Tuesday, September 27, 2011
That lead me to the following analysis:
A typical hedge fund manager gets a 20%/2% to run the fund, which means 20% of the annual profit, and 2% of the value of the fund.
Assume no tax dodges, so that the investors (including the manager) pay 15% Capital Gains tax on the annual gains (directly from the fund).
Being confident in his own abilities, the manager invests his after-tax income in the fund.
At the start of a year, the investors have $M_old in the fund, the manager has $m_old, and the fund gains r%.
Capital Gains tax on the investor money is $0.15*r*M_old, 20% of the after-tax gain goes to the manager, and remainder gets rolled into the investor funds. The manager then gets 2% of the total.
For the manager, his share of the fund increases by $r*m_old, of which $0.15*r*m is Capital Gains tax. He also gains the 20% of the after-tax investor gains, and 2% of the fund, on which he pays a 35% tax rate.
Thus, we have
M_new = (0.98)*(1+(0.8)*(0.85)*r)*M_old
m_new = (1+(0.85)*r)*m_old+(0.2)*(0.85)*r*M_old+(0.65)*(0.02)*(1+(0.8)*(0.85)*r)*M_old
What is the result?
If the fund gains 20% per year, it only takes 16 years for more than half of the money in the fund to belong to the manager. At 10%, it takes 23 years.
Monday, September 26, 2011
This would not be without precedent: in 1859, the strongest recorded solar storm, known as the "Carrington Event", caused telegraph systems to fail or be shut down. But the world then did not have electronics, and water and power supplies did not depend on electrically-operated and computer-controlled machinery.
The facts of the sun's storm and ejection of vast quantities of charged particles appear to be corroborated by the amateur heliological website solarham.com:
Should we avoid going outside? Not clear: according to this Wiki article, ultraviolet light replenishes the ozone layer by splitting O2, so it is when the sun is "quiet" that the layer thins and more UV light penetrates to the Earth's surface. But there may be more UV health risk if you live in high northern latitudes, where the ozone layer is already thin or holed.
Indirectly, health and safety could be compromised by the failure of electrical systems that govern and provide for so much in our urban lives. Should we lay up extra water and cold food? It wouldn't hurt.
I like IPJ's idea of cowardy-custard politicians cowering in underground shelters; let's hope nobody superglues the locks.
Friday, September 09, 2011
It demonstrates that there is a vital and very early window of learning in which babies acquire the typical sounds of their native language - has to happen well within the first year of life.
But partway through the talk, there is a piece of research showing that audio / TV make virtually NO difference to learning new sounds, it HAS to be through direct human contact.
To me, a possible implication is that this connection of learning with the social part of the brain is that it may also be true for later learning.
Perhaps teachers cannot be replaced by computers, after all - despite this new project in the USA by a private company looking to get into educational provision.
Tuesday, September 06, 2011
WEDNESDAY UPDATE: a half-starved black cat has appeared at the kitchen door of our hard-to-get-into garden. After some food and drink, she is now laying siege outside. We have already progressed to the cardboard-box-and-blanket-in-the-garage-and-get-some-catfood-in stage.
Perhaps I shouldn't quit, after all.
"In 2005, a year after Belhadj’s rendition, Jack Straw declared there was ‘no truth’ in claims of British involvement, while Tony Blair maintained there was ‘absolutely no evidence’." - Daily Mail
Blair, with his Prince of Orange tan and ever camera-ready face, is slippery; Straw, with his worn, domesticated look is slippery as defined by Ross Noble: a bit like a slipper.
Straw gets into trouble; Blair, as a teacher at his public school said, "... is a superb actor. He’s good at getting others into trouble but avoiding it himself. He’s a s*** and Labour will regret it if you choose him."
Perhaps I should be glad that Blair, described by Clarissa Dickson-Wright as a "mimsy psychopath", got where he did; glad that the bankers have brought the country down and yet are themselves prospering better than ever; glad that MPs cheated on their expenses; that my share of the vote will soon go from 1 in 72,000 to one in 80,000; that the law is an ass, that the police have become better at public relations than public protection, that nurses are too busy to feed and water their patients, that the DPP has decided to turn a blind eye to euthanasia.
For where the authorities and institutions of this world are concerned, I want liberation from trust. I wish the reverse of Mark 9:24 - "I disbelieve; help thou mine belief". So many of us write to the papers (press men tell each other we're nutters), comment on web posts (and are derided by Private Eye's "From the message boards" column) and, of course, write our own citizen's-journal pieces for no money and which are read by almost nobody.
What a weight will be lifted from our shoulders when we finally give up, and ape our betters in the cold pursuit of self-interest.
Monday, September 05, 2011
I got a copy of this book. I found it somewhat depressing. Don't get me wrong, it was realistic and all. Thing is the scenarios were done in a pretty pessimistic way—at least for my liking.
Sourness tends to go down badly with the enviably vigorous and cheerful Australian, but remember the irrationally exuberant times in which this book was written - in a way, it was a spoonful of vinegar to make the toffee mixture right.
Three of the four problems are finally in public debate; the question now is whether the derivatives market will be brought under proper control before a disruption there causes a crisis that the current economic system can't handle. Theoretically there is a counterparty for every bet, but if someone welches on a big one (and the derivatives market is inconceivably enormous) there could be a domino effect.
Depression is often swallowed anger born of frustration, which in turn comes from trying to fix things that are out of your control. The real lesson of this book is to turn to the things you can fix yourself. Get out of debt, develop more than one line of income, build up emergency reserves of cash, tools and supplies, build up and nurture your social network, consider where you should be residing in case society becomes unstable, and remember (as we were beginning to forget in those days) that life is not just about money. Especially when fiat money in its present form may be an endangered species.
Saturday, September 03, 2011
Panellists on Radio 4's Any Questions? and Charles Moore in this week's Spectator magazine agree (with lots of others, it seems) that there is a housing shortage in the UK and the only question is how to satisfy it. I beg to differ, or at least think we can question the assumption.
1. "According to The Empty Homes Agency, there are an estimated 870,000 empty homes in the UK and enough empty commercial property to create 420,000 new homes", according to the BBC website section on Homes.
2. There are over 245,000 registered second homes in the UK, according to Schofields home insurers.
3. The 2001 census showed that average home occupation in England and Wales had declined from 10 years before, from 2.51 to 2.36 persons.
4. According to the official Housing Survey of 2008/9, 7.7 million households were couples with no dependent children; there were also 6.2 million single person households (up from 3.8 million in 1981).
5. The same survey showed that the average (mean) dwelling had 2.8 bedrooms, rising to 3.0 bedrooms for owner-occupiers. Fewer than 3% of households were defined as overcrowded.
6. According to a 2005 Home Office study, there were 310,000 - 570,000 illegal immigrants in the UK, a figure which MigrationWatch thought to be underestimated by 15,000 - 85,000. This is a separate issue from the 8.7% of the population who are economic migrants to the UK, and whose real net contribution to the economy (after taking into account all benefits to which they and their dependants may be entitled) is a matter of debate.
We are not in the situation we faced in 1945, when soldiers returning home from war squatted on military sites and even caves. The modern "housing shortage" is an arbitrary notion.