USA: withdrawing from world affairs?

It may seem perverse to wonder whether the USA is withdrawing into an isolationist shell only a couple of days after it has orchestrated a rather modest coalition[1] into military action against the Houthis.  World Policeman, or what?  Yet I can't help feeling this may be the reflex action of a former bruiser who was in the process of retreating from the fray ("leave it babe, he ain't wurf it") when somebody rushed up to take another swipe at him anyway.

Well, maybe that will persuade him to get stuck right back in there again.  People inside and outside America have been urging its government since the first few years of the Monroe Doctrine to disengage from the ROTW and concentrate on self-sufficiency and domestic affairs.  That long-lived policy saw American governments intervening all over the place, to no obvious good effect, for many years.  There was always a "leave it babe" faction advocating the opposite[2].  But overseas intervention is a hard habit to break.

But what would getting stuck right back in there entail, in a world of truculent Russians, increasingly confident & capable Turks, Iranians and N.Koreans, an out-of-control Netanyahu, and, errr, China?

For one thing, it would require military spending on an implausible scale.  The USA of Bush / Clinton / Bush / early-Obama not only operated with no serious Russian threat and only the early signs of Chinese (and Iranian) upsurgence, but also with far and away the biggest & best-equipped armed forces on the planet.  Not any more.  The Peace Dividend[3] has been taken in no uncertain terms, and the USA could no more fight the fabled "two big wars and one small one, all at the same time" than fly over the moon.  (And it's not very good at flying over the moon any more, either.)

So what are the voices that will prevail, longer-term, in Washington?  There is certainly a bellicose "pivot to China" lobby, which thinks in terms of defending Taiwan and the South China Seas.  There's another modest coalition of nations behind this one, too (always us and the Aussies, eh?  Us with our two naked aircraft carriers and all.)  But drill down deeper, and the practical measures being advocated by all except the outright headbangers are a great deal less offensively-minded than in years gone by.  The talk is of porcupine defence, stand-off weapons, drone-swarms etc - not marine divisions storming up the beaches under 100% air-superiority.  Just as with the Roman Empire: when you trade in your stabbing sword for a long-sword, you're basically on the defensive, however widely you cast the perimeter. 

And that's the warlike lobby - many of whom would withdraw substantially from the Middle East, too - not to mention looking to Europe for the bulk of support for Ukraine.  The outright isolationists & Trumpists would cheerfully deal with China - perhaps in return for their taking N.Korea out of the equation.

And what will Starmer do then, poor thing?  Some, of course, think he'll rush to Rejoin.  There could conceivably be an intelligent offering from the EU on that score.  But, interestingly, his track record as DPP was of shameful, grovelling obeisance to Washington, which seems to be a deep instinct for him.  

He'd certainly keep the RAF busily bombing on whatever coordinates Biden dictates.  While old Joe is still slugging it out at the bar.

ND

_______________

[1] What were we doing there?  The answer is obvious: the traditional combination of (a) the general policy of sticking with our biggest & most important ally, come what may (not entirely without merit, though Wilson never saw fit to gratify Johnson in Vietnam); and (b) the age-old tradition of us in these islands:  show us a good fight, and we're in!  (a.k.a. oi'll foight any t'ree of yuz!) 

[2] It's been argued that the only thrust under the Monroe Doctrine, broadly conceived, with genuinely strategic justification was the annexation of Hawaii in 1898.  The others, all over Latin America and even beyond, were generally deeply controversial within the USA itself

[3] What peace? - Ed

Competition: Predictions for 2024

So here we are, crystal balls at the ready, testing our predictive powers on the year ahead.  What will 2024 bring?  Some of the big unknowns for this year are rather obvious "known unknowns", of course, but please address yourselves nonetheless to the following questions:

• UK GE:  date (month);  and number of Labour MPs after the GE 
• US Presidency: who wins?
• Size of V. Putin's share of the Russian vote (as announced)
• By how much, and in what direction, will the FTSE100 change between midnight UK GE polling day and the end of 2024?
• Length of Sam B-F's gaol term upon sentencing (note: zero is a number).  Extra point for size of the fine in USD
• Where will Man Utd rank in the Prem at the end of the '23-4 season, and who will be manager?

Go for it!

ND

"What the Science Says"

For context, in philosophical terms I am (approximately) what is termed a scientific realist, meaning that (a) there are objective truths about the physical world, whether we know them or not - 'Realism' - and (b) science is our best tool for edging towards knowledge in that realm.  I say 'edging' because there's nothing linear, predictable, or even inevitable about how scientific knowledge advances.  Arguably, it sometimes even goes backwards.

There are complexities along the spectrum which we may identify as stretching from maths & formal logic at one end, to "social science" at the other.  Maths and logic advance ratchet-wise: since the late 19th C, what constitutes a proof is not in contention, and new results layer atop old ones in an ever-growing edifice built on firm foundations.  It's fair to say there are some philosophical challenges in figuring out the 'meaning' of some results in formal logic: but results they are.

At the far end of this continuum, use of inverted commas is essential: how much of "social science" really deserves the moniker?  Even linguistics has thus far disappointed, for all the claims that Chomsky's work is a science.  But formal logic sets the standard; physics and chemistry, at least, reckon to be bound by it, and I think we broadly know what we mean by (real) Science.

That said, professional scientists frequently let the side down in a big way, with weaknesses in several dimensions (not necessarily all at once):

• they tend to forget that, Newtonian physics having been well and truly shown to be in error (even though admirably and formidably consistent mathematically), almost any current theory is up for revision.  They sort-of know this, but often don't behave accordingly.
• many, if not most of them are cowards (i.e. 'just human'), and won't go against the prevailing dogma - whatever their own results and reasoning suggest.  The dominant dogma in question might be the current scientific paradigm, or some crazy political diktat, but they ain't gonna be the ones to rock the boat.  This makes their claims to objectivity and purity of method particularly galling.
• many are venal (i.e. 'just human') and money speaks very loudly, in science as elsewhere ...    

We are living in a ba-ad time for science, which betrays all of the above shortcomings aplenty.  Exhibit 'A' is "climate science", and I give you two concurrent headlines from the Graun today: 

Climate scientists hail 2023 as ‘beginning of the end’ for fossil fuel era 

World will look back at 2023 as year humanity exposed its inability to tackle climate crisis, scientists say

OK, it's possible to force-fit a ropey kind of reconciliation onto these two statements.  Conversely, it's possible to retort they prove that scientists are indeed capable of disagreeing in public.  But what interests me more is how (i) "scientists say" can be enlisted to make any point that suits the writer; and thus (ii) how ridiculous it is for anyone to say that "we should follow the science", as if that would result in an unique course of action.

Personally, I strongly suspect that climate scientists (in inverted commas, if you prefer) are in agonies right now, not daring to admit that when they say "it's almost too late to save the world from ... [fill in favourite apocalyptic prediction here]", their own calculations - right or wrong - tell them it's actually wa-ay too late.  I say this with due respect for their earlier pronouncements - in fact, complete respect because, for the sake of argument, I accept them as valid.  My suspicion is a self-contained observation about those scientists' agonised state of mind, an observation that requires no judgement on, and makes no comment on, the Realist "right-or-wrong" aspect.  And why the agony?  Because they fear that if the world knew they really think the game's up, there wouldn't be quite as much appetite for their next project or policy proposal, be that an altruistic fear or one motivated by self-interest.

Exhibit 'B' is of course the disgraceful way in which many university biology departments are allowing themselves to be strong-armed into pernicious, arrant nonsense about sex and gender.  But that one's for another day.

Notwithstanding the foregoing ... Happy New Year!  The tradition 'NY predictions' compo to follow in a day or two.

ND

Piers Morgan vs Sweary Goalkeeper - no contest!

It's Morgan again - & this time he chooses to pick a fight with the nation's choice of its beloved Sweary Goalkeeper as Sports Personality of the Year.

The man has completely taken leave of his senses!  Just as Boaty McBoatface was justly the nation's resolute choice in one popular contest, so is Mary Earps this time around.  We're British.  We're like that.

"Shouldn’t it have been given to someone who actually won something in 2023?", he bleats.  No, dickhead, it's a Personality contest, clue in the name etc etc.  Aren't red-top journalists supposed to have their finger on the popular pulse?  Who exactly pays his salary - and why?

Festive greetings to all!

ND

"Interpreting COP28" - easy!

Lineker Lookalike compo, UAE entry

Each COP since at least COP21 in Paris has claimed to be the "last-chance-to-save-the-world, one-minute-to-midnight" etc.  Each one breaks up with tearful hugs all round - "we've done it!" - and those confected whoops of joy one becomes accustomed to in TV shows where, at key moments, someone at the front lofts a placard reading Everyone Whoop Now Like Demented Gibbons! and the live audience complies with distressing readiness.

Then we read The Text.  The buyer's-remorse hangovers start almost immediately.  What does it mean?  FFS, you can drive a coach and horses through that!    Well of course: what did you expect?

This time we have the following (my emphasis): 

... calls on Parties to contribute to the following global efforts, in a nationally determined manner, taking into account the Paris Agreement and their different national circumstances, pathways and approaches: (a) Tripling renewable energy capacity globally and doubling the global average annual rate of energy efficiency improvements by 2030; (b) Accelerating efforts towards the phase-down of unabated coal power; (c) Accelerating efforts globally towards net zero emission energy systems, utilizing zero- and low-carbon fuels well before or by around mid-century; (d) Transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner, accelerating action in this critical decade, so as to achieve net zero by 2050 in keeping with the science; (e) Accelerating zero- and low-emission technologies, including, inter alia, renewables, nuclear, abatement and removal technologies such as carbon capture and utilization and storage, particularly in hard-to-abate sectors, and low-carbon hydrogen production; (f) Accelerating and substantially reducing non-carbon-dioxide emissions globally, including in particular methane emissions by 2030; (g) Accelerating the reduction of emissions from road transport on a range of pathways, including through development of infrastructure and rapid deployment of zero-and low-emission vehicles ...

One can have a bit of fun parsing all the UN-speak boilerplate guff (which lobby is being appeased with which empty form of words etc), but let's stay with the salient bits.

Tripling renewable energy capacity by 2030.   This mostly means wind and solar.  Setting aside the gross implausibility of this target; greenies, please note that wind & solar capacity is a very poor guide to wind & solar output of electricity.  Average for solar: around 10% of nominal rated capacity: for wind, maybe 25%.  Challenging.  And that's before the system balancing issue is addressed, not to mention the grid issues (multiple). 

Towards net zero emission energy systems.  What are 'energy systems'?  A vexed point - see below - and very relevant for ...

Transitioning away from fossil fuels in energy systems ... to achieve net zero by 2050.  This was supposedly the Great Triumph: the first ever explicit mention at a COP of fossil fuels!  Of course, many wanted Phase Out or even Phase-Down, in preference to Transition Away.  Hard luck.  Look around you - who was hosting? (and who'll be hosting next time ..?)

Nuclear / CCUS.  Nuke is the big win for France; and CCUS for the oil industry.  Many greens hate both with a vengeance.  More tough luck.  Look around you.

So - what are 'energy systems'?  The obvious interpretation is power generation, plus heating.  This former is the only sector where serious (albeit flawed) detailed work has gone into what Net Zero might actually mean.  But of course it ain't enough for many.  Here's a bleat from the Graun: 

... the ambiguous term ‘energy systems’ in the agreement, and how it should be understood ... This ambiguous term is what enabled textual agreement between the 130 countries at Cop28 that wanted a phase-out of fossil fuels and the oil- and gas-producing states who didn’t. The former are absolutely clear that energy systems should be taken to include transport energy – they would not have signed it otherwise. The latter want you to believe it doesn’t... This is a battle for interpretation. It is vital that all supporters of climate action insist that Cop28 has called for the gradual transition to a non-fossil fuel future. Saying the opposite will be self-fulfilling.

The Graun correspondent's 'evidence' is a bit of background puff-wording he likes, that appeared on a UN website.  Nothing direct or specific.  My counter-suggestion would be that, particularly as to transportation, there's a completely separate and explicit little subsection on that sector [(g) above] which makes no such prescription; but only 'reduction of emissions from road transport' (not even air travel or shipping; and certainly not agriculture).  So, no - transport is not in 'energy systems'.  And there it is.  Simples.

But the battle for interpretation will rage on.   Bald men, comb ... COP28's 'text', unlike that of Paris 2015, is not a Treaty, it's entirely pour encourager.  Onwards to COP 29 and, errr, Azerbaijan!

ND

Harry vs Piers: couldn't they both lose?

Whenever I see someone who's done one Very Good Thing, but is otherwise seriously reprehensible, I am reminded of Auberon Waugh's dictum on Rupert Murdoch:  for crushing the print unions, Murdoch deserves a dukedom.  For everything else - one of the less pleasant circles of Hell.  Piers Morgan has long been in this category, his One Good Thing being unremitting onslaught on the hypocrisies of the House of Sussex.  For the rest, well, how has he escaped sanction here on earth, let alone Hell in the life to come?

Ironic, then, that Harry Sussex might also be working his way towards doing One** Good Thing as he lights a fuse under Morgan.  Harry has his Dukedom already, of course - maybe we can regard that as a down-payment.  And, come to think about it, he already has his circle of Hell ... well, purgatory, anyhow.

Hopefully, they can both lose.  Hopefully also, Harry is redeemable.  We must all hope for redemption.

ND 

___________

** Let's also grant him full credit for some of his pre-Markle charity endeavours.    

Education: competing theories on how to make it worse

Ever a reliable source of glimpses into leftie angst, this week the Grauniad provides us with these competing accounts, within two days of each other:  

Scottish schools have tumbled from top of the class.  Pupils became unwitting guinea pigs of faddish, unproven theories – and paid a high price ... England’s performance on the other hand, with some caveats, held up relatively well, even with the impact of the pandemic, and it has moved up the international tables ... there is little doubt that, educationally, England is performing significantly better than Scotland.

Peers call for urgent overhaul of secondary education in England:  there is too much learning by rote and many key Tory changes should be reversed 

The former article goes on to make it explicitly clear that for the Scots "faddish, unproven theories", we should read "progressive claptrap": read it if you're interested in more of the details.  In terms of those baleful "Tory changes" in England, here's what the Graun says, contrasting them most favourably with Scotland: 

The comparison with England is instructive ... To take the example of maths, there has been significant investment in effective models of teaching from the highest-performing systems in the world. The data shows that it is paying off, in line with the international evidence that high-quality, evidence-based curriculums are a very good and cost-effective way of improving education outcomes.

It's pretty clear that for anyone broadly on the right with the slightest regard for social equity (whether for altruistic or self-serving reasons), providing good education for the masses to facilitate any latent potential for meritorious advance is one, if not the main, central plank of policy.   It ought to be so for lefties, too.

Sadly, education, and what constitutes "good" in this context, are highly contested, not least because for lefties (and Jesuits) it is an ideological battleground and they have more interest in politically-motivated indoctrination than in what might be termed "objective learning".  (That's when they don't have outright malice and social sabotage in mind.)  In leftist countries like China (and, in former days, Soviet Russia), they are simultaneously keen on both ideology and solid learning.  Because they are in charge, they have practical concerns and an economy to build.  

In the west, the left carelessly takes the economy for granted and cares not a fig for genuine learning: they (the left elite) already know all that needs knowing, and the lower orders don't need to be equipped with anything beyond some slogans of the elite's devising.  They've obviously succeeded triumphantly in Scotland - once rightly proud of its education system - and wish to set about English schools in turn.  A plague on them: recall what Christ said about the fate of those messing with the wellbeing of the young.

ND

Musk, Twitter & free speech

Having a brain the size of a planet doesn't in any way guarantee clear thinking or intelligent decision-making.  But large cranial capacity coupled to a high degree of bias towards action, rather depends upon there being sound judgement in tow, if crazy things aren't to result.  Exhibit A, one E.Musk, who by all accounts is exceptionally clever; is demonstrably ultra-strong in the initiative department; and whose practical ventures include some astonishing achievements.  And yet, his track record with Twitter from the very start has been one of crass ineptitude - a rich man's folly, ill thought-out.  

Can his primary ventures (Tesla, SpaceX) be so comfortably on autopilot now, that he has spare time to engage properly in this manic, frivolous hobby?  Presumably not: and perhaps that's why we see such an utter fiasco unravelling.  Is there a sound business plan for Twitter lurking somewhere there, merely being hindered temporarily by some unforeseen teething troubles?  We hear clearly enough the statement that is supposed to sum it up, Twitter supposedly being strategically positioned at "a unique and amazing intersection of Free Speech and Main Street" - but that sounds to me like so many a brilliant plan to exploit some cunningly identified synergy-on-paper (if not merely a post-rationalised excuse).  Might sound great, but where's the proof it'll work?  Every VC and PE fund hears twenty glib pitches like this each month.  Zuckerberg got there first, anyway.

Speaker's Corner at Marble Arch is at just such an intersection, but I don't see anyone building a business empire on it.  I do, however, see all manner of madmen ranting there of an afternoon with the occasional fist fight breaking out.  Which brings us to another aspect of all this: Free Speech, an issue on which Musk declares himself to be a fundamentalist.

Another failure of judgement, because there are no fundamental positions on Free Speech this side of North Korea (where they simply set the dial at absolute zero).  Everything else is a position on a spectrum - even in the Land of the Free with their hallowed 1st Amendment.  There are all manner of things you'll be prosecuted for saying or writing, in the USA as elsewhere (including Speakers' Corner).  The argument that a medium like Twitter is "just a platform" is as vacuous as if the Times declared itself to be just some sheets of paper with black ink on them.  The only pertinent difference is, it's easier to pin down the Times.  Oh, and perhaps also that the Times isn't so beloved of da yoof.  It is, however, owned by someone with pretty much the same amount of political clout as the Musks of this world, so it can't simply be that the tech magnates hold more sway in Washington etc.  Let's see what the next US election brings - or rather, what happens afterwards, in 2025.  Social media carnage is pretty much guaranteed next year, along with maximal Russian attempts at interference.  

In any event: does anyone see where Musk is going with Twitter - and can a genuinely compelling commercial narrative be framed?  Business case - or nutcase?

ND

Goodbye, Darling

We were never very kind towards Alistair Darling here.  Well, a Labour Chancellor, who once supported a Tobin tax - what do you expect?

But, to be charitable - as today we should - how could anyone have followed Gordon Brown in that a role, which meant reporting to the man hour by hour, being second-guessed all the time?  Quite amazing that he maintained the dignity he did.  BTW, he wasn't at the Treasury when Brown did most of the damage (1998-2007).  Oh, and he chaired the 'No' vote campaign during the Scottish Inde1 referendum.  Yes, we did have a bit of regard for the Badger.

RIP, Darling.  Tough trade, politicis.

ND

Euan Blair's Grand Adventure

Reading about the business fortunes of that prodigy Euan Blair (supposedly worth £420m at one stage - but very much on paper, we must conclude), I felt transported back to the extremes of the dotcom bubble of 25 years ago: 

Euan Blair’s apprenticeship company Multiverse has reported a near-tripling of pre-tax annual losses to £40.5m – its seventh straight year of losses since the son of the former prime minister Tony Blair set it up in 2016.

Seven straight years!  Wonderful!  There was a Doonesbury strip at that time, showing our hero Mike, by then in middle age, presenting his start-up business plan to an insufferable and very young exec at some private equity firm, who says something like: "Hmm - you project a loss this year, and more next year, and even more the year after: excellent!  Frankly, Mr Doonesbury, we find that businessmen of your generation generally just don't get it."

Still, who's the fool?  Last year, Blair Jnr ... 

... was awarded an MBE for services to education.  He also bought a five-storey townhouse in west London for a reported £22m. The seven-bedroom residence, which he shares with his wife, Suzanne Ashman, and their two children, features a two-storey “iceberg” basement with an indoor pool, gym and multicar garage.

Oh, but then he goes and spoils it all: 

“I’ve always been clear that we believe a sustainable, profitable company is the best institution to deliver our mission, and I am accountable for building it,” he said. “And that’s why this decision needed to be taken.”

Well, well - he wants a sustainable, profitable company: who'd have guessed?  What a hide-bound little conventionalist the man is.  Careful, Euan, if you go setting expectations like that, somebody will conclude that maybe you ain't the one to build it after all.  And that 'decision' of his?  Why, sacking 44 of his staff, of course ...  His very middle name is 'sustainable'.

ND

Hunt's Autumn Statement - open thread

So - what do we think?   Does Hunt's Statement change anything?   Is the Tory goose so truly cooked, nothing can save it?   Has he succeeded in laying a trap for Labour?   Is he scorching the earth ahead of 2025, Gordon-Brown style?

Answers on a postcard ...

ND

Hockney at the Lightroom: outright genius

Rather late in in the day I have at last visited the extraordinary, innovative Hockney display in the Lightroom (London).

Hockney is an outright genius, on a par with Picasso, and more industrious (yes!), constructive and philosophical to boot.  Nobody has thought harder, and experimented harder, with the art of the visual space and indeed the visual space itself than he, deploying remarkable insight & vision (in every sense) alongside technology, the latter brilliantly displayed here - to vastly greater effect than his RA show a few years ago, or a couple of TV programmes of around the same time.

Sorry not to have been in a position to recommend it sooner; because it only runs until 3 Dec, and tickets for some slots are sold out.  So time is dreadfully short.  Still, if you can ...

ND

Biomass & litigating against Drax's costly little game

As noted here before, there's something ludicrous and indeed ultimately dangerous in governments making targets that are "legally binding" - particularly targets of the purely aspirational / virtue-signaling[1] kind - thereby inviting lawsuits when somebody can find an argument that the target won't be met.  My earlier observation was that governments will soon tire of this costly game, and will find ways to imunise themselves against it.  The best thing is not to set "legally binding targets" in the first place, because the alternative remedy against endless litigation is to put government beyond the law, a very dangerous step indeed.  

Anyhow: someone has seen fit to litigate against HMG for its ridiculous "BECCS" policy - bioenergy with carbon capture and storage.  For those unfamiliar with the notion: some kinds of bioenergy may fairly reckoned to be (almost) carbon neutral.  If one captures this energy output (e.g. as electricity), and permanently sequestrates the CO2 emitted in the process, one may with equal fairness be reckoned to have achieved "negative emissions" (subject to having accurately reckoned on the extra energy, emissions etc needed for this entire operation). 

Even on its own terms[2], there's a gigantic flaw in this logic (along with some smaller difficulties).  In practical terms and with existing technology, to do this on the industrial scale required to be useful, the range of biofuels that may be employed is essentially confined to rather high-quality wood, which only comes from the trunks and boughs of mature trees.  But using these as fuel is far from carbon neutral over anything like a sensible timeframe.  Even with perfect counterfactuals the resulting "carbon debt" is measured in decades or even centuries; or maybe it's outright irrecoverable.  Drax - the world's biggest tree-burner, likes everyone to believe they are burning bits of old bark and sweepings from the carpenter's floor - but that's utter bollocks.  The bio-stuff that genuinely doesn't incur much carbon debt when it's used as fuel (e.g. the aforesaid crud; the products of coppicing; fast-growing reeds etc) just can't be used by Drax - it simply ain't the right quality to be used by their kit.

But.  The UK's plans for achieving NZC 2050 are wholly dependent on BECCS - just as indeed are the UK's credentials as regards its current CO2 performance significantly dependent upon Drax and a handful of other industrial-scale tree-burning power stations, whose contribution to the UK's numbers (not to mention whose subsidies) depends upon a "carbon accounting" sleight of hand which allows them to ignore the carbon debt they run up when burning high-quality timber.  Drax isn't reducing CO2 emissions right now (as it is being subsidised to do), it is in fact increasing CO2, because burning biomass with long carbon debt is even more CO2-intensive than coal-burning; and twice as much as burning gas, which in the UK is nowadays the only practical alternative[3].  

The whole thing is a multi-billion pound scam that consumes our money and whole forests every year; and should never have seen the light of day (courtesy of the two successive LibDem energy secretaries, Huhne and Davey, the former of whom has benefitted financially from the biomass industry, post his other disgrace).  We're stuck with it until 2027 (when the subsidies run out), but there is absolutely no need to extend Drax's scam beyond that date and allow it to be the pioneer of BECCS, as it intends - and as HMG seems intent on encouraging.

Why is it tolerated?  Easy: as well as the spurious CO2-reduction credits for both Drax and HMG, the electricity is flexible ("despatchable"); the fuel can be obtained from friendly nations; and there are lots of UK jobs involved - the logistical side of shifting millions of tonnes of wood pellets every year has become quite an industry, not to mention the jobs that are envisaged for building the BECCS set-up.  

The parties bringing the litigation with the aim of calling a halt to all this, are drawing the High Court's attention to the total lack of scientific logic behind the BECCS concept in practice.  

It will be interesting to see what the justices make of it.  Much as I dislike the "lawfare" phenomenon, on this occasion I reckon the lawsuit has merit.

ND

___________________

[1] Nobody will do anything about this before the next GE: and we then run the risk of a Starmer government legislating for "legally binding targets" on a range of ghastly woke social-engineering goals.  Plenty on the redistributive / reparationist left will welcome this with open arms.

[2] There is absolutely no point in arguing against it on other terms.  You may like the sound of your own voice but otherwise you'll not get a hearing.

[3] Incidentally, there's evidence Drax may not even be living up to the crazy low standards of "sustainability" they are obliged to meet now, sleight-of-hand and all, let alone any stricter ones that would be appropriate in terms of the genuine science and logic of the situation.

Something afoot on the Kherson / Crimea front

Here's an interesting development.

Background: the Ukrainians have had a small beachhead on the east bank of the Dnipr opposite Kherson, for so long now it almost amounts to a lodgement.  Russian milbloggers have been hyperventilating about this for weeks as being a(nother) threat to Crimea, even as they crow over the obvious relative failure of Ukraine's summer offensive, which has failed to reach Tokmak (never mind Melitopol).  There have been strange goings-on in the Russian force opposing this bridgehead which has completely failed to push it back into the river, precarious though it looks, amidst rumours of the original Russian commander there being an ineffectual martinet and lately dismissed, and his highly regarded successor being recently wounded badly in one of many precision strikes by Ukraine on Russian HQs while top-level meetings are in progress.

Now we have this, from the official Russian news agency:

The original post had been up for one hour 22 mins.  I'm sure you don't need me to interpret for you the euphemism "regroup to more advantageous positions".  The Russians did a lot of that Sept-Nov last year.

Well, of course, they have an answer to the TASS debacle:

Yeah, right: annulled as issued by mistake, errr, no, wait a minute, allegedly on behalf of ../.. a provocation.   So which is it guys?  A mistake - or Ukraine having hacked TASS ... twice!  Not sure which is more awkward, really.

ND

AEP - manic religious enthusiasm for wind power

Several folks around here cite Evans Pritchard from time to time, noting that some of his stuff is excellent and some is bonkers.  His latest on the wonders of (offshore) windfarms is firmly in the latter character, being in the nature of an outpouring of religious fervour.  How else can we explain this? 

Barry Norris from Argonaut Capital disagrees [with AEP's uncritical enthusiasm], calling wind “an unsustainable economic rent seeking parasitical industry”. Rent seeking, certainly. But unsustainable?  The cost of running a gas power plant this autumn (around £84 MWh) is still almost double the average tariff paid to wind companies under recent CfD contracts (£46 MWh).  It was nine times more during the gas panic last year.  The Treasury pockets the difference.  It is a reverse subsidy.  Home-harvested wind also slows the leakage of our national wealth through the current account deficit.  Mr Norris doubts that wind companies will be able to meet commitments agreed in their CfD contracts, and will require a renegotiation.  I agree.  The strike price will have to rise in the new unforeseen circumstances.  He expects a ”shabby bail-out”: I call it a reduction in the wind tax paid to the Treasury.

Oh dear.  Aside from the entirely dishonest use of the "9 times" statistic (as coined by Ed Miliband, oft-parroted by greens, and true for just a couple of days last autumn): why will higher-than-expected gas prices require renegotiation of windpower contracts?  Answer: because that's not the unforeseen circumstance.   The problem is not high gas prices - which ought to assist other forms of energy - but shortage of raw materials and skilled labour (see diagram below) as every developer on the planet is seeking to pile (literally) into the same things at the same time, on a truly gigantic scale.  A bit, errr, inflationary, wouldn't we say?  And

(a) Those CfDs, far from the being hedge they were offered as (via auctions), were in fact used as speculative punts by the developers, hoping that they'd be able to source their raw materials at prices which the CfD would reward with an acceptable rate of return.  But that's what they were - naked speculative punts.  And pretty stupid ones too, because ...  

(b)  ... this wasn't remotely unforeseen.  Trust me: the banks knew this all along: both the speculative aspect, and the inflationary outcome.

AEP puts up a couple of diagrams.  One neatly proves that windpower is horribly variable, which doesn't really assist his cause.  The other is this (right).  Does he feel it demonstrates the feasibility of what he's so stricken with?  I'd say a resource-heavy surge that the "Development" projection represents should trigger a reality-check for the most optimistic forecaster.  Even the "Consented" tranche is f**ked.  What does he imagine the impact of actually materialising demand on the scale of this graph would be on the price of raw materials?  

As with so many aspects of the Net Zero thing, there's a very strong odour of incense here: it's basically a religion. 

ND

 

The London ULEZ in action

Transport for London have published their first set of what must loosely be described as "numbers" since the ULEZ was extended, from their ANPR cameras and payment / fines records.  It's fair to say that little can be taken by way of meaningful conclusions from this effort, although it is conceivable they'll be in a position to do better between now and the Mayoral election next year.  Whether "better" will include anything genuinely meaningful and useful is open to question.  Don't bother looking at what has appeared in the meejah on this: the TfL numbers provided are so ropey that pressmen and politicians alike have been resorting to guesswork in an attempt to make a commentary-narrative from it.

Under the weighty heading "Compliance Data" we have been given numbers for the first month, plus historical figures, supposedly for the purpose of demonstrating "improvements".  Can they properly be compared?  No, because the number of cameras deployed has been changing p- increasing - throughout, AND coverage by cameras in the extended zone was very patchy indeed in that first month.  (Some boroughs have not been cooperating, which means TfL has been largely confined to installing cameras on "its" roads - the Red Routes - although these do, or ultimately will, provide quite a mesh for capturing vehicle movements of any distance within the full zone.)  Maybe, perhaps some time in 2024, they'll have a fairly full network of functioning cameras.  Even then, there are helpful online resources enabling the crafty driver to (attempt to) plot a route that avoids them.

Then there's the obvious issue that drivers' behaviours in the early weeks of a scheme aren't necessarily indicative of how things will be when it settles down.  

TfL's own commentary cheerfully mashes up DVLA data relating to vehicles known to exist and be registered to a London address, with vehicles actually logged by the cameras.

Finally, there are as yet no data whatever on air quality which in principle is the purpose of the exercise.

Granted that much of this data shortfall will "improve" over time (in the statistical sense of more cameras in action, data collated from a longer period of the scheme's operation, and air quality data actually being provided), it still isn't clear we'll get solid conclusions on what ought to be the political issues arising.  Partly that's because all the politicos involved are quite capable of cherry-picking data, not to mention abusing statistics and of course lying outright.  But even if the data were turned over to the most objective statistical analysis, there are several fundamental problems, including:

1.  It is really obvious that the number of dirty old bangers on the road has anyway been decreasing steadily, for the simple treason that they fall off the perch eventually and are replaced, if at all, by inevitably newer, cleaner models.  This has been going on inexorably for decades.  Khan won't be able to prove what part, if any, of the "increase in compliant vehicles" is down to his ULEZ extension, as opposed to the steady march of technology, or indeed to people no longer being able to afford to drive - including firms going out of business.  He may not even find a handy inflexion-point on the graphs to call in aid.
2. Still less will he be able to conclude definitively on any changes in air quality that might be registered in due course.  (a) Road vehicles are only one contributor to air pollution.  Another very large contributor is the vast fleet of diesel engines associated with building sites: diggers, cranes, gennies, etc etc.  According to Private Eye, Khan has resolutely refused to implement the latest European standards on building-site emissions, on the grounds that to do so might impact on London's economy (and he's probably right, at least at the margin).  Plus, (b) the road network is constantly changing - indeed, Khan himself is having a new cross-Thames tunnel constructed, which is bound to result in increased traffic.  Stick all that up yer exhaust pipe, Sadiq, and smoke it.

None of these objective difficulties will prevent the politicos from bandying their chosen "analysis" next year - and of course Khan from brandishing his cute little book "Breathe" on the subject of air quality.  (Nicely reminiscent of Gordon Brown who laughably wrote a tome on "Courage" ...) 

There are several possible desiderata in play**, that in an ideal world we might seek to audit.  The easiest will be "number of compliant vehicles on the road".  But that is at best a proxy for "air quality", and if the latter doesn't show a material improvement that can somehow legitimately be claimed by Khan's scheme, the former will be irrelevant.  Which leads us to "value for money".  Ah yes, VFM.  Well, let me simply say that last month I scrapped a car, for which Khan kindly paid me £2,000.  Which was around double its market value (or three times what Webuyanycar offered me).  Me and tens of thousands of others.  Thanks, Sadiq.

ND 

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** Some will suspect that another desideratum is - more cameras surveying our streets ...

Reforming the NHS and the laws of politics

Many years ago as a young local councillor, I discovered that politics is bedevilled by the sheer irrationality of our electors.  London Transport (as it then was) proposed to make some perfectly sensible changes to the bus network in my area, and held a public consultation.  A woman rose and made an impassioned speech in two parts: 

(A)  the current bus service was shit;  and 

(B)  it mustn't on any account be changed, in any particular.

I was very glad it wasn't me in the chair, because I find it really difficult dealing with stuff like that ( - the same motive that caused me to recoil from being foreman of the jury on which I sat recently; and was heartily grateful someone else accepted that solemn duty).

The public's attitude to the NHS is the same, only on a truly monstrous scale.  Here's an extract from a piece in LabourList last week: 

Normal people are very capable of holding contradictory views in their heads, especially in subjects about which they know little but feel strongly ... paradoxes, which have regularly been witnessed in opinion research ... are of profound importance as Labour thinks about how to frame its NHS offer running into the next election. They are:

- Everyone loves the NHS and yet in focus groups it quickly becomes apparent that absolutely everybody has a personal horror story about waiting lists or botched admin. These stories flow from them like a public policy fever dream.

- Everybody knows that the NHS is in desperate need of reform – and yet in focus groups almost nobody believes such reform will work. Getting people to imagine a high-performing NHS is very, very hard.

- Everybody knows that the NHS is in desperate need of investment – they see it with their own eyes every time they visit a hospital. And yet nobody believes it will make any difference to the service they are experiencing.

The piece goes onto say that "[Wes] Streeting’s speech at [Labour party] conference seemed to try to reflect these paradoxes and even solve some of them."  He's also recently told the Royal College of GPs that Labour "won’t entertain requests for blank cheques", which is rather what they have in mind.

Assuming he & the rest of Labour are seriously preparing for power (as well they might), I very much hope this all means they have taken heed of Drew's Laws of Politics #1:  Never buy off anyone at a higher price than absolutely necessary.  Virtually no voter will change their allegiance based on the precise nature of Labour's NHS policy next year.  But Labour could get itself into needless trouble by promising the earth, tempting though that must be.  Now one might say: Satrmer is such an accomplished liar and shameless U-turner, he can say whatever he will and then renege on it as PM, just as quickly as he always has with any other pledge or promise he made to the Labour faithful since 2019. 

Still, he'd probably rather not.  Might Labour then be the first party to come to power with a bit of a free hand on the NHS?  We do all really know it can't go on like it is.

ND 

The future price of electricity

Round these parts we often have a bit of fun at New Year, predicting prices etc.  We've even been known to suggest a few punts that might be taken.  That said, solemnly forecasting commodity prices etc as if it's a science is a fools' game.  The track record of "respectable" price forecasters is truly appalling - and that's not just because we're waiting for cleverer chaps to come along - it's because it is impossible.  Of course, they fact that plenty do it anyway is a tremendous boon to liquidity and commercial life generally: you always need to find someone to take the other side of a bet.

Having registered those points, we now turn to electricity.  From the Green corner (and indeed Miliband in the Red corner) there is currently a mighty howl going up: if we want to get the price of electricity down, we must accelerate "investment" in renewables.

Well, no.  This belief in "renewable electricity = cheaper electricity" is based on a couple of things, neither of them worthy of being the basis of policy.  First, there's the naïve view that because wind and sunlight are "free", this means the resulting electricity must be pretty cheap, too.  For those arguing in that way we can even helpfully chip in that sometimes, wholesale prices of electricity go negative!  All of this is true, but it has very little bearing on what the long-term, sustained wholesale price will be, when very costly capital equipment is required on a vast scale to intermediate between (e.g.) "free wind" and the consumer who wants power on demand, 24/7, every day of the year - and who finds himself being forced to "invest" in that capital equipment at exactly the same time everyone else in the world is buying the same stuff.

Secondly, and perhaps based on the first point, there's the entirely religious view that of course it will be cheaper because it's virtuous and clean and generated locally and that nice Caroline Lucas says so and, errr, well it must be.  To me this bears strong resemblance to those who argued that of course we'd be better off financially after Brexit, because, well, because.  It is of course perfectly fair to espouse the political view that Brexit is the way to vote - I espoused it myself - but please don't tell us it'll be cheap.  And exactly the same holds for renewable energy.

The underlying reason is similar in both cases.  Absent a subsidy, any time businesses and individuals are constrained to do something in the economic sphere that runs counter to what they'd do given the freedom to make their own informed economic decisions, that is prima facie gonna wind up costing more.  Of course there are exceptions: once in a blue moon there is genuine market failure (e.g. in energy, the practical inability of tenants and some householders to do the economic thing as regards short-payback insulation etc); and sometimes an economically viable new technology just hasn't become socialised yet (LEDs). 

Governments make people do more expensive things than they might choose to all the time, for policy reasons sometimes sound, sometimes not (and in any case, political policy is frequently politically contestable).  To me, the key is that politicians shouldn't lie about these things.

Now governments could choose to manage many of these types of policy intervention via general taxation.   That's what they do in the case of, e.g., the policy decision "we need nuclear submarines".  But mostly, they try to offload the cost onto the punter in various ways.  And that's certainly the case with most aspects of Green policy, in this country and elsewhere.

This being the case, all the evidence is there that wholesale electricity prices will rise, and continue to rise, over the very lengthy period over which it is intended - by almost all political parties -  we will aim towards "net zero".  This is so glaringly obvious, it barely needs explaining in detail: just sit back, watch and point.  But put on the ear defenders, because the Milibands of this world will continue to bellow that it'll be cheap ...

ND

Diversity to the nth degree

One of the leading professional bodies in the energy sector is, errr, the Energy Institute.  (Formerly known as the Institute of Petroleum, but they clearly saw the writing on the wall a long time ago ...)

I think we can guess what the average profile of the membership looks like.  So here's the Membership page from the www:

Pretty funny, huh?  Is there any point in asking: "now aren't we told that when someone looks at a body of people in authority etc, and is forced to say 'I don't see Anyone Who Looks Like Me', then that's a jolly bad thing - ?"   

No, there's no point whatsoever.  What we can say is that if you need energy in any shape or form (as some of us do), on average it will be provided to you by a supply chain of hairy-arsed people who aren't remotely represented above.

ND

RWC: England not too badly placed

OK, so England beat Fiji on muscle-memory, as predicted.  But overall, I'm more optimistic than I would have expected to be at this stage.  Partly, that's because England have a history of building to the later stages of the RWC rather uncertainly (2007 etc, and even including 2003): but mainly because, notwithstanding 2019, South Africa isn't a bogey team for England.  Let me explain.

In a given period of time, most teams seem to have a semi-irrational bogey.  For years, France couldn't get past England in any competition whatsoever.  Australia often seem to freeze against England.  And France themselves have lately done the job on England.  (England would also fancy New Zealand rather than they would have Ireland ... but let's not, *ahem*, get ahead of ourselves.) 

So - back to Saturday last: what did we witness last week?

Farrell:  for about 10 minutes towards the end, Farrell more-or-less earned his pay - at long last.  (Right up until his crazy knock-on right near the end, which might easily have seen him in the bin at the very death.)  That's a pretty thin return on the many years of undeserved England pay he's drawn.  We'll never know whether Ford + a different captain could have done the same job over that 10 minutes: but then again, the alternative combo might well have closed Fiji down even earlier.  Counterfactuals are like that.  So I'm unrepentant: Farrell shouldn't have played.

Smith:  well, he didn't pick himself at 15, and he gave it everything he'd got.  But, as they say, a good big'un ...  Anyhow, it's irrelevant now; and tomorrow, Steward it will rightfully be.

Tuilagi:  we've all heard the tired old saying, uttered continually over more than a decade - "if Manu's fit, he's in".  Well, by some miracle he's managed to stay fit.  But how many more times is it deemed satisfactory that he storms into a match and grabs a dynamic early try, then fades into the background?  If that's his MO, take him off after 30 minutes. 

Lawes:  how many more times can he be expected to go to the well and draw performances like that?  Unless he has truly superhuman powers of recovery, I don't like to imagine the shape he'll be in after Saturday - whatever duties might be sought of him beyond that point.

Earl:  speaking of super-human ...

ND

Footnote: apologies for the garbled early draft of this post for those who encountered it. 

Farrell / Part 3

Alright, so Farrell now has his record points tally and sentimental indulgence has been granted (well done that lad) - can there be any remaining reason why he isn't given the shove?  If his abject performance on Saturday isn't enough to have him dropped, Borthwick deserves everything that follows.  Fiji might just about be sufficiently shaken that they can be beaten in the quarters using muscle-memory alone: but an England appearance in the finals seems highly unlikely with Farrell on the pitch in any other capacity than water carrier.

Farrell père, now that's a different matter.  No obvious sign that the Irish have peaked too early, is there?

ND

Wars and rumours of wars

The Hamas attack on Israel is quite astonishing - shock, and maybe even awe.  To pull off coordination and surprise like that in a space so confined and - as we are given to believe - so intensively, comprehensively and 'intelligently' monitored, is little short of impressive.  (And on Putin's birthday, too ...)  So much so, that it can easily trigger all manner of speculation - but for now we must wait for more data and developments.

However, some very broad comments can be essayed.  From the start of Putin's war upon Ukraine, it was obvious that the implications for Taiwan would be uppermost in the minds of some important actors.  Several leading commentators assumed that Ukraine would provide a distraction that allowed other 'geo-political initiatives' to kick off, with Taiwan heading the list (by dint of the seriousness of the global implications) but with the middle east also very much in mind, alongside the Balkans, the near east and central Asia.  In point of fact, for many months nothing much really happened.

Maybe the waiting is over.  In the runup to the Hamas offensive we've seen Armenia humiliated, Serbia stirring the pot, Syria being brought to the boil, Putin meeting the Wrong'Un ... and there are no doubt other things I've overlooked.  Players like the latter, Turkey and Iran are always looking to manoeuvre purposefully for advantage, in contexts of expansionist policies.

Coordinated?  Woah!  - down that rabbit-hole, lunacy lies (e.g. "The flywheel of WW3 is spinning faster and faster ...").  For now, let's just say "opportunistic".  Sometimes, though, just because you're paranoid, doesn't mean they aren't out to get you ...

ND

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Footnote:  we don't choose to let this blog be, how shall we put it, a forum for "partisan middle east rants".  Some do, we don't.  All our regular BTL commenters have respected this over the many years, for which our thanks.  Any, errr, newcomers / anons wishing to flout this policy will not be hosted.   

Gordon Brown's aircraft carriers - looking sillier than ever

'Silly' is too light a term for Brown's costly pork-barrel folly.  He lumbered us with two ocean-going white elephants that wouldn't last 10 minutes against the Chinese.   ('Prince of Wales' !  What cynic came up with that? - as we've joked before.)

That prediction of fragility in combat might have been conjecture until very recently, albeit fairly universally endorsed.  But now ... well, now we've seen Ukraine defeat Russia's much vaunted Black Sea Fleet with little more than naval drones, aerial drones and some helpful, accurate intelligence from its friends.  Quite literally, that fleet is no longer a combatant: reduced to ignominious retreat to more distant ports.  Maybe - just maybe - US Carrier Groups have so much air-defensive firepower that they stand a chance of defending the mighty jewel at the centre of the protective ring.  But maybe not even them.  And certainly not the RN.  Asymmetric warfare at its apogee.  Like the advent of the torpedo, before destroyers were invented.  Think what anti-capital-ship effort even Iran could mount these days, let alone China.

Did I say a costly folly?  The expenditure alone - past and ongoing - on the UK's aircraft carriers is bad enough.  But the way that the very possession of the carriers drags UK defence policy into deep and distant waters will probably be more costly still.

ND

Self-identifying is completely out of control

The age of pandering to individuals and their whims might, I suppose, be seen as some asymptote of the rising trajectory launched by the individualism of the 1960s, coupled with a kind of American liberalism-positivism that says "you can be anything you want! [sotto voce ... if you are willing and able to do what it takes]".

Well, not really.  As well as the lunatic business of allowing young people (often in the hopefully-temporary grip of some pathological condition) to re-gender themselves upon a whim and no meaningful rationale, there are other worrying trends**.  A very good friend of mine, a qualified and highly experienced psychotherapist, tells me that people these days are prone to walking into consulting rooms and self-declaring themselves to be suffering from PTSD.  And of course 'ADHD' is bandied around equally loosely - frequently by parents excusing their badly-behaved offspring, & schools ditto.  Both conditions, if they are to be meaningful, require careful diagnosis: in the case of PTSD, requiring weeks if not months of observation.

Are these complaints the statements of practitioners trying to make a role for themselves?  Well, I think we can discount for that and still recognise that things have gone a long way down a ridiculous road.  We know what Gove means about 'experts'; but technical expertise on serious matters is still not to be idly skipped past.  But the evidence-resistance of much of the population is growing as fast as the antibiotic-resistance of many a strain of nasty bug.

The consequences may be just as bad.  We are all doomed to be dominated by people who think they are Napoleon: and we aren't allowed to disabuse them - still less deploy the Men with White Coats ...

ND

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** There's another complete discussion to be had about the self-identifying, self-appointed "voices of the community" who step in front of the camera / Police panel / parliamentary enquiry in order to ventriloquise said "community" for malign purposes of their own.

Sunak's net zero rethink: good politics?

Without the slightest doubt, every nation will be forced to rein back its 'net zero' plans - because with the technology available right now, they are infeasible, never mind costly.  That's even before we factor in the eventual but inevitable electoral unpopularity of the 'politics of compulsion'.

The questions, therefore, are of timing and tactics.  Sunak has decided to make it a General Election dividing line.  The ULEZ fiasco speaks in favour of this judgement, but as Chris Dillow is wont to say - but, but, but ...

The greens have obviously been out in force from the moment this broke - prematurely, of course and obviously leaked maliciously by Someone (the candidates for having done this are legion).  Right now it looks like a tsunami of "international condemnation" is being orchestrated.  Starmer, for sure, has absolutely no desire to be tarred with anything here, including becoming the Green Champion; so he'll just snipe judiciously and try to restrain Ed Miliband & other rank liars who'd love to promise to reinstate every crazy scheme, and more.  We know this of Starmer: he has form, including specifically on 'green' issues of which ULEZ is but one.  But there will definitely be some free hits available to him here, and he may not be put on the "OK-so-what-would-you-do?" spot very much at all.

So Sunak has gone for the 'up-front partial-truth-telling' approach, which is looking a bit, errr, courageous right now.  He should at the very minimum have come up with a Cummings-style Very Good Slogan: "more pragmatic, proportionate and realistic" is not it !

What other strategies are available to governments wishing to back-pedal, as they all must?  Here are some:

• say nothing, but simply miss all targets as they come along, as will inevitably be the case, and deal piecemeal with whatever opprobrium arises, as and when.  Hope it's the other lot that will have to break the Bad News.  (Even Sunak is still doing a bit of this - viz retention of the NZ 2050 target.)
• wait until after an election
• quietly but positively engineer delays in costly net zero measures (easily done) so that, perhaps imperceptibly to observers, the actual costs being incurred are materially reduced
• build consensus before back-pedaling, via a careful campaign of softening up pubic opinion
• wait for an absolute crisis which clearly derails their net zero plans, so that nobody demurs (actually, we just had one of those and it was only partially exploited thus)
• come up with a quid-pro-quo that the electorate finds rather attractive, e.g. - enough of the crazy heat pumps, but we are going to insulate all your homes

UPDATE: spurred by Matt's comment BTL, there is another consideration - the crazy aspect of having targets "legally binding".  Well, Parliament can do whatever it likes but in jurisprudence terms, this is a real nonsense and, as we've seen, leads to endless fatuous court cases, in the UK and other countries.  As I've written before, there will logically come a point where either (a) the courts tire of this, and rule in such a way as to neuter it, and/or (b) governments tire of it, and legislate it away.  Another item for the strategy list.   

What do we reckon on all this?  Maybe Sunak reckons he has to take risks like this if there's to be any hope at the next GE.  Has he judged the politics of this correctly, or has he been just too candid for his own good?

ND

(1) Demise of Wilko; (2) Rise of the subsidy-stuffers

Evidently undeserving

(1)  So, farewell then, Wilko.  Always seemed a nice store to me.  We'd all welcome BQ's informed take on What Went Wrong ...

(2)  The other big business headline on the same day was BMW's decision to make the new electric Mini in the UK rather than China.  Well, obviously multi-dimensional politics there, but the aspect that interests me for now is the big subsidy from HMG.  That's evidently the mood of the moment.

Evidently highly deserving

Going back, say, a decade, international trade law in most of the West was broadly agin state support.  Obviously, several countries had a history of mercantilist policies, explicit or under-the-counter, but it was supposed to be on the wane and the EU, to be fair, mostly clamped down on it.[1]  

Well, that's over and no mistake, ever since Biden's IRA drove a coach and horses through it, if not before.  Germany is of course screaming to be allowed to do the same, although see this intelligent piece from our old motorbiking friend Yanis Varoufakis which indicates why a number of EU countries won't be so keen to let them without far-reaching "reforms" in EU treasury governance.  Meaning a lot more "Europe" for all of them.  We shall see.

When push comes to shove, it seems, everyone is a protectionist.  Let it be recorded that in happier times, Free Trade accomplished a very great deal and we may live to regret its passing, imperfectly enforced as it undoubtedly was.  You don't need to go far in history - even (say) that of ancient Greece (you listening, Yanis, old chap?) - to find tremendous examples of new-found prosperity born of free trade; and its converse, prosperity ended by a collapse in trade.  C@W, right?

ND

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[1] Of course, the really big ones, like Hinkley Point C, were always waved through, if only eventually & after a bit of horse-trading at the top in Brussels: "too big to be stopped"

Farrell / Must Be Dropped / Part 2

From Curry's sending off in the third minute of England's RWC opener on Saturday, England were backs to the wall.  And how George Ford responded! - 27 points from his boot, and a masterpiece of strategic adaptation and game management (which he'd been doing for Leicester all season before his nasty injury in the 2022 Premiership final[1]: so, no surprises whatever).

The suspended Owen Farrell could no more have pulled off that essential performance than fly over the moon: all he'd have come up with would have been blood-and-guts, huff-and-puff, & probably another card.    And England would effectively have been out before the tournament had even really got going.  His red card and still-current suspension during the warm-up series was as felicitous for England as that.  

And there is no obvious vacancy at 12.

This is the RWC; this is serious.  So, back to where we were four weeks ago:  Farrell Must be Dropped.[2]  

ND

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[1] Haven't seen this mentioned, but nearly half England's starting 15 (and some of the Argentinians!) have played with Ford at Leicester at one time or another.

[2] Actually, for a little more creativity: when his suspension is lifted, Farrell could be put on the bench against the contingency some opposing eejit decides the solution to Ford's dominance is to drop him with a forearm to the head.  Then the bonehead can take over against the remaining 14 men.  Smith can also be on the bench as a general-purpose option: people already like the thought of him at 15, and he could probably do 9 as well as 10.

Putin steps closer to the edge

A month ago we wrote: 

Scrapping the grain deal, and blasting grain storage facilities, looks like a serious blunder ... the potential for a grotesque Putin mis-step coming along soon. As critical Russian commentators have been quick to point out, a de facto Russian blockade of Odessa will drive Ukraine to export via the Danube. Now: much as Russian historians love to recount the Battle of Izmail, do they really plan to blockade the Danube, arguably Europe's greatest river linking 9 countries (mostly NATO members), 4 national capitals and a large amount of trade? Really? Article 5 looms large here ... Putin's capacity for cocking things up on the world stage has known few limits since 2021 ... I can't guess what he'll do next

Well it rather seems I did, because a day or so ago Russia bombarded Izmail, with drone debris crashing into Romania.  The latter (a NATO member, obviously) is hosting a lot of allied military resources right now, including UK fighter aircraft that fly top-cover for Black Sea reconnaissance, and very regular border patrols by the US Navy and Italian Air Force.  All the triggers are there.

This is, however, as nothing compared to the protective shield around the Polish areas bordering Ukraine.  The weight of anti-aircraft / anti-missile defences there is like nowhere else on the continent of Europe.  People have often mused - including BTL hereabouts - as to why Russia doesn't interdict the large daily flows of munitions across the Polish border.  Well they might try: but it wouldn't be easy.

There's a case to be made that things are ratcheting up to something very tense this coming winter.  It used to be a rule of thumb in ancient Greece that no city-state could survive a second winter after its lands had been ransacked two summers in a row - which might be in Putin's mind.  

He might also like to recall that Athens successfully** devised a solution to this: significant use of imported goods along heavily-defended lines of logistics.

ND

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** Yeah, yeah, I know that eventually Athens lost to Sparta.  But that was imperial over-reach born of monumental, buccaneering hubris. 

Hedging for Whingeing Farmers - part 2

Some valuable practical detail in BTL comments after that last post - very much what I had in mind when writing "very real practical complexities around our simplified account above - which might have made for a genuinely interesting & informative Countryside piece."  Let's take a look at the issues they raised, & some more that I'm chucking in for good measure.

1.  The ability to hedge, even in principle.  (A) Scale.  Jim has suggested the threshold for being able to get into grain futures is 10,000 acres.  There will always be a lower limit (although with spread betting and ETF, that's been getting lower and lower) and certainly I have no better data.  And why shouldn't there be a minimum size / critical mass for any particular viable line of business?  We scorn the pitifully small energy suppliers (well, I do) for their lack of capitalisation, and wonder WTF they got a supply licence from Ofgem in the first place.  Why shouldn't some industries be for the competent Big Boys?  Nobody has a God-given right to set up a "craft" blast furnace just because they fancy.   

1(B).  Credit.  - maybe thought of as an aspect of 1(A), but it's a distinct issue.  It's always the case that a non-creditworthy counterparty (however large) can't get an OTC forward contract.  That's because payment may become due either way, & maybe they ain't good for the potential monies due.  Of course, if you're trading on an exchange (futures), you'll need to put up collateral and pay ongoing margin (if your position is moving out of the money) to minimise the credit risk.  That again may exclude some players if they can't put up the table money.  Again - so what?   

2.  Weather.  As raised by a couple of you.  Yep, this is one of the 'operational risks' that actually has little directly to do with hedging the financial exposures involved (though see 3. below on volume & Basis).  Weather risk will impact on farmers irrespective of market risk - it can impact adversely on timing, quantity and quality.  There was a time, in the late '90s / early '00s, when lots of people believed a big market was going to develop that would offer 'weather derivatives', there seemingly being a vast potential range of applications for such products.  It never really took off (for reasons we might discuss in another post), despite many big players putting in a lot of time, money, people & effort go get it going.  So:  as was mentioned BTL, insurance always was, and remains, the first recourse.  

Insurance, BTW, should always be anyone's fallback if they can't get a satisfactory hedge - and not just for weather, and not just for farmers .  No credit issues, except that naturally you need to be able to afford the premium upfront.  I say 'no issues' but of course as the client, you always have concerns over the creditworthiness of the insurance provider.  it's a heavily regulated sector, for that reason.

3.  Volume.  (Also mentioned BTL.)  Being subject to several unknowns - weather being perhaps the biggest - how does the farmer know exactly how much by volume to be trying to hedge?  This volumetric uncertainty is an intrinsic feature of some sectors, while virtually unknown in others.  The answer, as far as it goes, is easy:  pick a sensible, maybe conservative estimate, and hedge that.  You're then exposed on the balance, be that long or short.  Coupled with weather insurance, it's the best you can do.

4.  'Basis Risk' generally.  In markets where volumetric risk is small (& hence not requiring a whole risk-management discipline of its own), it would be viewed as a subset of the more general category of 'Basis Risk' - where there's an element of exposure remaining even when you've hedged the best that anyone can.  It can arise from a heap of different factors impacting the 'basis' of your hedge vs the basis of your own situation, e.g.:

-  the forward / futures contracts are only traded in lot sizes that don't allow you to create a perfect volume match;

- the settlement of the traded forward / futures is at a location and/or date that doesn't perfectly match your own locational / timing situation;

- the settlement is for a quality or grade of product that doesn't perfectly match that of your own product (e.g. a very special grade of oil for which there is no specific forward contract).  

That last point - quality - was indeed specifically raised in the Countryfile prog - about the only interesting thing that was aired.  They said that weather could affect what type of grain the crop would turn into, in terms of how it would be viewed - and priced - in the market.  I hadn't known that, but it makes perfect sense. 

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To my mind the Countryfile team should have been at least mentioning some of the above, just as they very fairly (and in an easily-understood manner) alluded to the Basis risk of the quality uncertainty.  It's the job of TV to make these things accessible, and the whole of it is no more difficult than the quality point.

Finally, though, we get to Sobers' really interesting - and quite technical - comment that, courtesy of outrageous hanky-panky on the part of the hedge-providers, for the farmer to enter a forward / futures contract they are in practice writing a naked option.  If that terminology doesn't mean anything to you, well (a) I think Sobers explained the essence of the problem well enough, in lay terms; and (b) writing a naked option is about the most dangerous thing you can do in financial trading.

As many of you will know, agriculture isn't my sector.  I've already noted that small players needn't expect to find things just as they'd like them in any sector, so maybe this is really just another manifestation of 'too small'.  That said, to me it's a pretty shocking matter when, within an industry where quality matters so much, there aren't objective standards and assays that can be relied upon for both parties.   The whole of trade finance depends on it.  WTF should agriculture be different to energy, or metals, or pharma?  Yes, fraud happens in any industry, but what Sobers reports is daylight robbery & very depressing.  Is it really a problem for bigger farmers?  In principle there would, IMHO, be a huge opportunity for large, honest players to step into this situation charging a very modest premium for a proper service.

ND