Saturday, 31 October 2020

NIgel Farage makes a good point.

From The Sun:

During his surprise appearance, Farage, 56, claimed close pal Trump, 74, is "bringing Israel together with Arab nations in a way that nobody ever believed was possible" as he addressed the crowd onstage.

I had noticed this. Over the past four years, US troops have been largely (although not entirely) withdrawn from Afghanistan, Iraq and Syria.

The outcome is as you'd expect, there is noticeably less violence going on in those three countries. A few Arab countries have even started normalising relations with Israel, i.e. at least acknowledging its existence (how you can pretend that a whole country doesn't exist was always a mystery to me; but I suppose the many Arab countries who said that Israel had no right to exist were at least admitting that it did exist).

Meanwhile, Trump is engaging in silly gun boat diplomacy vis a vis Iran and forcing other countries to go along with his sanctions. Inevitably, tensions are increasing. IMHO, US warships have no more place in the Persian Gulf than Iranian warships have in the Gulf of Mexico. The Yanks got very prissy when Russian warships tried to get near Cuba, didn't they?

Few in the west will ever give Trump credit for any of this because it doesn't fit with the narrative - they'll just focus on him provoking Iran, but hey. Let's see what happens if Biden wins on Tuesday and goes back to the old Clinton-Bush-Obama way of doing things.

Thursday, 29 October 2020

Killer Arguments Against LVT, Not (486)

"Unknown" submitted a couple of KLNs, you can tell his heart wasn't really in it:

1. The landlord owns the property and land it stands on because of homsesteading. Nobody has moral claim to it other than them.

Poor start. A landlord is clearly not "homesteading" and owns more land than he needs. There's no such thing as a moral claim to land, it's a legal and economic concept, so whether or not a landowner (or anyboyd else) has a "moral" claim to land is neither here nor there. But landowners do not have a moral claim on a large chunk of everybody else's output and labour, i.e. the taxes on output and earnings which are used to pay for those government services which give land its value in the first place.

2. Land is just one more scarce resource. There are many, many people who live fulfilling, economically productive lives never owning land.

If we put a 100% tax on chicken consumption, guess what? Everybody would eat turkey McNuggets.

Georgism is stupid because no scarce resource is unique. They're all scarce and thus not special. There's even plenty we're not making more of. The idea of one of them being the one thing we can tax is just ridiculous.


That's kitchen sink stuff.

I don't think that land is scarce at all, 99% of the UK population lives and works on less than 10% of UK surface area, the developed bit. Developed land = geographical areas where society in general and the government in particular make land valuable, that's where people want to live, some trade-off between good jobs, shops and leisure opportunities, good schools, low crime, good transport links, nice views, a bit of open nature - or not as the case may be. Developed land is 'scarce' because providing or organising all these services is very expensive and complicated (simply owning land is the easiest bit); it is the services which are in limited supply.

It is quite true that many people don't own land. Most of them are economically productive, but their lives are all the less fulfilling for having to fund land values out of their taxes AND pay rent for somewhere to live or do business. But if they can manage - and they can - why can't everybody? Is there a special class of people who can only lead "fulfilling, economically productive lives" if they own land? How is a landlord "economically productive" anyway? Any tenant who buys the place he was renting must know that they aren't.

The chicken-McNuggets analogy is fatuous. Land Value Tax is just landowners paying the government for the value of the services they receive, it's a user charge, like paying for the market price for chicken or turkey McNuggets. You wouldn't say that McDonalds charge a 100% tax on turkey McNuggets, they just charge market price. And the government can "tax" land rental value at 100% (for administrative reasons, call it 80-90%) and the land is still there, the same services/benefits are still being provided at that location, and demand for land is unchanged.

As mentioned, whether land is scarce or not is irrelevant. What makes it unique is the fact its "value" is actually the value of services and benefits being provided at that location. My car doesn't change in value if I buy it in Wales and park it in Kensington. If you could buy farmland in Wales and move it to Kensington, it would go up in value a million times over. That's why land is an ideal source of government revenues (there other equally ideal taxes, like fuel duty, but they are minor in comparison), and certainly far better than taking arbitrary percentages of business output (VAT), wages (National Insurance) or income generally (income and corporation tax).

Tuesday, 27 October 2020

Cow news

Both via @AmbushPredator.

From The Daily Mail:

A growing wellness trend out of the Netherlands has people cuddling cows for comfort.

Called 'koe knuffelen' in Dutch — which translates to 'hugging cow' — the practice typically involves visiting a farm and spending several hours in the company of cows. According to proponents of the trend, cow cuddling can be quite soothing thanks to the animal's warm temperature and size, and the oxytocin boost it leads to can even reduce stress.


Presumably you have to sign a lenghty disclaimer saying that the farm owner assumes no responsibility or liability if customers get kicked or trampled to death.

Also from The Daily Mail:

A teenager from Northern Ireland has died after the car he was driving collided with a cow. Josh Fletcher died in the early hours of Sunday morning after his car left the road when he collided with the animal...

Police have not confirmed the fate of the cow that was hit but is thought to have been killed as well.

Saturday, 24 October 2020

Killer Arguments Against Citizen's Income, Not (32)

With my Citizen's Basic Income Trust hat on, I had a Zoom call with somebody doing an MA on the topic yesterday.

He asked me about "political feasibility", given all the other (spurious) objections.

The answer is, do it softly-softly behind the scenes. For example (ignoring the fact that they are trying to lump a lot of this into Universal Credits), to get down to the tedious details:

1. There is a significant couples penalty in the welfare system. A single adult gets £74/week Income Support (in its various guises) and a couple gets £117/week. So just hold the single person rate fixed and gradually bump up the couple's rate to £148 and allow them to put in two separate claims. Then get rid of the tick box that asks whether you have a 'partner' or not.

2. Gradually align Working Tax Credits (basic amount £3,040 a year for a single adult working more than 16 hours/week or £3,865 for a single adult working more than 30 hours/week) with Income Support Rates and reduce the 16 hours/week threshold down to 1 hour.

3. So Working Tax Credits would end up at £74 x 52 weeks a year = £3,848, even if you are only working 1 hour a week.

4. Gradually reduce the earning threshold for Working Tax Credits withdrawal down to £nil, while at the same time gradually reducing the total withdrawal rates for Working Tax Credits, Income Support and Universal Credit down to 32% for every £1 of income (from their current overall rates of about 60% to 100%).

5. 32% is of course the current real basic tax rate (income tax + Employee's NIC). At this stage, you no longer need a parallel means-testing system - claimants are just given a PAYE code with no personal allowance (a BR code) with a tick in the box for "Income Support/WTC claimant - no NIC threshold". They do this with the extra 9% tax for people with student loans, it's perfectly realistic . So they get full amount of benefits and these are "means tested" or "clawed back" via normal PAYE.

6. Gradually reduce Statutory Maternity/Paternity Pay (£151/week for 39 weeks) to the same as Income Support or Working Tax Credits, while extending the eligibility period from 39 weeks to "until you decide to stop claiming or are old enough to get the old age pension". Claimants get the same adjusted PAYE code as above.

7. Married people who earn less than the Personal Allowance can transfer part of the notional tax saving to their working spouse, it's a tax saving of a laughable £250 a year. This one will keep the Daily Mail readers happy. Allow the lower earner to transfer the entire unused part of their personal allowance, and/or allow the lower earner the claim the lost tax saving on the unused part as a cash payment (to the extent they are not getting Statutory Maternity/Paternity Pay, see above) and gradually bump up the cash payment to the same as Income Support - WTC - SM/PP rates.

8. Gradually phase out all the "looking for work" conditions, do interviews every three months instead of every week, reduce the number of hours people have to pretend to be looking for work down to 1 hour a week.

9. Gradually increase the normal NIC thresholds to £12,500, so that the value of the NIC and income tax allowances for somebody in full-time work - not receiving IS, WTC, SM/PP etc - is £4,000 (£12,500 x 32%) and then get rid of the allowances and deduct tax and NIC from the full amount of earnings with a monthly "tax credit" of one-twelfth of £4,000 (mathematically exactly the same thing - they used to do this in Ireland), then increase the IS, WTC and SM/PP rates to £4,000 a year as well so that people are heartily indifferent which system they're on.

And so on - in five or ten years, we'd have a UBI system (or Negative Income Tax system) and nobody would have noticed. Most people wouldn't have a clue what all these things mean, so won't have a strong opinion if some obscure sections in some obscure social security acts are amended a bit every year.

Friday, 23 October 2020

Neal Hudson's one-to-ten ratio

Somebody asked me recently whether this ratio still holds.

The answer appears to be, yes, there is still a ratio but since 2005, it is closer to one-to-eight than one-to-ten. Maybe he was using different data sources? Maybe it's do with Help-to-Sell and all the similar subsidies that Labour introduced post-2008? See *UPDATE*. I used numbers from here and here. If anybody finds transaction numbers for a longer period, please send me the link.

The reason for this is simple. House builders know that if they build more homes, their selling prices would drop and costs would increase. They work on marginal revenue and marginal costs, which are much lower (or higher) than overall average revenue (or costs) and they stay at the narrow sweet spot which maximises marginal profit per unit i.e. by drip-feeding one new home for every seven existing homes that are bought and sold. So anybody who believes that handing out planning permissions like confetti would lead to more construction and lower prices is living in cloud cuckoo land, home builders will always stick to the one-to-eight profit maximising level.

OK, we can argue over cause and effect, but it's clear from the chart that the blue completions line lags (i.e. responds to) the red sales line by about a year. Homebuilders make their decision on how many units to start when sales are high, and this year's completions depend on last year's starts, in extreme situations (like 2008) they just leave things half-finished (or something like that).

This is quite unlike mass-produced goods where average costs go down by much more than selling prices if output is increased, so as far as a manufacturer is concerned, the more the merrier. In 2008, house prices fell by about a fifth and supply fell buy a half to maintain or at least maximise margins.


---------------------
UPDATE I contacted him on Twitter @resi-analyst and he posted this chart showing a one-to-ten ratio and the impact of HTB:

Things that have irritated me this week

From The Conversation:

Soot, otherwise known as black carbon, is also made when burning dirty fuels, and emitted in large quantities from older cars.

Why use an actual word that everybody understands when a made-up phrase will do, eh?
------------------------------------
You need three devices to activate an iPod Touch once you have wiped it and reset it to factory settings. The iPod Touch itself, a PC to log on to the website and requesting one-time codes, a mobile phone for receiving texts with the one-time code. You then enter these codes either back onto the website or onto the iPod Touch. This process is highly circular and took me nearly an hour.
------------------------------------
From the BBC:

"They were swimming against the tide - but their whole lives were about swimming against the tide so they ploughed on.
------------------------------------
From The Evening Standard:

John Leslie remembers vividly the moment his showbiz career ended and the life that he knew it changed forever; when he instantly went from lovable TV host to suspected rapist.

He and Fern Britton had spent the morning of October 23, 2002, treating ITV viewers to their usual blend of cookery, lifestyle features, and the tribulations of the celebrities of the day. But over on Channel 5, the host of The Wright Stuff Matthew Wright had blurted out Leslie’s name when discussing Ulrika Jonsson’s claim in her autobiography "Honest" that she had been raped.


What I can't find out one way or another is, did Ulrika confirm or deny that it was him or did she remain silent (which sort of implicates him)? Assuming she denied it, did Matthew Wright ever apologise? Did Matthew Wright ever explain why he thought she meant John Leslie? It's all well and good passing on unfounded rumours and tittle-tattle in a small group of colleagues or friends, but surely there's a rule against doing it on daytime TV? That's like hitting "reply all".

I know that this is not relevant to the recent case, but it was Matthew Wright's comment that sparked it all off, and I'd really like to know.

Tuesday, 20 October 2020

"A Saturated Gassy Argument"

I've been delving ever deeper into MMGW theories. Most of the common-or-garden ones are easily demolished*, their next line of argument is far more subtle and goes like this:

In the layers so high and thin that much of the heat radiation from lower down slips through, adding more greenhouse gas molecules means the layer will absorb more of the rays. So the place from which most of the heat energy finally leaves the Earth will shift to higher layers.

Those are colder layers, so they do not radiate heat as well. The planet as a whole is now taking in more energy than it radiates (which is in fact our current situation). As the higher levels radiate some of the excess downwards, all the lower levels down to the surface warm up. The imbalance must continue until the high levels get hot enough to radiate as much energy back out as the planet is receiving.


Fair enough, like most MMGW arguments it seems to stand up in isolation if you ignore the equal and opposite counter-arguments and evidence. But that claim does not square with the following statement:

In any event, modern measurements show that there is not nearly enough CO2 in the atmosphere to block most of the infrared radiation in the bands of the spectrum where the gas absorbs (1). That’s even the case for water vapor in places where the air is very dry. When night falls in a desert, the temperature can quickly drop from warm to freezing. Radiation from the surface escapes directly into space unless there are clouds to block it (2).

1) Either CO2 blocks a lot of infrared or it doesn't. You can't have it both ways. The clever diagrams show that CO2 blocks nearly all the outgoing infrared at 14 - 16 microns (terrestrial infrared goes from 4 to 100 microns). If that's not "most", I don't know what is. Then they cheerfully admit that "Radiation from the surface escapes directly to space unless there are clouds to block it".

2) Water vapour behaves in a similar fashion to CO2 as regards absorbing and re-emitting infrared (just at many more wavelengths). You cannot compare this with the effect of clouds i.e. actual water and ice droplets, which do indeed have a very strong blanket effect (cooling by day; warming by night; the overall effect is slight cooling). The acid test for all this would be to compare the rate of night time cooling where/when it's dry without clouds and times where/when it's moist without clouds.

Their maths is wrong as well:

In reality, that mere percent increase, when combined properly with the "thinning and cooling" argument, adds 4 Watts per square meter to the planets radiation balance for doubled CO2. That’s only about a percent of the solar energy absorbed by the Earth, but it’s a highly important percent to us! After all, a mere one percent change in the 280 Kelvin surface temperature of the Earth is 2.8 Kelvin (which is also 2.8 Celsius).

Nope. The "4 Watts" (often given at 3.7 Watts) was reverse engineered by assuming that the entire increase in temperature was down to increased CO2 levels over the same period, so can't be presented as evidence in support of the underlying assumption. Even if true, a one per cent increase in incoming radiation would lead to a one-quarter per cent increase in surface temperature = 0.7C.

* Such as:
(i) the IPCC energy budget diagram which does not add up or explain why the 'greenhouse effect' is negative during the day time;
(ii) claiming that the greenhouse effect adds 33C of warmth, ignoring the fact that this only applies at sea level and is entirely due to the gravito-thermal effect;
(iii) using Venus as an example of runaway global warming when its high surface temperature is also due to the extra gravito-thermal effect because its atmosphere is one-hundred times as massive as Earths;
(iv) glossing over Mars which has forty times as much CO2 per m2 but no greenhouse effect;
(v) pointing to experiments which show that CO2 warms up more than normal air under a bright light and saying it's because it traps infrared. Nope. This is because of its lower specific heat capacity - if you do the experiment with argon, it warms as much as the CO2; etc.

Monday, 19 October 2020

Daily Mash out-pedants itself

From The Daily Mash:

3am in the morning

‘AM’ means ‘in the morning’, cockwad. Saying them both is like asking ‘would you like some gravy meat sauce on that chop’ or ‘are you seriously smoking a cannabis drugs spliff before work?’ For f**k’s sake just choose one.


Agreed. But they overlook the next iteration:

Could you pop in your pin number for me?

Who else would I be doing it for? I’m the only person in the shop, my card is in the machine, I’m talking to you and only you. Save your breath.


It's not "PIN number". It's "PIN". The "N" in "PIN" stands for "number". That's the crime here, the rest of the sentence, while largely superfluous, is just general politeness and friendliness. In some places, they just point vaguely in the direction of the card reader.

Ah well, it is what it is, just saying etc.

"Money" again

From the comments to the previous post:

Graeme: I knew this from A level economics in the 1980s. Money is a medium of exchange (1), a unit of account (2) and a store of value (3). Depending on the transaction, one of these things is more important than the others. But the other functions still exist.

(1) and (2) are clearly true. That would apply to things with intrinsic value as well, gold in historic times or cigarettes in prison. "Money" has no intrinsic value (numbers on your bank statement or bank notes or shopping vouchers) but is still (3) a store of value, because it is a claim on something else. The fact that you can swap these for goods and services gives them value. If a shop sells vouchers, it has cash in the bank and an equal and opposite liability to provide goods in future. It does not make a profit by selling the vouchers (unless they lapse, in which case it's a win for the shop and a loss to whoever let them lapse) and the existence of those vouchers does not change the total amounts of goods available to consume now or in future.

Ralph Musgrave: But government/central bank created money (with which the above article started is very different). That is, what exactly does the BoE owe you in respect of your £10 notes? Nothing much!

The BoE is part of the government. When it's time to pay your tax, you could pay it in bank notes which the self-same government printed in the first place. Once you've paid your tax, they could throw all those bank notes on a bonfire. Basic Modern Monetary Theory. The same logic applies to numbers on bank statements, they appear out of nowhere (printing) and disappear into nothing (incinerating).

What's in it for the government and what gives those bank notes value?

You can see them as permission slips to earn money. If you want to earn £100,000 real money in the private economy, you need to acquire £40,000's worth of those permits by the end of the year to hand back as income tax. Even if you invoice only in foreign currencies and earn €110,000 or $120,000 or whatever, you will still need to get your hands on £40,000's worth of permits.

The government puts the permits into circulation by printing them (out of nowhere) and using them to pay public sector salaries, old age pensions, welfare etc (and increasingly, giving money to their mates for nothing in return). Businesses and workers have to get hold of those permits to pay their tax and they do this by providing a certain fraction of their output to public sector workers, pensioners etc in exchange for the permits. Those salaries and pensions transfer output from private businesses to public sector workers and pensioners, which is the whole idea.

If you yourself have more permits than you need to pay tax, you use them to buy goods and services from a business which needs more. The logic applies just as well to rationing vouchers. A non-smoker who wants to bake a cake swaps his tobacco vouchers with a smoker who doesn't need his full quota of eggs or flour. Or the non-smoker can sell them to a smoker and use the cash to buy something else that isn't rationed. The rationing vouchers have no intrinsic value and cost very little to create, but they still have value. Once used, they go on a bonfire.

Sunday, 18 October 2020

"Money and Cryptocurrencies"

From J W Mason's blog:

In the quantity view, “money” is something special. The legal monopoly of governments on printing currency is very important, because that is money in a way that other assets aren’t. Credit created by banks is something different. Digital currencies are a threat or opportunity, as the case may be, because they seem to also go in this exclusive “outside money” box.

But from the Minsky-Mehrling-Graeber point of view, there’s nothing special about outside money. It’s just another set of tokens for recording changes in the social ledger. What matters isn’t the way that changes are recorded, but the accounts themselves. From this perspective, “money” isn’t an asset, a thing, it is simply the arbitrary units in which ledgers are kept and contracts denominated.

The starting point, from this point of view, is a network of money payments and commitments. Some of these commitments structure real activity (I show up for work because I expect to receive a wage). Others are free-standing. (I pay you interest because I owe you a debt.) In either case money is simply a unit of account. I have made a promise to you, you have a made a promise to someone else; these promises are in some cases commitments to specific concrete activities (to show up for work and do what you’re told), but in other cases they are quantitative, measured as a certain quantity of “money.”


Good summary. It's what I've always said. Things like gold or the metal in coins have an intrinsic value, but they aren't "money" in the true sense. True "money" is just a measure of indebtedness. I go to work, my employer owes me my wages. For every hour I work, he owes me a bit more. This accrued debt is formally settled at the end of each month when the balance in his account goes down and the balance in mine goes up. If - coincidentally - I use the same bank as they do, then as regards the outside world, absolutely nothing has happened. It's just a ledger entry.

Thought experiment #1. I am free to agree with my employer that he will pay part of my salary in Tesco vouchers. In which case Tesco's bank balance goes up by the amount he paid for the vouchers. Those vouchers are "money" in the narrow sense (no intrinsic value). I can take them to Tesco and exchange them for food.

Tesco is now indebted to me - they owe me some food. The outstanding vouchers which I haven't used yet show up as liabilities on Tesco's balance sheet and are assets from my point of view, I tuck them into my wallet alongside a few fivers or tenners. Tesco and I are both heartily indifferent whether I pay for my shopping with their own vouchers or with fivers and tenners. If I don't use them this week, I'll use them next week instead.

Or instead of giving me vouchers, my employer could pay Tesco to deliver me certain staple food items each week (and cut the salary payment into my bank account). My employer's bank balance goes down and Tesco's goes up - they now owe me some food, exactly the same as if my employer gave me Tesco vouchers. Once delivered, that debt has been paid (in kind rather than in "money") and we are back to where we would have been.

Thought experiment #2. All bank balances and debts (including govermnent bonds) are simply cancelled, bank notes in circulation are declared invalid. Every adult is given a small amount of the new notes in cash and we all start again. A modified version of this actually happened in Germany in 1948, and it did them their economy the world of good. As unfair as it might seem, did the total real wealth of that country plummet or even change in 1948 (ignoring balances held or owed by foreigners)? Clearly not. One man's loss is another man's debt relief and it cancels out to zero.

It would be quite a different thing if the German government had confiscated all gold in the country and dumped it in the Marianas Trench. Gold has intrinsic value and Germany as a whole would have clearly been a lot poorer afterwards.

Friday, 16 October 2020

Well I thought it was funny



Timing wise, I think her left hand pigtail should have come up a fraction of a second earlier, at the same moment as her right hand pigtail, but hey.

"Hot!!" is the new "Skorchio!".

Wednesday, 14 October 2020

"Natural disasters are turning the world into an uninhabitable hell"

From The Daily Mail:

The number of natural disasters around the world has doubled since the turn of the century, with climate change to blame according to the United Nations.

Speaking on Monday, the UN Office for Disaster Risk Reduction said 1.23 million people have been killed in natural disasters since 2000.

Around the world, 7,348 disasters including earthquakes, tsunamis and droughts have cost nearly $3 trillion, nearly double the numbers for the previous 20-year period.


That sounds a bit worrying, but is it really?

Remember that most 'natural disasters' are failures of town planning. If you build in areas prone to earthquakes, floods, forest fires or tornadoes; on cliff edges or unstable ground; if inequality is so extreme that people are forced to live in shanty towns on steep slopes or flood plains or do subsistence farming on marginal land (yes, it always boils down to land inequality...), then it's only a matter of time.

Although they try to pin this all on 'climate change', they state that "Geo-physical events such as earthquakes, tsunamis and volcanoes have killed more people than any of the other natural hazards reviewed". If more than half died as a result of "geophysical events"*, that brings the total deaths which might or might not have been caused by 'climate change' (rather than failures of town planning or land inequality) down to about 600,000 in about 7,000 events classified as natural disasters over 20 years.

That averages out at 350 events a year (or two per country per year) with 85 people dying in each event = 30,000 deaths per year. There are over seven billion people, about 100 million of whom die each year on average. The extra 30,000 deaths a year (slightly less than the number of road deaths in the USA each year) are nowhere near turning the world into an "uninhabitable hell", are they? And $3 trillion is a lot of money, but that averages out at $150 billion a year. Global GDP is about $80,000 billion a year, so the cost of sorting this all out is about 0.2% of global GDP or about $20 per person per year. And half of that is due to earthquakes and volcanoes.

* I think that's what they meant. The two biggest disasters were caused by earthquakes, which have nothing to do with 'climate change'. About 450,000 people died in the Boxing Day Tsunami and the Haiti earthquake (Haiti is an uninhabitable hell anyway, I believe, that's a political thing), with plenty of other earthquakes and volcanic eruptions which you've forgotten about that would bring up the total deaths to more than half the headline 1.23 million.

Tuesday, 13 October 2020

Baffling throwaway comment about nitrogen and infrared

From sciencemag.org:

Ho-kwang Mao at the Carnegie Institution of Washington in Washington DC, tried to create this new form of nitrogen at room temperature.

Mao's team used a diamond anvil that can inflict the highest pressures ever created in a laboratory. It works like the name suggests: Two flat-topped diamonds are mechanically pressed together. Between the diamonds is a metal gasket with a small hole, where a nitrogen sample is loaded. Squeezing the diamonds together flattens the gasket and subjects the nitrogen to pressures nearly half that at the center of Earth.

Mao could watch the sample through the diamonds. At this high pressure, nitrogen lost all signs of being a molecule - infrared light that normally is absorbed by nitrogen-nitrogen bonds passed right through the sample, they report in the 7 August Physical Review Letters.


"Normally"? Didn't these clever scientist chaps get the memo that nitrogen neither absorbs nor emits infrared radiation?

Monday, 12 October 2020

"Bank of England questions banks over negative rates"

From the BBC:

While the Bank of England may set its base rate below zero, it is unlikely most consumers will immediately enter the topsy-turvy world of being paid to borrow money. Those on fixed-rate mortgages will see no difference, while variable-rate mortgage terms often state that borrowers will never pay less than zero.

Savers with deep pockets such as the wealthy and the banks themselves, may be charged to deposit their money. Banks depositing cash overnight at the European Central Bank currently pay 0.5% to do so. In November, Swiss bank UBS began charging up to 0.75% for cash deposits from wealthy clients.


From the BoE:

Bank Rate determines the interest rate we pay to commercial banks that hold money with us. It influences the rates those banks charge people to borrow money or pay on their savings.

This is Emperor's New Clothes stuff. Read the bit in bold!

I know that commercial banks are required by regulations to deposit a certain amount of money with the BoE, so the BoE can pay any old interest rate it likes on that, even if that is negative i.e. the BoE can charge commercial banks for holding their money. That's just a cost of doing business or a modest payment towards the value of a banking licence.

I know that there are some loan agreements where the interest rate is expressed as the BoE base rate plus or minus a certain percentage, so the contractual rate might go negative (unless the loan agreement stipulates a minimum interest rate).

And I know that in extremis, if most banks were perceived as risky, then people would accept a (small) negative interest on their deposits with those banks perceived as safe (whereby NS&I is the central bank for mere mortals), just for the peace of mind.

But there's no underlying economic reason why it should happen. It's pushing a piece of string. If it were the other way round, and banks could borrow from the BoE for negative interest rates, they would have more money to lend on to borrowers and so they might well drop the interest rates they charge. But they aren't. They are just losing money on the token amounts that they have to deposit with the BoE. So you might as well argue, commercial banks will push up the rates they charge borrowers to try and make up the shortfall (or indeed reduce deposit rates to make up the shortfall). But they are already charging as much (or paying as little) as they can get away with.

Banks do not take deposits from customers with the sole purpose of depositing them with the BoE, that just wouldn't be worth the hassle. So it's not like commercial banks have to reduce the interest rates they pay to discourage people from depositing with them. If they can get away with it, they will do it, whatever the base rate is.

Sunday, 11 October 2020

Life copies satire

From The Daily Mash, 5 August 2020:

TEACHERS have announced that they would be willing to relocate schools to pubs as a compromise to keep both open.

As scientists warned that curbing coronavirus might mean closing pubs so schools can operate normally, educators have volunteered to teach classes from behind the bar.


I'm sure they did one about 'home working' from the pub, but I can't find it right now. The principle stands however.

From the BBC, 11 October 2020:

Some pub-goers have queried whether "pub desks" offer a safe way of working, but industry leaders argue more coronavirus transmissions take place in educational settings and care homes than in pubs and restaurants.

In this village pub in Kent, a tenner gets you a table by a plug socket, wi-fi, lunch (I went for a halloumi wrap) and unlimited tea and coffee. (Pints, sadly, are not included.)


Cheers!

Lies, damn lies and coronavirus statistics

The BBC has to big up lock down and diss the Brazilian President (a right wing-populist, apparently, politics is weird down there):

The number of people to have died from Covid-19 in Brazil has passed 150,000, the country's health ministry says.

Brazil has the second-highest coronavirus death toll in the world, after the US, and the third-highest number of cases after the US and India*. The country also passed five million total infections earlier this week.

President Jair Bolsonaro has been accused of downplaying the risks of the virus throughout the pandemic, ignoring expert advice** on restrictive measures.


Ahem.

Brazil has a population of 211 million. Pro rata, it's death rate was only slightly worse than the UK (705 per million against 629)

In Colombia, the next worst-hit country in the region, 27,495 people have died and there have been 894,300 confirmed cases.

To be fair, Colombia's death rate was indeed lower (542 per million) but not that much better than Brazil's. Also, the countries on or near the equator appear to have fared slightly better (more sunshine).

However the daily number of new cases in Brazil has been slowly falling since it plateaued in the summer, when there were about 1,000 new deaths per day for two months.

Geography lesson - Brazil is in the southern hemisphere. There were chalking up about 1,000 deaths per day from late May to late August (i.e. their winter). Daily deaths have been falling slowly but steadily for the past six weeks. Whether that is because or herd immunity or because sunshine kills the virus, I don't know, but good news is good news whatever the cause.

* The comparison with India is meaningless and misleading in the extreme. They have a population of 1.4 billion and a surprisingly low official death rate of only 78 per million. Their daily deaths crept up steadily (not logarithmically, Neil Ferguson please take note) to 1,200 a day at the peak in mid-September and now appear to be falling again (thankfully).

** Maybe he listened to those experts who said that lock downs were fairly pointless? Or maybe he just accepted that lock down measures would be unenforceable in an inherently unstable country?

Saturday, 10 October 2020

Outbreak of common sense at HMRC

From Landlord Today:

An accountancy firm is warning Airbnb landlords they may be investigated following a decision by the short lets platform to share data with HM Revenue & Customs.

The Grunberg & Co accountancy practice says that in reporting its tax affairs to HMRC - in the shape of its accounts to December 31 last year - Airbnb has also agreed to share data for the two preceding tax years.

Alexander Kossoff, a partner at Grunberg, says so-called ‘hosts’ for Airbnb may wish to ensure their tax affairs are in order as a voluntary disclosure to HMRC could help to reduce any potential fines.


The comments are surprisingly supportive of the move, but there are those who don't get it:

Paul Barrett: Short term holiday lettings could easily transfer to spareroom.co.uk or other short term letting sites although spareroom does all types of letting. If the AirBnB platform isn't used then lettings cannot be detected.

Robert Brown: In that case, HMRC will (eventually) turn their attention to spareroom.co.uk. I know that they do occasionally focus on small local holiday letting agents where there are lots of holiday lets and flex their muscles. I enjoyed witnessing this happen in a popular Open Golf venue a few years ago, with a healthy six or probably seven figure sum extracted from many home owners cashing in on five figure rentals from golfers and spectators.


Why HMRC haven't always been trawling all these possible data sources - letting agents, banks which do buy-to-let loans, HM Land Registry (to identify owners of multiple homes), local councils and insurers (where council tax bill or insurance bill is sent to a different address), housing benefit departments - remains unknown.

Friday, 9 October 2020

Skeptical Science shoots itself in the foot yet again.

From Skeptical Science:

The greenhouse effect occurs because greenhouse gases let sunlight (shortwave radiation) pass through the atmosphere. The earth absorbs sunlight, warms then reradiates heat (infrared or longwave radiation). The outgoing longwave radiation is absorbed by greenhouse gases in the atmosphere. This heats the atmosphere which in turn re-radiates longwave radiation in all directions.

Some of it makes its way back to the surface of the earth. So with more carbon dioxide in the atmosphere, we expect to see less longwave radiation escaping to space at the wavelengths that carbon dioxide absorb. We also expect to see more infrared radiation returning back to Earth at these same wavelengths.


This is promptly shot down by Concerned Citizen/Matt Sykes at comments 6 and 8:

[Re] the picture showing solar light penetrating the atmosphere but terrestrial IR being trapped, what happens to the solar IR? The sun produces [more] IR at the frequency absorbed by CO2 [than] the earth. The atmosphere must therefore absorbs and re-radiate half of this back into space...

Point #3. Energy balance. So an increase in CO2 will absorb, and re-emit to space more IR from the sun as well as absorb and re-emit to earth more IR from the earth. Since the sun produces more IR than the earth how does the extra CO2 cause warming and not cooling? I am genuinely interested in the science behind GH gases, it is just that logically there seem to be problems with the theory.
--------------------------------
That seems very plausible to me, and if true, this single observation would completely demolish the whole MMGW theory in one fell swoop. It appears to be undisputed that solar radiation is 55% infrared. This is at shorter wavelengths than terrestrial infrared emissions, but a large chunk of them are absorbed by 'greenhouse gases' on the way in.

It stands to reason that the earth's surface receives the same amount of infrared whether:
a) the solar infrared punches straight through a GHG-free atmosphere, or
b) the solar infrared and terrestrial infrared 'mix' in a GHG-laden atmosphere and half is re-radiated back down.

Similarly, the amount of infrared radiation going back to space is the same whether:
a) the terrestrial infrared punches straight through a GHG-free atmosphere, or
b) the solar infrared and terrestrial infrared 'mix' in a GHG-laden atmosphere and half is re-radiated back to space.

I have re-created the picture to illustrate this (a) without and (b) with 'greenhouse gases':

Crikey! The Gruniad 'nearly' talking sense.

Headline.  "Boris Johnson's 95% mortgages will put Britain back on course for a house price crash".  

By line:  Josh Ryan-Collins

Here

A few errors though.

1.  This is not a failure of weak or not enough regulation as Mr R-C asserts.  I run a retail FS business and I absolutely know that regulationism, was, is and continues to be, complex, onerous, massively costly for clients and an almost complete failure. In other words there's a lot of it so the lack of it cannot be a cause of high house prices.

2. The house price boom between 2000 and 2008 was when the Gruniads favourite idiots were in charge. It was driven by the arbitrary expansion of money and credit.  Also IMHO helped along nicely by the FSMA 2000 which eviscerated the Bank of England's supervision powers and passed them to the FSA, which failed.  From where I sit I could watch all that happen.

3. This is all driven by bad money, to which the Gruniad is either philosophically unable to grasp (it being avowardly lefty) or willfully blind. 

4. The recent Stamp Duty threshold increase policy is also driving the current mini-boom.

Otherwise very good. And agreed generally. (Oh and excluding all that guff about state investment banks are similar)

Thursday, 8 October 2020

Lockdowns and the Sherlock Holmes principle

The Sherlock Holmes principle is, once you have ruled out the impossible, the remaining explanation, however unlikely, must be correct.

Applied to the question of what degree of lockdown* to impose, first you rule out the strategy that is doomed to failure, then you adopt the one that's left by default, however slim its chance of success might seem.

There are two basic strategies:
-------------------------------------
1. The Swedish/Brazil "hope for the best" herd immunity strategy - this might or might not have been a good strategy given the lack of clear information at the time**. But it always had a theoretical chance of working and, with the benefit of hindsight, seems to be working, especially if you take into account the economic, social and educational damage that such countries have avoided. This of course involves the elderly and vulnerable voluntarily self-isolating, and it will cost money to employ people to do their shopping etc for them, but that is a small cost compared to the economic etc damage caused by a full lock down.
-------------------------------------
2. The "suppress infections until a vaccine comes along" strategy which cannot ever work. I can sort of see the point of "flattening the curve" but they've done that. The NHS wasn't swamped and isn't being swamped.

a) Even if they develop a vaccine that works (unlikely) at some point in the future (months? years?), are we all going to take it (no)?

b) If immunity is only a few months after having caught it (the arguments AGAINST the herd immunity strategy), then the same will apply to people who have been vaccinated. So this will require endless repeat vaccinations.

So strategy 2 can only ever be delaying the inevitable and can never succeed.
------------------------------------
Ergo, given a choice between a strategy that MIGHT work (and appears to be doing so, with the benefit of hindsight) and one that CAN'T POSSIBLY work, surely you choose the former?

* It is a question of degree. Some things appear to worth trying where the economic cost is minimal, for example banning large gatherings (concerts and football matches); turning down music in pubs; face masks on public transport; encouraging people to work from home. Testing people for coronavirus after they get off an airplane or boat misses the point - it makes more sense to test people before they get on at the other end and to turn away passengers who test positive. Not sure on the logistics of this, but that's the principle.

Things like shutting pubs at ten o'clock are insane. Is the virus more infectious later in the evening? I think not. People under 30 are barely affected, so shutting schools and universities is also insane. The older teachers and lecturers will just have to take a sabbatical.

** The best information we had was the Diamond Princess. That was pretty much a Petri dish. 15% of the 1,045 crew tested positive and precisely none of them died (being presumably young and healthy). Twenty percent (or should I say "only twenty percent"?) of the 2,666 elderly passengers tested positive and twelve had died between the first positive test in early February and the end of March when most lockdowns were imposed (two more died in April).

Scaled up to the UK, we'd expect to see around 50,000 deaths among the elderly in the first two months, which is not far off the actual outcome. To paraphrase Prof Michael Levitt, that was the Grim Reaper taking all the people who would have died during the previous two years' flu seasons, but didn't because they were very mild. A year ago, UK undertakers were worrying about the low number of funerals!

Wednesday, 7 October 2020

"Scientists call for Covid herd immunity strategy for young"

The fight back has begun!

From The Guardian:

An international group of scientists has called on governments to overturn their coronavirus strategies and allow young and healthy people to return to normal life while protecting the most vulnerable.

The proposal, drawn up by three researchers but signed by many more, argues for letting the virus spread in low-risk groups in the hope of achieving “herd immunity”, where enough of the population is resistant to the virus to quell the pandemic.

One of the lead authors is my favorite epidemiologist, Prof Sunetra Gupta. My second-favorite, Prof Michael Levett, has counter-signed it. I can't see Ivor Cummins on the list but maybe he'll turn up.

And now to the nay-sayers:

One critic said the “grotesque” plan amounted to a culling of sick and disabled people.

Nothing of the sort:

The authors of the declaration... argue that Covid-19 lockdowns and restrictions are having “devastating effects” on public health by disrupting routine care and harming mental health, with the underprivileged bearing the greatest burden. While many governments are trying to suppress the virus until new treatments and vaccines are found, the trio write that older people and others at risk should be shielded while those in the least danger should “immediately be allowed to resume life as normal”.

No mention of a cull. The general idea is instead of everybody being locked down, the vulnerable are given the support they need (help with shopping and so on) to enable them to lock themselves down, if that is what they wish to do.

De-nesting nested radicals using an Excel spreadsheet

This wasn't very difficult to set up.

Let's say you are given "√(17/5 - √24/5)" i.e. you have to find the square root of "17/5 - √24/5":

The Steps are:

1. Write this down in the proper format - the "1" in the middle is implied if there is no number there. The calculations are the same whether the sign in the middle is "-" or "+", you only need this again at Step 7.

2. Write a "2" in the middle and adjust the right hand number accordingly. I set up a look-up table, so if the number in the middle in Step 1 is "1" you do 24/5 ÷ 4 = 6/5. NB, dividing by "1/4" is the same as multiplying by 4. You can reconstruct the table by doing "4 ÷ middle number squared"

3. Then we apply the same trick as for solving quadratic equations. Divide 17/5 by 2 and square it (or square 17/5 and divide the result by 4) = 289/100. Compare this with 6/5. Subtract the smaller number from the larger number = 169/100.

4. Take the square root of the result from 3. √169/100 = 13/10.

5. Divide the left hand number 17/5 (from Step 1) by 2 = 17/10 and add your answer from Step 4. 17/10 + 13/10 = 30/10 = 3.

6. Divide the left hand number 17/5 by 2 and subtract your answer from Step 4. 17/10 - 13/10 = 4/10 = 2/5.

7. Now check in the first line whether the sign in the middle was "+" or "-". Assuming you are looking for an answer which must be a positive number (like the length of the side of a triangle), if it was "+" you put "+" in the middle of your answer. If it was "-" you put the a "-".

If there are two possible answers (a positive and a negative) then you switch signs, so if it the sign in Step 1 was "+", the other possible answer is "-√3 -√2/5". If it was "-", the other possible answer is "√2/5 -√3".

Here are the steps on the spreadsheet plus the look-up table. The symbols in columns B, D, F and H, i.e. √, (, ), +, - and =, are purely for decoration and are not used in the calculations:


Email me if you'd like the spreadsheet with workings :-)

Tuesday, 6 October 2020

Killer arguments against Citizen's Income, Not (31)

Recently I was sent a link to an article, entitled "Europe's New Social Reality: The Case Against Universal Basic Income" which was long and not very interesting, but did contain this gem:

One of the most profound concerns around UBI is the impact it could have on diminishing the scope of existing social policies and the potential for new programmes. Most modest models of UBI – which offer guaranteed payments at relatively low levels – account for the withdrawal of many existing benefits and allowances, often with the exception of housing and disability payments.

As Figure 5.1 shows, the RSA’s model – drawing upon prior work by the Citizen’s Income Trust – proposes the abolition £272 billion worth of existing UK programmes and allowances. Thus in order to finance a very modest UBI, many existing structures of the welfare state would still have to be swept away.

So what is a feature of UBI, simplification of the welfare system, is being presented as a bug.

Preumably the author, Daniel Page, thinks that the ability of politicians and bureaucrats to tinker with and micromanage welfare payments is essential. There is also the "UBI is too expensive" KCN which is presented as a given, without any justification, apart from another paper based on the same KCN.

Sigh

Here

 No doubt from his own gas.

Buffoon.

Sunday, 4 October 2020

LV hodie!

Saturday, 3 October 2020

They (want to) own land! Give them money!

From the BBC:

... Boris Johnson has promised low-deposit mortgages to help young people get onto the housing ladder.

In an interview with the Daily Telegraph ahead of his party's four-day conference, the prime minister said he had asked ministers to work up plans for encouraging long-term fixed-rate mortgages with 5% deposits.

"We need mortgages that will help people really get on the housing ladder even if they have only a very small amount to pay by way of deposit, the 95% mortgages," he said. "I think it could be absolutely revolutionary, particularly for young people."

Haven't we been doing this for decades - ramped up with Help To Buy - and simply seen house prices increase to soak up the extra borrowing?

UK travel restrictions: Why isn't the UK on its own quarantine list?

From the BBC:

How is the quarantine list decided?

The Joint Biosecurity Centre (JBC) - set up by the government to monitor coronavirus - works with the chief medical officers of each UK nation and advises on which destinations should be on the list. The decision is often made when 20 or more people out of every 100,000 in a country, or island, are infected over seven days, but other factors are also considered..

From the BBC:

On Friday [1 October], the country recorded 6,968 new cases, slightly down from more than 7,000 a day earlier in the week... An estimate from the Office for National Statistics (ONS), released on Friday, suggests that roughly one in 500 people in England had coronavirus in the week ending 24 September, only slightly down on the previous week.

7,000 new cases a day x 7 = 49,000 cases per week.
(Sure, there are some false positives, but there will be a lot of people who have mild or no symptoms and don't get tested, so let's accept 7,000).
49,000 ÷ population 70 million x 100,000 = 70.
Which is over three times the official limit.

Check: one in 500 people are infected. Out of 100,000 people, 100,000 ÷ 500 are infected = 200 are infected. Assuming each person is infectious for two weeks, it requires 200 ÷ 2 = 100 new infections per week to maintain the one-in-500 ratio. That's a bit more than the first answer 70, but they are in the same ballpark.

Friday, 2 October 2020

De-nesting nested radicals

A "nested radical" is something like this "√(18 + 8√5)", in other words, the answer includes the square root of a (multiple or fraction of a) square root. I stumbled across this concept recently and have read a few articles since, I think they make it all too complicated.

You often end up with a nested radical when you are solving quadratic equations or trying to find the length of the hypotenuse.

For example, the adjacent and opposite of a right angle triangle are both "2 + √5" long (it's an isosceles right angle triangle i.e. a 45-45-90 triangle) - how long is the hypotenuse?

Using "first insides outsides last", (2 + √5) x (2 + √5) = 4 + 4√5 + 5
This simplifies to 9 + 4√5.
Multiply by 2 = 18 + 8√5.
The hypotenuse is the square root of that = √(18 + 8√5). Messy.

The steps to de-nesting this are as follows:
Start again with "18 + 8√5"
Change the "8" to "2", which means divide it by 4*.
Square the number you had to divide by = 16.
Multiply 5 (the number after the square root sign) by 16 = 80.
Restate it as "18 + 2√80"
Then see if you can find two numbers which add up to 18 and multiply to 80.
The answers are "8" and "10", obviously.**
So "√(18 + 8√5)" simplifies to "√8 + √10"***.

You can check this on a scientific calculator - either way, you end up with 5.9907.
-----------------------------------
* There are endless wrinkles to this - what if you are trying to find the square root of "8 + √320"? You need a "2" in front of the square root sign, so just pop a "2" there anyway (multiply the implied "1" by "2") and divide 320 by 2 squared = 80.

Then there are multiples which are fractions or odd numbers; roots of fractions; negative numbers and so on. But they are all variations of the basic method.

** If you struggle with this step, and I often do, you can use the same approach as for solving quadratic equations.
18 ÷ 2 = 9.
(9 + u) x (9 - u) = 81.
81 - u^2 = 81.
U^2 = 1.
U = 1.
(9 + 1) x (9 - 1) = 80.

*** Don't forget the basic rule that the square root of 4 can be "2" or "-2". So although there's no such thing as a negative length of a hypotenuse, in a different context, "-√8 - √10" might also be a valid answer. If you get "√8 - √10" then the negative of that, "√10 - √8", is also a possible answer.
-----------------------------------
Clearly, there are some nested radicals that you just can't simplify, unless you are happy ending up with an answer that includes a multiple of i (the square root of -1) which is sort of missing the point.

There is one handy shortcut to see whether you can solve it in the first place, which is to change the number before the square root sign to "1" and adjust the number after the square root sign accordingly.
If the whole number squared minus that number is itself a perfect square, there will be an answer.
For example, starting with "8 + √320" again:
18^2 = 324.
324 - 320 = 4.
"4" is a perfect square number, so there will be an answer.
-----------------------------------
Right, that's a bit of fun with numbers for a Friday evening, clocking off now :-)

Thursday, 1 October 2020

Daily Mail on top form

From The Daily Mail:

When police arrived they found [Hancock] covered in blood as he told them 'I'm hardly going to deny it; look at me'.

Hancock, of Etwall, Derbys, had already pleaded guilty at Derby Crown Court in July to two counts of murder via video link.

PE teacher Ms Almey and [her new partner], a company director of a marketing firm, were discovered in a pool of blood at the £400,000 property on New Zealand Lane just after 4am.