Sinkhole and cow news

Sent in by Derek R from CTV News:

Two people fell into a hole that opened up in the sidewalk outside a Kitchener department store Monday. It’s not clear what caused the hole to form outside the Sears store in Fairview Park Mall around 2 p.m.

Deanna Haddad was near the front of the store when she saw a woman try to walk into the building: “As she stepped in closer, she fell into a hole,” she said, “I don’t know exactly how deep the hole was, but she was up all the way up to her neck.”

There's your clue, right there.

From The Guardian:

A section of road in the centre of the Japanese city of Fukuoka has reopened just days after a sinkhole opened up outside a busy railway station and threatened to topple nearby buildings.

In a typical demonstration of Japanese workmanship and efficiency, workers toiled around the clocks and had practically filled in the section of road in just two days, according to local media. The road reopened to traffic and pedestrians early on Tuesday after local officials declared the repaired stretch safe.

Meanwhile, Up North:

Emergency planners are discussing when residents can return 'ome after a large sinkhole opened in North Yorkshire.

Twelve homes were evacuated on Wednesday after t'ole opened in t'back gardens of Magdalen's Road in Ripon.

Ian Spiers, emergency planning manager for Harrogate Borough Council, said Yorkshire Water were deciding how to reopen t'sewers so t'residents could return 'ome.

The worst kind of subsidence is an earthquake of course, among all the human misery there's this from MSN.com emailed in by James Higham:

Three New Zealand cows looked like they could use a little help on Monday after an earthquake triggered landslides all around them and left them stranded on a small island of grass.

Video taken by Newshub news service from a helicopter near the small town of Kaikoura shows two adult cattle and a calf stuck on a chunk of land in a paddock that had been ripped apart in Monday’s magnitude-7.8 quake. The patch of grass was surrounded by deep ravines of collapsed earth, trapping the animals where they stood.

Aptly named Japanese cities: Fukuoka

The man on the right of the sinkhole was overheard shouting down to his trapped companion: "Fuck!! You OK?"

From Inhabitat.com:

Fun Online Polls: When you heard the news & Hiroshima and Nagasaki

The results to last week's Fun Online Poll were as follows:

What were you doing when you heard the news?

Listening to the news - 12 votes
Other, please specify - 11 votes

Top "other" answers:

Bayard: I think I was sawing a piece of wood

TDK: Running away from the Grassy Knoll trying to hide my rifle
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It's seventy years since they dropped atomic bombs on Hiroshima and Nagasaki.

So that's this week's Fun Online Poll: "What would you have done if you had been US President in August 1945?"

Vote here or use the widget in the sidebar.

VAT is borne by the supplier, part 94: Japan.

From the BBC:

Retail sales in Japan fell 4.4% in April, compared with the same period last year, as the effect of an increase in the country's sales tax began to be felt. Japan raised the tax from 5% to 8% on 1 April - the first hike in 17 years.

The country faces rising social welfare costs due to an ageing population and is trying to rein in public debt.

So that hopefully puts to rest this nonsense which the politicians bandy about, and which so many armchair economists trot out, that "The consumer pays the sales tax". The consumer only pays the tax if demand is price insenstive (tobacco, booze, petrol/diesel); the supplier pays the tax if supply is price insensitive (fixed supply, such as land, or fixed high overheads/low marginal costs).

Analysts said sales had dropped in part due to consumers rushing to make purchases ahead of the tax rise. That trend was evident in March, when sales surged 11% - the fastest pace of growth since March 1997.

Illustrating why it is a bad idea to announce changes to tax rates in advance.
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UPDATE: Dinero says:

A lot of the time, where the word consumer is approriate, the consumer does pay the sales tax. It is often a very competitive market with items being sold close to the cost of production, and so VAT along with the cost of raw materials are included in what establishes the price.

Problem is, there is no evidence to support that and plenty of evidence to debunk it.

The UK ran the real life experiment of changing VAT from 17.5% to 15%, back to 17.5% and then up to 20% over consecutive years.

The ONS publishes separate retail price indices for the main categories of consumer spending, some VAT-able, some not. If you look at total selling prices for VAT-able and not VAT-able (inclusive of VAT, where appropriate), rather unsurprisingly, overall inflation, from the point of view of the consumer was exactly the same for each.

If Dinero's theory held water, then RPI for VAT-able supplies would have been 2.5% lower than for not VAT-able in the first year and then 2.5% higher in the two subsequent years.
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Dinero again:

... if a bar of chocolate is being sold in a supermarket for 100p inclding 20p VAT and VAT is removed - what is the process that enables the price to stay at 100p?

Supermarket retail is very competitive and a retailer who left the price at 100p would be undercut by a competitor who would be removing the full 20p to attract the customers to himself.

That's all supposition. I do facts. Then I try and discern patterns and only then do I try and work out the logic. Charles Darwin knew bugger all about DNA and molecular biology, but he accepted and refined the theory of evolution.

1. I did some more number crunching looking at Tesco's gross margins during the period of VAT changes and their gross margin went up (or down) by about two-thirds of the VAT reduction (or increase).

2. During the recession, the EU graciously allowed a couple of Member States to experiment with VAT cuts in labour-intensive businesses. Sweden did quite a significant VAT cut for restaurants and pubs (from 25% to 12%). Menu prices only went down slightly; what happened was a huge increase in custom and hence employment.

3. Although supermarkets are competitive inter se, they act as a cartel to the outside world and have already set prices at the profit/revenue maximising level. If they can get away with making an extra 20p profit per chocolate bar, why would they give it away again?

4. Every penny they reduce the price is 5% off their extra net profits; would people eat 6% more chocolate if a bar costs 99p instead of £1? Would people eat more than twice as much chocolate if the price were 90p instead of £1?

5. Look at the whole supply chain; manufacturers are geared up to a certain level of output; supermarkets only have so much shelf-space etc. Even if their pricing guru tells them that they could sell more than twice as much chocolate if they cut the price to 90p, it simply physically can't happen. So supply is fairly fixed; suggesting that the tax is borne by suppliers.

"There are more people living in this circle than outside it"

The Daily Mail published a load of fascinating maps this week.

My favourite was this one:

Included in the article is another map showing the average age at which people say (whether they are telling the truth or not) they first have sex; the average age is far higher in exactly that very populous region. Cause, effect, who knows?

Musing #2, the Philippines typhoon was a tragedy and 10,000 people died. Using the figures from here, about 6,000 babies are born every day in the Philippines.

Musing #3, a far worse natural town planning disaster was the Boxing Day tsunami which killed/drowned about 200,000 people in Indonesia. According to the UN, about 12,000 babies are born every day in Indonesia, which means that the population would have replenished itself within two or three weeks.

Home-Owner-Ism compared

While looking through some articles on the web, I came across this little paper; a conference submission from 2007 on: "HOUSING CONSUMPTION AND RISK SOCIETIES: HOMEOWNERSHIP AS A MEDIATOR OF RISK IN BRITAIN, JAPAN AND THE NETHERLANDS".

Not really that juicy, but the extract of some of the responses from the different countries speaks for itself:

6.2 GOOD INVESTMENT OR SECURE ASSET

I: Do you think this house has been a good investment?

M: I don’t think so at all. We knew at the time we bought this place that the prices were going down.

I don’t really expect them to recover too much either, but it is quite important to maximize the performance of this house. You might feel that it is better to own a house than renting even though the value has gone down
(Japan, home-owner, male, 37).

It all happened by chance, not that we thought beforehand that we could make a killing by selling. In fact, you weren’t at all sure whether buying the house on Parklaan was a good idea, or if the price we paid wasn’t too high. Looking back, it turned out to be a good decision, but that...

Not speculating at all. No, it all happened to pass off very well, not as we expected. We couldn’t have anticipated it. I didn’t realise that the market would...Well, it just exploded. We sold at the right time.
(The Netherlands, home-owner, male, 59)

I think it is the only possible way of making decent money in the long-term, there are no get-rich schemes, you can’t do that, the stock market is not worth investing in, pension schemes aren’t worth you putting your money...

And also you can buy properties with other people’s money, whereas if you invest in stocks or shares or in a pension scheme every single penny has to be your own money, but if you are buying an asset like property you can borrow up to 85% of the cost and in ten years time when it has doubled in value, that’s all yours, so your money is worth 11 times what it was worth 10 years ago...And in the meantime someone else services the debt.
(UK, home-owner, male, 33)

"Lucozade and Ribena sold for £1.35"

From the BBC:

A bottle of Lucozade and a small box of Ribena have been sold by Mr Patel at the corner shop in Sudbury to a Japanese tourist and his wife for £1.35.

The couple already own a bottle of Orangina and a bottle of Schweppes, and the deal is expected to help them expand their choice of drinks later in the day when they head into London to do some sight seeing.

The deal was widely expected after the couple entered the shop and started perusing the chiller cabinet early this morning. Mr and Mrs Patel chose to stock the well-known UK brands after deciding to complement their core newspaper and cigarettes business.

The Patels saw combined sales of Lucozade and Ribena totalling £6,000 last year and starting selling the brands after a strategic review with their regular delivery driver in April.

Tokyo loses race to host Games

From the BBC

Tokyo has been chosen to waste billions on the 2020 Olympic and Paralympic Games ahead of Istanbul and Madrid.

The Japanese capital lost a final round of voting by International Olympic Committee (IOC) members in Buenos Aires to lose to Istanbul by 60 votes to 36.

The announcement was met with anger from taxpayers in Japan, as Tokyo prepares to host the event for the first time since 1964.

When IOC president Jacques Rogge - who will retire after 12 years in the role on Tuesday - announced the winning city, Madrid taxpayers jumped to their feet in celebration and waved the Spanish flag.

A number of them were overcome with emotion and wept, following two years of anxiety.

"I would like to thank everyone in the Olympic movement for giving the games to Tokyo" a delighted Istanbul taxi driver said.

A Spanish software developer added: "It is a great that Tokyo has been chosen. I'd like to thank them for picking up the tab for my entertainment. We really dodged a bullet there."

"The wrong kind of bird droppings"

From AOL.co.uk:

Two cities in Nagano Prefecture, Japan had a total of 25 thousand traffic lights disabled as a result of a buildup of bird droppings.

"Japanese village washes up on Oregon beach"

From The Australian:

An entire village cast adrift by Japan's killer tsunami has washed up on an Oregon beach 15 months later, among the biggest pieces of flotsam to make landfall on the US West Coast so far.

The 20-acre town, made of wood, bricks, concrete and metal, was spotted floating off the coast and then washed in with the high tide on Agate beach, 160 kilometres southwest of Portland. The two hundred villagers appeared undernourished but otherwise in good spirits, having lived off radioactive tuna fish and rigged up a basic desalination plant during their perilous journey.

Local authorities contacted the Japanese consulate in Portland, who confirmed that it was from the March 11, 2011 tsunami, thrown up by a massive earthquake off Japan's coast 8800 km across the Pacific.

"Several villages were were washed away by the tsunami. This is one of them," deputy consul general Hirofumi Murabayashi said. "The others, we don't know where they are, if they're floating somewhere or they sank in the ocean or not," he added.

Japanese Yen Intervention

Steve_L did a post on AUD/USD, which reminded me that six weeks ago I remarked that JPY looks a bit on the high side as well.

The BoJ finally intervened in the currency markets a day or so ago, and allegedly pushed down the value of JPY by around 5 cents against USD.

1. If we look at JPY against a basket of currencies, yesterday's move does not look spectacular on a five-year chart, if anything, JPY had been drifting down since my earlier post, from 1.20 to 1.17 last Sunday, it's about 1.14 as at today (click to enlarge):2. The question is always: does the BoJ time its interventions to reinforce an existing downward move or do insiders cash in on a planned intervention, thus precipitating the downward move?

3. The other question is, how dumb are some people at the BBC? They mentioned it on Radio 4 yesterday morning, and the reporter announced quite earnestly that the BoJ has got lots of foreign currency reserves which it can spend to intervene in the currency markets. EPIC FAIL! A central bank only needs foreign currency reserves if it wants to prop up its own currency (see Black Wednesday) because you have to sell those reserves and buy your own currency; if a central bank wants to depress the value of its own currency, it does this by selling its own currency (which is can print at will) and using it to buy foreign currencies.

Or you can do like the wily insanely mercantilist Chinese or Germans and instead of printing your own currency, actually manufacture stuff that people in other countries want, sell it to them, and then lend them back their own money - because swapping their currency back into yours would push up your own currency and hence make it more difficult to export. Of course, beyond a certain stage, that small bit of marginal extra income you can earn from exporting gets wiped out by the constant erosion of the value of your foreign currency reserves, but hey...

Letters From A Tory is up and blogging again!

Although I can't quite make sense of it any more.

Killer Arguments Against LVT, not (105)

James Higham quotes from my previous post:

"... if you pay rent to a private landlord, they say that because you are paying to a private individual, that's fair game and voluntary, but if the state levies a land-related tax on top (e.g. Business Rates) that this is involuntary."

and responds thusly:

"Most uneasy about this one. A tax and a rent are two different things. One is payment for services directly rendered and the other a payment for theoretical benefits as a national whole."

Ho hum.

Let's look at facts and real life and logic.

1. The rent or price you pay to occupy a building is an all-inclusive price for that building at that location.

2. So if you compare two different buildings at the same location, the price will differ slightly if one is in good condition and the other is in poor repair etc. That difference is extra profit which the owner of the good building generates and clearly belongs to the owner. We can safely assume that there is such a thing as a fair return on the money tied up in bricks and mortar (let's assume five per cent per annum), so even the owner of the bad building will be getting some return on his bricks and mortar investment (see limiting case in 4. and 5. below).

3. Similarly, you can compare two identical buildings at two completely different locations (let's say Outer London and the North West). There will be a huge difference in the price which clearly has nothing to do with the efforts of the owner. It is the location which sets the upper limits for the price, and not the building.

4. Taken to extremes, let's imagine a well-built office block in north east Japan which survived the tsunami but is surrounded by tens of square miles of rubble; it is the only building which still has electricity and water supply, so the services which the landlord is providing his tenants is unchanged since a month ago.

5. Do people not think that this landlord will struggle to command the same rent as he would have been able to a month ago? It is quite possibly the case that the rent he can get is so low that it is less than a fair return on his bricks and mortar investment and the cost of other services he provides (concierge, cleaning, repairs, whatever) and he'd be best advised to give it up as a bad job and abandon the building to its fate.

6. Therefore, is is quite easy to differentiate between the value of 'services directly supplied by the landlord or vendor' and the value of 'benefits provided by the nation as a whole'. There is nothing 'theoretical' about it; the precise calculation is to some extent guesswork but the net present value of the 'benefits provided by the nation as a whole' is reflected by the cost of buying bare land at that location (again, to work out the annual value, you can either take this known figure and multiply it by an interest rate, or you can simply compare total rents at a good location and a bad location, as in 3. above).

Fun Online Polls: Fukushima & The Census

On a high turnout, the results to last week's Fun Online Poll were as follows:

Has the Fukushima catastrophe changed your attitude towards nuclear power?

No. I'm still against nuclear power - 5%
Yes. I'm now more negative about nuclear power - 5%
Yes. I'm now more positive about nuclear power - 29%
No. I'm still in favour of nuclear power - 61%
Other, please specify - 0%

Given the right-wing nature of most of this 'blog's readership, I'm not surprised that a majority are in favour of nuclear power anyway, but I'm (pleasantly) surprised to see that so many, like me, are more positive (or less negative) than they were before. As it happens, there are six nuclear power stations in the earthquake/tsunami zone, so I find the fact that only one was badly affected rather reassuring.

As ever, thanks to everybody who took part.
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Health Minister Dick Puddlecote highlights another example of the ONS fighting back against the government - in the great tradition of bureaucratic warfare, they are continuing this war despite the change in government.

I actually trust the ONS. For sure, they'll bend with the political wind and publish statistics showing that alcohol-related deaths have trebled in a short space of time (or whatever) but they'll leave coded messages like "Due to a change in the way that the figures are compiled, later series are not directly comparable with earlier series" which is ONS-speak for "These figures are all complete bollocks."

All of which reminded me that I hadn't completed our Census form yet. Happily enough, you were supposed to complete it as at 27 March 2011 (yesterday) so I duly completed it this evening and answered every question with a straight bat. For the 'optional' religion question I entered 'smoker' as previously agreed (for the life of me, I can't remember which 'blogger first proposed this - I'll link if anybody tells me who it was. UPDATE: ViewFromTheSolent reminds me it was Leg-Iron). For 'nationality' I chose 'English' (not 'British') and for 'racial origin' I put 'Other - European' (being a mish-mash of anything between Northern Ireland and Poland).

So that's this week's Fun Online Poll - have you completed your Census form yet?

Vote here or use the widget in the sidebar.

Oo-er...

According to this week's Fun Online Poll, a quarter of people (including me) are more favourably (or less unfavourably) inclined towards nuclear power after the Fukushima disaster, for reasons which Electro-Kevin articulated thusly:

I'm more positive about nuclear power than ever. The Fukushima plant should be a ringing endorsement to everyone. Hit by a scale 9 earthquake, a 20 foot Tsunami, various explosions and still contained. It doesn't get worse than that and ours will never be subjected to anything like the stresses... short of a nuclear attack by which time it won't matter anyway.

Lo and behold, from George Moonbat's article in today's Guardian:

You will not be surprised to hear that the events in Japan have changed my view of nuclear power. You will be surprised to hear how they have changed it. As a result of the disaster at Fukushima, I am no longer nuclear-neutral. I now support the technology.

A crappy old plant with inadequate safety features was hit by a monster earthquake and a vast tsunami. The electricity supply failed, knocking out the cooling system. The reactors began to explode and melt down. The disaster exposed a familiar legacy of poor design and corner-cutting. Yet, as far as we know, no one has yet received a lethal dose of radiation.

I thought that people like Moonbat are our political compass - whatever they say is probably wrong and we just say the opposite? Bit of a moral dilemma here: do I now pretend that I supported nuclear power all along, or decide that I am actually less favourably inclined? Hmmm.

Fun Online Polls: Savings strategy and Fukushima

The results to last week's Fun Online Poll were as follows:

Which is the better investment?

Paying off your mortgage as quickly as possible/saving up cash to buy a house - 73%
Investing in stocks and shares - 27%

Please note that I was not trying to compare the respective merits of buying a house or buying shares as an investment, so I suppose I should have asked "Which is the better way of saving money?.

Nonetheless, I'm relieved that I'm with the majority on this one.
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The whole Fukushima catastrophe is still rumbling on, and we still don't know what the final outcome will be. For inexplicable knee jerk reasons, a lot of countries in non-earthquake threatened areas got the jitters about nuclear power, and nuclear power generally has taken a hiding in political terms over the last week.

So that's this week's Fun Online Poll: "Has the Fukushima catastrophe changed your attitude towards nuclear power?"

Vote here or use the widget in the sidebar.

Google Maps Fun

Pinched from Brian Groom's column in yesterday's FT: if you select the 'Get Directions' function in Google Maps, type in 'USA' as your starting point and 'Japan' as your destination, then item 31 on the list is genuinely quite chucklesome.

Guns, Germs and Steel (2)

As recommended (yes you), I ordered this book, which arrived on Friday and I have now finished reading. It's all very interesting, or least useful background info, and for a modest £6 or something at Amazon the sort of book which everybody ought to have read.

It does make me wonder what possessed people from south east Asia (via New Guinea) to island hop all the way as far as Hawaii in little canoes, presumably by trial and error without even knowing whether there was a destination, let alone in which direction it might be. For every single person who made it to Hawaii, how many just ran out of food/water at some random place in the Pacific? A hundred? A thousand? Ten thousand? According to the book populating "virtually every habitable scrap of land in the Pacific" only took about two thousand years from start to finish

And in the epilogue, he says what I have always said: that history is a science like anything else, in that if you look at the grander sweep of things you can recognise definite patterns; and if you can recognise patterns you can predict future events. (Isn't that what economists do all the time? The problem being that economists are on the whole so stupid (or corrupt) that they can't recognise what's going right now, e.g. few of them called the land price or credit bubbles).

Isaac Asimov referred to this as 'psychohistory' in the Foundation Trilogy - ignore the later additions, they were crap. When I read the original trilogy, I assumed that The Foundation was an allegory for Japan (very developed scientifically, but on a distant planet with very few raw materials so that the tides of history would force them to become a successful and hence powerful trading planet), only it turned out that the books were written in the early 1950s, long before Gen Douglas MacArthur's Georgist reforms had turned Japan into the success it was for a few decades (until they turned their back on Georgism again, of course).

Readers' Letters Of The Day

From The Evening Standard (I can't find this online):

My respects to Winnie Langley's family, but I dispute her title as Britain's oldest smoker. My grandmother, Esther Zietman, is coming up to 103 in December and has smoked since she was 13. At 99, she asked her doctor about giving up and he advised against it, saying that to do so would kill her.

Clive Zietman

A potted history of the next ten years from the FT:

... for so long people have sneered at the Japanese for their inability to steer their economy to recovery. Perhaps because they have sneered so much, it is no longer possible to admit that after a huge housing bubble bursts, there is nothing to do except suffer many years of economic indignity.

The fixation with Japan was not helpful during Mr Greenspan’s watch, nor I fear will it be of much use this time. The Japanese may be different, but they were not stupid.

Takashi Ito, Tokyo, Japan

And, the slightly longer summary of how we got here from The Metro:

Aran tells us we need to reform the international finance system to fund the vision of risk-taking entrepreneurs, but how many of those making millions in bankers' bonuses are doing just that?

Much of the 'wealth' supposedly created by the financial system in recent years has been mortgage debt. The more people borrowed because they were scared of being left off the property ladder, the more house prices rose and the more money (but really debt) was used to pay for it.

There is no real entrepreneurial wealth creation in this vicious circle. It has brought the country to its knees, not just because of the misery of those forced out of decent housing by high prices, but also the stress caused by borrowing too much and the resultant economic crash as the boom turned to bust. The only people who profit are those who are so wealthy they don't need a mortgage, or those who oil the wheels of the system and take their cut.

Matthew Huntbach, via e-mail.

Iain Duncan Smith. Who is one eighth Japanese.