UK Sharia Bonds - ?

As part of the government's blitz of 'look what we're doing' announcements, we now have "Britain to become first non-Muslim country to launch sharia bond: David Cameron to unveil £200m Sukuk".  So what's going on here ?


a.  Political Significance

A couple of weeks ago I posted about how the UK is kow-towing to the Chinese as part of our economic escape plan.

"This is a particularly acute risk for the UK ... In our semi-detatched euro-positioning, our vulnerability to having the City isolated by jealous continental and American financial authorities, and our commendable centuries-old willingness to roam the high seas, we will always be inclined to 'trade our way out of trouble'. Now true commercial trade is a great thing and would indeed be the ideal way forward. But increasingly what we see is a baser trade: the prostituting of our institutions to the whim of Russian and Chinese wealth. If they want to lavish their money on our libel courts or Mayfair shops, that's one thing. But it won't be ending there. Today we see the first of the mega-bargains our desperate UK politicians will enter in order to engineer short- and medium-term relief from our woes. Faustian is just one way to describe it."

There, I was writing about the nuclear deal, but of course that was part of Osborne's Sino-package that included a putatively huge and strategic banking 'n' finance deal.  These are the kind of moves that can leave green-eyed Frankfurt and New York grasping vainly at thin air, reinforcing London as "the undisputed capital of the world".  At least, that's how the dream story-line runs.  Brown hoped to do the same, but Osborne is acting more decisively.

The sharia leg of this burgeoning development causes nervous murmurs on the home political front - see this piece at ConHome.  Should it ?  Given that in technical terms the distinguishing  features of sharia finance are, to the unbeliever, quirky to the point of quaint (see below), objectively the whole thing is a bit like the 'ethical investment' industry: why not let anyone who wishes to cut themselves off from the full range products, do so if they choose?

But obviously there is a heavyweight cultural overlay to this, and maybe objectively speaking is not enough.  I am 'relaxed' about all sorts of 'alien' business influences and ownerships in the UK.  To me it is part and parcel of what I take to be a very traditional British openness to trade and cultural curiosity (which, by the way, is only one strand of British tradition as I know full well).

But I am not remotely relaxed about the rule of UK law and for me there is a simple bottom line.  Provided all this UK sharia stuff is subject to the same banking regs as everything else (and these are enforced with the full force of law, see C@W  passim), let's go for the money and leave Frankfurt and New York fuming.  This proviso is not trivial, and not just because enforcement of banking regs had become a sick joke.  It must surely be the case that hawala transfers are routinely used to dodge western banking regulations (not to mention money laundering); and bringing any such system into mainstream scrutiny must be a highly desirable goal of policy - nay, even an imperialistic power-grab!

b.  Financial Aspects

Sharia finance properly analysed is a subset of general Finance-with-a-capital-f, delineated by some strict rules around interest-payments which must not feature in the story of what A pays to B.  Recalling the informal definition of a Swap - the exchange of cash flows between consenting adults - most sharia-compliant deals are what are known in the real world as total return swaps (TRS), and there is nothing scary or alien about them per se. Of course, they are a bit more complicated than plain vanilla loans etc - but so what?  Lots of financial instruments are.

Far from scary, putting aside the political stuff I'd say the whole thing is pretty amusing.  The restrictions that make these deals sharia-compliant remind one of nothing so much as the crazy, tortuous tax regulations which make certain kinds of (e.g.) UK film investments qualify for attractive tax breaks.  In other words, they are an adventure-playground for shyster tax-lawyers, and sharia will be just the same**.  The arguments over what counts as what; the twisted convolutions required to label interest payments as anything but interest, are hair-splitting sophistry - literally theological.  There already is a service industry around this, with "Islamic scholars" getting good money for certifying individual deals.  The People of the Book know all about this stuff, too, and what a gravy-train for the City it promises to be !
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** Just as with 'ethical investments', one imagines there are disappointments ahead for those who place great store by what they are being sold truly complying with the advertised principles.  I suppose that in some countries, anyone caught playing fast and loose with the sharia interest rules might have their parts cut off  ... a risk that the City boys will need to factor in for themselves, eh?  


This post first appeared on the Capitalists@Work blog

 
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Doglight

Pic source: http://www.aef.com/exhibits/awards/clio_awards/2005/11

America's 80 million dogs produce 11 million (US) tons of faeces every year, according to this article from NorthJersey.com, which is about DNA-testing the waste and prosecuting non-pooper-scooping owners.

What to do with it?

In these energy conservation conscious times, conceptual artist Matthew Mazzotta suggests using it as a power source for street lighting - see his Park Spark project here.

All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. 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; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.

Quiz Night

We strolled a few yards up the damp road and into the pub. The board outside was there, advertising the competition for 8.30, but there was hardly anybody in. The gambling machine's display seemed to be keeping time with the piped music, until a man returned to it and fed in a tenner, which took several goes.

"It's full."

"I know, I'm trying to get some of it back out."

Gradually the entrants gathered: three chefs on our left, a couple of solitaries at this end of the bar, and a trio of regulars at the other end, hidden behind the pillar.

"We'll start at nine."

A man and his girlfriend dropped in to tell the owner about the funeral arrangements for a local who'd be known to others here, though he'd kept himself to himself.

Then we began. Welcome to the fourth pub quiz at the Castle. Googlers would be instantly disqualified. Prize a ten pound bar tab for the winner, and a packet of crisps for the best team name.  As Brummies, my wife said we should be the Peaky Blinders.

"Is there a picture round?"

We said it would be whoever could draw the best picture, but the barman handed us all a streakily-copied sheet of logos to identify.

A couple of years ago at the Waterman's, a big bloke had come in dressed as a Roman soldier and been thrown out for farting. The question-setter that time had been Lily, who'd escaped the dullness of Plymouth, but she's moved on again with baby and partner. Her sheets were full-colour and artistically illustrated.

Our host began squinting at his iphone and reading out questions.

"What type of monkey lives on the Rock of Gibraltar?"

"Orang-utans," said one of the chefs to his mates.

"Spaniards."

The lone wolves were comparing notes on the picture round.

"What element is needed for all forms of combustion?"

CO2 wasn't right when we came to mark a loner's sheet, but he can't have heard the barman remark "Another oxygen-related question" to the regulars round the corner.

Between rounds, the majority decamped to the pavement outside for a smoke, including Mine Host, leaving his taps vulnerable in the near-deserted bar. Stupid law.

A chef showed us a party picture on his phone, with two ghosts' heads in the group. Later, one of his mates suggested it could be done by someone changing position while the phone panned round. Post-quiz, a couple of girls turned up, one of whom had taken the pic, and she said they hadn't done that.

Next round. One of the loners left abruptly. He'd scored 5 out of 20, most questions not answered and the rest semi-legible. His response to "What do the letters RAM stand for in computing?" had been "ramofocation". (What do the letters THC stand for?)

Another chef came in and was updated on the ghosts.

"What are there twenty-six pairs of in the human body?"

We got an extra point for spelling chromosomes right. We had briefly considered "bollocks."

There was much anguish over what the C stood for in YMCA. And when asked what nuts were used in making pesto, the chefs agreed on cashews. Apparently the answer to "the butcher, the baker and the..." was not Old Mother Hubbard. The cry in fencing was what we'd put, "Touché!", not "Dun ya!" as they'd said - and there was no consolation point for correct punctuation.

Then there was the dispute with the quizmaster.

"What is the coloured part of the eve called?"

"Don't you mean eye?"

"No, there's no i in it."

"No, a y instead of a v."

"It definitely says eve," said the barman, screwing up his eyes and peering closer.

"If it's eye it's iris," said the remaining loner.

We settled for eye.

The Peaky Blinders struggled with the logos. Mercedes and Camel cigarettes were a cinch, but the double W defeated us (Wonder Woman) and the stylised R (Robin, Batman's partner). The head surrounded by a Greek wave motif turned out to be Versace.

The last question was impromptu, because of IT malfunction. "It's covered by the Google bar." "Move your thumb up." "I've done that."

So he thought and gave us, "What Spanish island did I spend a few months on when I was 21?"

"Alcatraz," said the loner.

"Majorca."

"No, it wasn't Majorca," said the barman.

We did our best.

The regulars beat us by two points, one of which I'd lost when I made my wife put yellow instead of white for the colour Wimbledon tennis balls used to be before they turned green. And we'd forgotten the candlestick in the six murder weapons in Cluedo; and it was a revolver, not a pistol (Mine Host had been very firm on that). The winners promptly left.

Best team name was between the chefs, who'd concocted something ending with a c followed by hunt, and the loner's Alone In The Dark. I gave my casting vote for the latter and the chefs accepted the justice of losing out for obscenity.

I stayed on for a half pint of lager while my wife went back to make a cheese and onion sandwich for me, but without onion as we'd used it up. The loner was a graphic designer who told me all sorts of interesting things about design, photography, maintaining copyright on the internet and making websites. He reckoned his 8-year-old child was ahead of him and you didn't need to be in London to go global any more.

A Hendrix documentary was on the screen behind us. I recalled seeing the news of his death as I walked into Newport bus station; AITD told me he'd covered it at college. Memory versus history. I told him what I'd only recently learned about how Bruce Lee had died (aspirin, the studio had spun -rubbish, it was Nepalese hash, especially dangerous if you had no body fat to absorb the toxins); he told me about his own martial arts expertise.

Home for a cheese sandwich, a shot of Chivas and the rest of Hendrix.

All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. 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; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.

ICS: Transporting the poor

Classic fm is broadcasting an advert for ICS, a government-funded scheme launched in 2011 to fund volunteer work abroad for 18-25-year-olds, who "don’t need cash, skills or qualifications", says the official website. Wikipedia (and who wrote the entry?) adds, "Following their placements ICS volunteers embark on a community project on their return to the UK."

Worthy, I expect, and interesting and fulfilling - and upskilling - for the participants. But why restricted to that age group? Anything to do with employment statistics?

Next best thing to the Thames Hulks and transportation to the colonies, I suppose.

But this doesn't go far enough. How about "Club 60 - 105" for the indigent old, to work and teach in the Third World? A few quid a week per head and they're off our hands. There is some corner of a foreign field that is forever Poundland.

All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. 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; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.

Five climate arguments

The point of my recent Five climate futures post was to introduce the idea of future climate scenarios and their likelihood. To recap - how likely is each scenario and how do we know? 

1. Unambiguous warming.
2. Ambiguous warming.
3. No change.
4. Ambiguous cooling.
5. Unambiguous cooling.

The short and obvious answer is that we have no idea. I estimated percentages based on how many there are. I know the estimates are illegitimate in any scientific sense, although I received only one challenge in the comments. Ah well.

The point is this – how do you estimate the likelihood of these climate scenarios using credible arguments? As far as I can see, there are five basic climate change arguments commonly encountered in the public domain. 

1. Science with no predictive track record
2. Appeals to authority.
3. Rhetorical emotional appeals.
4. Images – ice crashing into the sea etc.
5. Abuse – overt, covert and parody

The debate is packed with nuances such the political use of exaggerated risk to control behaviour, but which of these arguments enables us to choose between the five climate scenarios do you think?

Well abuse can be fun and in my view has a useful place in the climate change debate, especially parody. If nothing else it holds before our tired eyes the absurdities of current energy policies and how we stumbled our way into this mess.

So let us humanise the whole debate and accept a more personal and emotional role in our own beliefs. Here are the crucial questions whereby I think we may get to grips with how little we know and how much we rely on authority :-

Which future climate scenario is your best guess?

Which argument supports your choice?

All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. 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; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.

Five climate futures

As I see it, there are five possible global climate temperature scenarios for the next five years. Apart from the unexpected that is! 

1. Unambiguous warming.
2. Ambiguous warming.
3. No change.
4. Ambiguous cooling.
5. Unambiguous cooling.

Scenarios 2, 3 and 4 are where various misguided enthusiasts claim we are at the moment. Climate science is too inexact in its definitions and too saturated with political exigencies for a neutral observer to distinguish between them. Not that there are any neutral observers in this debate.

Even so, what may we say about the coming five years with some degree of confidence? Obviously we have to guess, but if we are able to get over the idea that this has much to do with science, then we may get somewhere.

Commonly observed traits of human behaviour are what guide us through the climate debate which in my view is mostly driven by global political ambitions, middle class anxieties and an undue respect for authority. Even so, it is surely possible to get away from the failures of climate science and take a look at human nature.

Scenarios 1 and 2 should ensure the political and intellectual survival of mainstream pro-AGW climate narratives. The other three, namely 3, 4 and 5 will obviously cause increasingly severe problems for the mainstream narrative.

If we assume that all five narratives are equally probable, and we have no science to tell us otherwise, then there is a 60% chance that the mainstream pro-AGW narrative may fail very badly indeed. It depends of the resilience of the narrative which is undoubtedly powerful for both political and emotional reasons.

On the other hand, there is a 40% chance that it will succeed politically and intellectually, at least for that five year period.

Not that these percentages should be taken too seriously, but we have to make sense of climate change somehow and the mainstream science isn’t getting us anywhere. Most of it is far too speculative as a basis for energy policies which one way or another will end up being driven by the real world.

All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. 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; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.

John Cook's Climate Change Mythbusters 20

This is part of a series reposting material from John Cook's Skeptical Science website. Although he is a physicist rather than a specialist in climate science, he is a convinced "global warmist" and tries to rebut frequently-raised objections to the theory. However, it is always possible to question the data (e.g. this valuable note about measuring temperature) and the line of argument. Please help advance the debate - with facts and logic.

Are glaciers growing or retreating?

What The Science Says:
Most glaciers are retreating, posing a serious problem for millions who rely on glaciers for water.

Climate Myth: Glaciers are growing
“[R]eports are coming in from all over the world: for the first time in over 250 years, glaciers in Alaska, Canada, New Zealand, Greenland, and now Norway are growing.”(JamulBlog)

Although Glaciologists measure year-to-year changes in glacier activity, it is the long term changes which provide the basis for statements such as "Global Glacier Recession Continues". Some Skeptics confuse these issues by cherry picking individual glaciers or by ignoring long term trends. Diversions such as these do not address the most important question of what is the real state of glaciers globally?

The answer is not only clear but it is definitive and based on the scientific literature. Globally glaciers are losing ice at an extensive rate (Figure 1). There are still situations in which glaciers gain or lose ice more than typical for one region or another but the long term trends are all the same, and about 90% of glaciers are shrinking worldwide (Figure 2).


Figure 1: Long-term changes in glacier volume adapted from Cogley 2009.
 

Figure 2: Percentage of shrinking and growing glaciers in 2008–2009, from the 2011 WGMS report

It is also very important to understand that glacier changes are not only dictated by air temperature changes but also by precipitation. Therefore, there are scenarios in which warming can lead to increases in precipitation (and thus glacier ice accumulation) such as displayed in part of southwestern Norway during the 1990s (Nesje et al 2008).

The bottom line is that glacier variations can be dependent on localized conditions but that these variations are superimposed on a clear and evident long term global reduction in glacier volume which has accelerated rapidly since the 1970s.

All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. 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; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.