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November 2011

Twattery

At its root, shopping serves one crucial purpose: it defines communities.

Bit strange to see a lefty defining community by how we satisfy our consumerism.

I thought community was supposed to be the opposite of that or something?

This does not mean what you think it means

But Jochen Flasbarth, president of the Environmental Protection Agency in Germany, who advises the German government, said: \”We are not missionaries, and every country will have to find its own way in energy policy, but it is obvious that nuclear plants are too inflexible and cannot sufficiently respond to variations in wind or solar generation, only gas [power stations] do.\”

This is used as an argument to not build nuclear but to build instead wind and solar backed up by gas.

But total emissions would be much lower if one built nuclear, did not have the gas back up and completely forgot about the wind and solar.

For, leaving aside that back up thing, nuclear emissions are around and about, total lifecycle, the same as wind and some one third of solar.

The low carbon option is thus nuclear.

Gosh, this is interesting

The UK\’s oldest environmental NGO has been forced to close after government cuts to local authority budgets drastically reduced its income.

Formed as the Coal Smoke Abatement Society at the end of the nineteenth century, Environmental Protection UK provided expert analysis on air quality and, more recently, contaminated land and waste issues. But over the past two years, the Brighton-based charity has faced severe financial challenges due to the coalition\’s cuts to local authorities, which purchase its products and services.

You mean a non-governmental organisation cannot survive without government money?

Not very non-governmental then, was it?

Nice idea: probably won\’t work though

However, evidence suggests that family-owned companies run by sons or daughters on average under-perform their professionally managed peers.

The Business Department is expected to encourage wider use of external expertise and non-executive directors on boards as part of a package of measures.

All mid sized companies that recognise they have reached the limits of their own skills are set be helped to bring in outside expertise. The Institute of Directors is understood to be drawing up a database of experienced non-execs as a new resource. Business schools could also be asked to redesign their MBA programmes to accommodate the needs of family owned companies.

All very nice: but a large part of what the management of large companies does is actually deleterious to the performance of the company. It\’s only possible for them to do it because the margins and buffers of a large company can absorb the waste.

In medium sized companies salesmen go and sell. In large ones they have diversity meetings.

OK, that\’s not quite true, but I can\’t remember whether it\’s Peters or Parkinson who points out that the best way to bankrupt a medium sized business is to bring in the ex-Chairman of a large one. What he\’ll spend on redecorating the executive suite is what a medium sized business would spend on developing the next version of the product.

They\’re just not the same worlds and the skills (hah!) aren\’t transferable in quite the manner people seem to think.

And asw to small business: how many people in a large corporation have ever thought about cash flow? And how many (surviving) small businesses think about virtually nothing else?

Ssssh…..don\’t tell Ritchie!

UHY Hacker Young said the extra investigations and more aggressive stance by the HM Revenue and Customs risks making the UK a less attractive jurisdiction for businesses.

“The Government and HMRC now seem to believe that they found the secret of alchemy,” said Roy Maugham, tax partner at the firm.

“All they need to do is invest more money in tax investigations and compliance work and the extra tax income will keep flooding in.

“The reality is that much of the money that HMRC collects from compliance work is from businesses that feel intimidated into settling or where HMRC is able to outspend a less well-resourced small or medium sized company.”

Mr Maugham said many UK companies have moved their domicile overseas to Ireland, Switzerland and Malta not just because of the UK’s high business taxes but because of the increasingly aggressive attitude of HMRC to tax collection.

“There is a downside to their tough approach,” he said.

The lost tax revenues from businesses that have avoided setting up their headquarters in the UK could be far more costly to HM Treasury than the short-term boost from the increased compliance take, he said.

Short term elasticity and long term elasticity can be quite different you know. But of course we mustn\’t tell Ritchie that as that is neo-classical economics, the stuf he insists isn\’t true.

The Real George Osborne

Yes, it\’s stunt by the World Development Movement.

You remember, the idiot Teenage Trots who want to kill the Third World poor by increasing the volatility of food prices and reducing the integration of the world food chain.

Deborah Doane, director of the World Development Movement, said: \”We hope that this campaign, with genuinely funny content and such an exciting star at its centre, will bring this important issue to people in a way that is compelling and interesting.”

Yes love, your campaign to kill poor babies really is something to be celebrated with some comedy clips, isn\’t it?

Fuckers.

There\’s a problem with this sort of statistic

One set of data shows children’s average vocabulary scores at the age of five – when pupils start compulsory education – and ranks them from one to 100.

Children with highly educated parents in Britain – those who had at least a degree – ranked 67 on average, while those whose mothers and fathers left school with few qualifications had an average rank of 29.

The 38 point gap was “significantly larger” in Britain than in all countries other than America, where it extended to 46 points.

The problem being that there\’s more than one possible way of explaining it. A bit like that conundrum about the way prices move in a perfectly competitive and in oligopolistic markets. They\’ll move in concert in both cases and purely observing the price changes doesn\’t tell you which type of market you\’re observing.

Here the way we\’re encouraged to interpret the numbers is that highly educated parents educate their kids, teach them to read, talk to them with their larger vocabulareies, before the children go to school. And that the schooling for poor children in the UK is shit.

In a blow to Labour’s education legacy, the watchdog said schools serving the poorest 20 per cent of pupils were four times more likely to be “inadequate” than those for the wealthiest 20 per cent.

I certainly wouldn\’t disagree with either point.

However, it is possible to look at the same statistics and come to a very different conclusion. Assume that intelligence is inheritable (which it is, it\’s the extent to which it is which is scientifically disputed…..ignore the numpties further left who insist that each and every child is an equal blank slate upon which society draws).

We could then say, well, so what? The Anglo Saxon societies have got it right: the intelligent are getting the uni educations, excellent, the dim are not. And that carries on into the next generation as intelligence is inheritable. We would expect the children of the intelligent to be intelligent, the dim dim and that\’s all we\’re seeing.

No, I don\’t believe it either, not as starkly as that, but it is a possible conclusion to draw from those bald statistics.

 

No, I don\’t know the answer: but I know where to start looking

Patients admitted to NHS hospitals for emergency treatment at weekends are almost 10 per cent more likely to die than during the rest of the week, according to a comprehensive new report.

Hmm.

I think we would start by looking at staffing levels, wouldn\’t we? They are the thing which is most likely to vary over such periods.

Many hospitals have far fewer senior consultants on site outside of normal office hours, the data show, and rely on junior doctors and nurses to treat critically ill patients.

And, if rumour is to be believed, many fewer junior doctors too.

It has prompted a strong response from the Department of Health, which wants trusts to find out why patients are not receiving the same standard of care around the clock.

Well, actually, I think I would start with the rules that limit the hours that doctors can work. You know, the EU ones which came in just a couple of years ago?

The way I would check and see if they\’ve had an effect is to run the same counting exercise over the death statistics from a decade or more ago. If we saw the same peaks in the death rate over the weekends then perhaps it isn\’t responsible: if we don\’t see the same peaks then perhaps it is.

As I say, I don\’t know whether this is the problem or not. But that is the place to start looking.

Hands up everyone who thinks they will actually look there though?

That 50 p tax rate

Rock star Sting has avoided paying 50p income tax on £20million of his earnings by giving himself a bumper payout, it was revealed today.

The singer and poverty campaigner saved himself up to £2million just before the rate was raised, his latest filings with Companies House show.

Accounts for Sting\’s firm, Steerpike (Overseas) Limited, disclose he earned £20.045million in the calendar year 2009.

The massive payout – which pushed his company into a loss of £20.49million – came ahead of the imposition of the 50p tax rate in April last year.

It meant he was legally able to avoid £2million in income tax – paying £8million at the 40 per cent rate rather than £10million at the 50 per cent rate.

But in the previous accounting periods and in the year after he paid himself just £60,000.

It certainly brings forward revenue but does it in fact increase it?

Yes, yes, just as I\’ve been saying for years

Gaby Hinsliff on the gender pay gap.

Amongst the young it is in favour of women now. Overall it is in favour of men but that\’s down to two things.

1) Overall is comparing women in their 50s etc, people who did not receive the same education or career opportunities as the men of their age group. This is a problem that will be solved simply by time.

2) Motherhood. The pay gap appears at the average age of primagravidae. We don\’t actually have a gender pay gap any more. We have a motherhood pay gap. To change this you\’re going to have to change biology and good luck with that in a mammalian species.

So, can we please decalre this problem over and get on with solving some of the others that plague us?

 

And as to Willy\’s other proposals

This is exceptionally good:

And, last, the government should slash employers\’ national insurance contributions until unemployment falls below 2 million, while cutting taxes on the low-paid.

Although he\’s still managed to miss the point that Keynes made about this. It should be employees\’ NI which is cut. If you want to have a bit of fiscal stimulus then you want to get it out there fast. And you want  people to see that they\’re getting it too. You want the cash to show up in the employees\’ paycheques in the next paycheque.

But still, at least we\’re on bard now with the idea that in varying NI the government does have a simple and sound method of fiscal stmulus. It\’s isn\’t necessary nor desirable to charge off and spend tens of billions on the pet desires of idiots. Just stop taking the money off people and watch it fructify.

However, this truly is stupid:

Here is how. The Treasury should offer to buy part of every new loan made to an SME as long as the originating bank accepts a small proportion of any loss and holds part of the loan itself to show its confidence in its lending decision. The Treasury should then merge these thousands of loan fractions into big bonds that it would indemnify, turning them into a security that the Bank of England – or private buyers – could buy.

In our paper, Credit Where It\’s Due, Lancaster\’s Professor Ken Peasnell and I estimate that this measure could lift SME lending by at least 10% a year, so that in 2013/14 the cumulative stimulus would represent up to £15bn a year. Banks can put up less capital, run less risk and access cheap finance. Triggering collective action by all banks and bringing forward investment by many SMEs will improve the economic climate, so the Treasury need not charge an insurance premium for its guarantee because the loan loss rate should be small – and high take-up at this stage in the cycle is highly desirable.

This is a Freddie Mac/Fannie Mae for business loans.

We do all know which part of the American financial system bled the most cash, don\’t we? Fannie and Freddie? We do all know which part of the American financial system is still in conservatorship, is still bleeding money? Fannie and Freddie?

And the minging cretin thinks we shouldn\’t even charge a premium for the insurance?

Jeebus. Does Oxford have an ivory tower we can lock him up in: one with no communication with the outside world for preference.

Wee Willy Hutton on the housing statistics lie

What\’s amusing is that he comes up with a different number to everyone else but still manages to get it wrong.

In the past six months, construction began on a mere 1,746 social homes

This is not true. A gross misreading of the statistics.

The true numbers are here.

http://www.communities.gov.uk/documents/statistics/pdf/2030989.pdf

The number of local authority and housing association starts was 9,310 in the past 6 months. And yes, housing association and local authority is what we mean by social homes.

What Willy has got wrong is that the figures he refers to are the number of social housing starts under certain specific central government programmes to build social housing. But most social housing is local authority and housing association: so counting only those under central government plans is, well, it\’s bollocks.

We really would expect the head of an Oxford college to be able to understand government statistics.

Bowie the Musical

Hmm, thought I, hmm:

David Bowie says yes to futuristic musical based on his hits

Bowie\’s space-age fantasies will be used for the first time in showcase London performance next year

So, in a business sense, like Mamma Mia or We Will Rock You. Get those old songs up on a West End stage, take the royalties and run.

Although it\’s not quite that. He\’s granted permission for a one off charity gig….which might, if it\’s all lovely, then turn into a longer running production.

The hmmm bit comes from the Bowie Bonds.

Back in 1997, Bowie securitised the future revenues (royalties etc) on his classic songs into a bond issue which was then bought by Prudential. The bonds had a slightly rocky valuation life….the fall in recorded music sales meant they lost rating and value, then the rise of iTunes etc seems to have revived them.

My immediate reaction was that he\’s licencing the songs to see whether greater income can be generated from them in order to pay off (or maybe refinance etc) those bonds.

But the bonds were supposed to mature in 2009. So maybe not: anyone know what is the actual status of those Bowie bonds?

It could be mildly interesting this: the first musical to be driven by having to repay a bond issue.

Just to give a guide, a seriously successful musical, one that had two or three casts around the world, could indeed make serious inroads into at least the financing costs, if not the capital, of a $55 million bond issue.

No Mr. Wintour, Just No

Put that economics down and come out with your hands up before you cause any more damage!

Ministerial sources suggested there might instead be a further hike in the bank levy.

Osborne first announced the levy on bank profits in the June 2010 budget, saying it was due to raise £8.3bn over four years. It is currently set at an annual tax of 0.075% on the value of all of the debts of UK banks.

No, it\’s not a tax on the profits of the banks. It\’s not even an annual tax on the value of all debts of UK banks.

It\’s charged only on the largest banks, those that have the implicit (well, pretty explicit now) \”too big to fail\” guarantee, that the government won\’t let them go bust. It\’s also not on all their debts (or liabilities as they are called in bankspeak) it\’s on only those that are not already covered by some other deposit guarantee scheme. So, for example, the £10 I have in a savings account is covered by the normal deposit guarantee scheme and the bank does not therefore pay this 0.075% levy on that £10 they owe me.

And please do note what this means: it\’s a tax upon some of their liabilities, not their profits. They pay this whether they make profits or not. And if they make vast profits purely from the use of regular depositors money they don\’t pay it while if they make losses by borrowing from the wholesale markets they do pay it.

It just ain\’t a tax on bank profits. While not entirely correct the best way to view it is as a tax on their leverage through the wholesale markets. And given that leverage through the wholesale markets is what brought Northern Rock down (although, amusingly, they weren\’t large enough to have had to pay it) it\’s not a bad thing to have either.

The correct way to view it is actually as an insurance premium on the insurance cover they\’re getting.

Which is a very good thing indeed for us taxpayers to be collecting: for we\’re providing the insurance so we should indeed be getting the premiums.

And please do note than when the likes of Andrew Haldane say the big banks are getting large subsidies, it\’s exactly this subsidy, the non-payment of premiums for the insurance that the banks get, that he\’s talking about. Which they should be paying for and indeed they are starting to pay for.

I realise that there\’s not a great deal to cheer about these days on either the finance or economics front but this particular one is. Problem sensible solution, all brought in by a Tory Chancellor*.

Who would have thought it, eh?

*Worth also noting that Obama has brought in the same thing over there. Which makes it truly astonishing, bi-partisan sensibleness shocker!

Err, no peeps, just no

Waiting staff and hairdressers are among the lowest paid workers in the UK, latest figures show

No, they really don\’t.

1. Waiter £12,117 -0.7

2. Hairdresser £12,219 -4.4

3. Bar staff £12,399 +2.0

4. Kitchen/catering assistant £12,422 -2.7

They\’re, as ever, forgetting the perks.

There\’s not a restaurant in the land that doesn\’t give the waiting staff free meals….in fact, full time of 1,3 and 4 will all get free food. Even in a Mickey D\’s.

And 1 and 2 earn tips, 3 will get at least the odd drink etc.

Wages just ain\’t the total compensation you get from a job.