Tuesday, 31 May 2016

Fun Online Polls: Project Fear & Fire extinguishers

The responses to last fortnight's Fun Online Poll were as follows:

What are the likely outcomes of Brexit?
Putin & ISIS expand their empires - 9 votes
A new European civil war - 6 votes
End of Scottish whisky distilling - 5 votes
No more new school buildings - 6 votes
End of UK pharmaceutical industry - 5 votes
End of UK beef farming - 5 votes
Global habitat endangered - 7 votes
House prices crash - 6 votes
Interest rates shoot up - 7 votes
Boarding schools close down - 4 votes
Holiday costs would soar - 9 votes
Sterling would tank - 11 votes
UK becomes haven for terrorists - 5 votes
Mass unemployment - 6 votes
All of the above and worse - 30 votes
None of the above - 138 votes

Total voters - 182 voters

Top comments:

Posted by

Henry Law
That is only the start.
* Birmingham will be wiped out by a large meteorite.
* Manchester will be flattened by a magnitude 8 earthquake.
* The south coast will be devastated by a tsunami.
* There will be an explosion in the rat population and London will be hit by an epidemic of bubonic plague.
* Sterling will tank and soar at the same time so that nobody will be able to afford British goods.

We don't want to scare people unecessarily.

Wigner's Friend

You missed:
Plague of locusts.
Death of all first born sons
Water turning to blood
And 7 others.

This week's Fun Online Poll.

"What are fire extinguishers most commonly used for?"

Vote here or use the widget in the sidebar.

Monday, 30 May 2016

Remain Bollocks #173

From the Guardian

Cultural and academic connections are not simply a matter of Britain’s being able to attract the best grants for research or for the arts. They are also a matter of the lives of students and young people. The Erasmus programme has sent 200,000 young Britons to universities elsewhere in Europe. The quantifiable gain is enhanced job prospects; harder to quantify are the sheer broadened horizons. 

Yeah, that would be fine except that according to this, there are 33 participating countries. So, Norway and Turkey are also members. So, assuming we exited to be an EFTA state, this would be irrelevant.

Sunday, 29 May 2016

Beyond satire.

Exhibit One:

Tony Blair has said it would be a “very dangerous experiment” if Jeremy Corbyn or a populist politician like him were to form a government.

In an interview with the BBC, the former Labour prime minister said populist politicians, whether on the left like Corbyn or on the right, were worrying and he spent a lot of time thinking about how people in the centre should respond.

Blair famously said last summer that anyone thinking of voting for Corbyn as Labour leader because it was what their heart told them to do should “get a transplant”, but his latest comment may be his harshest yet.

Exhibit Two

An unfortunate mobile phone salesman was tied up and beaten by an angry crowd in Cixi City, China, after he was mistaken for a baby snatcher.

Exhibit Three

Channel 4 comedy Raised By Wolves is being adapted for American TV by Diablo Cody, the writer of Juno...

Now The Guardian has reported that Moran and Cody have been in contact about reworking the action from Wolverhampton to the US…

The remake is being made by Berlanti Productions, whose credits include the less down-to-earth shows Supergirl and Legends of Tomorrow.

Exhibit Four

Lack of unity on the EU, UK government challenges and UKIP all contributed to the Welsh Conservatives losing seats at the assembly elections, leader Andrew RT Davies has said.


Ruth Davidson, the Scottish Tory leader, has declared herself a “John Major”-style Conservative, after leading the party to its best election result in Scotland for almost 60 years.

I saw another good one last week but I've forgotten it.

Saturday, 28 May 2016

Here we go...

Donald Trump has has finally go to the madness of money printing to pay off the National Debt.

That's it. We're doomed.

Friday, 27 May 2016

The Land Value Tax Campaign's view on Brexit

Henry Law has done an excellent summary, read up at the LVTC website (they could do with the hits).

Peter Lilley debunks "free trade deals"

Emailed in by MBK, from The Telegraph, Peter Lilley on top form as usual:

Trade and the Single Market are key referendum issues yet I am the only MP with first-hand experience of either. Sadly, when politicians debate issues of which they have no experience they seize on any plausible argument which supports their case, even arguments that are the reverse of the truth.

Let me bring some facts to bear on claims made by those who want us to remain in the EU.

How important are trade deals? It pains me to admit – their importance is grossly exaggerated. Countries succeed, with or without trade deals, if they produce goods and services other countries want.

Tariffs between developed countries now average low single figures – small beer compared with recent movements in exchange rates. The most worthwhile trade agreements are with fast-growing developing countries which still have high tariffs.

Is our net £10 billion contribution to the EU a price worth paying for tariff-free access to the EU market? If we left the EU with no trade deal – inconceivable given the tariff-free zone from Iceland to Turkey – our exports would face EU tariffs averaging just 2.4 per cent. But our net contribution to the EU budget is equivalent to a 7 per cent tariff. Paying 7 cent to avoid 2.4 per cent costs is miss-selling that dwarfs the PPI scandal!

Does EU membership help us negotiate free trade deals with the rest of the world? Tariff-free access to the fast growing, protected markets of Asia, Africa and Latin America would be worthwhile. Unfortunately, EU membership prevents us negotiating free trade deals – and the EU has negotiated few deals for us: none with China, India, Australia, Brazil.

Does the EU’s size mean it gets better deals than we could alone? This is the reverse of the truth. The more countries involved in a trade deal the harder, slower and worse the result.

All 28 EU members have a veto on their negotiations which is why EU deals take so long and exclude so much. Bilateral deals are simpler, quicker and more comprehensive. Hence Chile has deals covering countries with collective GDP five times the EU’s deals. Even Iceland – population less than Croydon – has a trade agreement with China – as does Switzerland.

Would Britain have to renegotiate from scratch the EU’s existing trade deals? Under the “principle of continuity” in international law we can adapt existing EU treaties to the UK. We should start that process before leaving the EU.

Would negotiating continued free trade with the EU take many years? Trade deals to remove tariffs involve complex trade-offs between differing tariffs on thousands of products and facing up to the vested interests they protect. Negotiating continuing tariff-free trade between the UK and EU simply means keeping zero tariffs.

Do only European Economic Area members have access to the Single Market? The Single Market is talked about as if it were some inner sanctum accessible to a privileged few. In fact, every country has access to the Single Market – with or without tariffs. The Single Market, involved harmonising product rules – sensible, since businesses can now make one product range for the European market, not 28. But that benefits American and Japanese exporters as much as German or British firms.

People assume Britain benefits from participating in setting these rules. But rules provide a framework within which all companies operate – not an advantage to any individual country.

Britain set the rules of tennis but rarely wins Wimbledon. British exports to the EU have grown less rapidly since the Single Market than they did before, less than our partners’ and much less than non-EU countries’ exports! Maybe that is partly because we suffer EU regulations on 100 per cent of our companies whereas non-EU firms need only comply with EU regulations on activities carried out within the EU.

Our shops are full of goods from countries with which we have no trade deal. They are not essential now tariffs between developed countries are so low. But outside the EU we will be able to negotiate speedily the really worthwhile deals to access fast growing protected markets such as China, India and Brazil which the EU has ignored. And we can retain free trade with the EU without paying our current entry fee which costs more than the tariffs we avoid.

Thursday, 26 May 2016

Nobody move… or I'll cut your pension and deport your carer!

Emailed in by MBK from The Sun, David Cameron plumbs new depths of silliness:

DAVID Cameron tonight warned the elderly a Brexit would wreck their pensions and cost them their carers as No.10’s Project Fear targeted Britain’s OAPs.

In an extraordinary blast the PM used his latest Referendum attack to try and scare the over 65s – the one age group most likely to vote Leave - into changing their mind. He said quitting the EU would shrink Britain’s economy by six per cent- meaning “less money to pay people’s pensions”.

And he added that cutting ties with the EU could cause shortages in the amount of migrant workers in the care sector handing out medicine. He told Saga magazine: “There are 100,000 skilled EU workers in our health and social care system. If we leave there will be uncertainties around visas and residency permits. That could cause some to return home and that would have an unpredictable impact on hard-pressed frontline services.”

You're the Prime Minister, Dave, you get to decide how high pensions are and who can live and work in this country, even after Brexit.

Wednesday, 25 May 2016

Nobody move or your holidays get it!

From BBC Reality Check:

Claim: Leaving the EU would make an average holiday for four people to the EU £230 more expensive in two years.

Reality Check verdict: It would be reasonable to expect a weaker pound to make foreign holidays more expensive, but it is hard to predict a precise figure.

We do not whether and by how much GBP would fall (or rise) relative to EUR post-Brexit, if it were to fall, then yes, the GBP price of holidays in the Euro-zone would go up slightly. Big deal. The amount you spend on a holiday is a fairly arbitrary figure, you can always go self-catering instead of full board; or camping instead of a hotel; or eat McDonalds not a four-course with wine; go for a walk or to a museum instead of to a theme park etc. Over the years, GBP has been a lot lower relative to EUR than it is now, and people still went.

But exchange rates are just one factor in the price of holidays.

As we well know, resorts set prices according to demand, and it is significantly cheaper during term time than during school holidays, so we could more than alleviate this perceived problem by having more flexible term times, i.e. having school holidays at a time when most other European countries don't.

Which brings us to this article from The Daily Mail:

Tourists are facing a shortage of sunshine holiday spots this year as British families turn their backs on previously popular destinations.

Travel agents say that thousands have switched to ‘safe haven’ resorts such as Spain, Portugal and Italy – apparently in response to terror attacks elsewhere.

However, there are simply too few hotels, apartments and villas to cope with the surge in demand. Even if people can find a holiday in Spain, analysts suggest they are paying a ‘safety premium’ of up to 20 per cent compared to destinations including Tunisia and Turkey.

Surely this will also push up prices and by considerably more than fluctuations in exchange rates?

Tuesday, 24 May 2016

Killer Arguments Against LVT, Not (397)

Here's the second half of the drivel I looked at yesterday, from the FT comments:

We did a small study to discover how many owners would have to sell up in a street where prices are at their highest [if LVT were implemented]. We reckoned there were 12. The street was in Cambridge and the owners were the most vocal that exist, professors! One house sale might not affect prices too much but 12 would certainly burst the bubble. Yes it needs bursting but carefully and sympathetically.

Fact free drivel. How many houses are on that street? What level of LVT is he talking about? Very low level like Council Tax; middle of the road LVT to replace existing taxes on land, buildings and capital; or fairly full-on LVT to replace large chunks of VAT, National Insurance, higher rate income tax etc? Has he factored in the corresponding tax savings? Has he fuck.

One house sale might not affect prices too much but 12 would certainly burst the bubble. Yes it needs bursting but carefully and sympathetically. There would be more upward pressure on the price of starter homes as it takes 100 years for the supply housing to adapt to changed demand.

Ah, the old Homey switcheroo -- say something irrelevant or downright incorrect and then contradict yourself with something equally irrelevant or downright incorrect, thus making it impossible to have a sane argument. If the price of some homes goes down, that is A Bad Thing, if the price of other homes goes up, that is also A Bad Thing.

Either way, actual selling prices themselves are irrelevant, what matters is the rental value, which is dictated by much wider forces than a few people, or even a lot of people selling up and trading down (with a corresponding number trading up). The chances are all the movers would remain within the same area doing the same jobs (or not as the case may be) and it is this collective effort which dictates the overall rental values of homes in an area, not exactly who lives where.

[There follows an ad hominem attack on all Georgists, skip that].

By the way there is an interesting question: are non income producing assets really wealth? Houses are a cost while one lives in them. Council tax has to be paid out of income. The question is an old one, asked in the first ever book on economics, the Oikonomos of Xenophon. Don't suppose Henry George thought about it.

FFS. I ask you. Are things like old master paintings, gold coins "wealth"? Of course they are. What about other assets - cars, fridges, computers. Are they wealth? Of course they are. HG devoted a whole chapter to this topic, as it happens.

But that is a sideshow, LVT is not a tax on "wealth", it is a user charge. It is not like rent, it is rent. What you are paying for is the benefit to yourself, like buying food, going on holiday or running a car or whatever. But having decried LVT incorrectly as a tax on "wealth" he then says that Council Tax (and by implication LVT) has to be paid out of income. It's the Homey switcheroo again.

Have you no sympathy at all for those who while earning big money acquired a very nice house and in retirement can afford to stay there provided they are not taxed out of it?

Yes, we do have sympathy for all low income people, hence most of us recommend a roll up and defer option for pensioners. But we do not see why those who hit the housing jackpot deserve more sympathy that those who didn't.

Myself I owned a house in the premier residential location in the North of England and hung on to it for 20 years after retirement. I traded down 11 years ago. The move cost £35,000, most of it tax. Not many retired have a net income of more than £35k.

So what? What is the relevance of any of this?

Nobody move or the poorest countries get it!

Emailed in by MBK, from The Sun:

Fuelling the Tory civil war, Mr Osborne also mounted a direct attack on leading Tory Brexiters by claiming they think an economic shock is “a price worth paying”.

The Chancellor told them: “It’s not your wages that will be hit, it’s not your livelihoods that will go, it’s not you who will struggle to pay the bills. It’s the working people of Britain who will pay the price if we leave the EU.”

The World Bank also yesterday warned that Brexit is one of the biggest threats facing the poorer countries in developing world. The British economy’s stability “is really important for the global economy”, its head Dr Jim Yong Kim said.

Words fail.

Monday, 23 May 2016

Killer Arguments Against LVT, Not (396)

BenJamin' did a bit of goading at the FT, and earned this hysterical response:

I take it you are happy to ghettoise the income rich from the income poor, to bankrupt every pension and insurance fund, and put millions into negative equity.

We have expensive and cheap areas already, largely populated by wealthy and poor people respectively. LVT merely speeds this up a bit. The part about bankrupting pension and insurance funds is completely baseless. Negative equity is a transitional issue that could be solved by the brute force of mortgage write-downs, in any event, the people with the largest mortgages will save the most tax.

Here's where the real fun starts - he manages to completely contradict himself:

The finest houses will be all owned by the income rich.

True - for high value locations.

Great gardens which are now open to the public like Kifsgate [sic] and Arley will be sealed off by their new kleptocrat owners.

These 'gardens' are not 'open to the public' like parks, they are privately owned and operated and charge admission.

The value of these gardens is not so much about location as the sheer cost of maintaining them. The LVT on remote country houses would be negligible and certainly no more than their current Business Rates bill (or is there an exemption for them?). I don't know what sort of profit or loss the NT makes on their stately homes, but I am quite sure that maintenance swallows most of the ticket price. It's like saying "Some wealthy person will buy up LEGOLAND and hog all the rides for himself".

Clearly, some wealthy people want flash gardens, and if they do, they can start pay for their own teams of gardeners if they wish - but they can do that anyway.

They will love the tax as they would pay less than if a progressive income tax were the primary tax source.

True - high income, internationally mobile people will be attracted to the UK by the low rate of income tax. Easily observable in practice.

As domestic houses have higher site values than commercial buildings the tax burden will be shifted to the domestic owner unless there is a fudge as is typical in the US.

Yes, residential land is under-taxed, but dude WTF? Industrial buildings on the outskirts have negligible location values, suburban housing land is clearly worth much more, but the most expensive locations by a factor of ten are city centres, which is mainly shops and offices etc.

Then when the crooks and corrupt of the world stop investing in Britain the land value will vanish and you have no plan B.

Wahey! So now he says that high income, internationally mobile people will stop coming to the UK! Thus completely contradicting his original line of bullshit.

I am sorry, but there's no polite way to put this, but...

...they are lying again. Headline and Article.

Heir to Blair indeed.

I do not have time to fisk the whole nonsense, so let's consider what would happen to the GBP if (when?) we exit.  We should note that Cameron/Osborne comments are pure speculation.  The numbers they cite are just fiction. (In lots of ways this sort of lunatic economic soothsaying is what has got us into this mess in the first place.)

Initially there will be uncertainty in the currency markets. (Personally I think that a lot of that is already in the price.).  The markets will then take time to work out what is going on.  I don't think that that will take long - financial markets being among the most efficient markets. The markets will quickly  realise that we are off the hook for all our contingent liabilities to the EU.  These are both massive and we have the true quantum deliberately hidden from us.  They will also realise that the government's finances have been materially improved by about £9 Bn per annum.  (I concede that there is a lot of uncertainty as to just how much the EU costs us).  This will mean that we can repay our international debts quicker.  Although it will take longer (the quangoistas will fight like Hell to hang onto their power and fat entitlements - I fully expect them to argue that 'now we have left the EU we need more regulation') the deadweight costs of EU created regulatory burden will be removed from the 55% of our international trade that does not go to the EU and all of it from the 90% of our GDP which is internal.  Production costs in the UK will fall. (If the Government had any clue what is was doing it could immediately cut taxes on production and hence create a low tax economy which in turn would immediately cancel out the  4% to 5% external tariff on exports to the EU. Next and crucially we will be able to return to proper supervision of our banks. (As you know I hold that Bank of England is largely incompetent at this and the FCA / PRA totally useless), but we could start to address the structure of bank capital outside the constraints of the EU's agenda that is to keep itself and the Euro in being come what may, mostly by printing money. The City would profit from this.  I also fully expect us to quickly become the largest offshore financial centre on the planet. (As part of this I also fully expect London land prices to carry on rising - but 'we' know how to address this, don't 'we')

Overall I expect GBP to rise in relative price.

Which is good because we'll be able to buy Mercedes cheaper.  Question,  What will Mercedes do with all those lovely GBP's?  Where can they spend them?

Cameron / Osborne whole scare mongering meme is based entirely on ill thought out speculation and deceit.

Culture and the EU

From the BBC

Jude Law, Keira Knightley and Benedict Cumberbatch are among stars who have signed a letter saying Brexit would "damage" the creative industry.
Almost 300 actors, musicians, writers and artists are backing calls for the UK to stay in the EU.
They say "vital EU funding" and work across borders has been key to projects from galleries to blockbusters.

OK, for starters, if there's something here that is funded with "EU money" and we should fund it, then it's very simple. Some passing it to the EU to pass back to us and just fund it ourselves.

As it happens, I don't see why the EU (or us) should fund very much art at all, particularly not blockbusters or galleries. I happen to rather like big superhero movies, but I don't see why anyone but me should pay for them, and I mostly don't care for galleries and don't see why I should pay for them (I really like sculpture, but I can look at a painting on my PC at home).

The letter, organised by the Britain Stronger in Europe campaign, says: "Britain is not just stronger in Europe, it is more imaginative and more creative, and our global creative success would be severely weakened by walking away."

So, like when Shakespeare pinched Macbeth and Romeo and Juliet from Europe 300+ years before the EU was founded? Or how about that Emeric Pressburger came here from Hungary 50 years before the EU. We don't have an "EU" with America, but somehow, Stanley Kubrick came here to work. Alfonso Cuaron has been here for over a decade, despite there being no superstate including Mexico and the United Kingdom.

As for "our global creative success", utter rubbish. That's down to a number of things: being an advanced nation, being fairly liberal. speaking English and in the case of the film industry, making it tax beneficial to make films here (and that we have huge amounts of technical skills in making blockbusters which goes back to at least the 1970s when we were in the EEC and less connected).

Even before the EU you were far more likely to see a British film on American screens or to hear British pop simply because of language.

Sunday, 22 May 2016

Raging bull water buffalo

From The Daily Express:

AN ESCAPED water buffalo was shot dead yesterday after roaming through a village and seriously injuring a man.

Police called in a licensed slaughterman to kill the animal after it was reported to be "on the loose" near a primary school in Seighford, Staffordshire, having escaped from a farm.

One man suffered a serious leg injury after being knocked over by the animal.

Saturday, 21 May 2016

Wow! That Sounds Great to Me! Where Do I sign?

Making homes more affordable.  Another excellent reason to quit the EU.

Raging Bull

Emailed in by Robert Hale, from Worcester News:

A HEROIC paramedic armed with only a welly managed to pacify a raging bull attempting to trample an injured farmer to death.

Emergency medical technician Keith Harrison's brave actions have been praised by his colleagues who believe he saved them and the patient, who had a fractured neck and broken leg, from further injuries and potentially death at McCartneys livestock auctions, Nunnery Way.

As well as being awarded the chief officer's commendation, his workmates at Worcester Ambulance Station presented him with the "Order of the Bull" for his bravery and "bull-whispering skills" yesterday morning (Thursday).

… his colleague Mr Edwards believes his actions saved the farmer and them from death or injury.

He said: "The bull was really kicking off, he wasn't happy and began charging and jumped on top of a flimsy gate. His head and chest were over and he was trying to get the farmer who was about a metre and a half away from him.

"It was a sheep pen and a bull's weight is all at the front of his body so the metal began to buckle. We knew if he got out, which looked likely, he would trample the farmer to death. I was shaking the gate trying to scare him back, the farmer's wife was shouting at the bull - nothing was working - then Keith took hold of the welly.

"He began waving the welly in front of the bull and whacked him on the nose, I honestly thought it would enrage the bull more. After a few whacks with the welly, the bull jumped off the wall and just retreated backwards.

"I've been a paramedic for 25 years and it was probably one of the scariest scenarios I have ever been in. The bull was so big and strong it would have killed the farmer and probably us if it wasn't for Keith's actions."

We love a cow attack story, especially one with plenty of graphic detail and a happy ending.

Friday, 20 May 2016

Just you carry on saying that Jean Claude, just say it again. I dare you. I double dare you.


Listen son.  Since 1914 we have three times spent blood and treasure saving 'Europe' from itself.  Just why do we need to do that again?  Eh?  Just tell me why?  In any event us getting out will liberate European nations (once again) from the empire builders and grotty little strutting functionaries like you.

I've got your number son, and I know where you live.  If (when) it all goes pear shaped I'll be popping round to see you with three big mates to have a quiet word about your likely fairly short future.  Just you see if I won't.


Some good graphs here.

Killer Arguments Against LVT, Not (395)

Emailed in by Sackerson, a load of self-pitying drivel (repeated here):

In my recent entry Dear Homeowner: If You're Paying $260,000 in Property Taxes Over 20 Years, What Exactly Do You "Own"?, I questioned the consequences of high property taxes.

People shouldn't 'own' land (more accurately, the rental value of land) any more that they 'own' the right to vote. The right to a share in the rental value of land or the right to vote should be shared out as equally as possible. Luckily, actual vote-buying is uncommon; if people want to occupy more than their pro rata share of land, they have to pay a bit extra.

Some readers wondered if I was saying all property taxes should be abolished. The short answer is no--what I was questioning is local government reliance on property taxes to the point that owning a home no longer makes financial sense because the property taxes consume any appreciation other than the transitory "wealth" generated by a housing bubble.

That's like saying "buying food" or "running a car" makes no financial sense. Consumers don't make a cash profit from these things but they benefit from or enjoy their own spending.

In effect, local tax authorities are capturing all future appreciation for themselves.

It would be good if they did, but they don't, not even in US states with high property taxes.

Note that applies to areas with high property taxes--in excess of $10,000 annually, not locales with annual property taxes of $2,000.

Why the caveat? Even under full-on LVT, there would be plenty of homes with a bill of $2,000 or less.

State and local taxes--sales, income and property--tax very different events. Sales taxes are based on consumption, and are typically highly regressive, as low-income households pay a higher percentage of their income on sales taxes than higher-income households.


Income taxes are typically progressive, as the higher one's income, the more income tax one pays.

Income taxes are progressive relative to income. Higher earners tend to live in more expensive homes, so property taxes are progressive too, putting Poor Widows In Mansions to one side.

Property tax is not based on consumption or income, but on the presumed wealth and income of property owners.

No they are not based on presumed anything; they are based on the rental i.e. enjoyment or use value of the plots which people choose to occupy, so they are very much a consumption tax - but unlike sales taxes/VAT, they are not a disguised tax on production.

In effect, property taxes are a wealth tax: if you can afford a house, you can afford property taxes.

In that case, all tenants are liable to privately collected wealth tax. Does that seem morally justifiable? And of course, in economic terms, the tax was borne by whoever sold you the house. What you pay in LVT comes off the price or your mortgage payments.

The fallacy in this assumption is that homeowners' incomes do not automatically rise along with housing valuations.

In individual cases, no. In the grander scheme of things, very much yes.

Consider the 35% increase in the Case-Shiller 20-City Index since 2012: in a four-year period that officially experienced a mere 4% inflation, housing leaped 35%.

Meanwhile, real median household incomes rose a paltry 5%. Local tax authorities love housing bubbles because rising valuations justify higher property taxes. But the homeowners' income needed to pay higher property taxes may well have declined during the bubble due to layoffs, shortened hours, medical emergency, reduced bonus, etc.

Nice bit of Doublethink there. Is he describing a growing economy or one in recession?

Real estate professional EB described the consequences of this mismatch of earnings need to pay property taxes and soaring property taxes:

"You are correct that property taxes are an oft-forgotten cost of homeownership that many buyers fail to properly evaluate when determining how much house they can afford over the long term. Perhaps a better way to view property taxes is as an inefficient proxy for income taxes -- state and local governments assuming that people who can afford a home of a certain value, must have sufficient income to pay ad valorem taxes and per foot and per parcel charges at a given rate.

"In a volatile economy, that assumption is often invalid. When the Fed runs out of monetary games to play, and asset values across the economy normalize, both state and local governments and homeowners will all be in a pinch -- governments because the valuation-based portion of the tax base will crash, and homeowners because the fixed charges will no longer fit within their diminished incomes.

"This is already occurring in suburban Chicago, where annual property taxes can approach 10% (!) of property values."

Shifting from income/sales tax to LVT is not supposed to increase people's tax bills, it merely changes the timing. So more people put away a bit of surplus in the good times. Is that not considered to be a desirable outcome?

In a recession, earnings can decline very quickly indeed. Meanwhile, property taxes are "sticky": they only decline grudgingly (if ever), and only if homeowners pursue bureaucratic appeals based on the declining value of their home.

Then push for more up to date and accurate valuations. With less tax on income and production, recessions would be much milder.

Owning your house free and clear (no mortgage) is no guarantee you'll be able to live there once property taxes are $1,000 per month. One of the emotional triggers of Prop 13 limitations on property tax increases in California was the stories of elderly pensioners having to sell their homes because they could no longer afford the skyrocketing property taxes.

And again, Poor Widows In Mansions. Defer until death or later sale. Sorted.

A wealth tax based on housing valuations applies equally to homeowners with diminishing income, i.e. the decidedly non-wealthy.

See above.

As pensions dry up and blow away under the relentless erosion of the Federal Reserve's zero-interest rate policy (ZIRP), unaffordable property taxes may well start evicting homeowners from the "asset" they mistakenly thought they "owned." If your Social Security pension can barely pay your property tax, never mind your Medicare, healthcare costs, food and other living expenses, then what exactly do you own?

Oh, so you like the idea of taxes to pay for social security pensions and Medicare?

As I noted before, as far as the tax authorities are concerned, all you really own is an obligation to pay property taxes...

Don't buy one then.

... and an option to profit from the next housing bubble. If the bubble pops in a recession that also costs you your job, well tough luck, Bucko--your "asset" reverts to the state/county as payment for property taxes you can't possibly pay.

With higher LVT, bubbles would be very much dampened so all his waffle about fluctuations in values is otiose.

If politicos and tax authorities think people will passively watch their neighbours lose their homes to sky-high property taxes, they will soon discover their mistake.

Save up in the good times, take out unemployment insurance, trade down if you must, take in a lodger, roll up and defer etc. Or alternatively, passively watch as somebody who is prepared to pay the rent/LVT moves in next door instead.

And why the adjective "sky-high"? Why is $1,000 a month property tax "sky-high" when $1,000 a month payroll tax isn't?

Thursday, 19 May 2016

Andy Haldane Maybe the First Honest Bank of England Employee...

...for admitting that he has absolutely no clue as to what he is doing.

FWIW pensions are a dead simple concept. They are just deferred income.  What make them complicated is all the Kafkaesque rules written around them by the likes of Haldane and his cronies.

Dear God. What next! What next?


To save putting this in the comments thread.

The principle around the pensions tax relief is that you are deferring your pay.  You get tax relief on contributions and the fund grows free of CGT and CT/IT (Yes, MW I know I know  - but this is the principle).  But when you draw your benefits as an annuity you get taxed on the whole payment, not just the interest component as in a purchase life annuity.  This applies however you take the 'pension'.

The laws of compound interest and the expected return on a mixed fund of shares, bonds and property (the assets in a typical pension fund) mean that if you save between 12% and 15% per year of your gross income, you will, by about age 65 have accumulated a fund large enough to buy you a 'pension' which will be about 50% to 67% of your final wage.  This is just one of those 'laws' that works.

The problem is all the bloody rules around this simple concept.  They - the government and their bureaucrats - have, to put it in technical financial services language, so forgive me, fucked it all up. End of.

I have run a business in this area for nigh on 30 years now and I have seen these ratios work and I have witnessed the utter, utter failure of the likes of Haldane and his cronies to do anything sensible ever. Ever.

And just to make another key point we do our level best to keep charges low.  But when upwards of 70% of my revenue goes back out of the door in a combination of taxes and regulatory costs, we are not the cost problem.

"The Angry Birds"

From imdb and imdb:

The classic horror film takes place on Bird Island, an untouched paradise inhabited by computer-generated birds who are naive and innocent and know nothing of the outside world. Melanie Daniels is a modern rich socialite, part of the jet-set who always gets what she wants.

Red, the lead of the film, is prone to losing his temper and attacks Melanie as she is crossing the bay in a small boat. Then, Lydia finds her neighbour dead, obviously the victim of another angry bird, Chuck, who moves fast and talks fast.

Soon, animated birds in the hundreds and thousands are attacking anyone they find out of doors Bomb, another main character, frequently blows up due to his disorder IED, Intermittent Explosions Disorder. Bomb lives in a bomb shelter.

There is no explanation as to why this might be happening, and as the angry birds continue their vicious catapult-based attacks, survival becomes the priority.

Wednesday, 18 May 2016

"Clintons Cards axed Virgin Mary from Nativity scene after fears of poor card sales, says graphic designer"

From The Guardian:

Shane Black, Christmas card designer, has said he was forced to change the gender of Jesus' mother from female to male after pressure from Clinton's Cards, which feared cards would not sell as well.

In an interview with Uproxx, Black said his original sketches featured Virgin Mary, a traditionally female character.

“We had finished the design and we were given a no holds barred memo saying that cannot stand and we’ve changed our minds because, after consulting, we’ve decided that cards won’t sell as well if there's a prominent female character. So, we had to change the entire design because of card sales. Now, that’s corporate.”

Black said in the original draft he had hoped audiences would assume the character was male, before her true gender was revealed. “I liked the idea, like 'Junior', you think a man has given birth but at the end, it turns out that it was a woman. They just said: ‘No way.’ ”

Tuesday, 17 May 2016

BBC Recipes

From the BBC

The BBC Food website carrying more than 11,000 recipes is to close as part of a plan to cut £15m from the corporation's online budget, a BBC source has said.

All existing recipes are likely to be archived, though whether some could move to the commercial BBC Good Food website is still to be decided. TV show recipes will be posted online but only made available for 30 days.

The BBC source said online services had to be "high-quality, distinctive, and offer genuine public value".

Which is why this makes sense. There are plenty of sources for recipes out there: food.com, epicurious, Martha Stewart, food network, all recipes, Delia Smith, netmums, cbc, as well as bloggers and food companies and supermarkets giving recipes away. There's nothing distinctive about the BBC's recipes, nothing superior about them.

And they might look free, but they aren't. They're free at the point of access. You don't directly pay for them. But your license fee is, and anyone who wants to watch live TV is forced to pay for a license fee, regardless of whether they then use BBC services. We don't force people who read the Guardian to pay for the Daily Mail. We respect that there are market choices. Now, there are things that count as public service TV - things that the market won't provide. We might include things like parliamentary broadcasting, or CBeebies, but it's clear that the market will provide recipes for creme brulee or coq au vin, so we don't need to have the BBC doing it. We can allow people to choose who provides it.

Monday, 16 May 2016

More than you might have thought...

In his post, Lola points out that 75% of tenants' income goes out in tax, one way or the other.

However, according to insurance company More Than, this is, surprisingly, less than it is for an average home owner with a mortgage:

Owning a three bedroom home in the UK comes with average annual running costs of almost £20,000 which equates to £1,634 per month. Renting a three bedroom home is only slightly less expensive at just shy of £19,000 per year (£1,576 per month).

For a household with two working adults each earning the average yearly UK pre-tax salary of £27,600 (£1,827.91 per month after tax), it means that between 43% (rented) and 45% (owned) of our post-tax earnings are being spent purely on household bills and on the rent or mortgage repayment.

Where it all goes is in the infographic above. Who would have thought we spend so much money on gardening?

The Daily Mirror channels its inner Daily Mail

From The Daily Mirror:

Mum died after plunging down 50ft well 'while gardening' at £600,000 home

Irina Nadiotis, 58, is thought to have been stuck in the well of her £600,000 Grade II-listed home for up to two hours before her body was recovered.

A mum-of-two died after plunging down a 50-foot well in the garden of her Grade II-listed home. Irina Nadiotis, 58, fell down the hole while apparently gardening at her 17th century townhouse in the Cotswolds on Saturday.

It is thought that she was stuck in the well for up to two hours before her body was recovered by rescue crews, according to her neighbours. Ms Nadiotis had only recently moved into the £600,000 property, and locals said she might not have realised there was a well at her new home.

It lacks the Daily Mail's subtlety and impish humour, instead going for the sledgehammer of mentioning the value of the house three times in the headline and the next five sentences.

Must try harder.

Unreported is whether the woman was ever a drummer for Spinal Tap.

Nobody move or female workers get it!

Harriet Harman on (over the) top form in The Guardian:

Harriet Harman has claimed campaigners calling for Britain to leave the EU are more likely to associate with an old-fashioned view that a woman’s primary role is in the home.

The Labour MP made the claim in an interview with the Guardian in which she also argued that Brexit could derail the fight for women’s rights.

Harman, who has been a leading campaigner on gender equality for four decades, said she would not trust high-profile out campaigners such as Boris Johnson, Michael Gove or Nigel Farage “as far as I can throw them” on the issue... Harman argued that lurking behind the opposition was the idea that women should not be demanding rights in the workplace when they should really be at home.

“We still see occasionally the veil slips,” she said. “And actually there is quite a good match between the people who want to leave the EU and the people who actually want women to be back in the home. Why would we want them to be in charge of our rights? Why would we trust our rights to them?”

Perhaps Johnson, Gove or Farage are indeed old school male chauvinist pigs (there's no evidence for it, but hey), surely we are having a referendum on EU membership, not voting on whether those three form the next government?

Sunday, 15 May 2016

Nobody move or your country's credit rating gets it!

Left in the comments by PaulC156, from The Telegraph:

If the International Monetary Fund and its co-conspirators in the Treasury wish to deter undecided voters from flirting with Brexit, they have certainly failed in my case...

The Fund gives the game away in point 8 of its Article IV conclusion on the UK economy. It states that “the cost of insuring against a UK sovereign default has doubled (albeit from a low level)”. Any normal person who does not follow the derivatives markets would interpret this as a grim warning from global investors.

Yes, the price of credit default swaps on 5-year UK debt – the proxy we all use - has jumped from 17 to 37 since late last year. But the IMF neglected to mention that it has risen from 15 to 33 in Switzerland, from 26 to 43 in France, and from 45 to 65 in Korea.

The jump has almost nothing to do with Brexit, and the IMF knows this perfectly well. The French have an expression that will be familiar to the IMF’s Christine Lagarde: ils font feu de tout bois [they are firing on all cylinders].

'Nuff said.

Friday, 13 May 2016

Nobody move or house prices and share prices get it!

Today's scaremongering from the FT, via MBK (as usual):

A vote by the UK to leave the European Union risked triggering “sharp drops in equity and house prices, the head of the International Monetary Fund has warned in a damning assessment of the effects of Brexit.

Christine Lagarde, IMF chief, warned the consequences of Brexit ranged from “pretty bad to very, very bad”, precipitating a protracted period of heightened uncertainty, financial market volatility and a hit to economy.

Appealing to the Home-Owner-Ists is always a good strategy, but actually those are the two least important variables in the economy, they are just a measurement of other much more fundamental things, they are a symptom and not a cause. So output, profits and employment matter - share prices do not.

Moreover, they are just transfers of wealth, if house or share prices fall, tomorrow's purchasers benefit by in £££ the same amount that today's owners have lost on paper.

Yet Another Face Palm Moment..This time - PPI


Of course it bloody is.  The 'government' is entirely to blame for the (non) PPI 'crisis'.  As all of you may know, had you been keeping up at the back, that I have told you before that the bloody government, both itself and its agents, the equally failed FSA and FCA, TOLD the financial services industry to sell PPI. Yep, they TOLD us to sell it.

(Point of information.  We 'sold' about five, yes FIVE, PPI plans. Successful policyholder claim on one - by an owner director of a small limited company that failed. Yes really.  His own firm. Work that out.  No policyholder complaints on the others.  And in dealing with the compulsion to sell PPI on any personal finance business - mortgages in our case - we changed our standard wording in one of our client info documents so that we could demonstrate that we had 'talked about it' to the regulator - if asked  - and then just carried on treating our clients as adults).

What's more we told the Financial Shambles Authority that the whole PPI thing would end in tears.

And then there's the reg-yew-lay-shuns.  These enable, nay encourage, an entirely mechanistic approach to dispute resolution that bears no relationship at all to the due process of law.  Essentially the 'rules' deliberately enable arbitrary decisions, based largely on 20/20 hindsight, by capricious bureaucrats. (BTW, if you print out the FCA rule book it will stand eight and half feet high  - A4 double sided). The effect of this approach is to create a companion opportunity for exploitation by the less than scrupulous to create fake businesses to 'help' people pursue these claims.  Furthermore, when you get a tsunami of such claims it is far cheaper for the target institution to just pay up than to investigate and fight every claim.  We have evidence that claims have been paid where no PPI had actually been sold.  Also, getting £20+ Bn out of Bank capital is helpful to the government as it just gets spent. Never mind that it is a conversion of capital to consumption.  Anyway the government can just print some more money to re-capitalise its crony banks.

And then you have to take into account the whole Newspeak concept of 'mis-selling', of which there can be no such thing in a free society with personal responsibility.  The Bank is its own agent.  If you buy a product or service from a Bank, Caveat Emptor applies.  If you have doubts that you understand a financial or insurance product you can take professional advice.  That adviser is your agent and takes professional responsibility and has PI cover in case he makes a mistake.

And to back this up I can relate a small vignette that befell Mrs L and me.  Some years ago, soon after we were told to sell PPI, Mrs L asked me to go to her bank with her where she was sorting out a personal loan. I went through the loan documents and spotted that a single premium PPI plan had been automatically added. (Single premium plans paid a very large initial commission, from memory about 25% of the premium).  The premium was in the thousands of Pounds.  'What's this?' I asked. 'Oh', said the bank lady. 'That's the insurance. The government says you have to have that'.  'Erm, no it does not' Quoth I. 'Take it off Mrs L doesn't need it'.   'And two other things, bank person, one, this stuff is going to be the next scandal, and if I catch you forcing any more of my clients to have it I will be down your throats ASAP' (or words to that effect).

The whole PPI farrago stinks. It is a litany of massive government and regulatory failure.  We've known this for years.

Update.  My memory is slightly defective on the scrapping of mortgage interest benefit for the unemployed.  I think it might have been that the term for which it was available was limited , and that the qualifying rules were tightened.  And also that the actual rate was capped  (Here). And I found this, which is very useful.  I do, however stand by my assertion that we were told to sell PPI - or mortgage payment protection of some kind.

Thursday, 12 May 2016

Nobody move or sterling and interest rates get it!

Yesterday's Project Fear output, via MBK:

From The Times:

Leaving the European Union would immediately cause the value of the pound to plummet by as much as 20 per cent, while income tax would have to rise to counter cuts in migration, a respected think tank has warned.

A vote to leave would result in a “significant shock to the UK economy”, the non-partisan National Institute for Economic and Social Research has said, as it presented prospects for the UK up to 2030 in the event of Brexit.

From The Telegraph:

The Bank of England will need to raise its key interest rate or Bank Rate to 3.5pc by the end of next year if Britain votes to leave the EU, the newest recruit to the Monetary Policy Committee has warned privately.

Michael Saunders, who was chief economist at Citibank, and will join the rate-setting MPC in August, said the drastic rise would be needed because Brexit would cause the pound to collapse, which would send inflation sharply higher.

If we were to stupid enough to reduce 'good' immigration (younger, healthier, skilled/working, ready to integrate) then yes, income tax rates on everybody else might rise a bit, some people say that would be a price worth paying. I don't think it is, but clearly, if we reduced 'bad' immigration, tax rates would go down a bit, which looks like a win-win to me.

The rest of their logic seems to be [unspecified cause] = GBP falls = inflation rises = Bank of England has to increase interest rates.

There's no particular reason to assume that Brexit would cause GBP to fall that dramatically, but even if it did, what would be the knock-on effects? No need to ponder too hard, let's just look at the last two instances of this happening - after Black Wednesday in 1992 and between 2008 and 2012, when GBP fell by a quarter each time.

There was surprisingly little impact on consumer prices (putting land prices to one side) in either instance, and the Bank of England did not increase interest rates - during both periods it actually reduced them (leading to land price inflation).

So nothing to worry about, as per usual.

Wednesday, 11 May 2016

"It's a beautiful day"

This fairly recent Michael Bublé song is the perfect background music for smug middle aged people to drive round in their open-topped cars, so I have heard it quite a few times in recent weeks.

It was only a couple of days ago that I actually listened to the lyrics. Unlike most pop songs they are not stream of consciousness gibberish, they are in fact gloriously spiteful.

Here's an excerpt from A-Z Lyrics:

'Cause you may not believe, that baby, I'm relieved,
When you said goodbye, my whole world shined

Hey hey hey, it's a beautiful day and I can't stop myself from smiling
If we're drinking, then I'm buying...[etc]

Tuesday, 10 May 2016

Evil climate sceptics bashing solar power as per usual...

... or maybe not?

Emailed in by Ben Jamin' and Physiocrat, article by Euan Mearns

A new study by Ferroni and Hopkirk [1] estimates the ERoEI of temperate latitude solar photovoltaic (PV) systems to be 0.83. If correct, that means more energy is used to make the PV panels than will ever be recovered from them during their 25 year lifetime. A PV panel will produce more CO2 than if coal were simply used directly to make electricity.

Worse than that, all the CO2 from PV production is in the atmosphere today, while burning coal to make electricity, the emissions would be spread over the 25 year period. The image shows the true green credentials of solar PV where industrial wastelands have been created in China so that Europeans can make believe they are reducing CO2 emissions.

Please note, the article refers to solar panels at temperate latitudes such as Europe. Solar panels might well be net energy generators in very sunny areas - the question is, how far from the Equator is the break-even point at which the return turns negative?

UPDATE: Bayard in the comments:

"A PV panel will produce more CO2 than if coal were simply used directly to make electricity."

but only if no renewable energy was used to make the PV panel. While that is probably true, it ain't necessarily so."

I didn't bother with that scenario because that would be an equally stupid thing to do - using up 1 unit of PV energy to generate another 0.83...

"The motive for the attack is unclear"

The BBC surpasses itself with this one:

One man has been killed and three others wounded by a knife-wielding man near Munich, with police investigating a possible Islamist connection.

The man attacked four commuters shortly before 05:00 (03:00 GMT) on Tuesday at Grafing station. One of the victims died of his wounds in hospital. A 27-year-old German man was eventually overpowered by police and arrested.

Some witnesses said he shouted "Allahu akbar" ("God is great" in Arabic) but the motive for the attack is unclear.

From other reports, it is perfectly clear that he is a Muslim immigrant (possibly second generation).

Monday, 9 May 2016

Fun Online Polls: Labour's "anti-semitism problem" & likely outcomes of Brexit

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

Is Labour's "anti-semitism problem" just the politically correct term for "too many radical Muslims"?

Yes - 84%
No - 10%
Other, please specify - 5%

Good, I'm with the majority on this one.

For crying out loud, while being a Palestinian sympathiser and by extension anti-Israel is a traditional lefty cause, there is no reason to assume that Labour party members or voters are in any way "anti-semitic" in the sense of not liking Jewish people. Last time I looked, the previous leader of the Labour party was Jewish, as indeed was the previous leader of the Conservative party.
This week's poll, according to Project Fear, Brexit would lead to various disastrous outcomes.

I have listed some of them in this week's Fun Online Poll, but which of them do you think would actually happen?

Vote here or use the widget in the sidebar.

Nobody move or the schools buildings, whisky distillers, drugs companies and patients get it!

All emailed in by MBK:

From Schools Week:

Loans totalling hundreds of millions of pounds to build new schools in the UK could dry up should the country leave the European Union (EU).

The European Investment Bank (EIB) has lent more than £350 million since the beginning of 2015 to build new schools under the government’s Priority Schools Building Programme (PSBP). The bank is owned by EU members and provides long-term loans on favourable terms for social action projects.

£350 million is of course less than 0.5% of the UK's education budget, and it is not a freebie, it is a loan, and one thing the UK government can do as well or as cheaply as any other government is lend/spend money out of thin air. What matters is the interest saving, given today's low/negative real interest rates, the true saving is close to nothing.

Even if you divide the full £350 million by approx. 10 million school children in the UK, that's a princely £35 each. Divide close to nothing by approx. 10 million and you get...

From the BBC:

Leaving the European Union could put more than £1bn worth of Scotch whisky exports at risk, industry chiefs have claimed.

The Scotch Whisky Association (SWA) said the European single market was "central to the success of Scotch". It warned against the UK voting to leave the EU in the June referendum.

Strange. When I look at the supermarket shelves, you can buy wine and spirits from every corner of the earth - it can't be that difficult for a non-EU country to export to EU Member States, can it?

From PharmaTimes:

Life sciences leaders are warning that Britain’s departure from the European Union will bring uncertainty to the industry, creating new barriers to inward investment and threatening access to novel medicines.

In a letter to The Observer, more than 90 signatories - including heads of the Association of the British Pharmaceutical Industry, GlaxoSmithKline, AstraZeneca and the BioIndustry Association - argue that the future success of the UK life sciences sector is underpinned by being part of the EU’s single market and regulatory processes.

If the UK was to bow out of a reformed Europe, companies could be forced to apply for separate market authorisations in both regions - which could delay access for the millions of NHS patients to the latest drugs and treatments, they warn.

Again, strange. The last time I looked, Switzerland had a relatively successful pharmaceutical sector. I guess that EU rules on which drugs are safe or not are much the same as ours anyway, so there's be no harm in having a single application procedure or mutual recognition or something.

What. A. Complete. Prat.


Oh, now this is getting so very, very silly.  Apart from anything else it is a gross insult on the peoples of the Continental countries that they are so juvenile and uncivilised that without the EU they would go to war with each other, ever again.

He is saying that outside Europe we always end up getting dragged back in to sort out the mess.  Indeed.  I would heartily agree.  But this time 'sorting out the mess' is getting out of the EU (and hopefully accelerating its collapse).  To demonstrate to free European peoples that they do not need the latest in a long line of European demagogues intent on building an Empire of Europe. 

The difference with the EU is that the bureaucrats - who in previous attempts at Empire worked under an inspirational (not in a good way) figurehead - to achieve their narcotic of power, sinecures and fat entitlements.  This time they have cut out the middleman and gone straight for power for themselves. 

And this utterly unaccountable bureaucratic rule is now engendering just as much political and public unrest and economic failure  as every previous Empire builder from Charlemagne to Hitler (ignoring the Romans pro tem).

Also he is fundamentally misunderstanding history.  Europe developed so well because it had competing Nations with different jurisdictions, tax rates and so forth.  Do not forget the 'free movement of people' pre dates Shengen by thousands of years.

And yet again is it left to the UK to spend blood and treasure to sort out the mess. Well, not so much blood this time, and without doubt we will be saving treasure by getting out of the EU and carrying on being good friends with all European peoples and Sovereign nations.

What a silly, silly man he really is.

Sunday, 8 May 2016

What's the Problem Here?

Tax Freedom Day is 31st May*.  Let's call that 41%  (ex the additional deadweight costs of regulations)

Rent Freedom Day is 5th May.  Let's call that 34%

That's 75% of income for tenants going out in tax in one way or another.

* 2015 number.

Georgon Osbrown on top form

Emailed in by MBK from The Telegraph:

"We're doing the work on it now but the emerging Treasury analysis backs up what you are hearing from major banks like Virgin Money that the value of people's homes will be affected and people trying to get on the housing market would be hit because mortgage costs would go up."

Exactly not.

Future purchasers would be unaffected because the hypothetical house price fall and hypothetical interest rate rise would cancel each other out.

Post-Brexit, the UK would have no free trade agreements with the USA or China… er...

As somebody on the internet pointed out (I can't remember who): "So what?".

The UK is a Member State of the EU, which in turn has no formal free trade agreement with China or the USA (yet).

Those countries have their domestic rules, we/the EU have ours and things seem to work fairly well, don't they? The TTIP will almost certainly make things worse, so the absence of a formal free trade agreement is not really a problem.

EU Related Failure Linkfest

CAP - Here

Bank of England - Carney Says that on BREXIT the Bank will cut interest rates.  So, he's got an infallible crystal balls then?  Seemingly, no. Also, he seems very confused.

Update 1a:  Not talking to Markie Karno are you Georgie.  So more people will be able to buy houses and savers will get the proper rate for their savings? Just please explain why this is a bad thing?

Update  1b. In passing the BoE record on setting the 'right' interest rate is woeful. They are expert at lagging 'inflation', or rather their preceding rate setting/money supply policies precipitate 'inflation' - which is entirely understandable as they mis-define inflation. (In passing, just why is the Bank tasked with maintaining 'price stability'?  How can they possibly do that?  How is price stability defined exactly? And just why should prices be stable? How can they ever know enough about everything in the economy {indigenous and global} to be able to calculate just what they have to do to get 'price stability. Whatever that is?). Of course all the same crap applies in the EU/Eurozone.

MI6 and MI5 - The former management that they are not capable of 'keeping the UK secure on BEXIT'. Oh really.  What do the current management say?  And if they also can't do it. we'll sack them and a couple of people who can.

Update 2.  Not just me that thinks that then?

That nice gentle completely totally not authoritarian Theresa May is finding out how stuff actually works when in the the EU, when she actually wants to stay in.  Surreal.

(Now being nagged to 'go and do something' by distaff side - will update later).

Friday, 6 May 2016

"Holborn Tube station to trial 'standing only' escalators for six months"

From The Evening Standard:

Tube commuters will be told to stand on both sides of the escalator at a busy central London station for six months - in a new trial which could pave the way for a permanent change.

Passengers are again being asked to ignore the decades-old "walk on the left" rule at Holborn in a bid to cut queues and ease congestion.

A three-week test run at the station late last year showed 30 per cent more passengers could travel on the escalator if they stood on both sides, Transport for London said.

This is one of those lovely counter-intuitive solutions, it took me a while to suss it out.

The point being, if an escalator is very long, then very few people will want to walk/run up the left hand side and most will wait/jostle in the queue on the 'standing only' side.

Imagine the escalator were so long that nobody can be bothered to walk/run up it and everybody waits/jostles for a place on the 'standing only' side... in that case, making it standing only on both sides doubles the capacity and greatly reduces the time spent waiting at the bottom.

Conversely, if an escalator were very short, most people would be happy to walk up it, so making it a 'no standing at all' escalator would also speed things up.

Thursday, 5 May 2016

Killer Arguments Against LVT, Not (394)

An earlier variant of KLN 393, from here:

… while the land value tax is paid over time, the burden of the tax (its incidence, in economics jargon) falls entirely on the person who owned property at the time the tax was instituted. The value of future taxes gets immediately priced into the value of real estate. For those who buy property after the tax is instituted, the higher property taxes are offset by lower mortgage payments.

True so far… here comes the crap...

In other words, the economic efficiency of the land value tax comes from the fact that it operates by confiscating wealth accumulated in the past rather than taxing the accumulation of new wealth. This, too, is unfair. Society benefits when people defer gratification and save for the future. People justifiably expect that if they save today, they’ll enjoy the benefits of that accumulated savings in the future.

Of course, people who generate income from their accumulated wealth should pay their fair share of taxes. But a land value tax goes way beyond that point, depriving owners of one particular asset class of the benefits of decades of thrift.

That's clearly quite self-contradictory bollocks which flies in the face of facts. Note also the use of the words "confiscation" and "depriving" when talking about taxes on land values, whereas taxes on other things are referred to merely as "taxes".

If you are one of the original landed gentry, inherited the land or took out a BTL mortgage, it required no "decades of thrift" whatsoever to acquire the land - quite the opposite, you have been able to spend more than you earn (at the tenants' expense). 99% of owner-occupiers who bought with a mortgage will have paid considerably less in cash terms than somebody (of the same age) who has been renting all his life; it is tenants who really have had to "do without".

But enough of my musings, by coincidence, Ralph Musgrave emailed me a link to this bit of academic research shortly after I re-discovered the KLN above:

Our original interest was to enquire whether the introduction of land into a growth model might account for a “virtuous” circle in which saving-up for land (or housing) generates growth and higher land prices, generating further increases in saving, and so on.

Such an account is sometimes proposed for high saving rates in East Asia, where mortgage markets are limited or absent. Our analysis does not support such a story. The user cost of land reduces the resources available for consumption of reproducible goods, so that the introduction of intrinsically valuable land into a growth model lowers the equilibrium stock of capital and raises the equilibrium interest rate.

On the asset side, the presence of land causes life-cycle savings to be reallocated away from productive capital towards land. The social optimum in such a model is for land to be nationalized and provided at zero rent. Land markets, far from generating saving and growth, are inimical to capital formation.

Captain America: Civil War of The Roses

From Wiki and Wiki:

Lawyer Gavin D'Amato is in his office discussing a divorce case with a client. Noticing the man's determination to divorce his wife, Gavin decides to tell him the story of when Hydra sent the brainwashed Bucky Barnes to kill a motorist and steal a case full of super-soldier serum from his car.

Approximately one year after Ultron's defeat at the hands of the Avengers, Oliver Rose, a student at Harvard Law School, meets Barbara at an auction, where they bid on the same antique. Wanda attempts to levitate away Rumlow as he detonates a suicide bomb and Barbara misses her ferry home. The explosion destroys a building and she and Oliver end up spending the night together at a local hotel. Eventually the two marry and have two children, Josh and Carolyn, killing several Wakandan relief workers.

At the team's headquarters, Secretary of State Thaddeus Ross informs the Avengers that Barbara has found an old mansion whose owner has recently died. Tony Stark supports oversight because he feels guilty for creating Ultron but she purchases it and devotes her time to making a home there, leading to the later destruction in Sokovia,

Unable to convince Rogers to support the accords, Romanoff attends their ratification in Vienna, after which a bombing kills King T'Chaka of Wakanda. At this point, Oliver and Barbara begin spiting and humiliating each other in every way possible, even in front of T'Chaka's son, T'Challa, who vows to kill the bomber, whom security footage indicates is Barnes. Both begin destroying the house furnishings; the stove, furniture, Staffordshire ornaments, and plates.

Despite Romanoff's objections, Rogers and Wilson track Barnes to his hideout in Bucharest and attempt to protect him from the police and T'Challa. Another fight results in a battle where Barbara nearly kills Oliver by using her monster truck to run over Oliver's prized sports car, a classic Morgan 4/4.

Barnes is soon released by Colonel Helmut Zemo, who uses Hydra's trigger words to question Barnes about the 1991 mission, then sends him on a rampage that allows Oliver to accidentally run over Barbara's cat in the driveway with his car.

Rogers stops Barnes and sneaks him away; when Barnes regains his senses, he explains that Zemo is responsible, and is heading to the Siberian facility. When Barbara finds out, she retaliates by trapping Oliver inside the in-house sauna where Barnes was held, ostensibly to unfreeze the other Winter Soldiers created with the stolen serum, where he nearly succumbs to heatstroke and dehydration.

Vote for me!

If you live in Buckhurst Hill West ward, you can vote for me in the locals. I did.
From City AM (print edition):

"Polish prince" John Zylinski is an outsider with odds of 100/1 to win today's [London Mayor] election, but he's already planning to run in 2020 and tells us he's forming his own political party.

The property developer is critical of Sadiq Khan's proposed rent controls, but last night he let slip he has an ulterior motive for going into politics.

"It's every developer's dream to become mayor. You can grant your own planning permission."

Too honest for his own good, the rent seeking twat.

Wednesday, 4 May 2016

Nobody move or the forecast gets slashed!

From The Guardian:

In another blow, the European Commission has just cut its forecast for UK growth this year.

The EC now expects Britain’s economy to expand by just 1.8% this year, down from a previous forecast of 2.1%, inching up to 1.9% in 2017. It blames the uncertainty created by June’s EU referendum -- echoing the slump in UK factory output.

The commission says:

“Risks to the outlook are tilted to the downside, reflecting less favourable external demand and uncertainty in the lead-up to the June referendum. Net exports are forecast to continue to detract from growth although less markedly in 2017.”

Well they would say that, wouldn't they?

Personne ne bouge ou vos éleveurs de bovins l'obtiendront!

Emailed in by MBL from The Daily Mail:

Mr Lamy, a Frenchman who headed the World Trade Organisation between 2005 and 2013, said that the rest of the EU would drive a 'hard bargain' in the event of Brexit...

"My own country will probably be among the hardest to negotiate with. Imagine how eager French farmers will be not to have your beef or lamb on our supermarket shelves. And no one will show any love for the City of London.

"If it fails to get a deal, there is a real risk that the UK would have to fall back on WTO rules. Some in the Leave campaign have said this would not be a bad option. As the former head of the WTO, let me be clear: this would be a terrible replacement for access to the EU single market.

"Though tariffs have fallen, they are still high enough to hurt businesses and therefore jobs: 10 per cent for cars, 12 per cent on clothes, 70 per cent on some beef products.

So, a bit like during the period 1996 - 2006, then? Distressing for British beef farmers (who do a very good job) but hardly a disaster for the economy. We'll just have to eat more of the stuff ourselves and we'll be able to go to McDonalds with the warm glow of having fulfilled our patriotic duty.

Tuesday, 3 May 2016

Fun Online Polls: Sports car attire & Labour's "anti-semitism problem"

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

What is the correct mode of attire when driving an open-topped car on British roads (assuming not done satirically)?

Leather jacket/aviator jacket - 26 votes
Driving gloves - 23 votes
Sunglasses - 22 votes
Goggles - 20 votes
Jaunty silk scarf - 18 votes
Leather helmet/headscarf (m/f) - 12 votes
Leather steering wheel cover - 12 votes
Other, please specify - 11 votes

I forgot to add "peaked cap" to the list. Going by the comments, that would have got a lot of votes. I also bought myself a super-grippy steering wheel cover from Halfords (with the ghastly silver stripe turned away from me).

Which is all very reassuring, because I do the first three items on the list (Mrs W even bought herself a matching biker-style black leather jacket to complete the look), I'm wavering on the peaked cap.

Top comment: newageingman

Given the current weather, I am wearing long johns, thermal jumper, thick insulated padded coat, topped off with petrol station supplied £4.99 Insulate gloves and hat set. All in addition to standard clothing requirements for us non naturists.

This week's Fun Online Poll:

"Is Labour's "anti-semitism problem" just the politically correct term for "too many radical Muslims"?"

Vote here or use the widget in the sidebar.

Monday, 2 May 2016

Thoughts on Europe and Peace

From the BBC

Author Michael Morpurgo - best-known for his children's books such as War Horse - believes the UK should stay in the European Union.
"I do know my history, and I know we've been at peace for all these years - and that has something to do with Europe," he says.

I know my history too. I know that Germany never really had any interest in France in either war, and that both invasions were because of factors outside the EU - the alliance between France and Russia in WW1 and the alliance between France and Poland in WW2.

The start of WW2, and what drove a lot of support for Hitler was his policy of lebensraum, of taking over bits of Eastern Europe to ensure food security after WW1 blockades. After the Germans invaded Poland, France and Britain declared war on Germany, leading to the invasion of France.

What's really created peace in Europe is the tractor and other agricultural improvements. No-one is going to invade bits of Polish or Czech arable land any longer. It's just not worth the costs. The tragedy is that the mass adoption of tractors started in the mid-1930s, and if that'd happened a few years earlier, things might have turned out differently.

I'm someone who believes that the EEC once worked because it was the "right-size" organisation for what we needed in the early 70s to the mid-90s, but it doesn't now. We trade with places like China, Vietnam and Africa in a way that we didn't back then. And we don't need a superstate. We've got organisations like the WTO to do global trade.

Nobody move or Planet Earth gets it!

Ed Miliband has taken exaggeration and hyperbole to its inevitable conclusion.

Sunday, 1 May 2016

Probably the Most Annoying Article of the Week - in soooo many ways.


It's getting mighty wearisome dealing with all this shit, but here's what I can be bothered to say.

Exhibit 1

Last month the Prudential Regulation Authority at the Bank told lenders to do more to make sure BTL landlords will be able to pay the bills if interest rates go up. The planned rules tell lenders to test borrowers’ finances to see how they can cope with the tougher of a two percentage point rise in interest rates, or 5.5pc.

WTF? Dude? These are supposedly commercial decisions by professional borrowers. Why do they need hand holding? It's 'capitalism'. Y'know. Risk and reward?*. Or more probably its the Bank telling the banks that they need to check their own carelessness.

* Yes. Yes. I know. I know. It's really landlordism, but You Know What I Mean.

Exhibit 2

They [Owner occupiers] cannot sell their property as easily should interest rates rise, when landlords can sell, raise the rent or use other income to pay the mortgage.

What? How? Eh? And, not a problem then?

Exhibit 3

He [Nigel Terrington] believes the latest worry is a case of mis-measurement by regulators who have far less data on the BTL sector than on the rest of the market.”

Never! Really? Well, I am surprised. Not. A bunch of bureaucrats being ignorant…

Exhibit 4

"Sceptics worry that regulators, having failed to spot the financial crisis coming, are simply playing a game of whack-a-mole in which sudden growth in any market is immediately deemed to be a risk, regardless of its cause.”

Yes, well. I'd agree with the 'whack-a-mole' analogy. And the cause is..?

Exhibit 5

Bank analysts are also on the lookout for bubbles, but right now they are relatively relaxed.”

Are they really?  AFAIAC that's a signal to run for the hills. Most of them were saying the same thing in 2007.

Exhibit 6


If problems do emerge, they might lie elsewhere. Terrington argues the Bank of England should keep an eye out for the activities of currently unregulated lenders rather than banks or building societies.

“In the BTL market you can become a shadow bank and step outside of the rules,” Terrington says “Where are they, and how much do they lend? “That is part of the problem.”

Shadowy indeed – just the sort of mysterious spectre to send more shivers down the spines of your dinner party guests.”

I just knew that they'd get round to the 'unregulated meme sooner or later.  Listen chaps, it was the 'regulated' bit that failed in 2008.  D'you think that there might be a causal relationshiop there?

Exit stage right back to the shed. Mumbling.  "Death's too good for them..."

Killer Arguments Against LVT, Not (393)

Spotted by Ben Jamin' at Doug Bamford's blog:

In a blog earlier this week I explained how changes to the tax regime can create windfalls or immediate costs to owners of the types of property affected by the change. For example, a tax on housing will hit the owners of housing at the time the tax is announced as their asset will immediately drop in value in line with the newly increased tax.

I’m sure those of you who have read my previous post explaining the LVT can all work out where I am going with this. If an LVT is introduced it will reduce the expected income on rented land; more of the rental income than expected will be lost to the tax. Similarly, for people who own and use land their cost for continuing to use the land will immediately rise.

Buyers will not be willing to pay as much as they will now expect to pay the tax in order to enjoy the use or investment income from the land. These future owners will not pay anything as the result of the introduction of the tax, nor will the past owners who sold up before the announcement.

Seems like a fair summary, whether existing landowners are "hit" or not all depends on which other taxes are reduced; with a sensible tax shift, most would be paying less tax overall.

But here comes yet another variation on The Poor Widow Bogey (Fred, in this example):

Anna, Bernie, Celine and Daryl all receive a significant inheritance (in an unjust society where inheritances are entirely untaxed), while Enid and Fred are diligent savers investing for their impending retirement. Anna and Bernie inherit a large amount of land while Celine and Daryl inherit money. Bernie sells his land to Fred and invests in other things, while Daryl decides to purchase land with his inheritance. Enid, meanwhile, invests in the stock market. Then the government suddenly announced an impure LVT.

Anna, Daryl and Fred face an immediate loss in the value of their investment. Meanwhile Bernie, Celine and Enid are entirely unaffected. This imposes a wealth tax on those who are unlucky enough to have chosen to invest in a particular kind of investment. Some of those taxed were economically fortunate, but Fred was not. Furthermore, some of the most fortunate people are unaffected, even if their good fortune arrived in the shape of gifted land. The introduction of the impure LVT is like a game of musical chairs, whereby those left holding the land at the time in question lose out.

So he is suggesting that we should perpetuate the iniquities of the tax system (taxing earnings and output instead of land values) merely for the benefit of our hypothetical Fred and at the expense of all future generations. In his highly artificial example, Fred's loss is Bernie's gain, therefore, he says, it would be better to impose a general wealth tax (gah!).