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Timmy Elsewhere


In Singapore the patient is the customer. More than that, the patient is the customer waving real cash money at the people thinking about treating them. As people like cash money, the patient gets treated in a manner that leads to the money flowing to the people doing the treatments.

Yes, it’s that foul idea of treatment not being free at the point of consumption. Except that foul idea does lead to what is seemingly desired — a joined up health care system that treats people efficiently.


But, as above, spending is largely made up of permanent funding streams. Which aren’t things that will be usefully funded over time by an entirely unreliable tax source, those hugely variable earnings of the 1 and 0.1 per cents. Californian politicians have looked at European social democracy and found that it is good. But they’ve failed to learn the tax lesson. You cannot buy tax funded presents for all by only taxing the rich. You have to tax everyone, European style – eyewatering VAT rates, payroll taxes, substantial middle class income taxes. European taxation systems are less progressive than that of the US for this very reason – that’s how you fund social democracy. For the incomes of the rich, therefore the revenues to be got from taxing them, are highly variable. As they’re also finding out, raising the rates to make up for it just means those rich, and their businesses, depart for Texas.

Timmy elsewhere

That new place, The Critic:

The usual diagnosis about this number flatlining the past 15 years is that economic policy has been wrong. There are claims of austerity (which there hasn’t been, but whatever), of underinvestment, of Tories simply being bastards. Given that I used to work for Nigel Farage, I’m willing to believe the last of whatever it was that “Call Me Dave” thought he was doing.

Do renewables grow the UK economy?

Sadly, the model used by the government to decide this was produced by an organisation that used to have Richard Murphy on the board. Therefore, obviously, the answer is no.

What we want to know is whether government spending upon the renewables transition makes us richer or not. Therefore we need to use a model that is equivocal – or possibly even neutral – about the effect of government spending. Only if we start from the point that government spending is neutral can we then go on to ask whether government spending on windmills (or, to be less perjorative, the green transition) is beneficial. This is a piece of logic that should be obvious but sadly does need to be spelt out.

That’s because the model that is being used here assumes that government spending grows the economy. The results gained from the model do not, in fact, distinguish between spending upon green or upon anything else. The effect is purely driven by that original assumption: that more is better.

In the Tele

We do not just desire windfall and excess profits, we positively lust after their existence: for the shortages that cause them get solved by their appearance. The cure for excess profits is excess profits. Those windfall numbers are exactly what generates the change in production that increases supply, the very thing that brings profits, and prices, back down again.

As a think tank number cruncher myself I’m willing to slide over the manipulations about inflation and so on – it’s very difficult indeed to consistently produce outrage if you have to be wholly and perfectly truthful all the time. But getting the actual driving forces of the most successful socioeconomic system ever, this free market capitalism, wrong is more than just smoothing the edges or being a bit careless, isn’t it?


At the Telegraph again.

Can you tell that a mate got a job there*?

Getting back to US banking, Dimon may well be right and it would be nice if he were. But the truth or not of his proposition is not based on any objective facts about the world out there. It depends purely upon whether we believe him. Or not.

For all banking, everywhere and everywhen, is a con: and like any con it only works if we have confidence in it.

*Not quite how it works, a commissioning editor is like a capo, he has his consigliere. When the comed gets a new gig then the cons get pulled along….


There are a number of different minerals we can get rare earths from – xenotime, bastnaesite, monazite and so on, but those are old school. The important source is called “ionic clay”. This is what China gets many of its rare earths from. In fact most of the really fancy magnet metals all come from China and from this mineral. You can get lanthanides from other minerals in other places, but it’s a lot more expensive.

We used to think – until maybe two years ago – that only China had ionic clay. That’s why we were all stuck with their control of the market. They had the cheapest, richest (much the same thing in mining) deposits. If we were going to break free, we’d just have to have subsidies so that suppliers outside China could compete on price.


That map is positively glowering crimson at us. One might conclude, naively, that whoever runs for the Republican party next time around is going to waltz home.

Of course the instant response from the Left-wing consensus, convinced that Biden would vanquish Trump in 2024, goes something like “land doesn’t get to vote, people do”. And it’s true, there aren’t all that many people in Flyover Country. That’s why the Republicans don’t romp home every election. The big population concentrations are on the coasts where being a Democrat is a socially acceptable perversion.

So much is well known: but in fact, in a presidential election, it’s not quite true that people vote and the land doesn’t.

Timmy elsewhere

We seem to have designed our governance system to require those Rolls Royce minds and then staffed it with Trabants, which isn’t we feel quite the right way around to be doing it. We’d prefer something so simple that even a papier mache two-stroke could manage it then stick the bright people into those positions.

So, the actual explanation of the banking problem

And now for the real, real problem

OK, so who else has done this? That’s what is collapsing bank stock prices across the markets and country. We don’t know who else faces such problems. Those Hold To Maturity losses don’t have to be declared as they happen. They’re not subject to mark to market. Except in one juddering change, when they might be.

There are rumours out there that there are $1 trillion of such losses inside American banks. Rumours only, I hasten to add. And the stock problem is not just that we don’t know whether that is true, but even if it is, we don’t know where they are.

As investors, what now?

As depositors we’re fine. If the Administration, Treasury and FDIC all tell us that depositors are safe, then they are. But stock, well, that can still go to zero even as that is true. Bonds can also be more than a little weak in such circumstances.

There is a way to try to get a clue. Here’s the SIVB 10-Q – on page 13 we get an idea of the holdings of “investment securities”. And that’s the thing we’ve got to do. Haul through these filings for each bank and try to work out whether they were long tenor (i.e., long-dated bonds, which then suffer greater price falls as interest rates rise) or not.

Well, you know, good luck. But that is also what all stock analysts in America are trying to do right now – work out who might have lost the bank’s capital by chasing yield in long-term bonds and who forsook earnings now for the ability to have any earnings at all in the future.

There’s no reason why we’re not as good as they are at this same task.

Which is, after all this, the game to be played.

On Silicon Valley Bank

So, I was just a few hours early then about SIVB:

Silicon Valley Bank – just an old fashioned bank run?
Banking is a confidence trick and when the confidence is lost so is the bank. Perhaps that’s the lesson for us here at Silicon Valley Bank?

That was at 8.40 am today.

NYT at 5.36 UK time today:

Silicon Valley Bank, a lender to some of the biggest names in the technology world, did just that on Friday, becoming the largest bank to fail since the 2008 financial crisis. The move put nearly $175 billion in customer deposits, including money from some of the biggest names in the technology world, under the control of the Federal Deposit Insurance Corporation.

Straight old bank run. I even got the why correct:

However, that then still leaves the possibility of a run. The usual cure for a run is deposit insurance, which the US does indeed have. But such deposit insurance only holds for accounts up to a certain value ($250k in the US we believe). And if the bank’s deposit base is largely from corporate entities then average deposit balances are going to be rather larger than that. Which means that the larger depositors are uncovered.

And yes, they were largely corporate customers:

But for customers with deposits totaling more than $250,000, the news was grim. Customers with accounts that surpassed that amount — the maximum covered by F.D.I.C. insurance — would be given certificates for their uninsured funds, meaning they would be among the first in line to be paid back — though potentially only partially — with funds recovered while the F.D.I.C. holds Silicon Valley Bank in receivership.


The single use vape market appears to be worth some £750 million a year. At a fiver a piece that’s 150 million units. Oh, and when we run the numbers back the other way each vape contains half a penny’s worth of lithium. At today’s very high valuation that is.

Ten tonnes of lithium – despite the fact that this is becoming one of those little factoids that is doing the rounds – is trivia.

It’s also true that there is that Pigou Tax idea to think about. That there are externalities, not properly contained in market prices and a tax should be used to correct that. But that idea does insist that the tax should – must – be equal to the size of the problem. It’s not in fact true that this is an externality, that ha’penny of lithium is already included in the market price. But imagine it isn’t, the tax should be that half penny. £4 is overdoing it by only 800 times.

People are losing their minds here. This is like trying to judge the overall health of British sport by concentrating on the question of Sheffield Wednesday’s B Team left fullback. Something of interest to perhaps five people – the manager, the two potential fullbacks and their Mums.

The nitty gritty of investment instruments

We might think that one S&P 500 ETF will be much like another. Sure, the SPDR S&P 500 ETF (SPY) is in many senses much like the iShares Core (IVV) and the Vanguard (VOO). That’s not hugely a surprise, they’re all supposed to be passive index trackers on the S&P 500, they’re all large enough to actually hold the stocks themselves, why wouldn’t they be pretty much the same?

But they’re not all the same, and this is something that we need to grasp about all sorts of securities. Even tiny differences can mean that we can and should use a specific security for one case – say, speculation or trading – and another seemingly similar one for investment purposes – buy and hold strategies say.

I get to use the old joke:

‘Arold, those tinned herrings you sold me. The Missus and I tried some, they’re terrible”. “Bert, those herrings, they’re for selling, not eating.”

Investing in forinn is difficult

Because, you’ve got to deal with foreign ideas about what’s right and wrong:

If a UK company, working in the UK, under the usual UK ideas and strictures, found that the majority owner, one of the non-exec directors, had been arrested for nicking $100m from a bank, the shares would collapse.

This is not what has happened at Ferrexpo (FXPO). The arrest has, but the share collapse hasn’t – things in foreign are in foreign, d’ye see?

As the Telegraph says: “ The billionaire majority owner of London-listed iron ore pellet producer Ferrexpo has been arrested at a ski resort over $100m [£83m] embezzlement allegations in Ukraine.” So the arrest part is indeed true. But why hasn’t that share price moved?

To repeat a subject

Hey, I recycle, right? Will Porsche kill Tesla?

At one level the idea that Porsche (P911) is about to kill off Tesla (TSLA) is ridiculous.

No, the manufacturer of toys for middle-aged hairdressers is not going to ruin a mass market car manufacturer.

It could be true if we considered the other Porsche (PAH3) as well – what used to be the parent of VW (VOW3). Combined, they might just be a danger as and when they roll out the EV versions of all of their vehicles. But even there, who do we think is going to buy a Skoda in preference to a Tesla?

Economics lesson of the day

The deeper point here isn’t in fact about GDP, nor women working. It’s that near all of the economic numbers we use are not, in fact, the measurement we’d really like to be making. They’re nearly always proxies — something that is close to what we’d like to measure but not actually the thing itself. This means that we shouldn’t be using our economic numbers as targets in quite the way we often do.

More women going out to work for wages would raise GDP. So what? GDP isn’t the thing we want to maximize. More people being able to do more of what those people want to do is — we want to maximize human utility. We have no measure for human utility, we use GDP instead. But GDP is that proxy and so we fall into error if we try to maximize the proxy — GDP, instead of the actual target — human utility.

Which leaves us with the actual answer here to female labour force participation. We must have a system whereby if women wish to work for wages, they may. Equally, if they prefer to run their household, then so be it. This applies to men too, of course. Maximizing the choices that can be made maximizes utility, not maximizing GDP.