Quarantine madness

At my daughter's school, one of the pupils in Year 8 had Covid-19 symptoms or tested positive (not sure). As a result, the whole of Year 8 has to stay at home for two weeks. I assume that this also applies to all teachers who gave a lesson with that pupil in it (she wasn't sure).

I don't know whether the school is under some legal obligation to do this, or whether they are overreacting to cover their arses, but this is surely madness?

There are one hundred pupils in each Year plus two dozen teachers. Mass Covid-19 testing indicates that about 2% of people test positive. So if they actually tested everybody in a whole Year and all the teachers regularly, the probability that at least one tests positive is over 90% (1 minus 0.98^124).

On that basis, most pupils and most teachers will be in quarantine most of the time (there is no test yet to see whether people have had it and are immune AFAIAA), so they might as well continue doing online lessons and everybody stays at home.

Bank of Mum and Dad

From the BBC:

Parents spend so much money to get their children onto the housing ladder that they are now among the biggest lenders in the UK, a survey suggests.

The average parental contribution for homebuyers this year is £24,100, up by more than £6,000 compared to last year, according to Legal & General (L&G).

Collectively parents have given £6.3bn, high enough to rank the bank of mum and dad 10th if it was a mortgage lender. Clydesdale Bank, the UK's 10th largest mortgage lender lent £5bn last year...

L&G's research, based on a poll of 1,600 parents, found more than half were using cash to help their children, but others were withdrawing money from their pensions or said they would consider using equity release from their homes.

Is it just me, or has the world gone completely mad?

Older generations, who own most of the housing, are taking out second mortgages to give their children money to buy housing?

At the level of an individual family, this might make a warped sort of sense, but collectively is is a massive Ponzi/pyramid scheme. Old people borrow money to lend it to young people so that they can sell their assets to young people for inflated prices, there being no net gain to anybody apart from banks and large landowners.

I also wonder how many of those who borrow from BOMAD disclose the fact on their mortgage applications...

"Totally wild! Bears return to woods 1,000 years on"

This is going to go horribly wrong. From yesterday's Metro:

‘We are literally making history,’ said Nigel Simpson, from the project. ‘We will transport people back in time to when the woodland was inhabited by bears and take people through time showing the effects of woodland loss on our native animals. Bear Wood is about conservation of woodland.’

Five European grey wolves, already at Wild Place Project conservation park in south Gloucestershire, will be moved to the woodland near Cribbs Causeway. It covers seven-and-a-half acres and the wolves will share the fenced-off space with European brown bears.

Bristol Zoological Society, which runs the project, has already received donations from benefactors and sponsors. Christoph Schwitzer, director of conservation at the society, said: ‘We are hoping that people will be really excited and want to support us. For the first time in generations people will be able to see brown bears in their natural habitat.’

1. Seven and a half acres? The average bear or wolf on its own needs a much larger territory than that, cramming them in any tighter means they will have to be fed i.e. domesticated. So it's a glorified zoo rather than natural habitat.

2. Bears are large, strong and resourceful animals (and wolves are no slouches). A fence strong enough to hold in bears is going to be pretty much like a wall, unless they electrify it - and an electric current strong enough to dissuade a bear from having a go is going to be pretty lethal to anything else that touches it (including wolves). Which sorts out the feeding problem, I suppose. The bears and wolves can just traipse along the fence and scavenge what's there. And people can stand on platforms watching them.

3. Heck knows what Health & Safety will have to say, or what their insurance premiums will be. Once one bear has escaped (and sooner or later, it will), that will be pretty much game over.

The lunatics have taken over the asylum.

From the BBC:

The governor of the Bank of England has said the banking sector could double in size but still needs tough regulation.

Mark Carney told the Guardian the financial sector could be worth 20 times the UK's economic output in 25 years.

He said: "If the UK financial system thrives in a post-Brexit world... it will be 15 to 20 times GDP in another quarter of century. Well then you really have to hold your nerve and keep the focus."

What he is talking about is gross assets, not net assets. In other words, if you add up the 'loans' made by all individual banks in the UK, it adds up to something like £7 trillion (five times GDP). This is wildly exaggerated as two-thirds of that is inter-bank stuff and made-up figures.

So if all UK banks were to merge into one large bank, the gross lending to the non-financial sector is about £2 trillion (a tad more than one times GDP). If you then deduct all bank liabilities (mainly deposits but also bonds), the true net worth is pretty much close to zero (balancing figure between two large unknowns).

Nonetheless, doubling the gross lending and borrowing is a superbly shit idea.

He said: "We have a financial system that is [now] ten times the size of this economy… It brings many strengths, it brings a million jobs, it pays 11% of tax revenue, it is the biggest export industry by some token... all good things.

The million jobs is a made-up number. There is a minority with truly essential/irreducible jobs (staff at the bank counter, people who fill up cash machines and people who keep the software working, a few loan officers to check the bona fides of borrowers) and the rest are completely superfluous.

The "11% of tax revenue" is another made-up number. Most of what banks collect is just rent from the productive economy, they are not adding anything much to it. If they were to collect less rent, the amount of tax they pay goes down but people would have more money to spend on other stuff which would generate the same amount of tax. We might as well levy income tax on burglars and say that they pay 1% of tax revenue.

We could go further and deduct the value of the government guarantee for banks, which has been calculated as being approx. equal to the total amount of tax that banks pay.

Another of those "have I gone mad or have they" moments...

From the BBC:

UK to agree Brexit divorce bill before trade talks - EU sources

The UK has agreed to sort out its EU "divorce bill" and citizens' residence rights before starting Brexit trade talks, EU sources have told the BBC.

But the UK's Brexit department has insisted a trade deal must be agreed at the same time.

They have gone stark raving mad.

Gleefully regurgitated by The Guardian:

Office workers should spend a minimum of two hours on their feet at work – building up to an ideal four hours – in order to avoid the ill effects of a sedentary lifestyle, according to a study co-commissioned by Public Health England.

Research has long linked excessive time spent sitting to increased risk of morbidity or premature death but the advice, co-commissioned by Public Health England and published on Monday, represents the first time British workers have been provided with quantifiable targets for getting out of their seats.

The study authors, who include experts from the UK, US and Australia, call for a revolution in the workplace through the use of sit-stand desks, standing-based work and regular walkabouts.

They also urge further research into whether facilities such as toilets should be moved further away from staff, some emails could be replaced by hand-delivered messages and employees could have alarms on computers or personal motion assessment devices prompting them to move.

Round the clock of silliness

From City AM:

Business groups have slammed politicians for failing to take action on energy supply shortages, despite 15 years of warning signs... Spare capacity will be close to four per cent, compared with around five per cent last year and 17 per cent three years ago.

Dan Lewis, energy policy adviser at the Institute of Directors, commented: “This has been in the offing for 15 years, and it really didn’t need to happen.” He called on the government to “start thinking hard about how to find renewable energy we can realistically integrate at a reasonable rate”

The acute lack of spare capacity is because a lot of perfectly good coal and oil fired power stations were forced to shut down in the last few years. Blaming it on not having enough "renewable energy" is completley bonkers. That's like giving your car away and explaining to your boss that you're late for work everyday because they haven't invented teleportation devices yet.

I used this circular argument in the comments here yesterday for a joke, but it appears that even relatively pro-market groups like the IoD can't see through it.

And what's this?

An energy department source told City A.M.: "Labour simply didn’t invest in the energy infrastructure we need. Under Labour, the energy system was creaking but we’re turning that around with £100bn investment and more than enough reserves this winter."

For sure, the government has to play a role in all this (pollution and safety standards, and without the government, the National Grid would never have happened, being a natural/land monopoly), but it doesn't need to invest a penny in power stations.

Isn't that what private companies are supposed to be doing? There's plenty of demand for electricity and it can be produced profitably provided the government doesn't interfere too much and taxes sensibly (i.e. on the natural monopoly element).

Preparations being put in place include plans to incentivise businesses to reduce energy demand. Lewis commented: “Now they are actually proposing to pay people not to work. It’s the last thing the economy needs.”

Amen.

"We won’t face winter electricity blackouts, insists energy minister"

From The Evening Standard:

Fears that the UK is facing a winter of electricity blackouts were dismissed by the Government today.

Energy Minister Matt Hancock insisted the lights would stay on despite the country facing its biggest energy crunch in years.

But he accepted the need for emergency planning including potentially firing-up mothballed power stations or asking factories to close.

It came as a report from the National Grid revealed Britain may need the emergency measures if we are hit by extreme weather or an international energy crisis.

Fair play to ASH

The WHO has gone completely mental...

The World Health Organization says there should a ban on the use of e-cigarettes indoors and that sales to children should stop.

In a report the health body says there should be no claims that the devices can help people quit smoking - until there is evidence to support this.

WHO experts warn the products might pose a threat to adolescents and the foetuses of pregnant women.

Is it perturbing or reassuring that ASH, who have pumped out so much of this anti-nicotine garbage propaganda over the years, appear to be reining it in a bit..?

Hazel Cheeseman, at the charity Action on Smoking and Health, said there was no evidence of any harm to bystanders and warned regulation needed to be proportionate.

She added:

"Smoking kills 100,000 people in the UK alone. Smokers who switch to using electronic cigarettes in whole or in part are likely to substantially reduce their health risks.

"Although we cannot be sure that electronic cigarettes are completely safe, as the WHO acknowledges, they are considerably less harmful than smoking tobacco and research suggests that they are already helping smokers to quit."

Even the "100,000" figure is a step back from their previous exaggerations.
---------------------------------
UPDATE. "Unknown" left a link to NHS Smokefree: "Smoking is the biggest cause of preventable deaths in England, accounting for more than 80,000 deaths each year. One in two smokers will die from a smoking-related disease."

Well, call it half a million deaths a year, a fifth of people are smokers, so going by those figures about 50,000 people each year die somewhat earlier than they otherwise would have done as a result of having smoked. It's going a bit far to say that even 50,000 people are "killed" by smoking, let alone 100,000, but it's not as entirely plucked-out-of-the-air unreasonable as other claims which ASH have made.

This comes under the heading of 'WTF?"

http://www.theguardian.com/politics/2014/jul/02/tony-blair-advise-egypt-president-sisi-economic-reform

You really couldn't make it up, could you.

This bit is good:

"The former political associate said that a bargain had been struck and added: "Tony Blair has become Sisi's éminence grise and is working on the economic plan that the UAE is paying for. For him, it combines both an existential battle against Islamism and mouth-watering business opportunities in return for the kind of persuasive advocacy he provided George Bush over Iraq.

But this bit gets better:

"It's a very lucrative business model," [I bet it is] the associate added, "but he shouldn't be doing it. He's putting himself in hock to a regime that imprisons journalists. He's digging a deeper and deeper hole for himself and everyone associated with him."

Mark Carney: somebody else who is clinically insane

Our cuckoo Canuck, writing in yesterday's FT:

As progress has been made in reforming the global banking system and as risk appetite returns to financial markets, wider attention has begun to focus on shadow banking.

That focus is not new for policy makers. Reform of shadow banking – the extension of credit from entities and activities outside the regular banking system – has been a core part of the Group of 20’s agenda to overhaul the global financial system since the 2009 Pittsburgh summit, when, in response to the crisis, leaders established the Financial Stability Board. The aim has been to deliver a transparent, resilient, sustainable source of market-based financing for real economies…

There follow endless iterations of buzz words like "opacity", "transparency", "misaligned incentives", "leverage" and "liquidity", you know the score.

But take it from me, there is no "shadow banking system". What he is actually referring to is all the "money market funds" (and hedge funds and so on) who bought the securitised mortgage assets from the banks, which in crude terms you could view as "money market funds lending banks money".

Those money market funds appear to the the bogeymen here, the ones to blame for the house price bubble and bust and so on. But in the real world, those wicked funds did not go round lending money to the man in the street, to businesses or to mortgage borrowers, they were created by normal banks doing securitisation in the first place. There was demand for such funds (to buy up banks toxic crap) and supply arose to meet demand.

Nobody asked the banks to do securitisation, it was not forced on them. And even if the funds involved on the other side are secretive and do not publish their own financial statements (why on earth should they? do you have to make public how much you have on deposit at the bank?) then so what? The normal banking system knows what the "shadow banking" system's total assets are, because their total assets are all the toxic crap which the normal banks sold them in the first place.

To sum up, the banking system itself knows perfectly well how much they have got on deposit and from whom, there is no vast unknown "shadow banking system" and Carney is just picking on a meme started by Gordon Brown and others to try and shift the blame away from themselves.

As ever, the question is, does Carney really believe in all this voodoo crap; is he deluded enough to think that he can persuade other people to believe in it; or is he merely deluded enough to think that he can get away with pretending to believe in it, even though nobody else believes it?

A field day for armchair psychiatrists

From the BBC:

The 2003 invasion of Iraq is not to blame for the violent insurgency now gripping the country, former UK prime minister Tony Blair has said.

Speaking to the BBC's Andrew Marr, he said there would still be a "major problem" in the country even without the toppling of Saddam Hussein in 2003. He insisted the current crisis was a "regional" issue that "affects us all".

Critics have rejected the comments as "bizarre" with one accusing Mr Blair of "washing his hands of responsibility".

"Even if you'd left Saddam in place in 2003, then when 2011 happened - and you had the Arab revolutions going through Tunisia and Libya and Yemen and Bahrain and Egypt and Syria - you would have still had a major problem in Iraq," Mr Blair said, "Indeed, you can see what happens when you leave the dictator in place, as has happened with Assad now. The problems don't go away.

"So, one of the things I'm trying to say is - you know, we can rerun the debates about 2003 - and there are perfectly legitimate points on either side - but where we are now in 2014, we have to understand this is a regional problem, but it's a problem that will affect us.

"Where the extremists are fighting, they have to be countered hard, with force."

"The cow that CAN jump over the moon..."

From The Daily Mail:

Cows have a reputation for standing placidly in fields.*

Not these beasts in Finland - who sprang and leaped over an obstacle course as if they were horses.

Farmers who gathered at an agricultural show picked their favourite animals for a bizarre 'bovine agility' contest, which pitched the 1,500-pound beasts against each other in a dusty arena.

The huge animals were pictured leaping over hurdles with one even clearing herself several feet from the ground.

They are actually training them to jump over fences?

This is madness, I tell you, madness.

* Oh no, they bloody well don't.

The Lib Dems we know and love

From The Daily Mail:

Cars should be banished from town centres, a Liberal Democrat minister has claimed.

Transport Minister Norman Baker said drivers should be hit with big increases in parking charges so they are ‘disincentivised’ from parking near high street shops. He renewed the Lib Dems’ war on motorists at a fringe meeting at his party’s conference in Glasgow.

Mr Baker admitted that higher parking charges could ‘damage town centres’ but he then claimed that pushing people onto public transport and bicycles would help revive the high street.

That doesn't really merit a response, does it?

Combine the absurd with the vulgar*

Channel 4 have broadcast some riveting documentary-cum-car crash voyeurism shows in the past about people with OCD who can't stop cleaning and washing and who are paranoid about germs and mess. Gruesome but great fun to watch.

Channel 4 have also broadcast some riveting etc shows about people who are incapable of throwing anything away and live in a house full of junk and people who are never do any cleaning and live in a house full of filth. Gruesome etc.

I've often wondered why they don't merge the two concepts - cut out the middlemen they use to give these shows the veneer of respectability (psychiatrists, counsellors, professional cleaners/junk removers, blah blah) and just send obsessive compulsive cleaners round to the homes of the terminally messy.

Ta da... some of these clever TV people have had the same idea and Channel 4 now has a series based exactly on this concept called Obsessive Compulsive Cleaners, on Mondays at 10 pm (first show yesterday, which I happened to watch).

The cleaners and the messies got on surprisingly well. The messies moaned and groaned but at the end they appeared to be quite grateful; the cleaners appeared to enjoy the challenge and I suppose it's much more satisfying spending a day cleaning away ten years' of filth and really seeing a difference that it is spending all day cleaning away one day's worth of non-existent and imaginary filth from their own pristine homes and having nothing to show for it.

My favourite character was the slightly Indian-looking lass who cheerfully admitted that she was probably addicted to the smell of bleach, and stood there scrubbing happily away at a filthy urinal while everybody else ran out of the building coughing with their eyes streaming.

* a line from "Some kinda love".

They have gone completely and utterly mad

1. Deciding to send arms to Syrian "rebels".

Unless the aim is purely to get as much money out of them and to ensure that as many Arabs and other Islamists kill each other as possible, in which case we should be selling arms to Assad as well, maybe even deliver them some non-launchable nuclear bombs?

2. This whole "revolving door" thing

I suppose they can't stop him from going to work for an accountancy firm; the point is he was already behaving suspiciously while he still worked for HM Revenue & Customs. This move to Deloittes sort of confirms most of those suspicions.

3. Privatising the courts service.

Yes, you read that correctly:

Plans for £1 billion-a-year savings have been drawn up, including selling off the court service and control of the court buildings and taking 20,000 staff off the public payroll.

Private companies would then be free to charge larger fees from commercial litigants and attract investors. However, the position of judges or magistrates would not be affected.

To ensure the judiciary’s continuing independence, Justice Secretary Chris Grayling is considering a Royal Charter, similar to the proposed regulation of the Press.

4. Yet more throwing good money after bad:

Public money set to be used to cover shortfall in private-finance projects. Promised £3bn to invest in infrastructure and stimulate economy may all be used to plug gap in overhauled PFI scheme.

The creatures outside looked from Gordon Brown to George Osborne, and from Gordon Osborne to George Brown, and from Gorde Obrown to Georgon Osboom; but already it was impossible to say which was which.

In an insane world, it's possible for both sides of an argument to be wrong.

Spotted by Joe M in the NY Times:

A small but growing number of American corporations, operating in businesses as diverse as private prisons, billboards and casinos, are making an aggressive move to reduce — or even eliminate — their federal tax bills. They are declaring that they are not ordinary corporations at all. Instead, they say, they are something else: [Real Estate Investment Trusts] that are typically exempt from paying federal taxes.

This is wildly misleading at best. As Randy from Colorado explains in the comments:

The conversion from a corporation to a real estate investment trust, does not create a windfall profit for anyone, it merely shifts the profit, and the taxation of that profit, from the corporation to the shareholders/taxpayers. The amount of income taxes paid to the government is not reduced either. This is the same way that subchapter s corporations, partnerships, limited liability companies, and sole proprietors are taxed; their owners are the ones who receive all the profits, and pay all the taxes.

This must be one of the most dishonest articles I have ever read. Any freshmen level introductory business or accounting course will teach you this, or any of the thousands of books ever written on the types of business entities, or how to start your own business. It is a disservice to the readers. This article seems to be just another brick in the wall of envy placed by those who want to perpetuate this awful class warfare between the presumed haves and those who think they have not.

It appears that instead of taking this line of defence, these corporations themselves are giving the game away:

One of the bedrock principles — and the reason for the tax exemption — was that the trusts do not do any business other than owning real estate. But bit by bit, especially in recent years, that has changed as the I.R.S., in a number of low-profile decisions, has broadened the definition of real estate, and allowed companies to split off parts of their business that are unrelated to real estate.

For example, prison companies like the Corrections Corporation and the Geo Group successfully argued that the money they collect from governments for holding prisoners is essentially rent. Companies that operate cellphone towers have said that the towers themselves are real estate... The I.R.S. released its latest decision, allowing a data and document storage company to convert, on April 5. The letter did not include the name of the company, but several data storage companies, including Iron Mountain and Equinix, are in the process of converting.

A few days later, a strategist at the Wall Street firm Jefferies wrote in a report: “It is not a far stretch to envision REITs concentrated in railroads, highways, mines, landfills, vineyards, farmland or any other ‘immovable’ structure that generates revenues.”

Exactly.

To a large part their income is just rent (in the literal or economic sense), which in any sane world would be taxed at higher rates than earned income from a business or employment. We live in an insane world where rental income is taxed at lower rates than earned income (that certainly applies in the UK). In a sane world, these corporations would be desperately arguing that their income is not rental income at all.

Fun Online Polls: Full English & Coal-fired power stations

There were 171 responses to last week's Fun Online Poll. Thanks to everybody who took part:

How do you like your Full English Breakfast? Choose max. one carbohydrate and one drink.

With toast - 108 votes
With chips - 7 votes
With waffles - 5 votes

With tea - 97 votes
With coffee - 48 votes
With other drink - 6 votes

Other preferences, please specify (i.e. mushrooms, Black Pudding etc.) - 57 votes
I don't like Full English Breakfast, full stop. - 14 votes

Of the 57 who voted "Other", about thirty people actually specified something. In descending order (if I've counted correctly):

Black pudding - 10 votes
Fried bread (apologies for missing this off the original list) - 10 votes
Mushrooms (the debate raged between 'field' and 'button') - 8 votes
Baked beans - five votes
Fried tomatoes - 6 votes
Kippers - 3 votes

I'd have thought that mushrooms, baked beans and fried tomatoes are part of the Full English, you'd expect at least one or two of them to be present, it doesn't really matter which. I'm not sure if they need an extra mention any more than 'slices of bacon' or 'sausages'.

We then descend into the long list of minority interest stuff with one or two votes each:

Saute potatoes
Bubble and squeak
Fried onions
White pudding
Haggis
Fruit slice
Cereal

So now we know!
--------------------------------
This week, three large coal-fired power stations shut down in the UK, see e.g. The Telegraph. Whether the EU's large Combustion Plant Directive was imposed on the large corporates running them, or whether those large corporates imposed the LCPD on us because it means they get even bigger handouts for doing something else instead remains to be seen.

Be that as it may, there are various different ways of estimating what percentage of the UK's total electricity generating capacity they represent. If I understand Ofgem's Electricity Capacity Assessment correctly, the total electricity generating capacity in the UK is about 80 GW and about 11 - 12 GW of coal and oil capacity is to be shut down by the end of 2015, including the big three power stations which have now shut down (4 GW or 5GW).

So that looks to me as if nearly 15% of the UK's capacity will be shut down in the next two years. Is this correct?

If anybody actually knows, please respond here.

"An irresistible urge to interfere in other peoples lives 'may be a sign of psychiatric illness'"

Spotted by Bob E in The Independent:

The controversial finding comes in a major report, Prodnosing and Mental Health, published this week by the Royal College of Psychiatrists.

It says that almost one in three prodnoses* in Britain today is someone with a usually undiagnosed mental disorder. When people with pronounced bansturbation tendencies are included the proportion is significantly higher. Of the ten million prodnosers in Britain, up to three million have a so far undiagnosed mental disorder, up to two million further have been diagnosed and prescribed a psychoactive drug in the past year and approaching one million are clearly addicted to bansturbation, it says.

Prodnosing tendencies increase with the severity of mental disorder suffered, and all fully fledged bansturbators are certainly a danger to ordinary members of the public. Access to easy to obtain taxpayer funding appears to exacerbate the symptoms of anxiety, depression and attention deficit hyperactivity disorder which afflict many prodnosers, tragically elevating them into becoming fully fledged bansturbators in no time at all.

* Meaning "busybodies" rather than the Irish term for "Protestant".

The Home-Owner-Ist checklist

- council house right to buy discount increased? Check
- council house right to buy discount increased a bit more in London, so that MPs will have places to snap up in a few years? Check
- Bedroom Tax for snivelling ingrates in social housing? Check
- Council Tax increases kept to well below inflation for severalth year running? Check
- £1 billion in soft loans to residential landlords? Check
- income tax breaks for wealthy middle aged businessmen to build up a BTL portfolio? Check
- schemes to help First Time Buyers extended to Second Steppers? Check
- extension of NewBuy to "second hand" homes? Check
- increase limit for these schemes to houses costing £600,000? Check
- government to underwrite up to £130 billion in new mortgages? Check (see previous link)
- builders' share prices up five or ten per cent? Check
- extend the Funding for Lending Scheme? Check
- abandon the inflation target and print more money? Check
- new construction figures kept at the 100,000 mark, the lowest since the 1920s? Check
- £290 million subsidies to sell government owned land at undervalue to private developers? Check (emailed in by BobE)
- £225 million Danegeld to persuade developers to finally finish off half-finished stuff? Check

Several of these emailed in by MBK, who adds, "They are not just throwing the kitchen sink at it, they are throwing the plumbing at it and chucking in the boiler for good measure."

I've overlooked any, please leave a comment and I'll add them to the list.