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Money | Anorak - Part 24

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Money in the news and how you are going to pay and pay and pay

If The Capitalists Ship Our Jobs To China They’ll Be just Fine With The Minimum Wage, Right?

A VERY nice little piece of logic from Don Boudreaux over in the US. We do all agree that capitalists are swine, I hope? That profit is the only thing they care about?

When the subject is international trade you correctly recognize that, all other things equal, firms prefer to pay workers lower rather than higher wages and will, as a result, actively exploit all available profit-enhancing opportunities to lower their production costs.  So why do you not recognize that the same economic motivation and opportunities exist when the subject is the minimum wage?

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Posted: 1st, October 2013 | In: Money | Comment


If the minimum wage is such a great idea why do we punish those who don’t pay it with a fine?

THIS is a very clever way of looking at the minimum wage:

The most direct evidence that advocates for minimum wage laws do not believe their own argument is the fact that they propose fines for companies that pay less than the legislated minimum. How are fines suppose to motivate businesses that are indifferent to costs?

Think about it for a moment.

And yes, we do fine people who don’t pay the minimum wage:

HMRC said on top of forcing wage payments, they had issued fines to 708 employers with 51 receiving the maximum penalty of £5,000.

So, the argument is that paying the minimum wage is something good for business. Certainly, you’ve got all those Living Wage people saying that it does wonders for morale and staff turnover to be paying higher wages. So, why, when people don’t pay the higher wages, do we fine them?

For at that point we’re obviously saying that taking more of the businesses’ money away is a punishment. But at the same time we’re saying that taking more of the businesses’ money away is good for the business.

Well, which is it?

Posted: 30th, September 2013 | In: Money | Comment (1)


Glory Be! Ed Miliband has brought back price controls

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ED Miliband has rather stunned the business world with his announcement that if Labour’s elected next time they’re going to bring back price controls. Because, you know, Ed Miliband, in his previous job as Climate Change Wallah in the Government made electricity too expensive for us all. The problem with this of course is that price controls simply do not work:

Mr Miliband has pledged that one of his first acts in office would be to pass emergency legislation forbidding energy companies from increasing domestic prices until 2017.

His promise is designed to persuade voters that only Labour can restore living standards eroded by years of prices rising faster than incomes.

However, energy chiefs and political opponents have warned that his plans could in fact lead to higher bills in the short term as well as blackouts and power shortages.

If you were told that in two years’ time you were not allowed to raise your prices what would you be doing in the next two years before that ban?

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Posted: 27th, September 2013 | In: Money, Politicians | Comment


Candy Crush Saga maker files for IPO: but are they a one hit wonder?

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THE makers of Candy Crush Saga have filed for their IPO over on Nasdaq in the US. That they’re an English company floating over there is interesting but of rather more importance is whether they’re really just a one hit wonder?

The basic news is here:

It is understood that King will float on the Nasdaq exchange in what is likely to be the biggest IPO by a UK technology company for years.

King, which used to be referred to as Britain’s answer to Zynga before the latter company’s fall from grace, has lodged its pre-IPO “S-1” paperwork with the Securities and Exchange Commission, taking advantage of the same loophole for rapidly-growing businesses that allowed Twitter to keep its IPO confidential.

Few financial details are available, but it was turning over around £300m at the start of this year and has grown rapidly since then. Its games were played an average of 300m times a month in 2011 but that figure now tops 30bn, helped by the success of Candy Crush Saga, which is the most popular game played on Facebook.

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Posted: 27th, September 2013 | In: Money, Technology | Comment


There are bad Bitcoin investments and then there are terrible ones

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YOU can mix and match these around either way you like: one is fairly obviously a scam and the other one just doesn’t make any sense in any financial manner. But amazingly, the one that doesn’t make any sense is also the one that’s entirely legal. So go figure, hunh?

For those knew to the idea of what Bitcoin is it’s a purely imaginary currency. It lives as bits and bytes on the world’s computer networks. There are those who think that it’s going to be the next big thing, a currency not controlled by any government. There are also those who regard it as a passing fad and not really good for anything very much. But, given that it’s fashionable there are people crowding around it and trying to make a buck off it. One of them is this one:

 Back in August, weird ads began appearing for something called the Bitcoin Robot that purported to earn massive profits by making hundreds of small transactions a day in the virtual currency, a version of the lucrative high-frequency trading done on Wall Street.

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Posted: 26th, September 2013 | In: Money | Comment


Netflix and BitTorrent: If you let people buy things then they won’t steal them

Netfilx headquarters in Los Gatos, Calif., Tuesday, March 20, 2012. (AP Photo/Paul Sakuma)

TWO interesting little bits about Netflix, the online on demand film and TV show service.

The first one is that they monitor what people are stealing over the BitTorrents to see what shows they should try to go and buy the rights for:

Netflix acknowledged this week that the company eyes piracy statistics to determine what kind of video content to offer subscribers and what kind of television programs they should buy.

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Posted: 26th, September 2013 | In: Money, Technology, The Consumer | Comment


Yes of course Ed Davey’s lying about fracking?

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YOU know, politician, lips moving and all that. But how he’s lying is just as important as grasping the fact that he is lying. Each particular thing that he says is more or less truthful but the overall impression left is entirely untruthful:

“North Sea gas didn’t significantly move UK prices – so we can’t expect UK shale production alone to have any effect,” Mr Davey said, pointing out that Britain is just one part of the wider European gas market.

He said it was “far from clear that UK shale gas production could ever replicate the price effects seen in the US”, where the shale gas boom has seen prices plummet.

The comments stand in stark contrast to those of David Cameron, who wrote in the Telegraph last month that “fracking has real potential to drive energy bills down”

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Posted: 25th, September 2013 | In: Money, Politicians | Comment (1)


The Robin Hood Tax is illegal so yah boo suckers

robin hood tax

INTERESTING news for those who support the Robin Hood Tax, or as it’s really called, the European Union’s Financial Transactions Tax. It’s illegal.

So much for Europe’s great sprint to tax financial transactions. In a leaked opinion dated September 6, the EU Council’s Legal Service argues that the proposed levy is “not compatible” with European Union treaties because it “infringes upon the taxing competences of non participating Member States.” Translated from the legalese, that means France, say, would be collecting revenue on certain trades conducted in the U.K. though the U.K. government hasn’t agreed to the tax.

So that would appear to be that. Another very stupid idea shot down because the people proposing it didn’t even bother to work out whether it was possible to do what they proposed.

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Posted: 25th, September 2013 | In: Money | Comment (1)


Real Madrid ‘stole’ Spurs loving Gareth Bale from Manchester United

HOW’S Gareth Bale getting along since moving to Real Madrid from Spurs?

Well, Real’s president Florentino Perez says that he got Bale at a great price. Sure, it was €100m (£85.3m) but that’s a a steal. As he says:

“Bale has come cheaply. Signing the best players out there is Madrid’s philosophy and Bale was the best available player on the market this summer. We had been following him for two years. Tottenham did not want to sell. We learned that Manchester United had made an offer and we made one ourselves.”

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Posted: 25th, September 2013 | In: Money, Sports | Comment


Apple’s competition is really Apple

IT may have passed you by but the best economist you’ve never heard of, Ronald Coase, passed away last week. One of the reasons he was so highly regarded within the profession was that he brought out into the open things that no one had seen before: but which once they were out in the open became immediately obvious. And it’s this that leads to the observation that Apple’s biggest competitor is really Apple itself.

Had I had room, I would have quoted a question that my former University of Rochester colleague, Ron Schmidt, a master teacher, posed in about 1976 and that I got the wrong answer to. The question: “What is General Motors’s biggest competitor?” [Remember that this was before the Japanese producers were a large part of the market.] My (wrong) answer: “Ford.” Ron Schmidt’s answer: “The used car market.”

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Posted: 24th, September 2013 | In: Money, Technology | Comment


Payday loan firms like Wonga don’t actually make any money

I THOUGHT this was a fascinating little snippet of information. OK, it’s about the US payday loan firms, not our own, but I still found it interesting:

“In a state with a $15 [fee] per $100 [loan] rate, an operator … will need a new customer to take out 4 to 5 loans before that customer becomes profitable. Indeed, Dan Feehan, C.E.O. of Cash America, remarked at a Jeffries Financial Services Conference in 2007, “[T]he theory in the business is [that] you’ve got to get that customer in, work to turn him into a repetitive customer, long-term customer, because that’s really where the profitability is.”

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Posted: 24th, September 2013 | In: Money | Comment


Starbucks really wasn’t making a profit you know

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YOU’LL all recall a little while back there was that furore about how much Starbucks was or wasn’t paying in corporation tax. And one of the defences offered for the company was that as they weren’t making a profit then there wasn’t any tax that they should have been paying.

Then the conversation turned to the things they were doing inside their accounts. For example, they paid a royalty to a Dutch firm for using the Starbucks name. That did indeed dodge UK tax (actually, EU rules make it illegal for the UK to try and tax that amount). But even so, even if we add that money back in, Starbucks UK still wasn’t making a profit.

So we move on to the next bit, which is that Starbucks were paying a 20% fee on the coffee beans they bought from Switzerland. From another Starbucks company of course: there, that’s real tax dodging!

And then today the Mail tells us how much the coffee actually costs:

 Cost of actual coffee in a medium £2.20 cappuccino amounts to 8p

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Posted: 23rd, September 2013 | In: Money | Comment (1)


Bono says U2’s tax avoidance policy is ‘in total harmony with the Irish government’s philosophy’

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MORE epic stuff from Bono, aka Mr G21. U2’s lead singer tells Tim Adams in yesterday’s Observer about tax and moving his money out of Ireland:

Tim Adams: “The other persistent criticism is about the band’s decision to offshore part of their income through the Netherlands to avoid tax. Was it not hypocrisy for you to try to hold the Irish government to account for its spending while going through fairly exhaustive efforts to avoid paying into the Irish exchequer yourself?”

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Posted: 23rd, September 2013 | In: Celebrities, Money | Comment


Dragoncon: Epic cosplayers gets Cease and Dessist letter for the vomitous Marriott carpet design they copied

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CONGRATULATIONS to the cosplayers at the 2013 Dragoncon who dressed as the hideous carpet at the Atlanta Marriott hotel. But when one of the carpet assassins offered to supply the outfit to others, the lawyers stepped in. The garish horror flooring is made by Couristan Inc. Not only were they not ashamed to say they created that stuff, they issued a a legal threat.

Posted: 23rd, September 2013 | In: Money, Reviews | Comment


Kickstarter needs to you to help book that says Obama is the Antichrist!

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CARTOONIST Rick Geary has launched a Kickstarter campaign we can really get behind. He wants fans to fund a book called ‘A is for Antichrist: Obama’s Conspiracy Alphabet’.

Of course, everyone loves a conspiracy theory (and the more outlandish the better) and he wants to get the weirdest rumours around about the American president put them all together in one glorious alphabet book.

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Posted: 21st, September 2013 | In: Money, Politicians, Reviews | Comment


Idiot governments and renewable power: the subsidy strike prices shambles

OK, so, let’s say that all this concern about climate change is correct. It’s happening, we’re responsible and we’ve got to do something about it. OK, fine, so, what should we be doing?

Well, obviously, we should be trying to find methods of producing electricity that doesn’t involve carbon emissions. This isn’t particularly sophisticated logic after all.

There are also various types of low carbon electricity, some more expensive than others. We’d clearly like to have more of the cheaper stuff and less of the more expensive. So, how would we do this? All of them require a subsidy but how do we get more of the cheaper and less of the more expensive?

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Posted: 21st, September 2013 | In: Money | Comment (1)


The EU’s investigating those Google, Vodafone, Amazon and Apple tax deals

I’M not sure how far they’ll get though, based on what it is that they seem to be investigating.

This is all about the Starbucks n’ Google n’ Vodafone n’ Apple stuff. How can they be doing so much business and paying so little in tax?

According to a US Senate report earlier this year Apple has a ‘special deal’ with Dublin and pays no more than two per cent tax on profits, at least 10 per cent below what some other businesses have to in Ireland. 

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Posted: 13th, September 2013 | In: Money | Comment


Courtney Cox arrested for alleged naked swim in casino fountain

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GET A NEW X-rated Friends into (see above). News is that a Courtney Cox has been arrested for allegedly swimming naked in the fountain at the Horseshoe Casino Hotel in Bossier City. But it’s not that Courteney Cox.

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Posted: 13th, September 2013 | In: Money, Reviews | Comment


Small balls mean you’ll be a good father. Obviously

good dadTHIS might come as a surprise to some, that having small balls and a low testosterone level will mean that you’ll be a better father. But this is an obvious result of the economics of the mating game. A blindingly obvious one in fact.

Anthropologists at Emory University found that men with smaller testes were more likely to be directly involved in the care of their toddlers. Smaller testes also correlated with more nurturing-related brain activity.

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Posted: 11th, September 2013 | In: Money, Strange But True | Comment


The Five Cognitive Distortions of People Who Get Stuff Done in Silicon Valley

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MICHAEL Dearing has created The Five Cognitive Distortions of People Who Get Stuff Done in Silicon Valley.They are:

Some common patterns of automatic thought among those who get a lot of stuff done / create tons of value

• Strong patterns of automatic thoughts = cognitive distortions

• Cognitive distortions are filters or lenses that influence thinking, shape interpretation of reality, basis for action

• The Big Five

o Personal exceptionalism
o Dichotomous thinking
o Correct overgeneralization
o Blank canvas thinking
o Schumpeterianism

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Posted: 11th, September 2013 | In: Money | Comment


Why do men still have to pay for dates?

paying for datesTHERE really are some handwringing feminists who need to get out a bit more. This particular one is wondering why it is that it’s men that usually pay for dates. The answer is very simple but not one that seems to have occurred to her.

When it comes to dating, even in 2013 and even among millennials, men are still largely expected to pick up the check.

There’s one detailed point where she is simply wrong:

And despite much bally-hooed talk about the “real” cause of the wage gap, the fact of the matter remains that, no matter how you caveat it, women make less than their peers in the same professions and much less than their male peers if you take into account their differing choices of professions (which some writers have noted are often driven by the experience of sexism in universities and professional settings).

So when it comes time to pull out one’s wallet at the end of the date for people under 30, the sad truth is that there might not be much money in either, but it’s statistically probable that there is less in the woman’s.

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Posted: 10th, September 2013 | In: Money | Comment


Finding the Holy Grail in cutting emissions

I’D never really had the Mail pegged as a paper that particularly cared about climate change but they’ve gone overboard on this story about how someone’s found the latest incredible technology that will save us all from Gaia murdering us in our beds. To the point that they are pondering whether it is the Holy Grail of the whole climate change thing:

Scientists believe they have achieved the ‘holy grail’ of the green economy by designing a hydrogen production plant that can split water with sunlight.The University of Colorado at Boulder envisages an array of mirrors that would focus sunlight onto a central tower several hundred feet tall.The tower would heat up to around 1,350 °C – enough to liberate hydrogen from steam with the help of a metal oxide compound.

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Posted: 9th, September 2013 | In: Money | Comment


And now for a really stupid investigation into a bank

THE Americans really do suffer from the not invented here syndrome. They’ve this really serious belief that the whole world is like the US: and if it isn’t that it should be made like it. One example is this, something I’d describe as one of the most stupid investigations into a bank that I’ve ever seen:

The U.S. Securities and Exchange Commission’s anti-bribery unit is investigating whether JPMorgan Chase & Co. (JPM) hired the children of Chinese officials to help its business, The New York Times reported, citing a confidential government document.

The bank hired the son of a former Chinese banking regulator who is currently chairman of China Everbright Group Ltd., a state-controlled financial company, while its Hong Kong office employed a Chinese railway official’s daughter, according to the report. After each appointment, the bank secured assignments from companies connected to the new hires’ parents, according to the report.

The bank has not been accused of any wrongdoing, according to the report.

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Posted: 9th, September 2013 | In: Money | Comment (1)


You’ve not lost 40% of the value of your house for a quick sale

THE Daily Telegraph reports:

‘I lost 40pc on my quick house sale’

Many firms will offer to sell your house quickly – but some sellers are losing up to 53pc of their property value. Anne Baker lost £40,000 on the sale of her inherited home.

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Posted: 9th, September 2013 | In: Money | Comment