Tuesday, 30 January 2018

It is not just Russia...

So say the highly intelligent, err, US intelligence agencies.


The USA is in a real bind with China.


On the one hand, China creates the mass market products that keep the American consumer market on the road, including the all-American Apple Iphone X - 100% China made of course by Foxconn.
The Chinese also finance this trade by being the willing buyer of trillions of dollars worth of US T-bills. So much so, that it has become a truly symbiotic relationship wherein unpicking it would really hurt both parties.


But China has also made many of its gains through stealth, subterfuge and outright theft. It's brand new FC-31 fighter is a copy of the US F-35 - America's own newest jet fighter. China stole the plans via industrial espionage. In the corporate world, most manufacturing companies from the West managed to destroy themselves in China, where with no intellectual property protection, their products were copied and delivered more cheaply with no recourse. Far fewer Western companies go to China now, the flow has turned the other way (which kind of works too, those expensive flats in Mayfair needed cocky buyers too....).


Moreover, just today the US is calling out China to be on a par with Russia in terms of a state threat. Not because it is as aggressive, but because it is so much richer and has its vast human intelligence network that Russia lacks.


Militarily too, there is no doubt China could defend its Eastern Hemisphere now from an US attack. It is 10 years since the Chinese sub famously emerged in the middle of the US 5th Fleet off Taiwan, since then they have been busy building even quitter nuclear and diesel subs and better missiles (recently tested in Syria by the Iranians, natch).


So what can the US do, one thing in their favour is that as much as the Chinese detest the West and still harbour deep hatred for the colonial period, they don't much care for the rest of the world beyond it being a source of raw materials. Not for China a global peacekeeper role. For all the talk of the Belt and Road, it is an aggressive economic strategy with little military input. Compare and contrast to the USA post 1945 with bases left and indeed, expanded, around the world.


China has problems at home too in the medium term as it tries to adapt its one-party rule state to the internet age and an impossibly large population to control. But time is on China's side.


How Trump and the US deal with China, always a canny negotiator (see since this month how European oil prices have increased after China/Russia agreed to reduce supplies going West and send them East instead), will be interesting to watch. No President yet has got it right, Trump at least tried with his Syria strike whilst dining with President Li.


What would you do?



Monday, 29 January 2018

Soros Might Actually Be Right For Once

So far as many of us are concerned, George Soros has limited bona fides.  But he's onto something here
"... social media companies influence how people think and behave without them even being aware of it. This has far-reaching adverse consequences on the functioning of democracy, particularly on the integrity of elections ... The power to shape people’s attention is increasingly concentrated in the hands of a few companies. It takes a real effort to assert and defend what John Stuart Mill called ‘the freedom of mind’. There is a possibility that once lost, people who grow up in the digital age will have difficulty in regaining it." ... Soros warned of an “even more alarming prospect” on the horizon if data-rich internet companies ... paired their corporate surveillance systems with state-sponsored surveillance – a trend that’s already emerging in places such as the Philippines. “This may well result in a web of totalitarian control the likes of which not even Aldous Huxley or George Orwell could have imagined,” he said. The companies, which he described as “ever more powerful monopolies” are unlikely to change their behaviour without regulation ... “Their days are numbered.” (Guardian)
It may be though odd that a blogger who's enjoyed a decade of freedom to spout anything that comes into his mind, would contemplate reining it all back.  And of course plenty would argue the dead-tree press and the Beeb et al have long enjoyed mind-warping powers in the hands of an unelected few.  But a glance at what goes on in FB and Twitter - not to mention following the Grauniad's link to this appalling story, makes it all too easy to imagine what's coming down the line for us all.

I refer, of course, to the next general election.  Momentum wiped the floor with the Tory party on social media last year; and right from the start, that organisation nurtured a tech group with exactly this in mind.  Recall how, way back in 1997 when John Major enjoyed a couple of good days on the campaign trail and Labour was having a quite needless attack of nerves, Blair solemnly wheeled out his Big Lie (that the Tories were going to scrap the state pension).  In 2022 or whenever, Momentum is primed to deluge the young and the gullible with endlessly re-tweeted (and disavowable) fake news on a scale we can hardly comprehend.  We can easily predict that ordinary Tories will be driven off the streets, in the sense that no humble campaign volunteer will feel able to knock on doors or put posters in their windows in any but the safest rural constituencies.  Again, this is exactly the effect malicious leftists are planning. 

Free speech is precious beyond compare, and I restate the self-interested blogger's point I made above.  But free speech is nowhere an unqualified right: it is well understood that it is trumped by considerations of potential irreparable harm.  On top of proscriptions against slander and crying 'fire' in crowded theatres, there is the altogether more subtle issue of how, in a courtroom, the judge tightly polices what may and may not be said, utterance by utterance.  Somewhere between the ultra-close supervision of the courtroom and the absolute malign anarchy being hatched for the next GE, lies a balance desperately difficult to draw, but seriously in need of being drawn - and soon.

We said we'd be posting again on issues arising from the Chinese mass-surveillance scheme - and here's another on that broad and vital theme.  What do we think?

ND

Thursday, 25 January 2018

Crime Statistics - Yeah, Right

What is a citizen to make of "soaring crime rates"?  This from the same source that gave us steadily falling cime statistics fro the mid 1990s.  Periodically one reads about various factors suggesting the falling trend might be true - something to do with flourine in the water or no lead in petrol any more.  It would be nice if it were true - it would set us looking for some more equally controllable factors to work on.

Suspicious inflection in 1996 ...
Then there are the 'freakonomics' factoids:  murder rates are down because surgeons are much better at saving the victims of gun and knife.  And all manner of other contributory factors - such as the invention of new crimes - and the ignoring of others (like insider frauds the banks never report, which we've discussed before).

I'd also like to know (and maybe our good friend Kev could tell us) - when did senior police officers start getting bonuses based on crime statistics?   On the graph from that Grauniad article, 1996 is a very suspicious inflection-point (even though that's the Crime Survey rather than police data).

And ... whether ACPO has had a meeting, when it was discussed if their financial lobbying efforts might be better served by seeing that long downwards trend going into reverse.  Here's an interesting quote (Grauniad again). "May risks facing a repeat of the period from 1988 to 1992, when police recorded crime figures doubled in England and Wales. The Tories were in power then ..."

Just wondering, that's all.  I expect that's a thought-crime now - another plus for the statistics.

ND

Tuesday, 23 January 2018

Boris Shows Up May for the Useless Politician She Is

One of the reasons the Iranian revolution 1979-81 succeeded so brilliantly was that the incoming clerical regime delivered an immediate financial win for the entire population.  This they did by the simple expedient of curtailing the Shah's immense military expenditure and returning the money to people's pockets.  Thus, long before the clerics started on the hateful stuff, everyone had settled back thinking - you know what, this ain't so bad.  It gave them a clear run at what they really wanted to do.

What May ought to have done on her own Day 1 was to declare that the amount of the UK's net contribution to the EU in 2016 would be added to the NHS budget - starting the day we left the EU.   She'd have killed dead the silliest meme she now has to face week in, week out; and she'd have had well over half the population militating to get us out ASAP.

Impossible?  Hardly: that's around £8 billion, and the NHS budget 2015-16 was £116 bn.  What with all the clamour and political blackmail we know she will succumb to anyway, it'll be more than £124bn by 2019 come what may.

Boris' latest self-serving nonsense merely goes to highlight the masterstroke that was available to a creative politician back in summer 2016.  Ah yes ...

Might it still work?  Presumably now, Hammond would stamp his little foot, and that would be that.  He wouldn't have had the chance if it had been on his desk when he first walked into the office.

ND

Monday, 22 January 2018

Are QE pension deficits a big hidden problem in the economy?

Whenever a big company goes under these days, much of the post-collapse discussion surrounds the pension entitlements of former employees. The UK Government even has a Pension Protection Fund set up to try the best for the employees who are rightly seen as victims.


Dominic Chappell, of BHS infamy, even lost a court case this week for not sharing the information on his companies pension scheme with the Protection Fund - he may even get locked up for it.


But what has worried me for a long time is the destruction of the Pension industry since 1997 and Gordon Brown's raid on the tax relief on dividends in pension funds.


Since there all the UK defined benefit schemes have closed, these were more generous and could not be sustained after the raid. Also, the pension deficits of companies have grown, long-ago now are the pension holidays companies used to take in the 1990's.


In fact, the total amount raised by the Gordon Brown tax is around £150 billion (about £10 billion per annum, twice what it was alleged to be at the time). Today total FTSE350 deficits are around £17  billion, far from healthy.


On top of this then we have the Quantitative Easing fiasco which should ended 5 years ago. Now, we a very low interest environment thank to Banks and Funds being for by regulation to by Government Bonds which have increased in price, thanks to demand, and shrunk in yield. As a result, despite investing at around 6% more each year and having Pension assets double in the past ten years, pension scheme deficits are rising.


With all the money invested into pensions schemes, companies show less profits and in turn have less money to invest. One of the drivers of the UK economy, in a negative sense, is the lack of productivity driven by low investment. Companies that are struggling end up with no profits at all, see Carillion and others - pension deficits are a key driver toward corporate failure.


QE on top of the Brown reforms has destroyed the UK pension scheme industry. Weirdly, a re-balance economy with the end of QE would quickly see Deficits fall and pensions back to health (in their new defined contribution form which is about 1/3rd as good as the old defined benefit schemes).


It is a big underlying macro-economic challenge rarely addressed and as ever was an attempted Labour reform to the private sector gone wrong!

Friday, 19 January 2018

Chilling Developments in China ...

... in more ways than one.

Firstly, the literal chill that has set in since the new "Xi Jinping Thought" was rolled out, including making China "beautiful" and, errr, less lethal to anyone depending on breathing for their existence.  This of course means switching off coal-fired power stations - not for reasons of CO2 emissions, about which they care little or perhaps nothing, but for reasons of outright air pollution.

I know exactly what you're thinking
Well of course this means people now freeze: and industry periodically suffers power shortages, too.   It also means the coal switch-off is more of an "on-off" and is being reversed whenever things get too bad (for industry, that is: people can put on another blanket) - which BTW is playing havoc in the coal and gas markets.  GDP trumps not only GHG, but pollution as well.

Yes, unless you are the USA or the UK with plenty of gas-fired capacity, phasing out coal is pretty damn' difficult, as Germany illustrates all too clearly.

But we know all this.  Back to China: what's more interesting to me is that "Freeze" article linked to above, from Greenpeace.  It makes extensive use of complaints aired on Chinese social media, which have evidently dodged the Great Firewall.

But for how long?  Read here and here about how China intends to institute a comprehensive monitoring / ranking / stick-and-carrot-consequences system controlling its citizens' every thought and action, very much based on the ubiquity of social meejah.  How many "Social Credit System" brownie-points will be deducted when you post about how the heating won't work?

The first of those two pieces is a definite must-read for the weekend.  Lots of politicians much closer to home than Beijing will be following Chinese Social Credit developments with *interest*.  Chilling?  Oh yes, very chilling indeed.

ND 

Wednesday, 17 January 2018

Political Betting seem to be forgetting something.

https://2.bp.blogspot.com/-K-XMj7qBF8Q/Wl5oJhtEojI/AAAAAAAASZE/oOoih9HqxAIK_yjHyNp3U7OCPMnDhyhigCLcBGAs/s1600/UK%2BICM%2Bporr%2Bfor%2BThe%2BGuardian%2BJanuary%2B2018.png 

Political Betting has very reliable data. And usually, very reliable, if liberal democrat interpretations, of that data.

Two posts today on the ICM poll that puts Labour 1% ahead of the Tories.


2nd is : Only problem Paul (Mason) is that Corbyn’s LAB needs 7-10% vote lead to win majority. We are miles away from seeing the required LAB vote breakthrough. 
Mike Smithson.

The stories are that Labour need a lot more votes than Tories these days to get a majority. A reverse of the last 20 years. Mainly due to the Tories losing big vote share seats in 2017 and taking easier to win Lib Dem seats in 2015. 
And so Labour need to be 7-10% ahead of the Tories to have a majority.

I do not believe that to be true.
here, from PB also, is the 40/41% as seats.


http://www2.politicalbetting.com/wp-content/uploads/2018/01/Election-Prediction-2-e1516108852576.png 

The Tories lose 29 seats.
Labour gain 26.
The magic MAJORITY number is still 326. 
Labour are 38 short.

So the PBers are correct. 
Labour do not have a majority.

But those figures will have Corbyn in Number 10.

 The SNP will be offered far more than the DUP. They will be offered everything they could ever dream of. Including independence referendums. Nationalised shipbuilders. Green energy contracts for farts in the wind. Everything will be on the table. And damn the expense. The IMF is going to be picking up the eventual tab anyway. So they can splurge away on magic money.
Same for Plaid. Same for Green. Who won't even need convincing and would be in Corbyn's bed without the cash.

That's the Progressive-Socialist-Alliance-Workers-Party right there. 329
Lib/Tory/DUP would be a Maximum of 321. And it won't be that. Because the 18 N.I are 
10 DUP. 
6 Sinn Fein.
 2 Independent. 

And a Corbyn party could happily, even longingly, grant an Independence referendum for Northern Ireland. Or even ALL Ireland. To get the Sinn Fein six to sit in the HOC. Just until Ireland is reunited?
And offering the Speaker a job for life? That's another possible vote if needed. History and tradition will have no place in Year Zero politics. Threats, Tolkach and Blat will be the new power. "Accept the New Reality, Comrade Berkovich. Enjoy the fruits of your labours. Comrade General Secretary Corbyn rewards his loyal people. Or else..He can always get another Speaker. Make your choice."
And so that is more than enough for a majority. 

And Old Corbyn hasn't even had to offer the ever persuadable Lib Dems anything yet. Their extremely useful 14 votes wouldn't be hard to buy. Confidence and supply to ease their fears of another national humiliation. And another AV referendum? Government funding of political parties? Abolition of the House of Lords? Nuclear Disarmament? 
A promise for a rejoin the EU referendum. All things Labour were probably thinking of doing anyway. But if they can secure the Liberals, then ..well..why not pretend it was all the Libs idea? Let a thousand flowers bloom in the collective consciousness of new and radical thinking. And a couple of Liberals in the Politburo won't make any difference to Corbyn.

So Paul Mason is probably right.
And Political betting are probably wrong.

 Its STILL the TORIES who need to be 7-10% ahead to form a government.



Tuesday, 16 January 2018

House-training the Labour Party for the 21st Century

The great genius of British society since the demise of Queen Mary 1 has been its ability to tolerate, absorb and generally house-train groups and factions that were ostensibly locked in life-or-death opposition to the establishment - without undue violence.  Since death and destruction in these islands didn't stop in 1558, obviously it isn't difficult to adduce some counter-examples (Civil War and Jacobites heading the list) but I'll stick with my generalisation and point to the significantly greater bloodshed in most other European countries after the mid 16th century.

We'll consider some recent examples later; but first let's briefly consider the reign of Good Queen Bess.  Unlike her sister, who set out to exterminate Protestantism by burning 'heretics' in their hundreds, Elizabeth sought no window into mens' souls and only had Catholics pursued to their deaths if they were actively out to kill her, that is, on account of treason and not religion - a very important distinction.  The Catholic question concerned the obvious civil criminality of seeking the Queen's assassination under a mandate from Rome.   Doctrinally the Church of England was more troubled by puritanism.

In the 19th century, Catholics were re-admitted to the body politic with no particularly baleful consequences that that can be identified today.  Perhaps even more remarkably, one hundred years later the would-be Marxists - including some out-and-out revolutionaries - of the first Parliamentary Labour Party were house-trained (indeed, House-trained) to the point when in 1929 Margaret Bondfield (a relative of mine and one-time firebrand union militant) was mostly concerned about whether or not she should wear a hat when she went to accept her office as Britain's first woman Cabinet minister from the King.  (Her instinct was that she should: but in discussion with the Cabinet Secretary they decided it might get in the way when she knelt to kiss His Majesty's hands ...)

Which brings us to the challenges of the hour, notably militant Islam, and revolutionary Corbyn/McDonnellism.  Defusing the obvious nightmare scenarios in the British Way is a work in progress, and the outcome(s) may fairly be in doubt.  But, not for the first time, I offer you Sadiq Khan as a significant phenomenon - possibly on both counts.

What's he been up to lately?  Here are two interesting straws in the wind.  Firstly, and in the headlines just now, he has responded to the London New Year knifings by announcing a "significant increase" in stop-and-search.  In so doing he is trampling on a lot of left-Labour sensibilities, not to mention going back (again) on a campaign promise.  David Lammy doesn't like this at all, and he won't be alone.  It all confirms Khan as a kneejerk politician in the (in)glorious British tradition.

But there's more, albeit not headlining in quite the same way. 
Mayor of London, Sadiq Khan, said: “Pubs across the capital are often at the heart of our communities or of historic value and should be protected by local authorities in order to protect the capital’s unique character. From historic watering holes to new pop-up breweries, nothing defines the diverse and historic character of the capital better than the Great British Pub. That’s why I’ve set out measures in my draft London Plan to protect pubs against redevelopment, ensure they can co-exist peacefully with nearby residential properties and ensure that councils across the capital recognise their importance to the city’s cultural fabric” ... Sadiq Khan committed to working together with the Campaign for Real Ale ...   (City Hall Press Release)
I put it to you that he didn't need to say all this.  Not every London announcement carries a direct Mayoral quote: he has plenty of deputy mayors to front for initiatives if he doesn't wish to put his personal fingerprints on them. Nope: he's making a point here, and not one that will go down well in every religious quarter.  

The great British genius for sweeping everyone along is still at work.  There is of course, a lot of Momentum moving in a nasty direction.  But who knows: maybe that tide will be turned as well by the time Corbyn kneels to kiss hands.  Continuity Rules ...

ND      

Monday, 15 January 2018

Carillion goes under - first reactions

There is plenty elsewhere on the not-so-swift demise of this huge UK corporate that the Government trusted with some very large infrastructure projects.


- The Government awarded them contracts last year because, according to the Govt advisers, not to do so would have sent them under sooner. HELLO!! Does anyone speak capitalism - if a comnpany is rocky, giving them more business creates a bigger hole for you down the road when it collapses. They are called profits warnings for a reason.


- Much criticism there is of outsourcing, but actually I wonder the role here of Government pushing for too harder a bargain and crazy contractors signing up in the belief that somehow they can deliver to the budgets. They can't and instead we have this. There is a lot of this in the building sector at the moment, Mace has seen profits turned into losses, Lang O'Rourke managed to lose £141 million last year. These are private sector companies doing private deals, but the market has really turned against them. Companies and Government want cheap builds and the greedy company directors are either not walking away or are too afraid of foreign competition.


- Brexit does have impacts, falling investment has reduced the number of projects in the UK, with more competition for those that are left on the table (some big ones like Crossrail are ending).


- The Construction industry is a lot less healthy than the markets think, even house building is coming off what have been an amazing run - inflation costs and a slowing housing market are taking the margins right off the sell prices and the land banks were all acquired at market peaks of late.


- Finally, the siren labour call will be for this kind of work to be done direct by the Government, I really don't see how that helps with the price controls or quality control for the government. It will only stop the projects failing, because, umm, the Government can throw more money at it. So trying to move this work into the public sector will simply create a big moral hazard problem.



Thursday, 11 January 2018

It's OK to Love Nigel Farage?

Do you get why?


You see, today, Mr Farage has pulled a complete blinder. Sat around for months on end he has witnessed the remain-led London media-political complex world banging on and on about a second referendum.


Also, defining leave voters as evil, thick, ignorant racists (well, that is the before the watershed version). Hating the world and wishing they could wind the clock back to happier, Cameron-Blair times. Listening to endless Alibhai Brown on screech-repeat.


But also, rather awkwardly in retrospect, declaring Nigel Farage as the devil incarnate and Nazi etc. etc.


And his response; to agree with them. We should have a second referendum.


Of Course!


Now the dilemma, to agree with ignorant, thick, devil incarnate Nazi or to oppose him. To stand  against everything he is as any true Hate not Hope believer simply has to do.


Which today, now means, errr....to argue against a 2nd referendum. Worse, once you consider for about, oh say 9 seconds, what on earth the question on the ballot would actually be given where we are...you realise this is a terrible idea and complete non-starter. Pity to have been pushing it so hard for 18 months then - but can you be seen to agree with Farage?


No, now the only righteous choice is to continue disagreeing with Nigel and declare there is no necessity or capability to hold a second referendum. Mrs May can lead us best to the hoped for remain holy land of leaving the EU in name only.


So, for all his many faults, Mr Farage remains quite capable of showing up time after time how thick and ignorant the metropolitan remain cheerleaders really are.

Tuesday, 9 January 2018

Battery Mania

Drawing a kindly veil over Mrs M's pathetic attempt to recharge her government, let us pass swiftly on to recharging of a different sort.  It's been brewing for a few years; and now large-scale battery mania has well and truly struck energy markets in the UK and elsewhere.  'Large-scale' applies both to the batteries and mania.  Electric vehicles are an absurdity phenomenon we've discussed before; but it's batteries used on a macro scale that interest us here.

Focussing on the UK: the mania has in large part been driven by the structural evolution of the grid.  The grid has been landed with an ever-more challenging problem of how to sustain our electricity supplies, sandwiched between two unhelpful trends: ever-increasing intermitency from windfarms, distributed generation etc on the one hand, and relenteless closures of reliable coal-fired plants on the other.   Well, the engineers are clever chaps and when money is no object (thank you for the guaranteed rate of return, Minister) there is generally a solution to be found.  We may be grateful, I suppose, that there is a bit of a competitive flavour to the solutions they are deploying: an auction for Capacity Mechanism contracts and a tender process for the plethora of services the Grid buys in to sustain the system.  And to fairly widespread surprise, battery-farms have been among the winners.

Now auctions and tenders are not true markets: there is always a distinct "free-money-on-offer" aspect, and inevitably the Law of Unexpected Consequences cuts in.  Ministers, ever keen to pick winners, had been hoping the winners would be new, ultra-efficient CCGTs (gas-fired turbines), and "demand-side response" (DSR) from large industrial energy users.   They were advised before they started (by myself and others) that what they would actually get was a new industry of less-efficient OCGTs instead - a fairly easy prediction to make when you looked at the numbers.  That's what has happened, to their dismay.  

Even more dismaying - and not widely forseen, though it should have been - was the rash of diesel-farms that also won a lot of the early contracts; a third-world "solution" if ever there was one.  For the future, that's largely been fixed by changing the rules (the usual trick); although the other dirty secret is that the dissappointingly small DSR sector often turns out to be factories that, in order to reduce their load on the grid at peak times, will simply fall back on diesels of their own - not what DSR is meant to be about.  Still, them's the rules.

The final surprise was batteries, the other big winner for capacity- and grid service contracts.  This is less dismaying for Ministers, because (a) everyone knows energy storage will play an ever greater role in any realistic scenario, it's just a question of what and when; and (b) unlike diesel gen-sets pouring out black smoke, batteries aren't a manifest abomination.   They can even be made to sound kinda green (by someone who doesn't know what goes on, out of sight, in the manufacturing process).

However, it wasn't as benign as all that for the Grid, because batteries of today's technology are a fairly suspect long-term source of the flexibility the Grid requires.  They run down in minutes rather than hours; and if hammered, their lifespan is as pathetic as a Mrs May re-shuffle.  We all know this will get better over time (battery performance, that is) but we ain't there quite yet.

So, very sensibly, the Grid has re-specified its requirements more exactly, and the rules have been changed (again) accordingly.  When the next Capacity Auctions take place later this month and in February, the first wave of battery mania should prove to be over; and I'd personally be quite surprised if the prediction of 12 GW by 2021 comes to pass ...

But strange things happen when public money is on offer.  What do all our C@W engineers out there think?

ND  

Is May worse than Brown?

Hmm....


  May Brown
  Policies Management Competence
     
Positives Brexit  
  No Spending Splurge  
  Nationalising Banks  
  No Euro  
     
Negatives PC drivel like equal pay Mandelson
  Dementia taxes Phone throwing
  Great Crash McBride
  Spending Splurge Non Election
  Selling gold at $300 Walking into Cupboard
  Tax Credits 2017 Election
  Energy Policy screw-ups Reshuffles jokes
  Hinkley point Conference speech
    Dodging Corbyn debates
    2017 Manifesto
     

Monday, 8 January 2018

Live UK Cabinet re-shuffle!

In a non-exclusive first for C@W we are going to cover the Government re-shuffle as it happens.


However, it seems none of the Foreign Secretary, Chancellor, Home Secretary will change or the Brexit Head - so the response of our man on the scene so far is this....






Updates later...


possibly....


LIVE UPDATE 17.27: THE BBC ARE REPORTING LARRY THE CAT HAS ENTERED NO 10. IT IS A NON SHUFFLE RESHUFFLE.

Friday, 5 January 2018

Upbeat news - UK productivity growth...unless you read the FT

If you want to read good news stories, check this out in the Financial Times.


Even by the standards of the #despitebrexit media this is a masterpiece. In what is quite a long and intelligent article they managed to get over the good news very quickly. In fact, they managed it in five lines before devoting the next eleven paragraphs to why in fact, everything was indeed terrible and we are all doomed, doomed I tell ya...


I have not been a fan of productivity as the obsessive measurement of it in my own industry leaves much to be desired. From obsessions with productivity come ideas like presenteesim in the office and other pointless paraphernalia of modern working life.


However, for the UK macro there are a few of truth bullets which really paint the picture:


1. The decline of the North Sea production and the easy productivity that went with it (a few people on rigs churning up billions of pounds per quarter) has been disastrous for the UK. This alone accounts for a huge chunk of the measured drop in productivity.


2. There is little retrospection in these numbers, so Financial Services are now way more unproductive than they were 10 years ago for worker output. But, um, most of the output was bullshit and the country had a huge recession, so were the original productivity measures also rubbish - almost certainly yes.


3. Mass immigration and an abundance of low wage labour has kept investment down and wages low. As a huge bonus to this we have had a cheaper cost of living and near deflation in many parts of the economy as well as near full employment - even with the immigration wave. Sadly, all this hugely lowers productivity - why invest in machines when there are people who will do the work for less.




I note the FT lightly touches on the 3rd point but only in passing and dismissively - whilst selectively quoting economists who agree with it and generally hand-wringing. Instead the above tells me we should not overly worry about productivity - the measurement is wrong, its a crap predictor and we cant do much about it anyway, so why worry.

Wednesday, 3 January 2018

Populists, are dicks.

 Image result for trump farage

Its a sad fact, but true. 

The leaders of populism are colossal arses.

From Trump down, whether progressives or regressives, they just don’t have any good leaders.
Worse. They actually  have bad leaders.

Le Pen.
A populist leader who took over an almost Nazi style fascist party managed to bring it all the way to the final round of France's election process. Despite the supreme odds against her of doing this, she did.
And then fluffed the round. Ranted and raved like the junior league politician she is. And scared off those who were wondering if a bit of authoritarianism wouldn’t go amiss in the ungovernable country

Nigel Farage.
An amazing figure. Took UKIP to the heights that actually threatened the Tory partie's ability to hold power. Actually caused the strategic decisions within the conservative leadership that directly led to the UK leaving the EU.
He achieved his, and his parties aim, without having more than two borrowed MPs. A giant political figure of the 21st century. And also a huge ass.

Every time he was getting close to breaking through. To turning those 4 million votes into a powerful, political force to usurp the liberals third place status, he managed to drop the ball.
Not just drop it. But kick it far into touch. Where it landed in a cow pat.

As with Le Pen, when the time for a little moderation came, Nigel would always, always decide instead to turn up the rhetoric to eleven and feed his opponents narrative.

http://d3n8a8pro7vhmx.cloudfront.net/plaid2016/pages/776/meta_images/original/LucasWoodSturgeon.jpg?1475663336
Trump.
Trump I want to do separately so we won't dwell too much. Suffice to say most thought him unfit before he became President. And they have been proved right. He is unfit for the office.
But he is still President. He did take on the vested interests in the same way Farage did. And won the biggest, most powerful prize on earth. Against the same, impossible odds.

But what has he done to cement this new type of politics? To make the new way?  The new idea. The genuine “populist, my people” party.
Not much.

His thin skin has allowed the 'whole world is against us, but we shall endure and prosper,' to become 'the whole world is against me. Well I'll show them...' 
Which was always how he was. So it shouldn't be a surprise he still is. But it still sort of is. He IS President, after all. Although looking increasingly like a one term President.  

Corbyn.  
The man of the hour. He stands on the cusp of power. Of bringing about the Marxist-Lenninist-Chavist-Maoist and whatever other teenage romantic socialist collective ideas he still waves banners in his head for. 

Another, remarkable, against the odds winner. Another written off low ability loser who's populist magic touch has brought great and unlikely rewards.
Instead of being in the dustbin of history, he has managed to almost make communism for the 21st century a reality. Here. In the UK. Where we don't have any time for that 'European' free-stuff, nonsense.
Corbyn is only a few missteps, a Brexit negotiation disaster, and a senior resignation away from being  Prime Minister.
But he is still far from being able to enact every fantasy nationalisation and tax rise, and every defence cut and US annoying law his old heart could desire. Because he hasn't , isn't, prepared for that. He's simply winging it.

What has he done with his power? With his legions of youth and disaffected? 
Not much. 

Instead of setting out the vision and moderating his lunacy, to attract over the last 10% of voters he needs, he spends his days plotting to take over local control of the labour party. 
The man needs 50 seats. Where do they come from? He doesn't know. But he does know that getting Reg Smith into the deputy people's workers committee for regional union appointments will cement control of the Brent East council with Corbynistas.
How long does he think he has? Why is he such an amateur ass?


Geert Wilders does the same. Makes the gains, and flings it all away in ways that are obvious to any impartial observer. What is Carles Puigdemont doing with his unexpected Catalonia Independence windfall. He doesn't know. 
Why is the UK Green party, in the age of Green, losing support and going backwards? Why does a party with no real membership and just one MP have two leaders?
Why dilute an already minuscule profile?
Image result for populists
Even a successful populist, like Sturgeon, had no real vision. Other than the independence one that had already been rejected. From holding the whole of Scotland, the Queen of the Heather, has let it slip away because she never put down any foundations. Never gave any inspiration for what an SNP could be. Other than a failing, incompetent, expensive protest government. 
The SNP lost 33% of their seats in 2017. And many that remain have a very small majority. The revolution could be over before it even began. the smack in the face reality might have come just in time for Sturgeon. If she is wise enough to change.

In all these cases the wind of opportunity was as good as it gets for the 'populists.'

Immigration. Austerity. Brexit. Crime. EU authoritarianism. Poor opponents. Divided opposition. Complacent ruling parties. Misjudged government interventions. Favourable news events and plain old lucky breaks. Everything from holding a referendum, to choosing unpopular Crooked. To van slaughters to letting Spanish police smack old ladies in the face live on TV.

Fortune has favoured the populists.

Its unlikely to continue to do so.

Where are these 'new people's politicians  advisers? Not the batty ones that they all surround themselves with who believe the same rubbish they do. But REAL advisers. Ones with actual power within the operation. Ones who can say, don't do that. Don't say that. Don't look like that. Look like this. Do this. Kiss this puppy. Hug this migrant. Wave this banner on the platform at this time for this reason.  Once you've won, you can be as fascist or communist as you like. But first you have to win.
They don't have them. or don't have them in authority.

So its likely the established order. Left and right social democrats. EU Federalists. Republican and Democrat big beasts will continue to survive and rule.

Because populists, are just amateurs.

Perónism in Argentina was formed in 1946. And has at times been ultra dictatorial, revolutionary, left and fascist corporative right. It became the political force. Then a political idealism. Perónists have won 9 out of 12 elections they have stood in. And to get anywhere, even today,  a leader has to at least claim some kind of Perónist credentials. 
Now that's populism done well. 40 years of  victory. 
Not just a single term. That once it is over everyone will try and pretend it never happened.

Drax and a Climate-Change Tipping Point

HNY, C@W readers everywhere!   Mine's off to a good start as I got round to reading this piece in the Observer:
Burning wood for power is ‘misguided’ say climate experts
Well yes; some of us have been saying this ever since the UK biomass thing really got going (click 'Drax' thread below).  The science is easy, the conclusion a no-brainer.  Then again, no-brain is exactly how the 'green' debate proceeds, as a glance at many of the CiF comments BTL under that story will confirm.  At the same time, there are even more anti biomass comments there too - which wouldn't have been the case even a couple of years ago.  2017 probably marks the year the biomass issue turned around in public discourse.

This whole thing exemplifies neatly a phenomenon one can often identify.  Something, somehow, becomes 'received wisdom' - in this case, that burning trees for electricity is carbon-neutral.  Anyone suggesting otherwise gets deluged with derision and disdain (or, in less advanced societies, gets lynched).  Then, one day, the penny drops and the cry goes up: why did no-one ever warn us about that?  And to the obvious answer: well actually, they did - the response is: yes, but those people are nutters.  (I recall Roy tub'o'lard Hattersley deploying this logic after the financial crash a decade ago.)  It's an interesting cognitive trap: you can't pay heed to the lone voice in the wilderness - because, by definition, he's obviously bonkers - but ...   

But what?  I suppose the only real rationalisation could be:  ... but someone (the 'experts', maybe?) ought to have listened on our behalf, and carefully considered the nutter's arguments, and told us to change our views.  Ah yes, the experts.  I think we know the fallacies in such an argument.  Ho hum; that's the way of the world.  You can get pretty cold and bitter, out there in the wilderness.

The Lie
The 'carbon-neutral' biomass thing was always a demented view, given the lie by two centuries of science and technology: but it wasn't just a batty green opinion.  No, it forms the basis of gigantic 'renewables' subsidies for woodpellet-burning electricity in the UK (almost £1 billion p.a.) which in turn has spawned a substantial new industry: the felling of tens of millions of trees a year in North America;  conversion into wood pellets;  shipping to northern England (we are the world's biggest wood pellet burners, oh yes);  and storing / onward trucking thereafter to the powerplants.  Several port authorities, and firms like Eddie Stobart, have become pretty well hooked on the trade; not to mention Drax and its smaller peers.

We've wondered before how long Drax plc - up to its eyebrows in biomass subsidies that must surely be in question - can survive when it becomes increasingly obvious the biomass game is up.   To be fair, Drax has been diversifying as fast a big company can - which isn't particularly fast but it is fairly purposeful.   They know the score.

Bottom?
My guess is, the government has decided it can continue to brazen out the carbon-neutral nonsense: nobody actually cares about CO2 when push (GHG) comes to shove (GDP).   But air quality is a new-ish issue that really does exercise people.  It's for that reason, not CO2, the Chinese are trying to cut back on coal.  The government will find it harder to ignore the appalling particulates spewed out from wood-burners.  Yes, as well as being worse than coal in terms of (a) energy efficiency and (b) CO2, wood-burning is (c) very much worse as regards genuinely harmful particulates.  (Have a watch of this Drax-plume-tracker - unless you are prone to epilepsy ...)   

So Drax is still in trouble, long-term  That graph may not yet have found the bottom.

ND

Tuesday, 2 January 2018

What does 2018 hold in store for us all?





So, a little belatedly for no real good reason, here are some of the major likely themes of 2018 - time to decide how it will pan out...




1. Brexit - will the current deal stick or will we move back to a no-deal scenario?


2. Remain - will the continual campaign to have a re-vote finally work, via the House of Lords, Judiciary or some other contrived nonsense?


3. Election - A 2017 election was a shock, but with the Tories in disarray is it out of the question to consider there could well be a 2018 election?


4. Trump - Again, for many reasons, will he see out the year at President of the USA


5. North Korea, could 2018 be the year, with the Winter Olympics in Seoul and sanction biting, the year things turn really nasty?


6. It's World Cup year, with Russia in charge could they win it all themselves or will Germany finally win in Moscow?


7. Economy - very goldilocks 2017, will 2018 prove to be a continuation?