Friday, 14 December 2018

Advent Calendars

The Mrs dutifully bought advent calendars for me and herself (the nice 'Celebrations' ones).

Every morning I want to be a rebel and open any old random window, but then I always chicken out and look for the correct one for the day. To do otherwise would just feel wrong, and not in a good way.

How daft is that?

Thursday, 13 December 2018

Questions to which the answer is no.

Via @SOLZ_ZYN, from Property 118, article reproduced in full:

Negative equity – are the banks responsible?

A few of my houses are coming to their end of term and the lenders want their money back.

They knew my exit strategy was refinance or sale, but now they don’t seem to recognise any responsibility for the negative equity.

When the banking crisis occurred it followed naturally that house prices dropped dramatically as lenders either folded (albeit bailed out by the government) or sold their book to others. (Not necessarily even lenders).

The banking crisis was caused by reckless lending and the banks ran out of money and were unable to continue their business. The bankers have apologised unreservedly for their error of judgement. Great! But now when some areas are still struggling with negative equity they should (in my opinion) extend the mortgage for a lifetime. Or if they want to recoup their capital reduce the amount owing to an amount that would enable refinancing.

The FCA do not regulate buy to let mortgages, however, the mortgage is a contract. In contract “every contract has an implied contract term that the lender will perform the contract with care and skill”. Surely lending recklessly and being unable to sustain your business, which then has the knock on effect of destroying the value of my investment, is lacking in the performance of care and skill?

There is so much more I can add to this argument but would like to hear a reasonable response that says I’m wrong. I just cannot see it any other way.

But would appreciate your comments.


Wednesday, 12 December 2018

An alternative explanation for the shape of spiral arm galaxies (part 1)

We are familiar with spiral arm galaxies. The 'problem' is that to maintain their shape, the rotational speed of the outer stars must be the same as inner stars.

That is in stark contrast to smaller systems like the solar system where the innermost planet Mercury goes round the Sun every 88 days, the rotation period gets progressively longer the further a planet is from the Sun, so the outermost planet Neptune (sorry, Pluto!) goes round every 165 years. This follows the inverse square law - see 2. below.

The still-fashionable explanation - Dark Matter - has been debunked endless times, most recently in the last few days.

Density wave theory is a contender (applies to the rings of Saturn, for example), but the real front runner must be Modified Newtonian Dynamics (MOND), which just says that people get Newtonian Gravity slightly wrong.

In such cases, I find it helpful to write down everything you know and then draw the obvious conclusions.

1. The surprising similarities between light and gravity

Yes of course, gravity doesn't really exist as an independent force, but for simplicity we might as well assume it does. The behaviour of light is well studied and understood, so let's use it as an analogy:

* The speed of light = the speed of gravity waves (I remember vividly reading about some fairly conclusive experiment/measurement in 2002 or so and thinking "Well, yes, obviously...")

* Photons = gravitons

* Light waves = gravity waves

For the past twenty years I have read about experiment/measurement after experiment/measurement to do with gravity and each time I thought, "Hey, gravitational waves seem to behave pretty much like light waves. Has nobody else noticed this?"

2. The inverse square law

The brightness of light is inversely proportional to the square of the distance. This stands to reason. The source is emitting the same number of photons every second and they travel in straight lines, so the surface ares of a hypothetical sphere with radius one light second (with its centre at the source) contains as many photons as the surface area of a sphere with radius two light seconds.

But the surface area of the two-light-second-radius sphere is four times as large (surface area of a sphere = 4 Pi r^2) as the one-light-second-radius sphere, so the light (number of photons) is only one-quarter as bright. Real life example: because of perspective, a light a certain distance away also only looks one-quarter as big as one half as far away, so if you look at a row of street lights stretching into the distance, they all appear to have similar brightness.

The same thing happens with gravity - the force of gravity you feel is also inversely proportional to the square of the distance. To continue the analogy, there are a quarter as many gravitons per unit area of the second sphere.

3. Gravity bends light waves, and...

That light waves appear to bend when they pass near massive objects is also undisputed (I hope); gravity bends light waves. Although photons have no mass so shouldn't respond to gravity. General relativity explains this.

The massive object bends light and so it changes the shape of the hypothetical sphere considered in 2. If the observer is at A, the massive object at B and the light source (star) at C, the light sphere emitted by C is stretched a bit. It is more like a boiled egg shape, with the star at the centre of the yolk and the observer at the pointy end. The observer sees brighter light than they 'should'; the star appears larger/closer than it really is; the observer receives more photons than they 'should' etc. The massive object acts like a lens.

Galaxies bend light on a much larger scale than a single massive object (h/t Dyson and Eddington in 1919), hence the term galactic lens.

If the light-gravity analogy is to hold, then gravity must also bend gravity waves. I'd guessed this all along, but Googled it this morning to check and yes, they do. For sure that's 'only' a blogpost, but she's a proper qualified scientist and her post is full of links to official stuff.

Every star's gravity field bends, and is bent by, the other stars' gravity fields. Start with two stars (sources of light AND sources of gravity). Each light/gravity sphere is bent egg-shaped, so we end up with a two overlapping light/gravity spheres shaped like a Rugby ball. Which is like an American football but a bit less pointy.

Add more stars and the gravity fields merge and flatten out into something the shape of an Olympic discus; add a whole galaxy and the galaxy's gravity field gets flatter and flatter.

4. Modified Newtonian Dynamics

Enter stage left, towering giant of non-bullshit astro-physics, Mordi Milgrom. What his MOND (link at start of this post) says is that up to certain radius (about 5,000 light years, 5 kly for short), the force of a galaxy's gravity on stars follow the normal Newtonian inverse square law; beyond that certain radius, the force of gravity diminishes inversely proportional to distance i.e. pull of gravity on outer stars is stronger than expected, meaning they spin round faster than expected, so have the same rotational speed as inner stars, maintaining the spiral arm shape, the problem we are trying to explain.

The problem I have when I read up on his MOND (whether he deliberately chose an acronym that spells the German word for 'moon' is unknown) is that nobody explains why there is jump from normal Newtonian gravity nearer the centre of a galaxy to MOND gravity beyond a certain radius, it all seems a bit arbitrary. 

Observations fit his equations because he tweaked his equations to fit observations etc. Which is why I have had to work out (reverse engineer?) the actual explanation myself.

5. A worked example

Let's start with a star 5 kly out from the centre where Newton's rules stop applying. It is pulled towards the centre with a gravitational force of X (whatever unit that is).

* Under normal Newtonian inverse square root rules, a star 15 kly out - at the other end of a spiral arm - only feels a pull of X/9 of that (15/5 = 3, 3^2 = 9)

* MOND says a star 15 kly out feels a pull of X/3 (15/5 = 3) not X/9, which seems like a huge discrepancy.

It's not such a big discrepancy really. The star 15 kly out just 'thinks' it's only 9 kly out (as it feels the same pull as if it were only 9 kly out).

Maths: The pull of gravity towards the centre of gravity on the surface of a hypothetical perfectly shaped sphere with radius 9 kly centred on the centre of gravity is (approx) 1/3 of that on the surface of a sphere with 5 kly radius. 9/5^2 = 3.24, = 1/3.24 = close enough to 1/3 for our purposes. (The correct number is 8.56 kly but let's go with 9 kly).

Possible explanation: the 15 kly star is actually sitting on the surface of a 9 kly-radius sphere... which has been stretched out in every horizontal direction, so it has height +/- 18 kly and width of 30 kly (see 3). The star is 15 kly from the centre, but in gravity terms, it is only 9 kly from the centre.

Bonus: Newton wasn't wrong, it's just that you can't expect his inverse-square-law spheres to be perfectly spherical in all conditions. They are at the small scale of a solar system where the central Sun is somewhere between 99.8% and 99.9% of the total mass of the solar system anyway; not in a large galaxy where mass is more evenly distributed and the cumulative effects are much greater.

6. If anybody has access to the right telescope...

... and somebody else knows how to do the calculations, I'm happy to split the Nobel Prize money three ways. Get to it!
Part 2 to follow, including diagrams and ways that we can test this theory i.e. what sort of results it predicts and how to observe and measure them.

Tuesday, 11 December 2018

An alternative explanation for why Planet Earth bulges at the Equator

Easy explanation - the world is spinning round, so the equator gets thrown outwards slightly, like people spinning balls of pizza dough into flat pizza bases.

Or maybe not.

Here's my gloriously long winded explanation...

As top telly scientist Prof. Jim Al-Khalili, explained in his programme "Gravity and me":

Rule 1. There's not really such a thing as gravity. Time runs more slowly near large masses and smaller masses want to move to where time moves more slowly.

Rule 2. Time moves more slowly for fast moving objects.

So with GPS satellites, they have to make a net adjustment between two opposite effects - the clocks on the satellites seem to be running a bit faster (than clocks on earth) because they are further away from the mass of the planet; but the satellites are moving quickly, which means clocks on satellites seem to be running a bit slower (than clocks on earth). The two effects don't quite cancel out.

The prof realised (after some false starts to which he cheerfully 'fesses up) that the same applies if you compare a clock at the North Pole (nearer centre of earth but not rotating) with a clock at the equator (further away from centre of earth but moving at 1,000 mph). And - unlike for satellites - these two effects exactly cancel out!

This is hardly surprising, really.

If we consider the earth to be a large blob of slow moving liquid (and ignore the thin layer of rocks floating on top), it must be clear that if a drop anywhere on the surface of the blob can move to somewhere where time is passing more slowly, it will do so. (This is no different to considering a liquid that has been poured onto a flat surface). So we can safely assume that four billion years later, the clocks for all drops on the surface of the liquid part of earth are moving at the same speed.

That is ultimately why the earth bulges at the equator - if you started with a perfect sphere, a clock at the equator would run more slowly than a clock at the North Pole (same distance from the centre of the earth and moving quickly).

So liquid on the surface flows from the Poles towards the equator until the equilibrium is reached, where the extra radius means a clock on the surface at the equator is a little bit further from the centre of the earth, which speeds up the clock a bit. The clock at the North Pole is a little bit nearer the centre, so slows down a bit, and both clocks (in fact all clocks anywhere on the surface) are running at same speed.

All part of the service!

Monday, 10 December 2018

Teresa May - Reader Poll

1. Trying to wreck Brexit?

2. Completely f*****g useless?

3. Just stupid?

4. Is absolutely lovely and fragrant and trying to do the Best for Britain?

Sunday, 9 December 2018

Absolute and relative values

Example One - Ted Heath. Having stoked the house price bubble in the early 1970s (the top of an eighteen year cycle), UK governments then had to spend five years deflating the house price bubble, but to avoid people noticing so much, what they did was create massive wage and price inflation; the correspondingly high interest rates kept house prices at the same absolute nominal level, but after five years wages (and all other prices) had doubled, so in relative terms, house prices had halved.

(Let's not get bogged down in precise dates and amounts, it is the principle that matters.)
Example Two - people say a weakness of the Council Tax system is that it is based on 1991 values; in some areas nominal house prices have 'only' increased threefold since then, in others they have increased tenfold. Which leads people to say that there should be a revaluation.

As a matter of fact, because of the way the Council Tax system operates mathematically, a full revaluation to 2018 values would make little difference. This is because each local council has to collect a certain arbitrary £ amount. So let's imagine an area where all homes are worth roughly the same amount (a suburb consisting of three-bed semi-detached houses). In that area, the tax per home is simply the total £ amount divided by the number of homes. It does not matter whether you use 1991 value of £80,000 each or 2018 value of £320,000 each.

Clearly, there will be less valuable and more valuable homes in any local council area, but it is only relative values that matter. So if the selling prices of all homes in an area have increased by a similar percentage since 1991, the final bills will be much the same.
Example Three - some time at the start of the Tory-Lib Dem coalition in 2010, a senior Tory (I can't track down exactly which one) said that one of their goals for government was to ensure that house prices would increase slower than wages, i.e. that in relative terms, housing would become more affordable.

UPDATE: RS in the comments points out it was their Housing Minister, who at the time went under the name Grant Shapps, who "spoke of a 'rational' market in which house prices fell in real terms, by increasing by less than earnings."
Example Four - I had a heated discussion with another Georgist recently (he has posting rights on this blog so is free to put his side of the argument). He said that 'we' want to keep house prices (i.e. land prices) as low as possible. For sure we do, but my point was that to placate the Homeys, we must make the point that absolute house prices would not fall if the tax shift were done properly.

If absolute house prices stay the same and disposable incomes go up (so houses are much cheaper in relative terms), then everybody's reasonably happy. It must be clear that selling prices are largely determined by credit availability i.e. banks willingness to lend and borrowers willingness to borrow i.e. borrower's ability to repay mortgages. As first time buyer disposable incomes would be significantly higher (the LVT on the homes they buy would be half as much as the reduction in taxes on their output and earnings, not to mention the boost to the economy), the tax shift can be easily be tweaked so that house prices do not fall at all.

We ended up agreeing to disagree, but I like writing things down for posterity.

Friday, 7 December 2018

Dark fluid: this bit doesn't make sense

From Space Daily:

The preamble:

Our best theoretical model can only explain 5% of the universe. The remaining 95% is famously [what sort of justification is that?] made up almost entirely of invisible, unknown material dubbed dark energy and dark matter. So even though there are a billion trillion stars in the observable universe, they are actually extremely rare.

The two mysterious dark substances can only be inferred from gravitational effects. Dark matter may be an invisible material, but it exerts a gravitational force on surrounding matter that we can measure. Dark energy is a repulsive force that makes the universe expand at an accelerating rate.

The two have always been treated as separate phenomena. But my new study, published in Astronomy and Astrophysics, suggests they may both be part of the same strange concept - a single, unified "dark fluid" of negative masses.

Jolly good, now here's the logic...

Negative masses are a hypothetical form of matter that would have a type of negative gravity - repelling all other material around them. Unlike familiar positive mass matter, if a negative mass was pushed, it would accelerate towards you rather than away from you...

My model shows that the surrounding repulsive force from dark fluid can also hold a galaxy together. The gravity from the positive mass galaxy attracts negative masses from all directions, and as the negative mass fluid comes nearer to the galaxy it in turn exerts a stronger repulsive force onto the galaxy that allows it to spin at higher speeds without flying apart.

That's a poor explanation. How can positive mass attract negative mass, but negative mass repel positive mass? Either the two repel each other (being mirror images)... or the two effects would cancel each other out.
Greater minds than mine reckon that there's no such thing as gravity anyway: space-time is bent by mass and objects travel 'downwards' to where time is passing more slowly (where there is more mass slowing time down). Just like a log which is floating down a river will come to rest in a static pool on the bank of the river if given half the chance.

So negative mass would just have the same effect on matter with negative mass. The logical conclusion would be that matter with positive mass would perceive time as passing more quickly if it were near negative mass, leading to the repulsive effect.

And what if you manage to force negative and positive mass matter together and mix it together, does it then have zero mass?

Clean Brexit 'Cliff Edge' Fallacy

The fallacy of the 'cliff edge' when (if?) we leave the EU without a 'deal' with it.

Evidence 1.  Chat with major insurer underwriting admin. bod in Major Corporates business.  They are targeting having all their contracts sorted out to accommodate EU and UK law by 1st January 2019

Evidence 2. M&G sorting out their funds

I just bet that all those supposedly 'fragile' supply chains will also be sorted out well in time as well.

Markets always eventually sort out the chaos caused by bureaucrats - if they are left alone to do so.

Thursday, 6 December 2018

Today's statement of the obvious

From the BBC:

Bush was almost certainly the last US president to have fought in World War II.

Tuesday, 4 December 2018

Killer Arguments Against LVT, Not (450)

Two equal and opposite ones:

1. Landlords will just pass on the tax to their tenants.

2. House prices will fall, people will be trapped in nequity, banks will go bankrupt, world will come to an end etc.

Clearly, if 1 is true, then house prices would be unaffected, as the net income/benefit from owning one is unchanged.

So at least one of them is untrue, or the truth is somewhere in the middle. Maybe rents would go up a bit and house prices down a bit.

(Also, falling house prices would A Good Thing overall and any transitional issues could easily be smoothed out, but let's assume it's A Bad Thing.)

Having thought about it for a while, prediction 1 will, after the event *appear* to have been correct - provided there are equal and opposite cuts to VAT and National Insurance (and minor taxes like Council Tax).

Rents are set by the disposable incomes of tenants who are in work; an average tenant household would have £15,000 more disposable income, so we can assume that rents would increase to soak up half that, which (coincidentally) would cover the LVT on an average rented home.

This is neither A Good Thing nor A Bad Thing, nor is it an argument against (tenants would still end up a lot better off; landlords would not lose out).

We can therefore safely conclude that KLN 2 is quite simply not true (regardless of whether it would be A Good Thing or A Bad Thing):

a. If net rents stay the same, then the price which landlords would be willing to pay for a home would also be unaffected.

b. It's mortgage lending which is the main driver of house prices. Buyers are in a borrowing arms race and whoever is prepared to borrow the most gets the home, banks are willing to lend up to an 'affordability' pain threshold i.e. mortgage repayments should leave borrowers enough to live on plus a bit of a cushion.

Borrowers' disposable incomes, even after deducting the LVT they will be paying, will be considerably higher, so if anything, the amounts which banks would be willing to lend will go up, meaning that it is possible (but unlikely) that house prices would actually go up slightly.

c. Clearly, if most people's disposable income goes up, then some other people's income will go down, i.e. semi-retired and retired in more valuable homes. But such people are unlikely to be taking out mortgages as banks don't like repayment periods which extend into people's retirements.

Therefore, their fall in disposable income has zero influence on house prices, they will be trading down to minimise their LVT bills and free up cash i.e. the opposite of taking out a mortgage to trade up.