June 2012

On that minimum wage thing

It is uncomfortable that the people most alarmed by the night of chicken shop raids are the employees: young teenage brothers from Pakistan who are obliged to show inspectors their living quarters above the shop, students from Bangladesh, who watch with growing unease as border officials check their papers.

The people with these less than minimum wage jobs are rather keen to keep them.

Sir Robin Wales has no affection for chicken shops…….. It makes sense for us to cut out this exploitation of people. While a raid like this will be difficult for those people [who are being exploited],

In other words, Sir Robin knows when you\’re being exploited better than you do.

Take up the White Man\’s burden!
Have done with childish days–
The lightly-proffered laurel,
The easy ungrudged praise:
Comes now, to search your manhood
Through all the thankless years,
Cold, edged with dear-bought wisdom,
The judgment of your peers.

So who thought Cameron wouldn\’t do this?

David Cameron has ruled out any referendum that could see Britain leave the European Union, insisting that the UK should remain a member of the union.

The same sort of wibble we\’ve had for a coupe of generations now. It\’s not quite right for us, problems,  our partners don\’t see it quite the way that we do. But we\’ve got to stay in so as to influence those 26 to 1 votes against us.

And it also makes Cameron a worse poitician than even I think he was. The biggest danger to any future majority is UKIP, on what, 8% or so? Peeling off the eurosceptics. Not enough to form a block in P, true, as with FPTP, but enough to kill a Tory majority.

Polly on competition in the NHS

Cancer networks are the template, as they caused survival rates to soar by joint working: one hospital does the best diagnostics, another the best surgery and a third the best chemo and radiology, collaborating not competing.

That is the heart of a market economy. The division and specialisation of labour. And the only way of getting to the collaboration part that we know of is a market.

As for the competition: it\’s the diagnostics departments of hospitals two and three, the surgery departments of one and three and the chemo and radiology departments of one and two which are the competition.

Why do people find this so difficult to understand? This \”collaboration\” that the left are cheering on is a market economy. It\’s the whole damn point of having one.

Spooky or what?

Yesterday was the day I officially moved from Germany to the Czech Republic. All of 50km but it is over the border.

And yesterday Germany lost and a Czech player threw Nadal out of Wimbledon.

Spooky, eh? Perhaps I should team up with David Icke?

The euro bailout

When the transfer takes place to the European Stability Mechanism the new loans will not be given seniority, giving extra security to Spain’s creditors.


That seems
to be the crux of the matter.

The new bonds do not subordinate the old, they rank pari passu. That means the ESM is on the hook for them.

What\’s going to be interesting therefore is the rate at which the ESM can borrow in the markets. For, at least I think I\’m right here, the ESM is being funded by jointly guaranteed bonds. Not by the ECB printing money, but by borrowing.

At which point, the greatly interesting thing becomes: at what rate can the ESM borrow?

An interesting point about Barclay\’s and Libor

On the manipulation by the bank itself:

It is hard to identify who exactly lost out as a result of these fictions. Since there was no interbank funding to speak of at the height of the crisis, it may not in any case have mattered very much.

Well, sorta. While there was indeed very little interbank lending, this being one of the actual problems at the time, there was still the huge towering edifice of mortgages, swaps, futures and so on priced off this now illiquid measure.

We don\’t extradite to places without fair trials

Seems like a fair enough law.

Shawn Sullivan faced spending the rest of his life behind bars under a controversial sex offenders’ programme in the US, but two senior judges said this would amount to a “flagrant denial” of his rights.

If convicted, he\’d serve his sentence, then be put into a sex offenders institution.

“Civil commitment is not a penal or criminal sanction; it is rather a means by which the State can protect the community from dangerous behaviour that the committed individual is unable to control.”

The court was told that no one had ever been released from the treatment programme in Minnesota since it was set up in 1988.

This \”fair trial\” lark, this civil liberties stuff, means that if you\’re fairly tried, found guilty, then sentenced, well, you did the crime so do the time. If the sentence is life inside so be it.

But if the sentence isn\’t, having served whatever the sentence is then you have to be let out, not locked up indefinitely on hte basis that you are a bad \’un.

For this civil liberties shtick means that you get setnenced for what it is proven you have done. Not for what you might potentially do in the future. And yes, this does apply to paedos just as much as anyone else.

All we need to do now is have a look at the European Arrest Warrant to see whether all our fellow EU jurisdictions offer the same protections as our own system. Unlikely that they do, eh?

Ritchie still doesn\’t get the efficient markets hypothesis, does he?

On the subject of Barclays and Libor.

Third, the means the assumptions of the efficient market hypothesis that underpinned City regulation have to be swept aside for good: they’re a fantasy, as some of us have said for a rather long time.

WTF has the EMH got to do with this case? All the EMH says is that markets are efficient at processing the information about what prices should be in a market.

Did this Burke really work as an economist?

Seriously, in The City?

Listeners to the Today programme on Radio 4 on Wednesday were treated to a knockabout interview with the architect of the Laffer curve: a graph which purports to show that lower tax rates for the rich will lead to higher tax revenues.

It\’s also a theory which has been widely discredited, both on a theoretical level and in practice.

Disproven in theory? What? You jest, you mean proven in theory the argument now being about where the tax rate that maximieses revenues is, that is what you mean isn\’t it?

Because with the Laffer curve – perhaps unusually for economics – we have a historical instance of it being implemented by a direct proponent. Laffer was an associate of the Reagan administration, which had a staged cut in the marginal higher rate of personal income tax from 70% to 28%. The effect on the budget deficit was also striking. Reagan doubled it to $155 billion and tripled government debt to more than $2trillion. His successor, Bush senior, was forced to raise taxes as the deficit doubled again.

What logic! The deficit rise thus taxes collected must have fallen. But, erm, what happened to spending at the same time?

Not all taxes were treated the same. Payroll taxes were increased. So taxes were cut for higher earners while workers paid more.

Ooooh, dearie me. Something to understand about the US system. The payroll taxes pay for social security. This is supposed to be self-financing over the long term, not reliant upon general revenue. Recall all that stuff about the trust find etc? Those Reagan rises in FICA were all about restoring actuarial balance to the SS budget.

You could characterise it the way Burke has done but it would be deeply misleading at best to do so.

The Laffer curve relies on the twin assumptions that the rich create the output in an economy and that they need incentives to choose idleness over work. But there is little evidence to support these hypotheses. On the contrary, economists from Adam Smith to Karl Marx have known that all value in an economy is created by labour.

Erm, incentives to choose work over leisure I think you\’ll find. And this is true of everyone of course, not just the rich.

But I am fascinated: can someone survive as a City economist while still believing in the labour theiry of value?

I do love seeing the scandium news

Such fun:

RENO, Nev., Jun 27, 2012 (BUSINESS WIRE) — EMC Metals Corp. (the \”Company\” or \”EMC\”) CA:EMC -15.38% announced today that it received notice of a lawsuit filed against the Company on Friday June 22, 2012 in the Supreme Court of Victoria, Australia, by our Nyngan Scandium Project partner, Jervois Mining Limited (\”Jervois\”).

The Company delivered a timely NI 43-101 F1 Technical Report on the Feasibility of the Nyngan Scandium Project (\”the Report\”) to the JV Partners in February 2012, designed to meet the specific requirements set out in the JV Agreement for a 50% earn-in to the Nyngan Scandium Project (the \”Project\”). EMC believes that all requirements for the Report as defined in the JV Agreement were met, however Jervois subsequently rejected the Report as inadequate, and denied EMC its 50% earn-in interest in the Project.

I know someone (indeed, was looking for money from them at the time) who has invested goodly amounts in EMC. On the basis of this Jervois property interest.

I said that there were several people in this \”scandium space\” that I simply would not trust. Even if you don\’t want to invest in me, I went on, certainly I could not recommend investing in them.

Pity I didn\’t get the cash, of course, but all rather satisfying a few years later…..

Murder in Bennett Street

This is both nasty and full of coincidence.

A father of one has been charged with the murder of his PhD student girlfriend at their Georgian home while their baby cried nearby.

Investment administrator Paul Keene, 31, is accused of killing 28-year-old Carmen Miron-Buchacra, known as Gaby, at their Georgian home in Bath, Somerset.

That Georgian flat being the next street up from my own flat in Bath. Bennett Street rather than Alfred. But here\’s the coincidence:

Mr Keene is listed as working as an administrator for Advance Investments Limited, in Bath, since 2007.

On its website, the company claims: \’Paul has become an integral part of the Advance support team.

\’With over ten years\’ experience in different sectors of the Financial Services industry, Paul prides himself on delivering consistently excellent customer service, case management and adviser support with a clear focus on the customer experience.\’

His company lists former London Irish, England and British Lions rugby star Mike Catt as a client.

And Mike Catt used to rent my grandmother\’s old flat which is the next street over again, Russell St.

Spooky or what?

Apologies, yet more Ritchie

Equality, because societies that aim for equality provide best opportunity for all and are happier as a result:

Entire, gargantuan, mind gargling nonsense.

The Soviet Union aimed for equality and this did not lead to best opportunity for all nor make people happier.

No, this is not to say that Ritchie is aiming for the USSR: rather, just to point out the logic failure in his statement. It is not aiming for equality which provides these desirable things.

It is how you attempt to gain the goal that does.

Which means that we must examine each and every of the mechanisms by which people aim for that greater equality. The simple statement \”this will increase equality\” is not good enough.

Interesting on island evolution

Here.

Pygmy mammoths and all that.

The important point to take away though is that island evolution is very different indeed from not island evolution. Which rather makes EO Wilson\’s estimations of extinction rates, derived as they are from island evolution, something of a nonsense, eh?