Friday, 22 June 2018

Glorious bit of landlord squealing

From the BBC, a few highlights:

Six thousand jobs are at risk in a drastic attempt to save [House of Fraser] from collapse. If the rescue plan fails, administration is likely. But High Street landlords are furious about the way they're being treated. They are the creditors who have to shoulder the burden of financial losses.

Many properties are owned by institutional investors who rely on store leases to provide a steady income stream for pension funds and insurers. Take the House of Fraser store in Milton Keynes. It's part of a shopping centre co-owned by Hermes Investment Management. Its rent generates long-term funding for two big pension schemes.

"Landlords are in an invidious position. We enter into these long-term contracts in good faith, with pensioners' income and security often at stake," says Chris Taylor, head of private markets at Hermes Investment Management.

House of Fraser is using what's called a company voluntary arrangement (CVA), a form of insolvency proceedings, to overhaul its business...

The plan requires approval from 75% of its unsecured creditors. All creditors get a vote, but the value of the vote depends on how much they are owed.

Under insolvency rules, landlords' claims are already heavily discounted because of how accountants judge their losses. The issue for landlords is that their "say" or voting rights in the CVA process is discounted by a further 75%, which they believe is grossly unfair.

The BBC understands that even if most landlords vote against the plan, they won't have enough clout to win the day.

"With landlords' voting power reduced by 75% of the value of their claims, the dice are clearly loaded against them in the CVA process," says Mark Fry, from the restructuring firm Begbies Traynor... "Even if the majority of landlords were to vote against the CVA, that would not be enough to stop it being approved in its current form, leaving landlords taking all the pain of the CVA process whilst House of Fraser's shareholder takes out £70m."

I'd never heard of that reduced-votes-for-landlords rule, but it sounds eminently sensible to me.

Thursday, 21 June 2018

Daily Mail on top form

Emailed in by MBK:

Love Island pays tribute to Sophie Gradon: Reality show airs 'in loving memory of' message ahead of new episode after ex-contestant, 32, was found dead at her parents' home following depression battle

* Sophie Gradon, 32, found dead at her parents' £960,000 home near Newcastle
* The model and former beauty queen appeared on the 2016 series of Love Island
* She was tweeting hours before death including loving message to her boyfriend
* The show has aired tribute to the star which was shown during tonight's episode

Exquisitely fucked up logic for keeping cannabis illegal

From this morning's Metro:

Legalisation of cannabis will not eliminate illegal dealing. There will still be a criminal element ready to supply it for a price undercutting the legitimate market.

HG, Kent.

That is just wrong on so many levels that it is impossible to know where to start.

Wednesday, 20 June 2018

MG TF remodel (blue)

Second attempt:

Tuesday, 19 June 2018

MG TF remodel

The MG TF (2002 version) looks good from some angles, but the boot is just too clumpy, the whole shape always reminds me of a giant, old fashioned slipper.

I have (literally) cut and pasted together how I think it should look, if it were:
- front engined/rear wheel drive front wheel drive (by shifting the cabin back and the wheels forward),
- same length but 3.3" lower:
- the front end will be somewhere between a BMW Z8 and a Toyota MR2 roadster, and the boot will have a rounded integrated spoiler (like a Mazda MX-5), but that's difficult to show in profile:

The same old tired template

A retired politican, who toed the party line and dutifully trotted out the "illegal drugs cause harm so must remain illegal" mantra while in office/in power, now comes out and admits it's all stupid and that some things - like cannabis - should simply be legalised, regulated and - presumably - taxed.

Those still in office/in power, toe the party line and come out with the usual crap:

Prime Minister Theresa May remains firmly opposed to legalisation or decriminalisation of the drug because of the harm she says it does to individual users and communities.

See also, George Schultz (Secretary of State under Reagan);
Bob Ainsworth (former Home Office minister);
Paul Whitehouse (former chief constable, Sussex);
Tom Lloyd (former chief constable, Cambridgeshire);
Francis Wilkinson (former chief constable, Gwent);
Brian Paddick, (former Deputy Assistant Commissioner, Metropolitan Police);
and so on ad infinitum.

Give it five or ten years, and former PM Lady May will no doubt admit that the whole thing is for shit and maybe we should legalise it.

Rinse and repeat.

Monday, 18 June 2018

Yeah! Go bear!

From The Daily Mail:

This is the terrifying moment an angry performing bear attacked its handlers after being forced to ride a skateboard and beaten with a stick at a circus in Russia.

Children in the audience screamed as the animal turned on its keepers moments after riding down a ramp during a performance at a village in Russia's Volgograd region.

Desperate members of staff tried to beat the brown bear with sticks as it pinned a colleague to the ground.

Pop over there to watch the action in all its g(l)ory.

And they should know...

From the print version of the DT Business Section:-

Bitcoin an environmental disaster with no real worth, warns 'bank of central bankers'.


Crypto currencies "are not backed by the assets and revenues stream of an established state.  Most can be rendered worthless by fraud or digital manipulation. They are essentially Ponzi schemes that masquerade as citizen currencies beyond government control."

Oh. Right. And just how well are those government controlled currencies doing then? £100 in 1945 buys what £4101 does in 2017 (

Sunday, 17 June 2018

Your taxpayers' money, hard at work.

From the BBC:

The NHS in England is to get an extra £20bn a year by 2023 as a 70th "birthday present", Theresa May says. It means the £114bn budget will rise by an average of 3.4% annually - but that is still less than the 3.7% average rise the NHS has had since 1948...

The five-year funding settlement covers just front-line budgets overseen by NHS England. About a 10th of the overall health budget is held by other bodies for things such as training and healthy lifestyle programmes, including stop smoking services and obesity prevention programmes. The BBC understands these will be protected, but beyond that it is unclear what will happen to them.

?!? One-tenth of £114 bn is £11.4 bn, which is approx equal to our net contributions to the EU budget.

Would anybody like to chip in for a battle bus, with "We spend £220 million a week on stop smoking services and obesity prevention programmes. Let's fund the NHS instead." written on the sides?

Friday, 15 June 2018

"The Missing Profits of Nations"

Via a Resolution Foundation email newsletter, this fine study which confirms what we knew all along:

By combining new macroeconomic statistics on the activities of multinational companies with the national accounts of tax havens and the world’s other countries, we estimate that close to 40% of multinational profits are shifted to low-tax countries each year. Profit shifting is highest among U.S. multinationals; the tax revenue losses are largest for the European Union and developing countries...

Our findings have implications for policy. First, they suggest that cutting corporate tax rates, as the United States did at the end of 2017, is less likely to generate quick positive effects on wages than textbook economic models suggest. For wages to rise, productive capital needs to increase, which can happen fast if capital flows from abroad, much less so if paper profits—not productive capital—is what moves across countries.

'Rents' get an honourable mention:

Second, profit shifting raises new challenges for tax policy. It reduces the effective rates paid by multinationals corporations compared to what local firms pays. Whatever one’s view about the efficiency cost of capital taxes, this seems difficult to justify—especially if part of the profits of multinationals derive form rents, which standard models suggest should be taxed.

Having examined the evidence, the authors make a surprising claim:

We show theoretically and empirically that in the current international tax system, tax authorities of high-tax countries do not have incentives to combat profit shifting to tax havens. They instead focus their enforcement effort on relocating profits booked in other high-tax places—in effect stealing revenue from each other. This policy failure can explain the persistence of profit shifting to low-tax countries despite the sizable costs involved for high-tax countries.

Their explanation is on page 23:

To ensure profits are taxed where they have been made (i.e., the prevailing internationally agreed rules), tax authorities in high-tax countries routinely audit large companies. They check that intra-group transactions are conducted at arm’s length (i.e., as if the subsidiaries of a given multinational group were independent entities). When they find it is not the case, they can attempt to ask multinationals to correct their transfer prices, which results in a relocation of taxable income across countries.

In the current international tax system, tax authorities have incentives to relocate profits booked in other high-tax countries—not profits shifted to havens. Take the case of France. e1 relocated to France is worth the same to France whether it comes from Germany or from Bermuda. But it is easier for the French tax authority to relocate e1 booked in Germany, for three reasons.

First, it is feasible, because information exists on the profits booked in Germany (from Orbis), while no or little information typically exists on the profits booked in Bermuda. Second, it is more likely to succeed, because firms are unlikely to spend much resources opposing this transfer price correction: for them, whether profits are booked in France or Germany makes little difference to their global tax bill, since the tax rates in France and Germany are similar. Third, if there is a dispute between France and Germany, it is likely to be settled relatively quickly.

Seems plausible to me.

The answer is to simply disallow all expenses paid to businesses abroad unless the company claiming the deduction can:
a) prove that they have no connection with the other company,
b) explain exactly what the payment was for, and
c) show that this is an arm's length, market price.