Money in the news and how you are going to pay and pay and pay
THE Wall Street Journal tells us that the ETS, the European carbon trading system, is dead. This is because the prices are so low that no one can be bothered trading:
One of the great policy bubbles of our times has been cap and trade for carbon emissions, and on Tuesday it may have popped for good. The European Parliament refused to save the EU’s failing program, which is the true-believer equivalent of the pope renouncing celibacy.
THE new iphone. It’s coming! Aren’t you excited too? I know I am because it’ll be just fabulous allowing me to pose even more effectively as a cool and in touch sort of person. You know, rather than the fat middle aged man I actually am.
The knowledge that the new iPhone is coming is revealed to us by the Wall Street Journal:
TAIPEI—Foxconn Technology Group has resumed hiring assembly-line workers in China after a postholiday freeze, in the latest sign that customer Apple Inc. is gearing up for production of a new iPhone.
THE Grand Old Man of Portuguese politics, too. Mario Soares says:
“Portugal will never be able to pay its debts, however much it impoverishes itself. If you can’t pay, the only solution is not to pay. When Argentina was in crisis it didn’t pay. Did anything happen? No, nothing happened,” he told Antena 1.
WHO really believes that Germany is poorer than Spain or Cyprus? Well, apparently, the European Central Bank does. Which sounds insane but bear with me. They’ve just released some research showing that German households are in fact poorer than households in Spain or Cyprus. The report is here. In the FT we get the following:
Measured in terms of the median, German households occupy the last place among all eurozone countries, with net wealth of a mere €51,000, while the median Cypriot household has net wealth of €267,000. The explanation for this gap is the low property ownership rate in Germany – well under 50 per cent. This means that the median German does not own a house, while the median Cypriot or Spaniard does.
The median is the statistic to quote when you want to say that your typical German is poorer than your typical Spaniard. But that is a meaningless statement because it is based on distributions within countries. If you want to compare across countries, it is better to take the mean. The gap is not quite as dramatic but it is still very large.
If mean German net wealth is €200,000 per household and mean Spanish net wealth is €300,000.
IT does worry me when people propose these sorts of things. It’s as if they are entirely ignorant of why the darn things exist in the first place:
Companies selling products such as toys, sweets, clothes and video games should be prevented from marketing them towards primary school pupils amid fears the trend is undermining children’s natural development, it is claimed.
In a letter to The Daily Telegraph, the group of academics, authors, MPs and charity leaders warned that aggressive advertising aimed at infants as young as two was leading to a rise in “pester power” as children increasingly nag parents for the most expensive brands.
The development also makes it harder for parents to control their children and teach sons and daughters how to manage small quantities of money, they say.
Today’s letter urges the Government to copy tactics employed in countries such as Sweden and Greece where advertising aimed at young children is banned.
It is claimed that the ban could work by placing curbs on advertising linked to TV programmes, magazines and websites orientated towards under-11s and restricting tactics such as the use of cartoon characters in ad campaigns.
THE Telegraph managegs to get itself slightly confused this morning:
Bitcoin passes $200 mark for the first time
Bitcoin, the controversial electronic currency, has passed the $200-mark for the first time, setting new records despite talk of a bubble.
This is not despite talk of a bubble. It is the very fact that Bitcoin has just passed $200 which leads to the talk of a bubble.
I KNOW, I know, we’re forever told that the minimum wage doesn’t in fact destroy jobs. It’s a lovely cuddly policy that has absolutely no bad effects at all. Except, if we consider Amazon’s Mechanical Turk marketplace this simply cannot be correct.
Estimates of what workers can earn on these crowdsourced tasks range from about $1.20 to $5 an hour without any benefits. Employers treat them as independent contractors not covered by federal minimum-wage legislation.
CAN your star sign dictate your wealth? Lordy be, some nonsense in the Daily Heil:
If you’re hoping to make your fortune, it seems your fate may lie in the stars.
A new study suggests those born under the Gemini star sign have the best chance of becoming wealthy, while Scorpios are the least likely to succeed.
The intriguing find was unearthed by researchers who studied the star signs of the top 1,000 richest people in England.
No, just no.
IT will take ten years to get Northern Rock money back. Or, as it should more properly be presented, this is a statement of the bleedin’ obvious:
Taxpayers will have to wait up to a decade to get their money back from the bailout of Northern Rock, according to the man charged with managing the rump of the failed bank.
In an interview with Financial Mail, Richard Banks, chief executive of UK Asset Resolution, said: ‘We expect the majority of the Government debt to be repaid within the next ten years.’
But Banks said he could not be precise about the final date as inflation and the state of the economy could push his forecast off course.
WE’VE had the report out today about how and why Halifax Bank Of Scotland fell over. You can read it in all its glory here. And the important takeaway point to be made about it is that it was nothing at all to do with speculation, investment banking, weird derivatives, high speed trading or any of the other things that people fulminate against. It was, very simply, a bank going bust in the way that banks have always gone bust. Lending too much money to people who didn’t pay it all back.
AND good on Willy Shakespeare for being a speculator in grant. For it is speculation in food that ekes out the harvest from year to year. Without them we’d all start getting damn hungry around May while waiting for the August harvest.
WHY would you want to be a CEO? Sure, the money’s bloody great but even so most of us would prefer to have a life to what these bozos do for their paycheques. Surprisingly, it’s The Guardian that tells us how hard these CEOs work. The piece is here:
First off – and there’s no getting around this one, I’m afraid – you have to get up early. Really early: 6am is good, but 5am is better. And CEOs don’t hit snooze: most of them claim to leap out of bed in the morning…..They may be in charge of large international companies, but they are absolute slaves to email. Karen Blackett of MediaCom claims to receive 500 a day. They’re emailing first thing in the morning, and last thing at night, and throughout the day. For the modern CEO, dealing with your own email seems to be some kind of touchstone of accessibility. I’m not sure what I’d do if I got 500 emails every day, but I know what I wouldn’t do: I wouldn’t read them.
A TORY MP has been complaining that the fees office treats them like dirt. They just go along to try and claim what is rightfully theirs, what the law provides for them to have, and they get treated like crap. Paid massively late, they’ve got to go into debt to pay their bills while they wait for the cash to be paid out.
Yes, of course this is what we should be doing to all politicians:
A Conservative MP has criticised the body responsible for overseeing politicians’ expenses claims, claiming they are trying to ‘screw MPs into the ground’.
Karl McCartney, the MP for Lincoln, says he has been forced to borrow £25,000 from his parents because of late payments by the Independent Parliamentary Standards Authority (Ipsa) caused by delays in the processing of his expenses payments, a situation he claims that many other MPs face.
SO. Here we have Ed Davey, the third runner up in a Wayne Rooney lookalike competition, telling us how all that work they’ve done on renewables is going to save us money:
But my Department has been concentrating on keeping bills as low as possible over the long-term – and for everyone.
Some people think climate change policies on things like wind farms are what are behind high bills. But they couldn’t be more wrong. The biggest single thing driving bills higher is global oil and gas prices. They have been rising remorselessly, fuelled by demand in growing economies like China. They’re likely to keep rising.
The Government can’t control the global market and drive down international wholesale prices. What we can do is try to drive a wedge between global prices and the cost of bills.
Through investment in domestic sources of low carbon energy like nuclear, wind and wave power, and other renewables, we are helping to insulate the public from volatile fossil fuel prices in the future.
MAX Hasting on Cyprus:
People who rob old ladies in the street, or hold up security vans, are branded as thieves. Yet when Germany presides over a heist of billions of pounds from private savers’ Cyprus bank accounts, to ‘save the euro’ for the hundredth time, this is claimed as high statesmanship.
It is nothing of the sort. The deal to secure a €10 billion German bailout of the bankrupt Mediterranean island is one of the nastiest and most immoral political acts of modern times.
IN fact, the settlement in Cyprus is so sensible that it’s a wonder they didn’t just do this a week ago. Or even 6 months ago when it was obvious that the place needed help. For is was obvious that the banks were bust,. For what they were doing was taking all that lovely Russian money and then lending it to the Greek Government. Who, as you might recall, then decided not to pay 90% of the money they’d borrowed back. From which point on the Cypriot banks were bust no matter what else happened.
OVER this Cyprus thing. They’ve decided that everyone who has their bank deposits guaranteed by the government of Cyprus must lose some of their bank deposits guaranteed by the government of Cyprus. Which is insane.
Here’s the real basic problem: banking is inherently unstable. No, I don’t mean casino banking, excessive trading and all that stuff. Because banks don’t keep your money in the vaults, they lend it out to other people. So if we all turn up one day demanding our cash the banks go bust simply because our cash is invested in Mrs. Miggins’ mortgage.
WELL, along one dimension it is, fracking producing much less waste water (and polluted waste water) than normal drilling for gas does. It isn’t quite how we normally think of it of course, but it does seem to be true:
There is a perception that the hydraulic fracturing of rock to discharge natural gas produces inordinate volumes of wastewater. After all, millions of gallons of water mixed with chemicals are pumped at high pressure into the ground and a considerable portion of this fluid rushes back to the surface when the pressure is released.
THERE are bad budgets and then there are bad budgets. And this one is a true stinker in at least one respect. Osborne’s decided to try and pump up house prices. The simpleton fool:
A state-backed mortgage guarantee scheme worth £130billion will see the market flooded with 500,000 cheap loans.
The Government is to subsidise deposits and provide state backing for loans to help homebuyers get on the property ladder or move up.
But there were warnings that the scheme risks creating a house price bubble.
No, that last line is wrong, is too milquetoast.
HOT in from the Mail we have the news that VW are thinking of building their new Bentley SUV in Bratislava in Slovakia. And why in Buggery would anyone want to do that?
Bentley may build its new luxury off-roader in Bratislava rather than Britain, the firm’s bosses have revealed.
In a dramatic blow to its 4,000-strong British work-force – and to Chancellor George Osborne ahead of today’s Budget – the firm’s German chiefs announced at their annual results conference in London that they were considering manufacturing the £150,000 4X4 in the Slovakian capital in Eastern Europe.
One of these things is not like the other: The EU on bankers’ bonuses and the Swiss on corporate pay
SADLY, all too many people seem to be thinking that these things are the same, or similar.
We’ve the EU trying to push through a limit on bankers’ bonuses. They can only get a bonus equal to 100% of their salary, or 200% if the shareholders agree. And then there’s the Swiss vote of yesterday about how fat cat corporate pay can be limited. The thing is, not only aren’t they roughly the same thing they’re actually opposites of each other:
Swiss vote to impose world’s strictest rules on executive pay after public outcry over fat cat bonuses
People in Switzerland have voted for strict controls on executive pay
68 per cent backed plans to veto pay-outs to bosses
Move sparked by anger over the big bonuses blamed for fuelling risky investments
It comes after the EU announced plan to cap bankers’ bonuses at a year’s pay
IT had to happen of course: that the Guardian would go from being partisan on the subject of economics (and why not?) to publishing stuff that is just flat out ignorant. Take this about Bill Gates for example:
One of the most peculiar but least understood developments of our time is the emergence of billionaires against capitalism. Even some of the greatest beneficiaries of the market system seem deeply disillusioned with it.
The same mistake is made throughout the piece. Capitalism and markets are not the same thing, not the same thing at all.
THESE figures about growth in the UK economy really aren’t a surprise:
The data is likely to deepen concerns about the widening gulf between the capital’s “bubble” economy and the rest of the country. Between 2007 and 2011, London’s economy grew by 12.4pc, despite the painful impact of the financial crisis on the City.
That rate compared to growth elsewhere which ranged between 2.3pc in the East Midlands to 6.8pc in the South West, the Office for National Statistics (ONS) said. The South East, boosted by proximity to London, was close behind at 6.4pc.
A rough guide to the British economy is that it’s a middle of the road, middle ranking, European economy. Nothing very special about it in any direction: except for the presence of London. That’s a part of the Great Global Economy and so is influenced by what’s going on out there, not what’s happening at home. China growing at 8%, India at 6, hundresd of millions, billions even, climbing up out of destitution into the petit bourgeois delights of three square meals a day: these matter more to London than whatever the hell is happening in Bradford or Bingley.
It isn’t just banking either: accounting, law, arts, real estate and so on and on. London’s global in the way that New York, Singapore, Hong Kong are.
Maybe it shouldn’t be like this. Maybe we should do something so that it isn’t. But what is currently happening makes a great deal more sense if you think about the British economy in this manner. London really is entirely different from the rest of the UK economy.
WHY do men fight to get rich? Because it gets the babes. Here’s George Soros and his former lover Adriana Ferreyr:
Soros’ papers state: ‘Soros and Ferreyr…engaged in a physically intimate relationship over the course of several years. [They] continued to date other people.
‘[At the time of the alleged assault in 2010] Soros was approximately 80 years old, and Ferreyr was approx 27 years old.’
THIS should be a spoof but unfortunately it isn’t: they’ve managed to get the economics of this situation entirely the wrong way around:
As bidding topped £680m, the Czech regulator pulled the plug on the 4G auction, saying that to continue would risk pushing cripplingly high prices onto the winner’s customers as well as delaying deployments – both to the detriment of the country’s citizens.
The Czech Republic was hoping for a fast deployment, and the regulator had placed a reserve of 7.4bn Czech Koruna (£250m) on the bands being auctioned off, but with four operators determined to divide the bands into three bundles, the bidding got out of hand and the regulator decided to pull the plug rather than taking the money.
This is insane.