that he allegedly used 80 grams of PETN — almost twice as much of the highly explosive material as used by convicted shoe bomber Richard C. Reid.

I\’ve no idea….is that an amount large enough to do serious damage or not?

No, not quite

HOUSE-hunting millionaires should head North for more than four times better value, according to the Halifax.

A prestige property on the dearest street in the South costs more than £5million but a similar deal in the North is just over £1million.

This is of course to ignore the point continually made by the (us?) land value taxers.

The value of a particular property is set by the value of the community around it. So of course places in the north are cheaper for they\’re north of Watford Gap. You know, flat cap emporiums, whippet flange mills and strange comestibles like Ecky Bah Thump. Whereas south of The Gap we have civilisation.

Huge Surprise!

Britain\’s leading companies are devising pay schemes that enable top executives to escape the new 50p rate of income tax for high earners that takes effect in April, the Guardian has learned.

Really, who would have thought it?

The details look rather interesting though:

A number of pay plans are currently on the drawing board and differ subtly from the current schemes used in Britain\’s biggest boardrooms. Many of them seek to re-classify executives\’ income as capital gains, which attract a lower tax rate.

Most pay schemes for FTSE 100 executives are currently based on awards of shares or options that are linked to performance criteria over three to five years. The income tax is paid when the shares or options actually \”vest\” (when the executive gains control of them).

But the new schemes being drawn up are based on a system known as restrictive stock. These seek to shift most of the tax liability to a capital gain on any profits made at the end of the three- to five-year period when the shares vest.

They use complicated financial instruments to minimise the income tax paid by the director when the stock is received and transfer some of the economic risk to the executive.

There is, of course, no such thing as a free lunch. So (assuming The G has got these details rioght, on tax matters not a given), in order to move this from income to capital gain there has to be an assumption of some economic risk by hte recipient.

In effect, the options vest into restricted stock which must be then held for a few years.

And this is something we\’d rather like to happen anyway. We like restricted stock, we like tying the payment for performance now to how that performance plays out over the next few years….rather, than, say the effect of accounting highjinks on next reporting period\’s profits.

It\’s going to be interesting seeing the reation of the usual suspects. Which emotion will win out? Anger that they\’re trying to avoid tax or a welcoming of the tie between pay and long term performance which they also campaign for.

This new invisible explosive

About this Flight 253 thing:

Abdulmutallab, the privately-educated son of one of Nigeria’s most prominent bankers, managed to smuggle his bomb aboard the aircraft by strapping a condom filled with the high explosive PETN to the inside of his leg and then attempting to detonate it using a syringe filled with a liquid chemical. The PETN powder caught fire but did not explode, sparing the lives of all those on board.

Investigators are worried that AQAP has developed what is effectively an “undetectable bomb” involving PETN that can only be found by using expensive and intrusive full body scanners at airports, with huge implications for airport security.

PETN ain\’t new. First World War German uses are known for example.

But skimming the Wikipedia page I don\’t see that it\’s really all that much of a problem. OK, so there\’s this liquid used to ignite it.


You still need two things. You need an actual explosion, not a fizzle. And (and this is where I could be very wrong) usually an explosion isn\’t caused actually by the explosive. It\’s caused by the containment of the explosive. Set off a pile of gunpowder and you get an interesting fizzle. Contain the gunpowder and as it burns, the pressure rises, then you get the explosion from the bursting of the containment.

The second thing you need is that liquid. And how much liquid are you allowed to take into a cabin these days?

Quite, So how much explosive can you set off with your 100 ml? Even if you can contain it are you going to get anything more than an interesting pop?

I agree that I could be wildly wrong here and that this is simply mildly informed speculation. But might we not be in a situation where the system really is working? The current regulations mean that even if PETN is undetectable, the restrictions on liquids mean that no one\’s going to be able to get enough together and explode it on a plane to actually do any damage?

Erm, right Sir David

These astonishing images from Sir David Attenborough\’s long awaited Frozen Planet series could be the last time many species are filmed in their natural habitats because of the devastating effects of global warming, the show’s producer has claimed.

The Telegraph illustrates this with a picture of a dog.

Very threatened is the dog\’s habitat.

Shock horror over the NHS!

David Cameron meets some radicals!

It says a hugely slimmed down NHS should remain only as a \”last resort\” provider for those who cannot afford private health care. The vast majority of people would get care through insurance schemes or simply pay themselves.

It also calls for controversial \”top-up\” care to be brought in now, so that people currently using the NHS can pay extra to get better treatment, drugs and services if they have the money.

Jeepers! How dare they!

Advocating something like the French health care system, routinely announced by the WHO to be the best in the world.

What is the world coming to?