Do they work for us at all?

"I discovered that there was a direct correlation between the highest outside earners and those with the poorest attendance records in the Commons" - Martin Salter

Notes and Queries (2)

Words of the Day:

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)

The collective noun for MPs is "an infestation" (for pairs or small groups, "a scurry"). Although gaining currency, "a prostitution" is incorrect; Professor Blanding suggests that the latter usage may have arisen from the recent public perception that Parliament is a "house of ill-repute".

Bad news round-up

Jesse discusses recent comments by Japanese economist Yukio Noguchi, predicting national bankruptcy and hyperinflation (the IMF reckons the crisis could hit in 2019). Jesse thinks the UK and some of Europe will go first; even more worryingly, he turns to spiritual matters (which I respect, but it's a sign of how bad he feels the situation to be).

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.

The economy - how it works

House prices could fall 40%

The above graph is from the Financial Times Alphaville website, as part of an article that discusses Britain's exceptionally poor situation compared with other major economies.

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.

Vote for the Apathy Party

The three Birmingham constituencies aggregated above have over 180,000 registered voters between them, though over 40% failed to use their vote in the last couple of General Elections. Had non-voters come to the polling station and all voted for "None of the above", they would have won in 2005 and 2001, and come second to Labour's "landslide" victory in 1997.

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)