Tuesday, March 30, 2010
Housing - plenty of room to drop
In a nutshell
"Jim in San Marcos"
Sunday, March 28, 2010
- We're from the Labour Party, can we count on your support?
- No. I can't vote for any of the major parties, because they won't give us a vote on membership of the EU. I believe that membership of the EU without a referendum is ultra vires.
- Ah, so I'll put you down as UKIP, then.
- No. I don't want in or out, I want a referendum.
- I recall we had one in the...
- No. That was on membership of the Common Market, not membership of the EU.
After asking whether my wife (they used her first name) was in, and my telling them that she was but was otherwise engaged, they left.
See you all again in five years' time, no doubt.
Thr triumph of bureaucracy
Debt: we will have to default
Saturday, March 27, 2010
Funny money and the politics of the Millennium
The exchange below is part of a comment thread from the redoubtable Angels in Marble blog, which recently featured a post about the horrors of school dinners:
NOMAD: My memories of school dinners in the 40s and 50s are quite positive and all in all good value for about 1/3d. We all got fed adequately - and even on occasion there was enough left over for seconds...
HATFIELD GIRL: 1/3d, Nomad? You'll be recalling dividing £67/13/6d by £14/11/5d next. (no writing down, of course).
ROLF: "dividing £67/13/6d by £14/11/5d"= 4, remainder £9/7/10d, I think (not writing down, as you said).Now I teach children who still can't grasp multiplying by 10. The easier you make it, the dafter they get.
£14/11/5d is 8/7d short of £15.
4 x £15 = £60.
So the remainder is (£67/13/6d - £60) + (4 x 8/7d).
= £7/13/6 + 32s + 28d
= £7/13/6 + 32s + 2/4d
=£7/13/6 + 34s + 4d
=£7 + 13s + 6d + 34s + 4d
=£7 + 47s + 10d
=£9 + 7s + 10d, or £9/7/10d.
We NEVER had to do something like that, and as I say, children who can't divide by 12 also can't divide by 10.
The duodecimal system is very good for dividing sums of money by time periods or groups of people, and was appropriate when people were paid in pennies per day or shillings per week.
The x12 and x20 system is not responsible for the rip-roaring inflation of the 20th century that has systematically robbed savers and now pretty much bankrupted the nation (except for a fantastically rich and corrupt elite).
I would also point out that there are 60 seconds in a minute, 60 minutes in an hour, 24 hours in a day - because government hasn't yet found a way to inflate time.
There are also 360 degrees in a circle, still used for navigation the world over.
If ever we do for the pound what France did for the franc in January 1960 (100 old = 1 new), the duodecimal system may come into its own again.
The rule of 10 is just part of the great plan to erase the past and all links to it, so that we may have Year Zero and the socialist millennium.
Thursday, March 25, 2010
Voters to strike on May 6th?
Bremner asks the audience (500+) how many will be voting Labour; I saw maybe three or four hands. Then Conservative; ditto.
The general feeling, after the fun section, is numb helplessness. An old Scot called from the audience that our democracy is a sham; nem. con. Nellist also made the point that there is essentially no difference between the major parties, and that it's all about management now, not political philosophies.
I think we might see a voters' strike come Election Day. I can't see who I can vote for, and I'm not prepared to vote Labour Buggins out just to get Tory Buggins in. Not that my 1/74,000th share of the electoral roll could make the slightest difference.
Wednesday, March 24, 2010
When the penny dropped
Tuesday, March 23, 2010
Do they work for us at all?
Monday, March 22, 2010
Notes and Queries (2)
Hawk: one who hawks, or peddles, his political influence to business interests via the services of a lobbying organisation.
Dove: one who seeks to wash away the sins of Honourable Members, e.g. by retrospectively redefining terms in order to exculpate his colleagues from charges of theft by false accounting. The term is derived from the name of a popular brand of soft soap.
Notes and Queries (1)
Sunday, March 21, 2010
Bad news round-up
Speaking of the IMF, Richard Daughty rehearses his theme of reckless money multiplication, the inevitable bust and the wisdom (so he thinks) of investing in commodities such as gold, silver and oil. He castigates the IMF and its proposed imitator, the European Monetary Fund, for their part in the inflationary process.
Nathan Martin uses official statistics to show how as debt increases, the additional stimulus to GDP gets less. The break point on the graph seems to be 2015, after which extra debt will reduce GDP.
Warren Pollock delivers a punchy two minutes from the Metropolitan Museum of Art, comparing the past civilisations inside with the doomed one outside, currently enjoying sunshine, hot dogs and a cappella music.
I read all the above people frequently. Each has his own take, his own style, but all seem technically proficient in finance while retaining their integrity, their indignation and their hope that something can be done. Their views are echoed in this week's article by University of Montreal economics professor Rodrigue Tremblay, whose conclusion in part reads:
It seems to me that the U.S. financial system, and even the world financial system, have to be profoundly reformed, if they are to serve the real economy, rather than the contrary. If such a reform does not come about, however, I am afraid that we have entered a period of economic difficulties that may last many, many years. In fact, I think that the world economy stands today at the edge of a large precipice.
Saturday, March 20, 2010
House prices could fall 40%
I bought the house we're in, in 1984. I was stunned when, several years ago, a friend told me what it was worth then. House prices have felt like a fantasy for years - maybe that's why people started to borrow against them for consumer spending sprees. Buying with a credit card (or line of credit on your home) never seems as difficult as parting with folding money. It was all a lovely dream.
Now, we're waking up. Britain's underlying troubles seem to me at least as bad as in the early 80s and the early 90s, so it appears logical that when the government faces up to the challenges (instead of credit-spending its way onwards, as is still happening) house prices will go below the "average" line to match the previous lows.
I think it will be a buyer's market for years to come. So for downshifters, it may be worth selling at what seems a painful discount now, to make sure you have the cash to go buy something cheaper (also at a discount, naturally).
Having said that, I have also observed before that the housing market is segmented according to location and price bracket. Prices may well change more (or houses may trade more slowly) in some categories than in others. To see what houses have actually sold for in the UK, look here; for sold prices in the USA, see Domania here.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
Sunday, March 14, 2010
Vote for the Apathy Party
One person's vote is worth c. 1/36,000th of the active voters, and less than 1/60,000th of potential voters*.
Little wonder that modern politics is a matter of computer-assisted psephology, spin and deception.
*Nationwide, the average is 69,935 voters per constituency (2007 Boundary Commission review)
Saturday, March 13, 2010
"Consent has not been given" - the EU and cross-party collusion
Email to Nick Clegg MP via his website, 17 February 2010:
Dear Mr Clegg
I was recently doorstepped by your colleague John Hemming MP, now that my address falls into the Yardley constituency, following recent changes by the Boundary Commission.
Mr Hemming asked whether there were any issues I would like addressed, and my immediate response was Europe, and when we would be allowed a referendum on our membership. He referred me to his support for EDM 20 (18.11.2009) and this, coupled with his courtesy in actually asking for my vote and opinion in person, are factors that, ceteris paribus, would persuade me to vote for him in the next General Election.
However, seeing the behaviour of the other major political parties on that topic, Mr Hemming’s stance will be entirely futile if an EU referendum is not also LibDem policy. Can you give me any assurances that will make it worth while to vote LibDem rather than UKIP in 2010?
Reply from Douglas Dowell, 10 March 2010:
Dear Mr xxx
Many thanks for your email to Nick Clegg MP. Nick has asked me to contact you on his behalf. I apologise for the delay in responding but I hope you’ll understand that, due to the sheer volume of correspondence that Nick has been receiving, it can take some time for us to reply.
Liberal Democrats understand that EU membership is controversial and that many people have concerns about it. However, we believe that membership is vital to Britain and we would point out that an exit would be very far from cost-free. It is true that countries such as Norway and Iceland, by virtue of their membership of the European Economic Area, have access to the single market without EU membership: but they have to pay for it. EEA countries pay into the EU’s funds, as do members, but have no ability to amend or change the laws which are enacted at EU level except, in theory, an ability to reject outright – which would be a potential occasion for the EU to terminate the EEA agreement. This is no real choice – simply a requirement to implement most EU laws without a vote on those laws. This is not a model Liberal Democrats want for Britain.
However, we also recognise that the European Union has evolved significantly since the last public vote on membership in 1975. Liberal Democrats therefore remain committed to an in/out referendum on EU membership the next time a British Government signs up for fundamental change in the relationship between the UK and the EU. This is the vote on Europe that really matters – not a dishonest vote on any particular treaty, but a chance for the European question to be settled once and for all.
Thank you once again for emailing.
Office of Nick Clegg MP
Leader of the Liberal Democrats
My response to Mr Dowell, 10 March 2010:
Dear Mr Dowell
Thank you for your courteous and detailed reply.
Your para 2 gives one side of the argument, which is fine, and I'm sure there are arguments to be made on the other side also. The thrust of my question is not primarily about for and against EU membership; if we had an honest debate and a referendum, I would abide by the result of the people's decision, whichever way it went.
In my view, this is the biggest constitutional shift since 1688. The issue is so great that it cannot be limited to an imprecisely-worded rider to a raft of manifesto commitments and aspirations. The fact is, we haven't been asked and the status quo, half in and half out, is one we have come to without proper democratic authorisation. It is like finding oneself being married by proxy, without banns, vows or exchange of tokens. Consent has not been given.
It is nothing like adequate to promise a vote "next time" there is some "fundamental" change. You will be aware of the ratchet-like legal process that has already commenced, and the way in which EU Commissioners and others find their positions and pensions conditional on their active support of ever-closer union.
From the street, it looks as though all three major political parties have colluded to repudiate democracy, and some would say that the political class as a whole has therefore lost the moral right to claim to represent us. This disconnection between rulers and ruled, together with the growing gap between the financial class and the consumers and workers they have abused, may threaten economic and social stability within the next generation.
I simply cannot use my vote to legitimise any party that refuses me a vote when it most matters. The LibDems appear to take the franchise seriously, with your call for the STV/Alternative Vote, and you have worked hard to build connections with local communities; why so shy of a referendum?
No further response yet.
Sunday, March 07, 2010
House prices - Wave 2
If you add up the nominal assets of the three banks - $903 million - and downgrade them to their real value as implied by the losses borne by FDIC - $602.3 million - you will find the collective assets were overvalued by 49.9%. In other words, current estimated real estate values should be cut by 33.3%.
These were banks operating in (now) economically distressed states - Florida, Illinois (both with official unemployment rates at or exceeding 11%), Maryland (over 7 % unemployment), so you can't necessarily apply that regrading to the whole of the USA.
Nevertheless, those states are relatively heavily populated, and so are the others now showing high rates of unemployment - see this US population map. So it may well be that the US housing market in general may need to be reassessed. If, as Denninger says, he is "generous" in estimating houses to be overvalued by 25%, that means we need to cut nominal prices by 20%.
This is borne out to some extent by reported house sale prices - see this real estate website - though the Northwest has shown a rise (why?).
And then we have to consider properties repossessed by lenders but not sold, and owners who are sitting on their properties and refusing to sell.
The UK, with its much more densely-populated land, maybe somewhat different; but I think that when all the recent financial stimuli stop and we get past the next General Election, we may see clearer evidence of declining valuations here, too.
ADDENDUM (10 March):
A counter-argument would be that the FDIC has applied a "forced-sale" valuation, as with individual or company insolvency. On the other hand, the FDIC must be in no hurry to overstate its obligations/losses - its own finances are already very shaky - and there are already many forced residential property sales actually ongoing, so the regrading of assets may to some extent reflect actual market conditions.
Wednesday, March 03, 2010
Grit your teeth, Scrooge
From "Naked Capitalism"
Tuesday, March 02, 2010
A passionate polemic, seductive in its combination of apparent political and financial savviness, high-level generalization, defrocked moral preaching, enemy-finding, self-pitying despair, self-castigation. Clearly one who has adopted Marcuse's Marxian-Freudian notion of "introjection". And one who secretly welcomes gotterdammerung because (surely) it is the necessary precondition of rebirth and the Golden Society. Don't believe his reference to species extinction - if he believed that he wouldn't bother to praise the international South American bartering system.
Yes, the system is in crisis - but it's fixable. The US medical system is about 3 times more expensive per capita than in the UK, there's a lot of room to cut costs. When the dollar crashes and house prices hit the floor, people won't have to earn the same money as before to make a living, and they'll begin to compete in the global market. And we surely don't really need the level of material possessions we have now, nice though it can be.
Where I do agree with this Jeremiah, is that a load of fat b*st*rds will have to be trimmed.
Put me down as a hope fiend.
Monday, March 01, 2010
Democracy: why bother?
Salami-slicing the franchise
At today's Conservative conference David Cameron promised real action in six key areas to help get Britain back on its feet
6: Change politics
Reduce the number of MPs, cut Whitehall and quangos by a third, and let taxpayers see where their money is being spent.
Comments to the above:
At 8:32 AM, Sackerson said...
6. Isn't reducing the number of MPs another step in the de-democritization of the UK?
At 1:53 AM, Chris Whiteside said...
Sackerson: a 10% reduction in the number of MPs won't have that effect, no.
At 8:38 AM, Rolf said...
Chris: thanks for your courtesy in responding. I have to disagree: a 10% reduction in MPs is an 11% increase in constituency voter numbers and so a corresponding decrease in the value of my individual vote. And where will it end?
Ourself, by monthly course,
With reservation of an hundred knights, by you to be sustain'd,
Shall our abode make with you by due turns.
GONERIL (Murmurs to Regan) He may enguard his dotage with their powers,
And hold our lives in mercy.
(To King Lear) It is not well! Dismissing half your train, come then to me.
KING LEAR (To Goneril) What, fifty of my followers at a clap!
REGAN I entreat you to bring but five and twenty:
To no more will I give place or notice.
KING LEAR What, must I come to you with five and twenty, Regan? Said you so?
REGAN Speak't again, my lord; no more with me.
KING LEAR (To Goneril) I'll go with thee:
Thy fifty yet doth double five and twenty, and thou art twice her love.
GONERIL What need you five and twenty
REGAN or ten!
GONERIL or five!
REGAN What need one?
(For those who attended school after the educational reforms of the 1980s, Shakespeare was an English writer and used to be regarded as an essential element of our cultural heritage. Yes, a bit like Carol Ann Duffy, as you say, Blenkinsop Minor; but only a bit.)