Monday 29 February 2016

Best Laugh All Day...

Headline in the online Telegraph:

"PM:  The only Project I am interested in is Project Fact"


(May have gone by now)

Fun Online Polls: US Presidential election, round 2

The results to last week's poll were predictable enough...

Who do you think will be the US presidential candidates in 2016?

Hillary Clinton (D) 73 votes
Bernie Sanders (D) 20 votes

Donald Trump (R) 83 votes
Ted Cruz (R) 8 votes
Marco Rubio (R) 7 votes
Ben Carson (R) 1 vote
John Kasich (R) 0 votes

This week is the grand final, who do you think will (would) win, Hillary or Donald? Please note - not who would you like to win, but who do you think is more likely to win.

Vote here or use the widget in the sidebar.

Sunday 28 February 2016

King Of The Jungle


There's a lot of people outraged on Twitter (when aren't they) about this Tweet

And yes, apparently those are Mussolini's words. And yes, Mussolini was a shit, but if you forget Il Duce said it, is there anything wrong with it?

Daily Mail on top form

Woman's skull is found in grounds of £4m mansion once owned by Drambuie whisky dynasty

Saturday 27 February 2016

"Sterling falls on Brexit fears"

Said all the headlines last week. The BBC goes with Pound hits lowest level against dollar since 2009.

As per usual it is a load of flummery. I've done some charts showing each currency against a basket of other major currencies (the vertical scale is arbitrary, the long run average for each is about 1).

It is true that GBP has fallen again recently, but it's still well above its low point of 2011:

Here's the chart for EUR for the same period, in relative terms, EUR has fallen against GBP over the five years, from 90p at the peak, down to 70p and then a recent uptick to nearly 80p:

If anything, it is USD which recovered, from a low of 62p (which happens to be the average since 1990) up to 72p today:

Interesting articles which people have emailed me.

Random sent this from The Independent:

A ban on super-strength kettles has been put on hold amid fears that it could drive Britain to leave the EU, it has been reported.

The European Commission had been planning a number of measures to ban high energy appliances for environmental reasons. However it has now quietly shelved the ban due to concerns that backlash in Britain could drive the country towards a Brexit.

Sounds plausible, actually. So they'll wait until after the referendum and then do it.
SG sent this from The Guardian:

A Silicon Valley venture capitalist whose net worth is greater than $1bn is asking the state of California to pay him $30m to restore public access to a beloved beach – sparking fresh outrage in a lengthy legal battle over coastal lands.

That's outrageous, how can the government sell off the public access in the first place? In English land law, if there is a public right of way, then the owner and all subsequent owners are stuck with it (it comes off the price when you buy).

MBK sent in this from The Telegraph:

A couple were shocked to discover their farm cottage is set to be surrounded by a 700-home estate - despite not being consulted when developers first applied for planning permission.

Cheryle Walton and her partner Paul Jones were unaware of plans to build the "mini town" until a passer-by mentioned the development. But the 507,500-square metre development in Chippenham, Wiltshire, is set to encompass their detached cottage, which currently sits in miles of fields.

Miles of fields, my arse. A quick search on Google Maps tells us that their house is in the wedge of fields (top left hand corner, opposite Wavin Plastics), which is pretty much the most obvious place to build new housing (unless the village/town is so big that it ought to be earmarked as a public park/woodland). (It is easy to find - the River Avon makes a distinctive bend on the plan in the Telegraph article which is easily identified on Google Maps).

So they must have known it would happen sooner or later (or be subject to a CPO to open up the park). Top tip, if you don't like change, buy a house in a built up area where not much more is going to happen or one which really is miles from anywhere.

Private Education

Thoughts on these two facts?

From the Independent

The research, commissioned by the Independent Schools Council, found that private schooling boosts teenagers’ GCSEs by almost two-thirds of a grade per subject.

From the BBC

The cost of putting a child through a 14-year private education in the UK stands at £286,000, research suggests.

Should have stuck to the rivers and the lakes that you're used to

From the Telegraph (au)

THREE British tourists have died in Vietnam while climbing waterfalls with an unauthorised tour guide.

Friday 26 February 2016

"Science shows how not to get killed by a cow"

Over at W M Briggs.

Since this is Science, we need a conclusion:

"More research would help reveal the reasons for fatal attacks, the authors write, as well as their frequency. It would also be helpful to have a centralized database where people could report cattle attacks."

It’s not true Science unless (1) it can be measured and (2) more research is needed.

Thanks to VNQNFTS for emailing it in.

"Sea levels are rising at their fastest rate since this morning"


The global sea level rose approximately three feet (90 centimetres) in the last eight hours, a greater fluctuation than had been observed all morning, according to a family picnicking on a beach near Sydney this afternoon.

Led by maths teacher Bruce Kopp and his wife, insurance actuary Sheila Kopp, the family was forced to gather up its windbreak and blankets and move several yards up the beach. Their eldest daughter Rebecca, 13, confirmed that a three foot high sandcastle she had constructed earlier in the day disappeared from view several minutes ago, enabling them to reconstruct a history of global sea level fluctuations going back to ten o'clock in the morning...

Extrapolating their findings, Mr Kopp predicts that the sea level will rise between 24 and 131 feet (7 and 40 metres) by the end of this week. This range is based on a set of projections which Mrs Kopp was able to calculate in her head and were verified by her husband, who added that he had then factored in a margin of error of fifty percent either way because they were not sure about the precise height of Rebecca's sandcastle.

"Norwich Radio DJ banned for speeding in Brighton"

From the BBC:

Local radio presenter Alan Partridge has been banned from driving after he was clocked doing 54mph in a 30mph zone. The 50-year-old radio host, famous for his quirky phone-in shows, pleaded guilty to driving at almost double the speed limit on the A259 at Black Rock, Brighton, on 14 October last year.

Partridge, who gave his address as The Travel Tavern, Linton, was caught speeding in a Kia Optima, Sussex Police said. He was disqualified from driving for 28 days and fined £670 at Worthing Magistrates' Court on Wednesday.

A further charge of obstructing the course of justice was dropped after Mr Partridge agreed to withdraw his initial statement that his personal assistant Lynn Benfield was in the driving seat at the time of the offence.

Thursday 25 February 2016

Killer Arguments Against LVT, Not (385)

Somebody sent me an email headed "LVT and Class Warfare" with the following nugget:

And here's a question worth asking, what if a low income neighbourhood gets together as a community and works with the police to cut down crime in their area? If land taxes then go up and a bunch of rich toffs move in, then the very community that worked hard to improve their neighbourhood could be forced to move on.

I'm inclined to agree with your economic arguments that LVT would increase overall productivity as well as improve the housing stock but you can't ignore the fact that a careless LVT zoning policy would exacerbate income band apartheid.

I've heard this one before, it is of course completely bunkum.

It is impossible for a very small, identifiable group of people to permanently reduce crime in their neighbourhood and thereby push up land values.

I suppose it is theoretically possible that everybody in "the local community" could agree not to commit crimes in the area and to carry out Neighbourhood Watch patrols, report law-breaking family members to the police etc.  But I've never heard of it happening, and apart from that, it only takes a few criminal households out of thousands to turn a low crime area into a high crime one. What if they don't sign up?

Further, in the absence of LVT, let us assume that one person from this neighbourhood decides to sell up for a higher price and move away...

Firstly, he sells it to a wealthier person. Secondly, what is that wealthier person paying for? He is certainly not paying for the efforts of the person who has moved away who is no longer contributing. Thirdly, if the new resident wants to keep crime down, he has to put in the hours and abide by the rules himself, so basically what he is paying for is partly his own efforts.

The First Duty of Government - the Defence of the Realm

 An item on Guido got me thinking.

In the last 1000 years (just under) the UK (well alright, England) has been invaded twice. 

Once in 1066 when about 10,000 Normans turned up and shoved a stick in Harold's eye, and second between 2010 and 2015 when 3,300,000 (approx.) various foreigners just walked in. OK, these didn't actually 'invade', as in take over by force, but permitting such numbers in is a de facto assault on the indigenous population's property rights.

So Cameron's argument that being in the EU is better for our security, indicates that he's clearly missing the point.

In any event if he and his government think that we need to surrender sovereignty to be secure then he's admitting that he isn't competent to provide security.  Which in turns means he'd better resign then.  

Wednesday 24 February 2016

Economic myths: mortgage affordability

From The Evening Standard:

However, historically low mortgage rates meant that first-time buyers only had to pay nine per cent of their income as mortgage interest, the lowest proportion since records began in 1973. Interest and capital repayments combined accounted for 19.5 per cent of earnings.

The "nine per cent" figure is irrelevant. Think about it - if mortgage interest rates were zero, house prices would go up accordingly and annual repayments would remain the same. What matters is total repayments and for how long.

The blue line in this handy chart from Savills shows that twenty per cent for the first year is par for the course (remembering that this is calculated on gross income before tax; it is more like one-third of net income). Interest is like privately collected land value tax, a reduction in the tax rate benefits landowners and sellers, not buyers.

For more important is the red line, which shows that in the good old days of high inflation, your mortgage was being eroded away and your payments in real terms fell quite markedly. This is what the oldies conveniently forget.

A final point to mention is that mortgage terms are getting longer and longer, paying one-fifth of your gross income for ten or fifteen years is fair enough; paying it for thirty years is not.

Tuesday 23 February 2016

And so it begins...

From here

Brexit ministers BANNED from accessing Government documents and BLOCKED from briefings

Ministers campaigning for Britain to leave the European Union have been banned by Whitehall’s most senior civil servant from accessing official documents and prevented from receiving briefings.
In a move like to enrage Eurosceptics, Sir Jeremy Heywood, the Cabinet secretary, has told ministers that when they campaign on EU matters they will no longer have access to official briefing papers, or get help with developing ideas for speeches.
Instead departmental officials will only be able to provide them with a basic fact checking service.
Sir Jeremy Heywood, the Cabinet Secretary, said that under-performing ministers need feedback to allow them to improveSir Jeremy Heywood, the Cabinet secretary  Photo: REX FEATURES
In a letter, which has been distributed in Whitehall this morning, Sir Jeremy said: “It will not be appropriate or permissible for the Civil Service to support who oppose the Government’s official position by providing briefing or speech material on this matter.
“This includes access to official departmental papers, excepting papers that ministers have previously seen on issues relating to the referendum question prior to the suspension of the collective agreement.”
He adds: “Departments may check facts for such ministers on request. And civil servants should continue to support such ministers in undertaking all official government business in the usual way.”
The rules from today until May 27, when the official Whitehall purdah period begins.
Christopher Hope, Chief Political Correspondent


From the ever reliable Guido Here

Advertising Standards Agency on top form.

From the BBC:

Three adverts for hotel website, where the word "booking" was seen to be used in the place of a swear word, were the second, fourth and seventh most-complained about ads of the year - with 683, 407 and 201 complaints respectively.

The complaints were not upheld, with the ASA saying "it was a light-hearted play on words that couldn't be mistaken for an actual swear word. To give you an example, if I were to say something like 'Lighten up, you miserable fuckers!', then that would clearly be an actual swear word. The word 'book', on the other hand, is not an actual swear word. Can some people not tell the difference any more?"

Monday 22 February 2016

Fun Online Polls: Shaving & The US presidential race

The results to last week's poll were as follows:

The power of advertising: do you use a dry-electic shaver or disposables?

Dry/electric - 23%
Disposables - 28%
Both - 20%
Neither - 29%

One 'other' was cut-throat razor, fair enough. Roy said safety razor with replaceable blades, which I would count as disposables.

I asked the question because I was puzzled by the vast amount of advertising for disposable relative to advertising for dry/electric. It would appear that they know what they are doing, as more people use the former than the latter, so there's more to play for and people replace them more often.

Thanks to all 102 of you who took part and helped clear that up for me.
This whole US presidential election thingy is dragging on and on, it won't be over until November, at a cost of billions of dollars

So let's see if we can predict it for them for a minimum of hassle. This week we will choose a candidate from each party and next week we'll have the final round.

List of candidates from a recent The New York Times, don't blame me for inaccuracies and omissions.

Vote here or use the widget in the sidebar.

Outbreak of common sense at the London Assembly.

From City AM:

Scrap council tax and business rates and replace them with a land value tax to encourage development, says London Assembly member

London’s housing shortage could be partially alleviated by replacing business rates and council tax with a tax on the value of land, a member of the London Assembly has argued today in a new report.

The tax changes could lead to the release of nearly 2,000 hectares of land for development, which would provide enough space for 275,000 new homes in the capital, according to the research from Tom Copley. The role of the London Assembly is to ensure the Mayor delivers on their promises.

It's City AM so they are wilfully misreporting as per usual. The report clearly stated that Stamp Duty Land Tax would have to go as well. Things in London are so skewed that SDLT on residential sales raises as much Council Tax, and SDLT is arguably a worse tax. Being City AM, they round off their article with two tired old KLNs, "What about valuations and how do we find out who owns what?". Duh. LVT is just Council Tax or Business Rates with more accurate valuations.

Disappointingly, they didn't adopt all of what I submitted, so they don't propose getting rid of section 106 agreements and the Community Infrastructure Levy, both of which discourage new construction (this is clearly something which the London Assembly has the power to do), let alone getting rid of Inheritance Tax and the TV licence fee (which are the obvious next steps but would require some devolution of powers or back room deals).

Sunday 21 February 2016

Prescient, or what? Yes Minister Season 2 Episode 5

Friday 19 February 2016

Lando: Empire Deal 'An Historic Moment for Cloud City'

From Sky:

Lando Calrissian has secured a "historic" deal on the Cloud City's relationship with the Empire after two days of intense negotiations.

At a news conference shortly after the deal was done in Bespic, Mr Calrissian said: "In the last hour, I have negotiated a deal to give Cloud City special status with the Empire'.

"This deal has delivered on the commitments I made at the start of this process.

"Cloud City will remain outside of Imperial control and Princess Leia and the Wookie will remain with us".

Killer Arguments Against LVT, Not (384)

I was chatting to somebody who is quite sympathetic to the idea, and he said that he assumed somebody who owns an acre of central London would pay more than somebody who owns an acre of Scottish farmland.

Yes of course, I replied, the London landowner would pay a hundred thousand times as much. He said that sounds a bit extreme - he would only expect the London land to be worth twenty or thirty times as much as the farmland.

So I did a couple of calculations for him (all figures for annual rental value).

Scottish farmland, £50 to £100/acre (not worth taxing, if truth be told).

Average UK home £12,000 x 2/3 location value x ten homes per acre = £80,000/acre

Office space in UK city centres excl. London = £50/sq foot plus £20 Business Rates x 9 (for sq yards) x 4,840 (for acres) x 5 storeys = £15 million. Knock off 10% for running costs and 50% for the land used for car parks, light wells, access, pavement etc = £6 million/acre.

Shop space in most expensive shops on Bond Street, London is £1,000 per square foot with £100 for four storeys of offices above, do the same calculation as before (Business Rates are lower as a percentage), you end up with £30 million/acre.

So the relative values are:

Farmland = 1

Residential = 800

City centre office space = 60,000

Bond Street, London = 300,000

The most expensive land of all is AFAIAA the Coca Cola sign in Piccadilly Circus, the rental value is over £20 million a year ÷ by area of land used virtually nil = value per acre more or less infinity. The sign/location alone, ignoring the shops and offices below it, is worth the same as 200,000 acres of farmland (a farm the size of Midlothian).

Thursday 18 February 2016

Cars v buildings

I've not done one of these for a while, so here are some of the highlights of the year so far:

Daily Record:

A FAMILY escaped unhurt when a car crashed into their living room as they sat watching TV.

Christine Armit was relaxing with partner Patrik Benneryd and her children Ryan and Emily when the Honda Civic ploughed through the wall. A neighbour said the motor shunted the sofa – where Ryan, 24, had been lying – across the room.

Wales Online:

A car has crashed through a shop window in a Carmarthenshire business park.

Police and the Mid and West Wales Fire and Rescue Service were called to the Cross Hands Business Park, near Ammanford, at 11.08am today. The vehicle had crashed into the window of the Home Bargains store but no-one was injured in the collision.

The Telegraph:

This is the moment an out-of-control car ploughed through the front window of an estate agents on a busy high street.

The driver, who was miraculously unhurt, smashed a Nissan Micra into Roger Dean estate agents in Stockport, Greater Manchester.  The astonishing CCTV footage, captured around 4:50pm on Sunday, shows the moment she sped into the shop window before attempting to reverse out of the wreckage.

Interestingly, the article doesn't say whether any estate agents were hurt :-)

The Press:

POLICE are searching for two men after a car crashed into a North Yorkshire shop.

The crash happened in the early hours of Sunday in Starbeck High Street, near Harrogate, when a black BMW crashed through the window of Staiano motorcycle shop after ploughing through bollards and street furniture.

Evening Standard:

A car has careered through the front of a mobile phone shop after being pursued by police though Crouch End.

The car sped up Crouch End Broadway before smashing through the window of the shop in Park Road. Police later recovered a large quantity of what are believed to be drugs from the car, and the driver was arrested after he was chased on foot.

Killer Arguments Against LVT, Not (383)

An argument against under a broadly pro-LVT article at the Institute for Economic Affairs:

Take a leasehold block of flats. The leaseholders must pay to the landlord ground rent and service charge every year. Usually, the ground rent is token and is set by the lease agreement. Along comes LVT. The landlord must now pay to the governmentt each year an amount far in excess of the receivable ground rent. The choices open to the landlord are…

Having started off with an entirely unrealistic assumption about LVT is apportioned, he then wanders off into idle speculation as to what might happen.

I explained on the kln blog:

The connoisseur then advances this argument, which means that they have ignored Rule One, that the tax is on the annual site premium or ground rent.

With blocks of flats, we often find that there is a freehold and several layers of leaseholds before we get to the real leasehold, the one that gives exclusive possession in exchange for the next … years in exchange for payment of ground rent to the next leaseholder up, who pays ground rent to the leaseholder above him all the way up to the freeholder, who just collects.

The rental value and hence site premium of the leasehold flats (level 1) is easily established, and if they have to pay £100 ground rent each to their immediate superior leaseholder (level 2), then the level 1 LVT assessments are knocked down by £100 each.

The leaseholder at level 2 thus has [number of flats] x £100 ground rent = income and pays [random amount of ground rent] to the leaseholder at level 3. If the level 2 leaseholder receives more than he gets, the net income is what is liable to tax (at up to 100%). If a leaseholder decides it's not worth the hassle of collecting it, merely to pay most or all of it over in LVT, then he is free to waive it, and the LVT assessments on the flats go up by £100 a year each.

Wednesday 17 February 2016

Reader's Letter Of The Day

From today's Evening Standard:

Jenny Thomas [Letters, February 15] claims that London tenants have "unrealistic expectations" and that owning their home home is not "their entitlement".

For most of the 20the century, the UK has a bundle of policies which kept house prices down while squeezing out private landlords. The inevitable result was precisely as intended - a massive increase in the number of owner-occupiers.

And yes, people did see this as "their entitlement" - it is precisely this entitlement that recent governments have snatched away.

Mark Wadsworth, Young People's Party.

I'd mark myself down for using the same word ("precisely") twice, but apart from that, it came out OK.

Good inequality vs bad inequality

From The Evening Standard:

Strong recent employment growth and low inflation had pushed typical household incomes in London up by 2.9 per cent higher than with before the financial crash of 2008, said a Resolution Foundation report. But once the cost of homes was included, living standards fell 3.9 per cent since 2008 – which the foundation said was by far the biggest fall anywhere in the UK.

“Londoners have experienced some of the strongest income growth in recent years, with typical household incomes now well above pre-crash levels,” said Matthew Whittaker, chief economist at the think tank.

“But the wider picture on living standards changes completely once housing costs are included. On this measure living standards have actually fallen over the last seven years, and by far more than anywhere else in the UK.”

This is an example of bad inequality.

Tenants are worse off, owner-occupiers are slightly better off and landlords are laughing all the way to the bank.

Tuesday 16 February 2016

Asking the wrong question.

From The Metro:

Does anyone actually know the name of their MEP and does anyone actually care?

Enid, Glasgow

Not clear if she's asking a trick question, is herself stupid or genuinely doesn't care.

The question should refer to "their MEPs" plural. Each region of the UK returns around half a dozen MEPs, so everybody has - in theory - around half a dozen MEPs.

Monday 15 February 2016

Fun Online Polls: Storm names, advertising and shaving.

The results to last week's poll were as follows:

Which was your favourite storm name so far? (Multiple choices allowed)
Abigail - 3 votes
Barney - 0 votes
Clodagh - 2 votes
Desmond - 0 votes
Eva - 0 votes
Frank - 2 votes
Gertrude fka Jonas - 3 votes
Henry - 0 votes
None. The practice is very silly - 80 votes

Lighten up, people!
I watch a fair amount of telly and hence a fair amount of advertising.

The old rule is that there is no point advertising a completely generic product like potatoes or sugar. People will probably buy them anyway, and if one farmer/producer reminds people how great his potatoes are, at best people will buy more potatoes, but they are just as likely to buy somebody else's. So it is only industry-wide organisations who would pay for it.

At the other extreme are products which are totally unique to the producer, they don't really need to be advertised either. If you need that product, you will buy it from the sole supplier, so Rolls Royce don't need to advertise their cars.

Most advertising seems to be for companies/products in the middle ground - cars, banks, online betting, price comparison sites - these are all much of a muchness, they are generic products but with some market segmentation.

- If you buy Car X, you will need to buy replacement parts for it in future. This overlaps with Indian Bicycle Marketing - cars are marketed as manly cars, girly cars, family cars, hipster cars and middle aged cars.
- If you open an account with Bank X, then you are unlikely to switch accounts for several years;
- If you have opened an online betting account with your "free £10 to play", you are likely to stick with them for while (or at least until you have lost more than your "free £10 to play"); and
- Price comparison sites. If you can get more customers, you get more advertisers, which means more customers etc.

Something else which irks is the amount of advertising for disposable razors. There's Gillette and Wilkinson's, who have been locked in mortal combat since the dawn of time (like Coca Cola and Pepsi Cola) with increasing outlandish claims.

Since The Onion spoof from 2004, Fuck Everything, We're Doing Five Blades, they really did go to five blades or here. On the other hand, you see relatively little advertising for dry/electric shavers.

I assume it's because people replace them so seldom, but it might be that it's only a very small market share and most people use disposables.

So that's what I need to find out: "Do you use a dry/electric shaver or disposables?"

Vote here or use the widget in the sidebar.

For the record, I tried disposables briefly when I was a teenager, hated it (rash, cuts etc) and have used an electric shaver ever since.

Sunday 14 February 2016

Economic Myths: Tax breaks for pensions reduce the burden on the taxpayer.

Mombers, in the comments to Lola's recent post about pensions and savings:

"Surely the purpose of any incentives is to provide enough private income to prevent OAPs becoming a burden on the state? If so, it doesn't matter what the person's income in their working life was. That said, I am a bit miffed that my enormous tax relief is all but certain to be cut :-("

My response, as tidied up:

M, yes that is how they always justify it but it is complete and utter horseshit.

Cost to the taxpayer of basic state pension = £50 billion a year.

Cost to the taxpayer of second state pension = £40 billion.

Cost to the taxpayer of top-up payments of Pensions Credit, Housing Benefit and Council Tax Benefit for pensioners with no SSP or private pension = approx. £15 billion.

Cost/value of pensions tax breaks = £40 billion.

Of necessity, a lower tax burden on income channelled into private pensions = higher tax rates on everybody/everything else.

Number of pensioners currently NOT claiming top up benefits who would be claiming them if it hadn't been for pensions tax breaks = very, very few indeed.

Saving to the taxpayer from not having to support these very, very few pensioners = a very, very small amount.

So they are spending/overtaxing by £40 billion a year to save the self-same taxpayer £5 or £10 billion at most.

That is fucking awful value for money, targeted at the wrong people and imposing higher tax rates on everybody/everything else.

Daily Mail on super tip top form.

Via Henry Noneofyourbiz on FB from a Daily Mail article about floods in parts of London:

Yesterday, the water was seen overflowing in Charing Cross where the average property costs £4.7million, Kew where homes cost about £1m, in Putney where the average home is worth £693,000 and in Greenwich where the average three bedroom house costs around £1.6m.

I live half way up a very steep hill on which the average home "is worth" £600,000, so I should be OK…

Quote of the day; spoken like a true tory

Readers might like to take note (or even join in) the debate over at Capitalists@Work on renting v owning. Now before I go any further, I'll start by saying I have met and broke bread with their blogger Nick Drew, and he is a nice chap, but he does live in conservative cloud cuckoo land.

Here he replies to a suggestion falling owner occupier numbers will damage traditional conservative interests:

@ Roger, Gradually all those potential Conservative voters will have no dog in the pro Green Belt electoral fight. As the renters get old they will have no assets to raid and their relatives no reason to keep them off the State 

excellent points - some of the very reasons why conservatives are in favour of property-owning for all the more people that have a committed stake, the better society functions real-estate being static, you have to stick with your neighbours, stand, & fight

To which I replied:

I'm sorry but I think you're talking absolute cobblers ND, real uber-stereotypical, retired army officer, Telegraph-reading, home counties tory grassroots canvassing, 24 carat gold cobblers. For a start, conservatives reversed all the post war housing policies that helped the UK from 50-odd per cent renting privately to only 10% and the vast majority being owner occupiers. Now the policies are reversed, the so has the trend, it is no coincidence. 

Next, people in secure social housing tenure have just as much interest in getting on with their neighbours, living in a nice place etc. It's only the short term renters on their 6 month shorthand assured tenancies - brought in by ??? - that have no reason to give a stuff about upkeep. 

Last, but by no means least, you assert society functions better as everyone has 'committed a stake'. If you were a financial illiterate I could forgive this. But you know more about finance than anyone I've ever met bar perhaps one hedge fund manager I bumped into on a train. So you know fine well that 'society' has effectively been encouraged to take a massive, collective short sterling / short sterling interest rates / long land prices bet. And being the clever chap you are you know that our political masters have to pander to this bet over and above nigh on everything else. And you choose to call this society functioning better ...

I'm really not sure what else can be done to counter such muddle-headed thinking.

Economic Myths: Amazon and Business Rates are crushing bricks and mortar retailers.

From The Guardian:

The former boss of Sainsbury’s has waded into the row over the tax paid by multinationals such as Amazon and eBay, saying it was unfair that that traditional retailers must pay huge rates bills for services such as roads and waste collection, while their online rivals paid little but received the same benefits…

Amazon, which raked in sales of more than £6bn in sales from UK shoppers, is estimated to pay only about £10m in business rates. Marks & Spencer, which has UK sales of just less than £10bn, last year faced a rates bill of £177m. Tesco’s UK sales last year were nearly £44bn, more than seven times those of Amazon, but its business rates bill is 60 times higher.

From ONS, total UK retail sales, year to September 2015: £375 billion. The largest single retailer is Tesco, with annual sales of £62 billion (two-thirds of which is UK).

From The Bookseller, total UK Amazon sale: £5.3 billion. Or £6 billion if you believe the Guardian.

To sum up and actually reflect facts:

1. Amazon have got a modest 1.6% share of the market. They do not compete on food, petrol or diesel, which make up half of retail sales by value.

2. Amazon pay more than enough for the roads they use via fuel duty for their delivery vans, which covers the cost of road maintenance three times over. And most councils charge separately for business waste, so Amazon will be paying its fair share of that as well.

3. Amazon clearly do not get the same benefits, they have a few large out of town warehouses in places where the location value and hence business rates are very low.

4. In terms of Business Rates per £1 of turnover, Amazon pay 0.2p, Tesco pay 1.4p and M&S, with smaller stores in even better locations pay 1.8p. Don't tell me that Tesco or M&S can't afford that, if not, then they are free to shut down all their stores in prime locations and just do home deliveries from their warehouses.

5. UK retailers are all building up their online sales and UK supermarkets are pushing their internet/home delivery sales quite heavily - if you shop at Sainsbury's or Tesco, you usually get given vouchers offering you extra points if you shop online, or money back on your first order after signing up etc.

Mortgage Market Review - Another Little Gem from the Financial Catastrophe Authority

Following on from a comment on another MW post, I thought you might like a little bit of enlightenment on how the FCA decided to intervene in the mortgage market post the 2008 banking crisis.  The FCA sets out why, what and how, here.

First, some background.

My personal experience of providing mortgage advice (and I mean 'advice', not sales) goes back to the early 1980's. The bulk of my work was sorting out mortgages for people whose criteria did not fit mainstream lenders criteria; self employed, low pay/high bonus employees, small business owners and the like.  My business also did some work on what was 'credit repair mortgages', which by definition are outside standard criteria. (Northern Rock for example).  Again used responsibly these products were very useful and successful.

When I first started lenders did not pay commissions (procuration fees, in the jargon), The way you got paid was by selling an associated life product - an endowment or mortgage protection life insurance - for the commission.  Or you could charge a direct arrangement fee, which we did mostly. (I never liked relying on indemnity commissions because they could be clawed back if the policy was cancelled in the first two to four years).

It is important to note that this was the way most real mortgage advisers worked.  That does not include most of those working out of estate agents, or the more questionable mortgage intermediaries.

The gradual introduction of procuration fees made this line viable and we built up a good business. By the early 2000's we were the biggest producer of self certification mortgages for an excellent lender - UCB Homeloans.

UCB Homeloans was by that time a part of the Nationwide group.  It had been established - I think - sometime in the very early 80's and knew the self cert market backwards.  It had a lower impairment rate than the Halifax.  It had excellent underwriting criteria and relatively low maximum LTV ratios; certainly lower than its competitors.  It relied on good pre-underwriting by its producers, like us. It charged a mortgage rate that was competitive but higher than the main market, because it was taking on higher risk lending.

By about 2004 +/- one year UCB's rates and criteria had become uncompetitive in the market.  Many new self cert lenders had been set up, mostly relying entirely on securitisation from the easy money in the bond market.

I valued the relationship with UCB,  But it was also becomingly screamingly obvious that we were in a classic time of massive monetary and credit expansion.  I telephoned the MD of UCB and we discussed the situation.  I said that I thought that UCB knew what they were doing and that the rest of market (mainly the new entrants) didn't and that they were under-pricing the risk.  He said, yes.

From that straw in the wind we worked ourselves out of the mortgage business as fast as possible.

Please note that all the forgoing relates solely to finding mortgage finance for owner occupiers, not buy to let.

Turing to buy to let, yes we have done a few, or rather we have small number of reasonably sensible BtL clients for whom we have found mortgage finance.  I do not need to tell you that all of these, all of them, have used the increasing equity in their existing portfolios to obtain funds for further purchases.

Whilst I was going through all this, you will all have observed in your own lives the massive expansion of mortgage lending from about 1994 to 2007, with particularly turbocharged expansion between 2000 and 2007, with a whole slew of new lenders. You will have also noticed the relaxation of criteria (lending based upon 'affordability' permitting ludicrously generous earnings multiples) and the very advantageous products - trackers at base plus 0.5% for the whole loan term.  (I snapped up as many of those as I could for our clients - serves the lenders right).

From this little history and analysis it should be perfectly clear that the reason and driver for the lending madness pre 2008 was government / central bank / regulatory failure.  All the mortgage market did was respond to the unwarranted expansion of money and credit by those three weird sisters. A classic example of the Austrian Business Cycle Theory boom phase. But, of course, that analysis would lead to the swift exit stage left of those same three sisters.

Then 2008 - bang.

Enter the MMR.  And note that this only dealt with lending to owner occupiers.  The MMR is right up there amongst the biggest load of self serving old tut that I have ever read.

If you study the material at the link you will note that the prescribed criteria for mortgage lending to OO's is now extremely challenging - and that none of that criteria apply to Buy to Let.

Since the MMR came into force the lending to BtL has expanded.  They can access credit and can still leverage their portfolios based on the inflated equity of their existing 'investments'.  This in effect gives them access to 'free' deposits.  At the same time the deposit requirements for OO's have been increased.

Furthermore the affordability assessments that lenders are required to use are system driven and distorted.  IMHO the very use of  'affordability' is seriously flawed as it permits, nay encourages. loan to earnings ratios of upwards of five times.  (In all my self cert business pre-underwritten by me I cannot think of any cases that exceeded about 3.5 times of the earnings I could establish).

The lenders also require squeaky clean credit history.  Many many people have the odd blip - a credit card payment recieved a day late, a previous address with a bad history, a water company failing to sort out a change of address etc etc and now, just one of those will get you declined, when previously a lender could 'take a view'.

There is much more to the whole farrago (e.g. the boxes we have to tick on the mortgage KFI's  which states that 'having assessed the market I recommend that you take out this mortgage' - I have never ever recommended that anybody take out any mortgage at all, ever).  But I think you'll probably get the picture by now.  The MMR is another failed regulatory intervention based on a deliberately self serving and flawed analysis of the situation pre 2008, which has also further distorted the housing market towards buy to let.

Death really is too good for the useless functionaries.

Saturday 13 February 2016

Nonsense on so many levels


1. It's total nonsense that higher rate taxpayers are not 'saving enough'.  This 'study' (or whining) only looks at pensions savings.  What about ISA's?  Owning a house that has inflated in value? Just buying some unit trusts.

2. Chris Noon: "Higher rate taxpayers will not save as much in their pensions because it is not as efficient for them…"" Cock. They'll just have to save in something else. Who's stopping them? But he does go on to say that these people are paying enough tax", as of course is everyone else.

3. "At present basic-rate taxpayers receive a £20 top-up from the Government for every £80 they pay into a pension." No. It’s not's a top up from the government. The government has no money. It is a rebate of the savers own tax payments.

4. It says that every taxpayer – basic, higher and additional rate are not saving enough for an adequate pension.  So the tax regime already fails to incentivise saving.  Or the authors are failing to include other forms of ‘saving’, unearned land price rises included.

Hymans Robertson have a vested interest in all this alarmism – they make money rent from all the higher rate pension savers.

Economic Myths: Building more homes will increase owner-occupation rates

The politicians keep saying that owner-occupation rates are falling because homes are too expensive(1), that increasing new construction would get prices down(2) and hence reverse the decline in owner-occupation rates(3).

On closer inspection, none of these assumptions are correct:

1) Every home has to be owned by somebody, either an owner-occupier or a landlord. If high prices are deterring owner-occupiers, then why are they not deterring landlords as well?

2) We establish by observation that building more homes where people want to live (the sensible thing to do) does not push down prices in those areas, agglomeration effects mean that they go up slightly on average. Prices would only fall in emigration areas because of people moving to the new homes in immigration areas.

3) Whatever happens, landlords will continue to outbid owner-occupiers:

From page 11/12 of the DCLG English Housing Survey 2013-14:

In 2013-14, the private rented sector accounted for 4.4 million or 19% of households. Throughout the 1980s and 1990s, the proportion of private sector households stayed steady at around 10%. However, the sector has undergone sharp growth since then and has doubled in size since 2002.

So scaled up for the whole of the UK, that's an increase of about 2.7 million homes in the private rented sector between 2002 and 2015. From DCLG Table 209, in the same period, 1.9 million homes were completed for private sale in the UK, along with 0.4 million completions by/for Housing Associations and local councils.

In other words, landlords were easily able to soak up all net new homes and then some. Why? Because people who already have some 'housing equity' can borrow larger sums more easily than younger would be owner-occupiers. The recent tax changes might put a bit of a dent in that, we will see.

As Lole explains here, the mortgage market review did make things slightly more difficult for BTL but much more difficult for FTBs, so in relative terms, BTL's advantage is larger. Consider: BTL and FTB are playing football and there is a punch up between players. The referee sends off one player from the BTL team and two players from the FTB team.

So you can build as many new homes as you like, as long as landlords have a natural advantage, they will be buying them up (even if prices were to fall, which they wouldn't).

“Did you get a look at any of the houses when you drove in this morning?”

From City AM:

Since the club was sold to its new Chinese owner Reignwood Group a year and a half ago, relations with some locals have gone into decline. In October last year, Reignwood announced that it wants to double the annual membership rate to £16,000, and current members are being asked to pay a one-off £100,000 debenture to keep on playing at the club.

At the end of January Wentworth Residents' Association, made up of Wentworth locals and the club’s current members, partnered with City law firm Quinn Emanuel and sent a 15-page letter to the owner threatening legal action if the changes aren’t abandoned...

When asked if he thought requesting a £100,000 debenture from current members would alienate the locals, Gibson quipped: “Did you get a look at any of the houses when you drove in this morning?”

Wentworth, with an overall average house price of around £1.9m, is better known as Surrey’s stockbroker-belt.

No doubt the Poor Widower In A Mansion Who Likes A Round Of Golf features heavily in their 15-page letter somewhere..

Friday 12 February 2016

Maths news: a small number times a big number is an even bigger number*

From The Mirror:

Arsenal fans left fuming after Stan Kroenke buys this mega 535,000-acre Texas ranch for £500 million

£500 million is of course a huge amount of money, but at less than £1,000 an acre, it was a fraction of the price of farm land in the UK.

The land for a typical, average English house has a selling price of about £100,000, which is £1 million per acre. Paying that much is extravagant!

* Assuming the small number is greater than 1 etc.

Thursday 11 February 2016

Oddly Edited Reader's Letter Of The Day

From The Evening Standard:

Zac Goldsmith grabbed headlines with his claim that a fare freeze by Transport for London would mean a 59 per cent increase in council tax [February 9].

However, anyone who reads the article will see that the true increase would be 17 per cent. Even his claim that the fare freeze would add £175 to an average council tax bill is deeply flawed.

[Missing third para, explaining that the required annual council tax increase would be more like £33.]

This seems like a sensible option to me, especially if the increase were targeted at the super-expensive homes in Zones 1 and 2 who pay the least toward TfL while getting the best value from it.

Mark Wadsworth, Young People's Party.


Wednesday 10 February 2016

Landlord confirms that "bashing landlords" leads to an increase in owner-occupation levels

The Chairman of the Residential Landlord's Association in today's City AM:

When the UK last had [rent controls], the private rented sector fell from 55 per cent of households in 1939 to just 8 per cent in the late 1980s.

OK, allow me to rephrase that: "When the UK last had [rent controls], owner-occupation increased from 35 per cent of households in 1939 to 72 per cent in the late 1980s."

There then follows the usual gurgling about lack of supply, the old argument "we can cool the fire down by throwing more twigs on it. Twigs are cooler than fire, aren't they?".

... private landlords created 60 per cent of new homes homes between 1986 and 2012 - a total of 3m. There is a market for corporate investment as well as private.

Allow me to rephrase that: "Developers and construction workers created 100 per cent of new homes since 1986, and landlords snapped up most of them."


From the Telegraph

The thousand year old tradition of printing Britain's laws on vellum has been scrapped to save just £80,000 a year despite concerns from MPs about ending the historic practice.

The House of Lords have confirmed that from April all legislation will printed on simple archive paper instead of the traditional calfskin vellum.

"just" £80K? There's never a justifiable "just". Either it's worth spending the money, or it isn't. If paper is cheaper and does the job, switch to it.

Tuesday 9 February 2016

Either they are terrible at maths or they are terrible liars.

Exhibit One

From The Evening Standard:

Zac Goldsmith claims Sadiq Khan would fund fares freeze with 59% rise in council tax

The row between the mayoral candidates over transport fares intensified today as Zac Goldsmith claimed his Labour rival would be forced to increase council tax by £175 a year for families to pay for a freeze.

Woah! Average Council Tax in London is £1,050 a year, slightly lower than the rest of the country (despite rental values and local per capita spending being about twice as high). That looks more like 17% to me…

Tory analysis of the figures suggests Mr Khan would have to increase City Hall’s council tax by 59 per cent — £175 a year for a typical household.

Sneaky! Technically, a London Council Tax bill is split into £850 for the local borough and a precept of £300 for the LGA (not many people notice this). £175 divided by £300 is of course something like 59%.

It's not even clear where the £175 comes from. TfL fare income is £3.8 billion a year (page 118 of their annual report, the other half of their budget is subsidies from the taxpayer), so if the normal price increase is 3% a year, a freeze means that TfL is foregoing £114 million a year, divided by 3.5 million homes = an average increase in Council Tax of £33 for each year that the freeze is in place.

Which seems like a perfectly sensible way of doing it to me, especially if the Council Tax increases were focused on Zones 1 and 2, who benefit most from TfL but pay the least towards it in fares, and especially if this meant that general taxpayer subsidies to TfL were reduced.
Exhibit Two

From The Nuffield Foundation (who are otherwise decent chaps):

Public sector employers, such as the NHS and schools, will need to find more than £3 billion a year from 2016–17 to pay higher National Insurance contributions.

Aren't we always told that National Insurance is there to pay for the NHS?* Total NIC revenues are around £110 billion, the NHS costs a bit more than that, so it's not far off. A tax is not a real cost to the NHS, because the NHS is taxpayer funded (a point which Lola has made about a million times).

* Cognitive dissonance being what it is, pensioners also claim that they have paid for their current state pensions (just under £100 billion a year) with their past NI contributions. When challenged, they refuse to accept that National Insurance is not a magical tax which can be spent four times over (for both the NHS and other people's pensions in the past, as well as the current cost of the NHS with a surplus built up being used to pay current pensions). I have actually seen pensioner propaganda saying that pensions are too low because their past NI contributions were squandered on something else, meaning it is spent five times over or some such accounting bullshit.

This is not evidence that a Brexit would help UK exports...

We have gleefully shredded many of the non-arguments put forward by the Remainers. In the spirit of fairness, it must be said that some Leavers are making the same mistake (i.e. putting forward arguments that are so feeble that they make you suspect that the opposite view is correct).

One that popped up again in yesterday's City AM (I can't find it online) was that the non-EU countries Switzerland and Norway export more per capita than the UK does. (I can't remember whether this was to the rest of the EU or rest of the world, not that it really matters)

Well duh.

This has nothing to do with the fact that Norway and Switzerland are not in the EU, it is simply because they are small countries (measured by population or economy). Logic and observation tells us that the smaller the country, the higher the value of imports and exports per capita (try imagining that your town was a separate country).

The list at Wiki shows the following in USD:

Liechtenstein 122,193 (2011)
Switzerland 40,250 (2011)
Norway 32,760 (2011)
Belgium 30,209 (2011)
Ireland 25,652 (2011)
Iceland 21,500 (2009 estimate)
Austria 20,424 (2011)
Denmark 20,000 (2011)
Sweden 19,687 (2011)
Germany 18,865 (2011)
Slovenia 16,640 (2009 estimate)
Slovakia 14,570 (2009 estimate)
Czech Republic 12,590 (2009 estimate)
Finland 10,766 (2009 estimate)
Hungary 10,700 (2011)
Estonia 9,820 (2009 estimate)
France [2] 8,989 (2011)
Italy 8,750 (2011)
United Kingdom 7,582 (2011)

Lithuania 7,250 (2009 estimate)
Spain 6,596 (2011)

I can't be bothered plotting a graph of exports per capita against actual population again, but you get the gist. Germany sticks out like a sore thumb, but exporting is their national religion.

The other four large EU member states are, as one would expect, bunched together at the bottom of that list. Dunno why Lithuania is so low down and going by population alone, Iceland ought to be higher up, but it's bloody miles from anywhere, and nautical miles at that.

"Violent puppet show sparks apology, but jailing puppets was wrong, says Madrid mayor"

From CBC News:

Madrid city hall apologized Monday to parents for exposing their children to a violent puppet show, but says jailing the puppets for allegedly praising terrorism was disproportionate.

Puppets "The Witch" and "Don Cristobal" were impounded without possibility of bail on Friday for using a sign saying, "Long Live Alka ETA," in a word-play reference to Spain's armed Basque group ETA and al-Qaida.

The satirical theatre piece entitled "The Witch and Don Cristobal", also featured the hanging of a judge's effigy, the stabbing of a nun with a crucifix and police beatings, prompting parents attending with children to complain. The show was commissioned by the city as part of Carnival celebrations.

Kermit and Sooty are spearheading a campaign for the pair's release.

Monday 8 February 2016

What a load of alarmist nonsense


If lots of illegal immigrants without adequate papers are allowed on cross channel ferries by lax French border officials and end up at Dover, from what I recall, international law is quite clear they can and will be sent back on the next boat.

Of course the French could mischievously issue said immigrants with French papers, but this would be easy to spot and deal with.

Fun Online Polls: Plastic bags & Storm names

The results to last week's poll were as follows:

How many plastic bags did you or members of your household pay 5p for last month?

None - 60%
1 to 5 - 29%
6 to 10 - 10%
11 to 20 - 2%
21 to 30 - 0%
More than 30 - 0%

So the claim that the number of supermarket plastic bags used has gone down by 80% might well be true. The unknown variable is, are people buying an equal and opposite amount of bin liners etc. to use instead of plastic bags? How do we find that out?

A good turnout, thank you to everybody (121 people) who took part.
This week's poll:

Which were your favourite storm names so far?

You can choose as few or as many as you like.

Vote here or use the widget in the sidebar.

Sunday 7 February 2016

Flowchart: Free early education, Working Tax Credits/Childcare element, Employer Supported Childcare or Tax Free Childcare?

In my capacity as number-cruncher for the Citizen's Income Trust, I have spent this weekend trying to get the bottom of all the overlapping schemes which various government bodies administer. To simplify things in my mind I had to create a flowchart.

The joke is that whichever route you take and whichever of the three boxes at the bottom you land in, you end with with benefits/discounts worth about £90/week for every child aged 2 to 4 at a registered nursery or child minder. Only instead of bumping up the Free Early Education to £90/week and calling it a day, they split it up into smaller amounts, all with their own conditions attached.

Why do they make it so complicated? Don't answer that.

Private banks and credit creation: if you make it seem complicated, you just create loopholes.

By Prof. Steve Keen at Forbes:

The great tragedy of the global economic malaise is that it is caused by a shortage of something that is essentially costless to produce: money.

Both banks and governments can produce money at physically trivial costs. Banks create money by creating a loan, and the establishment costs of a loan are miniscule compared to the value of the money created by it—of the order of $3 for every $100 created.

Governments create money by running a deficit—by spending more on the public than they get back from the public in taxes. As inefficient as government might be, that process too costs a tiny amount, compared to the amount of money generated by the deficit itself.

But despite how easy the money creation process is, in the aftermath to the 2008 crisis, both banks and governments are doing a lousy job of producing the money the public needs, for two very different reasons.

Nope. Let's split this up into two separate cycles.

1. His description of how governments create money is broadly correct, but government spending should be judged on its own merits, not on how much 'money' it 'creates'. Government debt is a necessary evil, but it can be put to good use as a) a handy unit of currency and b) somewhere for people to put their savings/surplus => full reserve banking.

2. And there are private banks. Strictly speaking, they hardly create any new money. Most of so-called bank lending is nothing of the sort, they are just glorified debt collectors - they collect debts from buyers of land on behalf of sellers of land.

Simple scenario: Mr B agrees to buy land and buildings from Mr S for £100, which Mr A does not have in ready cash.

If Mr B takes out a mortgage of £100, Mr S gets credited with a deposit of £100. These pop up on opposite sides of the banks' balance sheet. Mr B has to pay that off in instalments over twenty years and Mr S can withdraw up to £100. But all depositors taken together cannot withdraw all their money at once and spend it. Collectively, they cannot withdraw their money any faster than all the mortgage borrowers are paying it in.

But there is no need for a bank. They could agree that Mr B will simply Mr S in instalments over the next twenty years. If Mr B defaults, then Mr S would take him to court, repossess the land and buildings, or employ a debt collection agency/firm of solicitors to enforce payment, by fair means or foul. Pretty much the same as what a mortgage bank would do.

So ultimately, what is the difference between banks and debt collection agencies? Not much. The added extra which banks provide is a risk-pooling exercise/insurance, so if Mr B's loan goes bad, Mr S only has to bear a tiny percentage of it; similarly, Mr S has to bear the same tiny percentage loss if other buyers' loans go bad. No doubt a debt collection agency could offer the same service.

Interesting Problem

From Yahoo

MILWAUKEE (Reuters) - Seven Muslim workers at an eastern Wisconsin manufacturer have been fired after disregarding a break policy that did not allow them to pray at the times dictated by their faith, the company said on Wednesday.

The terminated workers were among 53 Somali Muslims who walked off the job on Jan. 14 after Ariens Company, a tools and equipment maker in Brillion, Wisconsin, began requiring them to pray only during the two 10-minute breaks provided to them during the day, the company said in a statement.


"It came out of nowhere and the company did not want to listen to some suggestions and options to make the current breaks more flexible to align with the prayer schedule," he said.

Ariens, which has 1,500 employees worldwide, has set up designated prayer rooms for Muslim workers in Brillion, the company said. Brillion is about 25 miles south of Green Bay.

The company said letting the workers pray during unscheduled breaks disrupted production schedules. In certain circumstances, workers can be prohibited from praying during unscheduled breaks if it causes an "undue hardship" for the business, according to the U.S. Equal Employment Opportunity Commission.

I'm personally of the "your religion, sort it out" and it's clear here that the company were not exactly being difficult here.

The problem is that manufacturing depends on the line. I once interviewed at Honda and mid-interview, the interviewers had a tea break. I was like "wait, what" and off we went to the tea room for 15 minutes, before then returning for the interview. Despite being an office job, the rules were no drinks at workspaces, and fixed tea times. You weren't allowed to get a tea at other times. Silly for the office jobs, but they like this whole "everyone's equal" culture, so there you have it.

Tea breaks exist in manufacturing, like they don't in most offices, for this reason. It's about the synchronisation of work. You need the line running smoothly. If a bunch of people aren't there, it doesn't. That's why there's this window for tea breaks - the whole line might stop for that period, but that's the only stop it'll get. A call centre doesn't have this. The "switch" gives calls to people signed in - if you're not there, it goes to another advisor. Everyone goes when they want to (and this actually works better, because it means there's always people handling calls).

This company probably couldn't care less about a small number of people taking 10 minutes off for a prayer. The problem is that it screws up the line. The guy who fixes on the wheels is stood around waiting for you, with nothing to do.

Saturday 6 February 2016

Economies of Scale: The most valuable Land there is.

Here (part 1 of 3) Prof Geoffrey West explains that all biological entities from DNA to cities have evolved from the exploitation of economies of scale (agglomeration effects).

This scaling effect is a Universal Law, hence Land. It gives us aggregate demand, the ability to produce capital, and gives natural resources their value.

Under a system whereby the State gets the majority of its revenue directly from land rents, they would have two explicit priorities. To increase the efficient exploitation of agglomeration effects,  and to compete against privately produced goods and services by providing(regulating) high locational amenity.

Another reason why LVT is as hardcore as Capitalism gets.

That ban on taxpayer-funded charities lobbying the government...

… is not so much loopholes as a gate without a fence.

From the BBC:

Organisations given UK government grants will be banned from using the money to try to persuade ministers to change the law or increase spending.

A new clause will be added into all new and renewed grant agreements to ensure funds are spent on good causes, rather than on political campaigns. Cabinet Office minister Matthew Hancock said "the farce of government lobbying government" had to stop.

Voluntary groups said the rules could threaten their freedom to speak out. Critics also said the restrictions, which come into effect in May and will only apply to grants from central UK government departments, could be hard to enforce.

Many people, including lawyers, somehow believe that money can be earmarked, streamed and traced. It can't*.

For example, 'charities' which are ninety per cent taxpayer funded can still use the other ten per cent of their income to pay for lobbying and spend the ninety per cent on whatever the government asks them to spend it on. So this measure achieves nothing, apart from perhaps restricting the amount that such charities can spend on lobbying slightly - the question is, as usual, was the measure supposed to achieve anything or is the loophole intentional?

And how do you define lobbying? If a 'charity' pays for advertising to sway public opinion, knowing that politicians will bow with the wind, is that still 'lobbying' in the narrow sense?

The only solution is to prevent charities in receipt of a single penny of public money whatsoever from doing any 'awareness raising' or advertising whatsoever. Unless of course 'raising awareness' is the whole point, like for example road safety campaigns (reminding kids to look left and right, warning against the dangers of drink driving etc). But these things are so basic, the government can do it themselves without resorting to an overpriced quango.

* It riles me for example when somebody wins a few quid on the lottery or something, and people ask them "What are you going to spend it on?". That lottery money just goes into the pot. Instead of giving the usual answer "Buy a house/buy a car/go on holiday" it would be just as correct to answer "I will spend it on normal household expenditure and then save up my normal salary to buy a house/buy a car/go on holiday"

Taking 'bansturbation' to its logical conclusion.

From The Daily Mail:


America is in the grip of a pornography pandemic that has become so serious it should be treated the same way as teenage smoking or drink driving, activists have warned.

Dawn Hawkins, executive director of Morality in Media said porn must be tackled no differently than any major public health crisis. Speaking ahead of a two-day conference on sexual exploitation earlier this month, she said, if left untreated, addiction to pornography can leave users with psychological damage.

"There's a lot of science now proving that pornography is harmful," Hawkins said at the National Press Club in Washington. Porn sites get more visitors per month than Netflix, Amazon and Twitter combined, a third of all downloads contain porn and the Internet now hosts 4.2 million porn websites.

I love the way that religious fundamentalists are basing their claims on 'science'.

Saturday Afternoon Gearchange

Just to remind us of how shit pop music was in the 1983 - 1988 cycle, "Rhythm of the night" by DeBarge. The middle eight, starting about 2 minutes in is a tone higher and the rest of the song stays in the higher key:

Bus Wankers

From the BBC

In Witney, Oxfordshire, represented in Parliament by David Cameron, the 213 and 214 services are among those under threat as part of county-wide cuts to bus subsidies.
Martin Hallam, a retired former senior probation officer who lives in the village of Milton-under-Wychwood, a few miles from Witney, is fearful there will soon be "no service worth the name", adding that provision has declined in recent years.
"The way the bus runs, if we want to get to the dentist, we have to leave our house before 10:00 and be on the bus back by 11:30, or it simply won't happen by public transport," he says.
"We don't have any buses on two days of the week, so on those days we aren't even allowed to get toothache."

Move to fucking Swindon, then. You choose to live in a pretty, expensive, remote village where almost no-one uses a bus, where you don't have the population density using it, you don't get it. Why the fuck should poorer people subsidise you having a bus?

(the best place for people to retire to is small towns in Dorset, Wiltshire and Somerset like Salisbury, Sherborne and Taunton, which now have agglomeration effects of old people, like they have butchers and bakers)

Friday 5 February 2016

The endless riddles of Home-Owner-ist logic...

From The Telegraph, two days ago:

Landlords will sell 500,000 properties in the next 12 months, according to new research from buy-to-let investor trade body the National Landlords Association (NLA)...

The sudden pessimism follows George Osborne’s double-whammy tax attack on the sector. In his July Budget he announced the removal of landlords' mortgage interest tax relief which, when fully implemented in 2020-21, will mean some landlords pay tax on zero income or even on losses. And in November he announced that landlords would pay a 3pc stamp duty surcharge, coming in from this April...

Many also predict that rents will rise as landlords seek to pass on the costs.

Fair enough, that was the whole point (allegedly) - to try and get owner-occupation levels going up again which of necessity means landlords leaving the market i.e. selling (as we saw between 1945 and the 1980s). Of course rents won't rise one penny, firstly landlords can't pass on costs, and secondly if there really were a sell-off of any magnitude, it would be higher earning tenants who buy them and become owner-ocupiers, pushing down the average incomes of remaining tenants and hence average rents.

So how bad is that sudden pessimism..?

From The Telegraph, today:

House price growth has hit a 17 month-high, as the supply of new properties being put up for sale tightens. UK house prices rose 9.7pc in the year to January, up from 9.5pc a month earlier, according to the Halifax. This is the biggest jump since in July 2014, when prices rose by more than 10pc...

Some experts believe the housing market is being lifted in the short term by buy-to-let investors looking to make a purchase before the sector is hit with a rise in stamp duty in April.

Not that terrible then, if they are still piling in, eh?

Or do the Homeys genuinely believe that landlords who are piling in now will sell them off again after 6 April 2016? Why would they do that?

Thursday 4 February 2016


From the BBC:

Although Chancellor George Osborne abandoned cuts to tax credits in the Autumn, cuts to UC announced last summer will still go ahead.

From this April the amount that anyone on UC can earn before their benefits are cut will be reduced. This so-called Work Allowance will be £4,764 for those not claiming for housing costs, or £2,304 for those who do.

Once claimants earn above that amount, they lose 65p for every pound they are paid.


From The Sun

BRITAIN’S biggest OAP charity has accepted £6million a year from an energy giant in return for pushing expensive tariffs to the elderly, The Sun can reveal.

Age UK recommended a special rate from E.ON which saw pensioners typically pay £1,049 for a year’s fuel — £245 more than on the firm’s cheapest 2015 rate.


The energy giant has been paying Age UK at least £6million a year in return, around £41 for every person who signed up.

From the Guardian

Except he’s not a chauffeur (although he certainly looks like one to me, driving Camila around, in a car), because there’s the other driver who is paid £30-40,000 a yea ... shhhh, keep quiet about that. And Annie, 34, who has been entirely dependent on Kids Company for years. And the swimming pool (OK, not such a big one, but undeniably a swimming pool), and the pomegranates in the bowl, and the massive telly in the lovely art deco house for disadvantaged children – and for Camila when she fancies a swim, or possibly a pomegranate.

From the Telegraph

How is it that organisations that secure only 10 per cent of their income through charitable giving are able to represent themselves as “charities”? Very easily, it seems. Analysis published in 2015 by the Centre for Policy studies found at least 24 per cent of total funding of Britain’s largest charities comes from public finances. Because of lack of transparency, the figure may be as high as 49 per cent.

It seems to me that if we can thank Kids Company for anything, it's that it's shone a light on charities, something that is long overdue.

Wednesday 3 February 2016

Child Benefit

Over twenty years ago, my then wife threw a wobbly and went off back to Germany, taking our two little babies with her.

The Child Benefit was being paid into our joint account, so I waited three or four weeks on the off-chance she'd return, but when it was clear that she wouldn't, I got in touch with the Child Benefit people to tell them about this 'change in circumstances'.

They promptly stopped the payments and asked me to repay the three weeks' worth I had received after the children had left the country, which I did.

Now, this all seemed perfectly fair and reasonable to me. She was, after all, claimimg the German equivalent of Child Benefit.

When did they change the rules that the UK has to pay Child Benefit for children living abroad if one or the other parent lives here? How do they check that the children even exist?

More importantly, should I have just kept schtum on the basis that sooner or later, EU law would swing round in my favour and make it legal?

Tuesday 2 February 2016

Vote buying? Who? Us?

From yesterday's Evening Standard:

GEORGE OSBORNE’S new Help to Buy London mortgage scheme could reduce first-time buyers’ monthly repayments by up to half, a top broker said today.

New buyers with a five per cent deposit can apply for government zero-interest equity loans of up to 40 per cent of the value of the property from today. Only having to find a mortgage for 55 per cent of the property will allow young buyers to access more attractive mortgage offers, said Ray Boulger, technical director at broker John Charcol.

On a £500,000 home, buyers with a five per cent deposit will need a £275,000 mortgage, compared with £475,000 without government backing. The Government’s equity loan is interest-free for five years and then has a rate of 1.75 per cent, rising by the level of RPI inflation plus one per cent each year. Help to Buy is available on new-build properties inside the M25 worth up to £600,000.

So even by their own admission, it will push up prices quite significantly; prices being the inverse of the effective interest rate.

And what a coincidence that Conservative mayoral candidate Zac rocks up for a photo shoot on the very day that the Conservative national government put this wizard wheeze into effect.

"Britain's top doctor asks drinkers to choose"

From The Daily Mail:

Britain's top doctor today reminded people that every time they have a drink, the pleasant buzz will help them forget her shrill incessant whining..

Dame Sally Davies appeared in front of MPs to defend her strict new booze guidelines, insisting it was her duty as chief medical officer to drive people to drink with her constant hectoring.

But at the Commons committee hearing she sensationally claimed: "I would like people to take their choice knowing the issues and do as I do when I reach for my glass of wine and think - am I going to give in to non-stop nannying or am I a grown adult with a tedious day job who likes to relax in the evening?

"Like most people, I express my preference each time I have a glass."

Sainsbury's Buy Argos

From the BBC

Sainsbury's has offered £1.3bn to win control of Argos owner Home Retail Group.
After revealing earlier this month that an approach last year was rejected, the supermarket giant has offered the equivalent of 161.3p a share for the retailer.

Presumably, the contract was signed with a small blue biro and then had to wait for their number to collect their shares.

(I do actually like Argos - they have some good bundle deals on Wii U games, you can order from home and collect the same day and you're in and out in 5 minutes).

Monday 1 February 2016

Fun Online Polls: Donald Trump; Plastic bags.

The results to last fortnight's Fun Online Poll:

Should Donald Trump be banned from coming to the UK?

Yes - 5%
No - 95%

That's crystal clear, I would have thought. I was with the majority yet again. A good turnout on 188, but as mentioned, the poll did run for two weeks.
Something else I've been thinking about…

From The Telegraph:

The 5p plastic bag levy has resulted in an almost 80 per cent drop in the number of bags taken home by supermarket shoppers in England, the first data since the introduction of the charge suggests.

Early figures from Britain’s biggest retailer, Tesco, suggest the levy is succeeding in its aim of drastically reducing usage of single-use carrier bags, 7.6 billion of which were handed out by major English supermarkets last year alone.

That works out at about six or seven supermarket plastic bags per household per week pre-5 October 2015, which seems 'about right' i.e. a trolley full at the weekend plus a couple of smaller shops in the week.

I ended up paying 5p once, shortly after the 'tax' was introduced, but that was it. Since then I've managed to remember to bring my own bags or I just make do without. So my plastic bag usage is, on the face of it*, down nearly 100%. Is this the same for everybody?

Vote here or use the widget in the sidebar.

* As Nessimmersion points out in the comments, perhaps people are just buying more bin liners etc.

"How cows are taking over the Internet"

Spotted by James Higham at RT:

Cows’ gaseous emissions are already blamed by many for spoiling the air and exacerbating global warming, but now bovines are carving out their own corner of the online world through videos of their hijinx…

Followed by lots of links to spectacular cow videos.

They don't like being beaten at their own game...

From The Telegraph:

Members of one of Britain’s most prestigious golf clubs have threatened legal action against their new foreign owners over plans to introduce a £100,000 fee.

Reignwood, the Chinese conglomerate that bought Wentworth, in Surrey, for £135  million, also wants to reduce the number of members from 4,000 to 800.

Those invited to rejoin the club will be charged a one-off payment of £100,000 while annual fees will rise from £8,000 to £16,000.

Well played Reignwood! If 800 people are dumb enough to rejoin for £116,000 up front, then Reignwood has recovered three quarters of its initial outlay of £135 million.

If this had happened to anybody else, they'd have my full sympathy, but in this case the plaintiffs are all city financiers and people who live in multi-million pound mansions surrounding the course. Serves them right for not buying up the golf club themselves i.e. 4,000 members @ £33,750 each.