June 2012

What a strange thing to say Mr. Charkrabortty

The urban-regeneration specialist John Houghton, who grew up there, can reel off the factories that employed locals: Schweppes, Murray Mints, Delco the car-parts maker and Ford\’s Halewood plant. Most of those disappeared long ago, and the others have shrunk severely.

From its industrial heyday, Kirkby has become one of the most deprived parts of the country. More than 12% of the available workforce in the borough of Knowsley, which Kirkby is part of, are out of a job, as compared with 8% in the rest of the north-west. Of those in a job, about one in three work for the public sector. The other big local employers are call centres: typically neither as high-paying nor as secure as the old industrial employment.

Given that call centre employment exists and the old industrial employment does not I\’d rather think that, by definition, the call centre employment is more secure.

The sugar maniacs

Oh dear.

Now it\’s the sugar in food that\’s killing us all.

There\’s one really very large problem with the thesis.

People are mixing and matching the US and not US experience. Evidence in one place is being used as evidence in the other. But the two experiences are entirely different.

The US has indeed been swamped with High Fructose Corn Syrup: HFCS (actually, sod all to do with the corn industry, it\’s the cane and sugar beet industry which maintains the import barriers to the much cheaper world supplies of cane sugar). The rest of the world hasn\’t. So almost all of the US panicking about HFCS simply does not apply to the rest of the world.

And yet it is exactly that evidence which is indeed being applied.

By the mid-70s, there was a surplus of corn. Butz flew to Japan to look into a scientific innovation that would change everything: the mass development of high fructose corn syrup (HFCS), or glucose-fructose syrup as it\’s often referred to in the UK, a highly sweet, gloppy syrup, produced from surplus corn, that was also incredibly cheap. HFCS had been discovered in the 50s, but it was only in the 70s that a process had been found to harness it for mass production. HFCS was soon pumped into every conceivable food: pizzas, coleslaw, meat. It provided that \”just baked\” sheen on bread and cakes, made everything sweeter, and extended shelf life from days to years. A silent revolution of the amount of sugar that was going into our bodies was taking place. In Britain, the food on our plates became pure science – each processed milligram tweaked and sweetened for maximum palatability. And the general public were clueless that these changes were taking place.

That\’s just plain irrelevant.

It\’s entirely possible that the increased consumption of sugar is producing problems. But the evidence needs to be evaluated narrowly: US and non-US. The moment you see anyone in the UK bleating about corn sugar then I\’m afraid they can be safely ignored. Because they\’re simply not making this vital distinction.

But this is the problem Polly

The aim is to rubbish the poverty measure accepted by all international organisations and to call for new measures that ignore inequality.

All of those international organisations use a definition of poverty which is about inequality, not poverty. So if you wish to insist, as is perfectly reasonable even if you don\’t happen to agree, that poverty should be about absolute poverty not relative poverty then you\’re going to be entirely out of step with all of those international organisations.

For example, if we measure UK child poverty by deprivation then we\’re 9 th in the OECD (out of 29).

If we measure by relative child poverty then we\’re 22 nd out of 35.

That is, we are a more unequal country than many other places, thus we have higher relative child poverty, but we have less child deprivation than many other places that are more equal than we are.

It is indeed possible to discuss which measure we ought to be using: but all those international organisations measuring it only by relative poverty are rather closing down that conversation, aren\’t they?

Well quite

\”The government bond market has quickly recognised that the bail-out is adding to pressure on sovereign risk,” said Dominic Rossi at Fidelity Worldwide Investment.

The problem being that Spain has €780 billion of debt which all ranks equally.

Then add a further 10% or so of GDP in the form of the €100 billion bank bailout. OK, painful but not entirely unmanageable.

But if that comes from the EFSF then various people are going to complain, Finland will want collateral and so on.

So, instead, let\’s get the cash from the ESM, only needs 90% to agree, much easier. Ah, but the ESM does not rank pari passu, it has first dibs.

So our €780 billion of Spanish sdovereign debt, and this would include any future issues as well, has just become €780 billion of junior Spanish sovereign debt. Junior to the ESM.

Having dropped below the 6pc mark, Spanish yields – or implied interest rates – on its 10-year debt later moved back above 6.5pc.

Yup, that\’s what happens to junior debt.

It gets better: the majority (67%?) of that Spanish debt which is falling in price is owned by the Spanish financial system. You know, the one being bailed out? The bailout is thus increasing their capital requirements….meaning more is required in bailout funds which increases the amount of senior debt and thus reduces the price of junior which requires more capital in the bailout which….

In the end, the markets agreed. Spanish bond yields or borrowing costs, on its 10-year debt touched 6.5pc yesterday afternoon – higher than where they were on Friday, before news of the package.

On the teaching of languages to seven year olds

And yet our govt wants kids to be mistaught a foreign language from the age of seven. ( Yes mistaught – as in most primary schools none of the teachers can speak any foreign language, yet alone teach it to the whole school. )

This is one of Gove\’s worse ideas.

I\’m afraid that I have to disagree with the shed dweller.

I think the teaching of language to seven year olds is an absolutely fabulous idea. Grammar, vocab, spelling, pronunciation: I cannot think of a better preparation for the life ahead.

We could start with English…..

The value of shareholders

Grauniad editorial about Spanish bank bailout. In the comments:

What I find amazing in all these bank bailouts is that the creditors who lent money to badly-run banks, and the idiot management that ran them into the ground, both get away scot free. Instead, taxpayers have to pick up the tab.

It would make other managers think twice if when there was a bailout at least the incumbent board and managers got properly sacked and disgraced.

Well, the managers of the cajas have all been sacked.

But more importantly, there isn\’t anyone other than the taxpayers to take the hit. You see, the cajas were mutuals (and often charitable foundations as well). Thus there just aren\’t any shareholders to take the loss or to top up the capital.

There is actually a value to these shareholders you see? Sure, they get the profits in the good times. They also take that first chunk of losses in the bad. Yes, even at RBS and Lloyds, while the loss isn\’t total it has certainly been severe.

And the problem in Spain has been at least partly that there just weren\’t any people in that situation.

Something I don\’t understand about scrap metal

But the last five years have seen a doubling in cases of metal looting, driven partly by economic hardship and partly by a thriving Chinese scrap market. Campaigners want an update to the 1964 Scrap Metal Dealers Act, to ban cash transactions and introduce strict dealer registration. This would also make a point about what we value.

I\’m deeply unconvinced that we want to make recycling more difficult in this environmental age. But what\’s the justification being used here?

Things fall apart, Ozymandias crumbles to bits, and the level of disorder in a system always increases unless some force intervenes to put it back into shape. In recent weeks, fortunately, such a force has been at work – and it is the police force of Croydon. Having recovered a haul of around 450 memorial plaques that were stolen from cemeteries, broken into fragments and sold to a scrap metal yard, they are now painstakingly reassembling the memorials as a giant jigsaw on the floor.

Umm, who told the police that this material was at the scrap yard?

My assumption is that it would have to be the scrappie. No one else is going to know that the stuff is there after all.

And if it is indeed the scrappie who has given the tip off, doesn\’t this show that it\’s not the scrappies that need the regulating?

How to show a certain familiarity with Ayn Rand\’s work

Eventually, leaving Rand was no more different or difficult than, say, leaving a friend who had grown to annoy me over time – sure, I was very intimate with her ideas, but that just gave me more insight into their outright dysfunctionality, and the strength to say \”sayonara!\”

OK, so,
claim of knowledge of Rand.

Granted, it\’s doubtful that any political group so suspicious of the intelligentsia would actually read Rand\’s 1,200 word magnum opus, Atlas Shrugged,

My, that is a lot of words, isn\’t it?

Never having been able to finish the dreck myself I do wonder what she put on all the other pages though.

George Eustice doesn\’t seem to get it

If the EU is to survive, it needs to be able to adapt, and that means making it easy for powers to be taken away from it and for countries to pick and choose the areas in which they want to co-operate and where they want to retain control.

The driving force behind the EU is the move to full political and economic union.

Something that\’s not really compatible with the surrendering of powers now, is it? Which is why it won\’t happen.

What are the doctors piffling about now?

Perhaps this is one for Chris Snowden as he knows his way aroiund the statistics better than I do. But this seems odd:

An alliance of more than 30 leading medical bodies and charities says Britain\’s \”alcohol problem\” has become so entrenched that drastic action – which would also include an end to sponsorship of sporting events – is required to protect children and teenagers.

Their submission to the House of Commons health select committee says the step is needed to tackle a growing burden on society, which costs almost 15,000 lives a year.

The ONS says that booze kills just under 9,000 a year, not 15,000. So where they got their number from I\’m not sure.

This looks even stranger:

Evidence submitted to MPs shows that alcohol has become the leading cause of deaths among young men, responsible for 27 per cent of fatalities among those aged 16 to 24.

Looking at the detailed figures this doesn\’t in fact seem to be true:

Suicide and injury/poisoning of undetermined intent 852 21%
Land transport accidents 536 13%
Accidental poisoning 393 10%

The percentage refers to total deaths in that age group.

Booze doesn\’t even make it into the top three causes let alone account for 27% of deaths is about that age range.

The only number I can see that might be related to it is:

The lowest male rate was in those aged 15–34; the rate for this group in 2010 was 2.7 per 100,000,

Please, they\’ve not confused a 2.7 per hundred thousand with 27% have they?

It is so glorious to be right

Andrew Gilligan today:

But the internal DfT report, “Productive use of travel time and the valuation of travel time savings for business travellers,” says that most of these supposed gains are illusory.

It says that the DfT is relying on the \”unsupportable\” assumption that time spent on trains is unproductive and demands \”major changes\” to the \”1960s\” method used to calculate the HS2 business case. No such changes have been made.

With laptops, wi-fi and smartphones now making long-distance train carriages an extension of the office, the actual amount of extra work produced by HS2 may be almost nil, the researchers find.

The research, based on extensive fieldwork, found that up to 82 per cent of business travellers did some work on train journeys and almost half of all train travel time by businesspeople was spent working.

Timmy in January (admittedly, riffing off something by Idle):

We’ve had a technological change: time spent in transit is no longer wasted time, in fact if you talk to people these days I’m sure you’d find many of them claiming that sitting on a train, on a plane, with the internet running, is more productive than much time spent in offices.

The business case for HS2, in fact for pretty much any \”fast rail\” is now irredeemably fucked. By the internet.

Great Work Ritchie

Today brings an interesting piece in The Guardian.

Spain\’s fucked as a result of the not for profit mutuals run by the politicians.

Ritchie\’s euro solution.

The third part is a simple one, which is that the government issuing the bond has to take over and manage the bank to ensure that its solvency and liquidity are managed within these constraints. This means nationalisation; nothing else will do.

Let\’s make all the banks nationalised and run by politicians.

Nope. I can\’t see anything wrong with it either.

Erm, slightly pessimistic I think Larry?

In the hundred years from 1914 to 2014, the century since the outbreak of the first world war, the UK will have declined from pre-eminent global superpower to developing country, or \”emerging market\”.

A tad of hyperbole there perhaps?

The symptoms of this vertiginous plunge in the world\’s rankings


Note the really important thing. In our \”plunge\” from relative number 1 to whatever it is today, number 6 or number 15, whatever, what has actually happened to the lifestyles of the citizenry?

Depends partly on who you believe but at the low end real incomes have increased by 8 times over that century and if we take account of hedonic improvements by anything from 20-100 times.

That\’s the sort of vertiginous plunge that sounds like a pretty good bargain to me actually.

Since the start of the crisis, the UK has borrowed more in seven years than in all its previous history.

What? Sirsly? An economics editor is using unadjusted nominal numbers to compare across time? Dear Lord, someone take away his economist\’s secret decoder ring.

\”and the annual allocation of places at state schools has disclosed such an enormous shortage that the authorities have resorted to lotteries and other forms of rationing,\”

Hang on a minute: this is becoming positively Pilgeresque. There is no shortage of places at state schools. The lottery is entirely to stop the middle classes colonising the desirable state schools. The system as a whole offers sufficient places for the number of children in the country. Lotteries are to stop people exercising a choice within the system, not to limit access to the system as a whole.

Barking, the whole thing.

Oh do fuck off Theresa

British citizens with foreign-born partners are to be given the choice of indefinite \”exile\” in countries including Yemen and Syria or face the breakup of their families if they want to remain in the UK, under radical immigration changes to be announced next week, MPs have been told.

The home secretary, Theresa May, is expected to confirm that she will introduce a new minimum income requirement for a British \”sponsor\” without children of up to £25,700 a year, and a stringent English speaking test for foreign-born husbands, wives or partners of UK citizens applying to come to live in Britain on a family visa.

The ghastly woman has forgotten the most basic point about this whole thing.

When the home secretary published her proposals in May she said that it was obvious that British citizens and those settled here should be able to marry or enter into a civil partnership with whomever they choose

Yes, of course.

\”But if they want to establish their family life in the UK, rather than overseas, then their spouse or partner must have a genuine attachment to the UK, be able to speak English, and integrate into our society, and they must not be a burden on the taxpayer. Families should be able to manage their own lives. If a British citizen or a person settled here cannot support their foreign spouse or partner they cannot expect the taxpayer to do it for them.\”

No, fuck off.

This is to misunderstand the most basic point about this whole government thing. It is not so that some middle aged racist can impose her views on the way that the citizenry live. Rather, it is that we hire the occasional middle aged woman to collectively organise matters so that the wishes of the citizenry are more easily achievable.

Including, obviously, the ability of those married to each other to sleep apeace in a joint bed in our green and pleasant land.

It isn\’t the job of government to say that you cannot go marrying Johnny Foreigner. Nor is it the business of government to say that if you do so you must live in exile. Your job, you miserable old trout, is that if a British citizen decides to do the marital hokey cokey with someone not of our tribe then you are to issue the documents that makes them one of our tribe.

\’Coz that\’s what this tribe thing is about, see, marrying into us makes you one of us. The very act of that marriage by one single citizen makes you so. And it is your job to make that issuance of documentation as simple and easy as possible.

So get with what your job is in a free and liberal land, stop trying to do the thinking that you\’re clearly no good at, and get down into the basement and get turning that mimeograph that churns out the passports.

By definition one whom a Briton embraces as a spouse is a Briton. With the same rights of residence, work, freedom and liberty as one whose ancestors were here before the Romans came to Rye.

That the law is not currently this way is an error in the law and your job as Home Secretary is to correct that error.

In short, fuck off would you?

No, Italy does not have Spain\’s problem

Italy has economic problems, for sure, but they\’re not the same as Spain\’s problems:

Eventually, the same could happen in Italy.

No, the quite remarkable thing about Italy is that it doesn\’t, in any manner at all, have Spain\’s problem.

Which is, of course, a massive housing boom followed by a crash and now half the population* is under water on their mortgages and there are a million houses left uncompleted and unsold.

What\’s remarkable about Italy is that almost no one has a mortgage. That leverage problem just is not there in any manner at all.

I\’m sorry Mr. Lean but this is just lying

Certainly the wind industry does not help its case. It should have a lot going for it: wind power produces no carbon dioxide or other pollution.

Onshore wind CO2 production has, over the entire cycle, CO2 emissions around and about the same as hydro and nuclear. Because you need energy to smelt the metals that they\’re made out of (and no, no one is running furnaces from wind or solar, it\’s simply not possible). And you do pour an awful lot of concrete to anchor them into the ground. Concrete being made from cement the production of which is, last time I looked at least, 6% of all man made CO2 emissions.

Wind power produces no CO2 is simply a lie.

Turbines can quickly be removed when no longer wanted, leaving uncontaminated land behind,

And I suspect that that is a lie too. Digging up those concrete foundations isn\’t going to be an easy thing to do…..

And where in buggery did this come from?

And though wind is subsidised, as are all energy sources, it is much less so than fossil fuels: just one fifth as much in Britain, OECD figures indicate.

I\’m sorry, what? Wind, in the UK, receives one fifth of the subsidies that fossil fuel in the UK does? What the hell is this nonsense?

Yes, I\’m well aware that fossil fuels receive large subsidies globally: $100 billion a year in Iran alone recently. But that\’s not the same as subsidy in the UK.

Can anyone track down where this absurdity comes from? Provide a list of fossil fuel subsidies in the UK as against wind subsidies in the UK?

What a strange thing to worry about

Both suitors vying for the 135-year-old metals trading exchange have spent the past few days speaking to LME shareholders and including feedback into their bids. Sources close to the process said no significant changes to the way the LME is currently run are being proposed.

The Chinese government chooses the chairman and chief executive of the Hong Kong Exchanges and Clearing, as its largest shareholder. Fears have been raised that placing the entity that sets prices for industrial metals globally in the hands of the biggest consumer of industrial metals globally may not be a sensible move for the rest of the world.

Assume that the Chinese do buy it then they manipulate the prices.

So, sellers will avoid the exchange and trade elsewhere (which they can indeed easily do). And the value of the Chinese stake goes down as the market bleeds trade.

Note that it is the exchange that is being sold: not the warehouses, not the actual metals themselves, just the exchange. Being \”concerned\” over this is a bit like worrying about what will happen to BP if the London Stock Exchange is owned by foreigners. You know, nothing…..