April 2010

Tomorrow, volcanos permitting, I shall be in London:

Title: A plague on all their houses?

Paul Staines of Guido Fawkes\’ blog
Tim Worstall of It is all obvious or trivial except…
Perry de Havilland of samizdata.net

Date: 29th April 2010
Title: 6.30pm to 8.30pm
Location: 23 Great Smith Street, London, SW1P 3BL
RSVP: [email protected]

Friday, if there\’s anyone hanging out in Bath at all, I shall be at the OGT around 6 ish for a swift one or two.

Crowd sourcing metals information

I\’ve been having a quick look around Google and it doesn\’t seem that anyone has already prepared this information. What I\’d like to be told is that I\’m wrong, and that someone has prepared this information. And, err, where that prepared information is…..

What I\’m looking for is information about the rare earth metals. Sc, Y and then the lanthanides, La to Lu (21, 39 and 57 to 71).

But the information I want is about the halides of these metals. The chloride, iodide and fluoride (maybe the bromide as well).

And the information I want is, what is the boiling point of each of these halides of each of the metals?

The reason? Some metals are separated from their ores by being converted to the chloride, turning the chloride into a gas by heating and then doing clever stuff to that mixture of metal chlorides to extract the one you want. (Titanium for example.) It\’s not hugely different in concept from distillation to get different alcohols, or different fractions of crude oil.

I\’ve seen it mentioned that this could be used as a way to separate the rare earths (which are very difficult to separate by the usual chemical means because they are so similar chemically).

What I\’d like is a bit more basic information, as above, so I can mull over whether this is entirely barking mad or whether there\’s something there.

So, anyone got Great Google Ju Ju?

This climate change thing

So what\’s stopping us? Partly cost, says Wolff. Hovering at around 10-20 US cents per kilowatt hour, CSP \”looks a little bit on the expensive side\”, compared with gas at about 5 cents. But this is likely to change when the volumes increase, he says. Indeed, three studies carried out by the German aerospace industry suggest that CSP could eventually become one of the cheapest sources of electricity in Europe. \”Until about 2017, electricity from CSP will probably be more expensive,\” concludes Wolff. But then, as economies of scale kick in, it will become cheaper and increasingly attractive.

As I keep noting, I really don\’t think that, even if we take everything the IPCC is saying as gospel truth, that climate change is going to be as big a problem as everyone else seems to think. As and when non carbon (solar isn\’t non carbon but it is low carbon) electrcity generation is as cheap as fossil fuel including carbon costs then we\’ll all naturally switch to it.

We\’re not far off that point as it is. When we get there then all we have to do is wait as the capital cycle replaces the wearing out fossil fuel systems with the new cheaper non fossil fuel systems. Here in Europe we\’ve already got the carbon taxes/cap and trade permits needed to price carbon properly. The technological advances are creating those non carbon generating systems at the right sort of prices.

We\’re done pretty much. The systems we needed to put into place to generate these technologies have done so: we\’ve already done what we needed to do.

No, I mean it. Once we\’ve got cheap non fossil fuel electricty everything else falls into place.

Not the best of examples

A 33pc rise that easily outstrips the 20pc average for the semi-conductor industry. Who says we don\’t make things anymore? Almost 98pc of mobile phones now have an Arm chip inside them, with most phones having more than one. Drop that expensive iPhone, for example, and you will find at least five Arm chips inside.

Really not the best of examples. For of course you won\’t find any chips at all \”made by ARM\” inside an iPhone. For, famously, ARM doesn\’t in fact \”make anything\”. They make the designs for other people to make things.

I agree absolutely that ARM is an excellent addition to our economy. Those 1,700 highly paid and very bright people are adding value like Billy Oh. They\’re making us all vastly richer through the value their designs produce (and by far, far, the majority of that value flows to us as consumers of the products containing the chips. By one analysis 97% of the value flows to us and only 3% to those innovators.).

But the point is that they don\’t make anything and yet still add this huge value.

Which leads us to a couple of interesting points: you don\’t have to manufacture things in order to create value. And you don\’t need to consume physical resources in order to create value. Thus it isn\’t true that only with manufacturing can you have a strong economy nor is it true that GDP growth (or economic growth if you prefer) is constrained by the finite amount of physical resources available on a finite planet.

That ARM doesn\’t make anything is disproof of two very common misconceptions.

Moral obligation towards clients

It\’s not easy feeling sorry for Lloyd Blankfein but I do here:

Lloyd Blankfein has admitted that he believes Goldman Sachs has no moral obligation to tell clients it is betting against a product it is asking them to buy.

The very act of selling something to someone is a bet against that product.

If I were convinced that BP shares were worth more than £5 then I wouldn\’t sell them to you at £5 would I? That I am willing to sell them to you at £5 means that I think £5 is worth more than a BP share.

I am, by the very fact that I\’m undertaking a transaction with you, showing that I think you\’ve over valued the item. This is as true of apples, houses, bales of hay and stocks, bonds and collateralised debt obligations as it is of anything else.

Greek bonds downgraded

The downgrade put Greece on par with Romania and below Kazakhstan, Hungary and Iceland, the last of which rocked global markets when its main banks imploded at the start of the global financial crisis.

S&P also assigned a recovery rating of \’4\’ to Greece\’s debt issues, indicating its expectation of \”average\” (30-50 percent) recovery for debtholders in the event of a debt restructuring or payment default.

Worse than Iceland?

50 to 70% haircut?

To be honest I\’m really not sure why the Greek Govt isn\’t just saying \”OK, game\’s up\”. Negotiate the haricut with the bond holders and get it over with.

Yes, they\’ll still have the deflation, still be in the euro, but without the debt spiral.

When factchecking goes wrong….

The Times looks at some claim about trade and jobs. And they seem to have fallen foul of a corollary of Muphry\’s Law. Perhaps we might call it Worstall\’s Corollary to Muphry\’s Law: any piece of fact checking will contain an error even more glaring and nonsensical than the original claim being fact checked.

last year Britain exported goods and services worth £3.4bn to the EU, and imported £3.5bn – out of total global trade of £14bn.

Quite where they\’ve got these numbers from I\’m not sure but my best guess is that they\’ve come from here.

But they\’ve managed to use the monthly figures for the trade balance instead of what they claim they\’re using, which is total annual trade.

Just to put this in context. They\’re claiming that total trade is 0.1% of the UK\’s GDP of £1.4 trillion. Whereas it\’s somewhere in the 50-60% range.

And that 3.4 and 3.5 add up to the £6.9 billion which was the total trade deficit in one recent month.

I think we can put this down as a fail, don\’t you?

Although I will admit to a certain joy at quite such a glorious exposition of Worstall\’s Corollary to Muphry\’s Law.

(And yes, there\’s bound to be an error in this post.)

Yes, this is interesting

Your perspective, though, gets a bit skewed. Strangely, whereas all the best blogs in Britain veer towards the Right, all the most entertaining people on Twitter seem to veer towards the Left. I don’t think it’s just the people I follow.

Left-wing blogs become dreary and earnest, but right-wing tweets (aaaagh) are functional and dull. There’s a great human truth in here, I think. I just can’t figure out what it might be.

Err, that lefty thoughts are so banal they can be put into 140 characters while righty thoughts are more nuanced and balanced?

Because righties, being privately educated, can actually write?

That righties are verbose and cannot get their thoughts into 140 characters? That righties, being privately educated, cannot in fact write and get their thoughts into 140 characters?

And your thought on this is?

John Mayer

I\’ve only just heard of John Mayer (yeah, I know, really up to date I am) and I was really rather surprised.

He did a version of Stevie Ray Vaughan\’s \”Lenny\”:

Here\’s a live version of the original.

Now is it just me being picky or does Mayer not quite manage to carry it off? He sounds to me (and I\’m certainly no expert) to be struggling a little bit with a piece that is simply too technically complex for him.

Not being able to play like Stevie Ray is of course no shame. But am I the only person to hear it this way?

On the cost of that financial system bailout

Just a thought:

The taxpayer is sitting on a profit of close to £10bn on its stakes in Royal Bank of Scotland and Lloyds Banking Group after a surprise surge in their share prices.

You know, all these people who have been saying that banks must be taxed more to pay back what they\’ve cost the Treasury.

Now that the Treasury\’s in profit, so, err, do taxes on banks get cut then? To account for the negative cost to the Treasury of the bailout?

Or is there some reason that it doesn\’t work like that?


Via, here.

Jen McCreight, a self-described atheist, feminist and geek “trapped in Indiana,” took issue with Hojatoleslam Kazim Sadeghi’s message during Friday prayers in Tehran, the Iranian capital.

The hard-line cleric, who was standing in for Supreme Leader Ayatollah Khamenei, said women who dress provocatively – thereby tempting men – are to blame for the world’s temblors…

McCreight, who is pursuing a double major in genetics and evolution, took to her blog, Blag Hag, on Monday, demanding that the world’s women band together in a scientific experiment to test the merits of Sadeghi’s hypothesis.

“Time for a Boobquake,” she wrote. “On Monday, April 26, I will wear the most cleavage-showing shirt I own. … I encourage other female skeptics to join me and embrace the supposed supernatural power of their breasts. Or short shorts, if that’s your preferred form of immodesty.”

She continued, “With the power of our scandalous bodies combined, we should surely produce an earthquake. If not, I’m sure [Sadeghi] can come up with a rational explanation for why the ground didn’t rumble.”

What fun and can we make it a daily event?

Sadly, of course, it won\’t work, for Diocletian was right. It\’s Teh Gays which cause earthquakes, everybody knows that….

Oh well done Ritchie!

Quite marvellous. So, our favourite retired accountant notes that crime is increasing in the Cayman Islands.


To Ritchie this is clearly to do with the fact that the whole place is simply a bunch of gangsters, Vampire Squids sticking a straw into the bloodstream of the global economy.

Only occasionally, but persistently none the less, have I argued that their business models are also deeply and fundamentally dangerous to the people who live in the small island secrecy jurisdiction.

There are two reasons why I have argued this. First of all, is is obvious in the case of the Crown Dependencies, Cayman and others, the model is incapable of funding the necessary functions of government.

Second, as in Turks & Caicos and Antigua, corruption has destroyed the state already.

This social unrest is spreading. You cannot build a state on the corrupt premise that is inherent in the abusive structures promoted by secrecy jurisdictions – structures that were always and solely designed to facilitate crime and, I will candidly suggest,  for no other purpose – without crime spreading, including in your home jurisidiction.

Cayman is the latest jurisdiction where this is being seen. It is suffering enormous tension in an island of just 55,000 people, an outbreak of violence and murders and has an inability to now police itself – showing how absurd is its claim to be an independent territory.

Cayman is collapsing fiancially.

Cayman is collapsing as a society.

Who knew accountancy could have such effects?

Looking at his actual source document though shows something a little different:

To counter the crime rise, the police commissioner cancelled all rest days and vacation for police officers and put them on 12-hour shifts. Nonessential services were suspended to boost police visibility on the streets.

Drawn from a number of Britain\’s police forces, the reinforcing officers, who will be on four- to six-week assignments, were investigators and detectives with expertise in running murder inquiries and tackling gang-related crime.

\”It is not about bringing in a SWAT team,\” said Baines. \”It\’s about filling in the skill shortfall we have because our existing detectives are stretched.\”

Like most of the local police force, the reinforcements will not carry firearms, but will be backed up by armed officers if the need arises, a police spokesperson said.

Varying factors like the release of violent gang members from prison, a greater prevalence of firearms and leadership battles appeared to be contributing to the violence.

Gangs, which gained a foothold in the Caymans in 1996, have been involved in transhipment of drugs to the United States, as well as in the local drug trade, said Detective Chief Inspector Patrick Beersingh of the Joint Intelligence Unit.

Shipments of marijuana and cocaine from South and Central America are brought into the Cayman Islands via Jamaica, Honduras and Panama and then moved on to the United States. So-called Jamaican canoes also frequently smuggle in guns.

Police say there are some 30 criminal gangs in the Caymans with names like Jamaican Posse, Central Crew, West Bay Mobsters, East End Crew, Fern Circle and Wild Dogz. They each have special hand signs, colours and tattoos.

Ah, the islands are being screwed over by exactly the same thing that is screwing over Northern Mexico (a place which, we might note, doesn\’t have any offshore financial system): the absurd prohibition of drugs in the US and the military nature of the \”War on Drugs\”.


So people do understand money then?

We\’re often told that people don\’t understand quite what average incomes are and so on. However, it seems that people do have a pretty good idea:

THE average Briton would need a home worth £500,000 and a salary of £42,000 before considering themselves “well-off”, a study revealed yesterday.

They would also need two foreign holidays every year and have more than £33,000 in savings and investments to be financially content.

This was a poll of some 3,000 people asking what do you think you need in order to be \”well off\”?

And the results are quite good really. £42k puts you in hte top 10% of incomes and £500k in housing wealth plus some savings and perhaps a pension as well put\’s you in the 8th or so percentile in terms of wealth. (The 9th percentile is £850 k or so).

So what people think they need to be \”well off\” corresponds quite closely with what the well off actually have.

Not a bad idea actually

Some stories do leak — such as the 2005 memorandum of our Ambassador in Poland, Charles Crawford, who suggested that Tony Blair, concerned about attacks from the “scary new teenage” Tory Opposition, should start a forthcoming EU negotiation by putting a “large naff children’s alarm clock” on the table to make it clear that time was running out on the egregious Common Agricultural Policy (the “most stupid immoral state-subsidised policy in human history, give or take communism”).

Certainly a reasonable description of CAP….although we do have to leabve room in there for rent control as well, the most dangerous policy to blight urban areas short of all out war.

From Robin Hood\’s Merry Men

According to the IMF, G20 rich countries have experienced an average 40 per cent decrease in their overall GDP since the beginning of the crisis.


4% would be closer (if a little low)….or have we just had a second Great Depression and no one bothered to tell me?

Ritchie want\’s to raise taxes on the poor

In fact, he wants to raise taxes on everyone. In his \”accountant\’s manifesto\” we have:

Deny tax reliefs of more than £5,000 a year to any person to prevent wasteful tax planning

The personal allowance is a tax relief. The personal allowance is currently £6,475 a year.

Therefore not only will that have to be reduced (and the elderly will lose their higher personal allowances etc) but no one will ever be able to claim any other form of tax relief at all.

I\’m unconvinced that this is a good idea really.

The rest of it is just as bizarre:

All accountants to be required to subscribe to a Code of Conduct requiring that they comply with the spirit as well as the letter of all law…


Companies to have a duty to stakeholders equal to that of shareholders

That\’s not actually possible. For the interests of stakeholders conflict at times.