Ragging on Ritchie

Dear Lord this is bad for an economist

Short term speculative profits, made by exploiting small price differences within and between markets, are one of the ways in which hedge funds make profit.

Err, no, exploiting pricing differences is arbitrage, which is not speculation. They’re opposites of each other.

In arbitrage the buying and selling is done at the same time. No leg hanging in the air. Prices are this, right now, buy and sell right now. That’s certainty.

Speculation is the opposite. Prices are this now and they might be that in the future. So, buy/sell now to sell/buy in the future.

Arbitrage does not involve price risk – although it does counterparty, obviously. Speculation involves price risk. That’s why they’re opposites.

The underlying point being made is no less awful:

And in an instant I understood exactly why we are having so many reports on inflation expectations at the moment when the real prospects for it arising (most especially now the Indian variant of Covid appears rampant) looks to be very low indeed. The fact is that markets – and most especially hedge funds – survive on market turmoil.

That’s the Jooos again.

And then there’s this:

So, is there inflation risk at present? I still do not think so, a short term possible burst when the real markets of the world actually reopen (if they ever do in the way that they once existed) apart. Thereafter I see no reason for inflation expectation. Money creation will certainly not be a cause.

He’s not even understanding his own MMT, is he? Stimulus will create inflation at some point. You know, as a result of money creation?

Idiot is idiot

We do need to tax the wealthy more, around the globe. The economic impact of excess wealth in the hands of a very few is deeply destabilising for society as a whole.

It is also straightforwardly economically undesirable: the accumulation of wealth in the hands of a few does reduce the capacity of billions of people to affordable spend to meet their needs. The gross wealth inequality the world is witnessing is a profound cause of injustice.

Bezos is also a rare case of a US multi-billionaire who has not made commitments to divest himself of wealth e.g. to charitable foundations.

Specifically using the example of Bezos is idiocy. His wealth comes from entrepreneurial activity. One effect of which has been the “Amazon Effect”. Which is that the inflation rate has been lower in every country that Amazon operates than it would have been without Amazon.

That is, each and every year billions have been better able to spend to meet their needs as a result of Bezos’ activities.

That’s before we even start to look at things like the consumer surplus and so on.

The European Central Bank…(…)…According to the bank, Amazon and its peers have pushed down inflation by about 0.1 to 0.2 percent.

Per year that is. Of course, the effect is larger on some items than others but that’s averaged out across the whole economy. The US plus EU economy is about $40 trillion a year. Just between friends, you understand. 0.1% of that saved by consumers as against their incomes is $40 billion a year for a decades. $400 billion then. At minimum, before the consumer surplus and all that.

Heff Bezos gets less than we do. This is a problem because?

This really does damn annoy me

Comment at the P³

But getting down to basic needs, the usable agricultural land, potable water, etc, are finite, and not necessarily near where the people want to live.

Since when has potable water been finite? Haven’t they ever looked up, seen the clouds and thought, you know what, that’s the water recycling system?

Do you remember?

The chuntering from the P³ expert on everything about how first doses first meant we’d not beat covid? How moving from 3 week (?4?) to 12 weeks between jabs was bad science, thetoriesarebastards, that will kill us all in our beds?

Delay in giving second jabs of Pfizer vaccine improves immunity
Study finds antibodies against Sars-CoV-2 three-and-a-half times higher in people vaccinated again after 12 weeks rather than three



Sam Part says:
May 13 2021 at 8:54 am
“We can’t also know which of these companies will ever declare any of the liabilities that they really owe. Nor will HM Revenue & Customs. They have literally no way of knowing for sure which companies operate false PAYE schemes in the UK”

HMRC have been aware of so-called Mini Umbrella Company fraud for quite a while now and have published warnings and given updates. For example, in an update published by HMRC last December (Employer Bulletin issue 87) , they said they had closed down many thousands of such attempted PAYE frauds and that a number of arrests had been made in November – presumably after many months of investigations. There have been other well publicised arrests over alleged ‘furlough fraud’.

How could HMRC be doing this if they have “literally no way of knowing” what’s going on?

“none of it ill be investigated, let alone prosecuted”

Quite clearly you are wrong in claiming that. If you are going to comment on these things, you should try and stay aware of developments. There’s plenty of information on MCU and other attempted fraud and HMRC’s work to combat it available on the HMRC website.

Richard Murphy says:
May 13 2021 at 9:32 am
They know it is happening

They do not know who is doing it

If they did it would not be happening

It is

You are very clearly wrong here and I am right

A memo does not stop abuse


Prosecutions by HMRC would seem to indicate that HMRC know who is doing it – or at least suspect – and prosecutions have been known to deter crime.

You’d think he’d bother to check this stuff

Richard Murphy says:
May 11 2021 at 8:33 pm
I am saying bank payments are legal tender

As the Bank of England says:

What’s classed as legal tender varies throughout the UK. In England and Wales, it’s Royal Mint coinsOpens in a new window and Bank of England notes. In Scotland and Northern Ireland it’s only Royal Mint coins and not banknotes.

There are also some restrictions when using small coins. For example, 1p and 2p coins only count as legal tender for any amount up to 20p.

Many common and safe payment methods such as cheques, debit cards and contactless aren’t legal tender. But again, it makes no difference in everyday life.

Given that he insists he knows how to redesign the whole system it would aid if he knew what the current one was.


Once upon a time the country was obsessed with the balance of payments and now we’re not.

No, peeps used to be obsessed with the balance of trade. The BoP always balances because it’s you know, something that balances?

As to why we’re not obsessed with the BoT these days it’s because we have a floating currency.

Accountant can’t count

The UK is a rich country. It has national wealth of at least £12 trillion.

That’s including the value of housing.

And our wealth should support this. Just offer decent interest rates on National Savings and the money would pour in.

We’re going to put our houses in the Green New Deal now?

Who has he pissed off now?

Simon says:
May 6 2021 at 10:58 am
I’ve given some thought to our post-independence defence policy here in Scotland. I’m of the view that a healthy chunk of the money we save on Trident should be spent on Defence Against the Dark Arts, specifically UK psy ops units like 77th Brigade. I think it’s very likely that Scotland would be the target of considerable UK chicanery.

Richard Murphy says:
May 6 2021 at 11:47 am
I am sure that is true

And deliberately subversive placing of staff to underline the effectiveness of as many organisations as possible – a technique I am becoming increasingly familiar with

From which we can assume that someone at some place he’s involved with is a spy? Or done something he doesn’t like? Or just the paranoia is kicking in?

Well, no, not really and wholly

The IFRS Foundation fails to rise to the challenge of sustainability reporting

What he means is that they’ve ignored his most strange, even silly, ideas.

Sixteen per cent of all submissions to the IFRS referred to sustainable cost accounting, or to putting the liability for climate change in the accounts.

Well, yes, we can explain that, can’t we?

Some readers of this blog will recall that last December I invited those with concern about environmental change to comment to the International Financial Reporting Standards Foundation

So, they figured out that some bloke with a blog had got his readers to write in. Then paid the appropriate amount of attention to those blog readers…..

Worth the money to be paid for it

That book for free thing contains this:

The type of economics that I address in this thread and
chapter is what is described as macroeconomics. This is
that part of economics that deals with the economies of
countries and governments. It also addresses issues such
as government income and spending, and so tax, as well as
the national debt, the role of central banks, inflation and
the balance of trade.
It is an aspect of economics that, despite its importance,
engages only a very small part of the economics profession.
The vast majority of economists deal with microeconomics.
That part of economics deals with the behaviour of
individuals, companies and markets.
Economists like microeconomics because it can be used to
construct deeply theoretical, largely mathematical, models
of behaviour that, if truth be told, tell us very little at all
about how real people, companies or markets behave. That
is because of the simplifying assumptions that too many
economists use in the course of their work.

The usual criticism is that macroeconomics is plagued with vast mathematical models which assume much and explain little while microeconomics is at least rooted in a certain observation of actual human behaviour.

As the best waiter might say, ‘Enjoy’.

Well, yes, the book therefore being about as useful as the average waiter’s ruminations upon economics.

Well, no, not really

The second issue relates to the first. I said ‘almost out of ideas’ deliberately. That is because there is one idea still left in use, and that is rentierism, asset stripping, or turning a fast buck, whichever you wish to call it. The idea behind a SPAC is that a new owner in a quoted entity can both buy a private company and strip value out of it before then selling it on. Much of the gain will simply come from being quoted. The rest will be old style asset stripping. Sales and leasebacks will be in vogue. Leverage will be increased to fund dividend stripping of retained reserves, whilst accounting tricks will be used to push profit upwards. Hollowed out firm creation, I call it. The result is quick bucks from financial engineering with no net gain to society.

The aim is to put investment into a currently private form by taking it public. Without having to pay the 7% tax to the bankers for an IPO. We can tell this is so because cash goes in and doesn’t come out again. You know, investment?


And if football cannot survive without the money from oligarchs / big business subsidy then it should not exist

If the Green New Deal cannot exist without the money from investors then it should not exist?

Aren’t TV and match day revenues enough? Isn’t this what fair competition is about?

Or don’t you like fair competition?

And maybe you don’t like democracy much either?

Aren’t revenues from windmills enough?

Richard Murphy says:
May 3 2021 at 9:46 pm
I have never come up with a good idea that has taken less than ten years to deliver

They laughed at Bozo the Clown too……

About them football clubs

I think local authorities might have a large part to play as the custodian of golden shares that protect the community and fan base of football clubs against commercial predation.

Yes, why not, let’s make Liverpool, Everton, Bootle, City of Liverpool, AFC Liverpool, South Liverpool, Marine and Waterloo Dock all subject to the local council that we’ve just had to fire for rampant corruption over property development.

That’s a good idea, isn’t it?

In fact, it’s such a good idea that the local council should have the management share in every club, those that charge a fiver a game to play on the public grounds. Why not 5 a side?

This though needs planning.

Or shooting of course.

As in all companies, stakeholders need to be at the heart of football. A serious plan to make that possible is required, that fans can really subscribe to. I hope someone can deliver on this. And tat some big names – I am looking at you Gary Lineker – can get behind it.

Charles Pooter is alive and well.