The best deal for the UK in the EU will only come after a NO vote in the referendum

February 8, 2016

A view from afar of Cameron’s negotiations with the EU.

I have seen my share of negotiations over 40 years and my judgement is that the current negotiations are far away from the crunch. They are just not serious. In fact they are a little naive. To think that the UK can get a “best deal” without first formally rejecting a proposal goes against everything I think I know about negotiations. The simple, fundamental reality is that the UK will get a better deal only after it has first rejected the “best deal” that the EU and Cameron can cobble together.

No party in a negotiation ever gives up some cherished position except when it perceives a real threat. There is just no real threat or incentive for the EU to pursue real reforms as long as Cameron has effectively promised that he will campaign in favour of whatever “deal” he brings to the referendum. The EU will not negotiate seriously with the UK until after a NO vote in the referendum.

The EU desperately needs to reform. The bureaucracy of the European Commission and the parasitic European Parliament need to be respectively, defanged and eliminated. The EU needs the UK to stay in and the UK would be better off in a reformed EU (but could be better off outside if the EU insists on setting up the Holy European Empire).

The current negotiations are not serious. They are primarily cosmetic and known – by both parties – to be cosmetic. The discussions will only get serious when a referendum has delivered a resounding NO and it is seen by the EU countries that a BREXIT is really possible. Right now they expect that some cosmetic changes – especially about high visibility issues like benefits and non-EU immigration, will be sufficient for placating Cameron and for allowing him to take a “good deal” into the referendum. But they are not even talking about the real issues of EC autocratic rule and the redundant layer of the EU parliament.

Of course Cameron would have to be sacrificed. The sequence would be:

  1. Cameron brings “best deal” to a referendum,
  2. the referendum would reject the deal and vote for BREXIT
  3. Cameron resigns,
  4. new PM would initiate formal move to request an exit from the EU,
  5. EU would come with a “better” deal,
  6. a new referendum would be called on the grounds that “substantial” improvements had been offered
  7. 2nd referendum votes YES and for BREXIN


Positive effects of oil price drop should kick-in by Q2

February 8, 2016

The net effect of lower oil price has always been expected to be positive.

Although oil price gains and losses across producers and consumers sum to zero, the net effect on global activity is positive. The reasons are twofold: simply put, the increase in spending by oil importers is likely to exceed the decline in spending by exporters, and lower production costs will stimulate supply in other sectors for which oil is an input.

Since June 2014, oil price has dropped by over 70%, but the boost to the global economy has not materialised as yet. The “explanations” being produced include – but are not limited to – the turn-down in China, the collapse of various economic “bubbles”, the fear factor, the reluctance of governments (especially in Europe) of allowing a pass-through of the price reduction to consumers and  the too rapid decline of tax revenues in oil producing countries.

Oil price 8th Feb 2016 - Nasdaq

Oil price 8th Feb 2016 – Nasdaq

Certainly the “fear factor” and the reluctance of governments and private players to plan for any extended period with low prices has been a major factor. The stock markets have not hit bottom yet. But the strange thing is that the money pulled out of the stock markets has not all shifted to gold and has resulted in only a modest increase of gold price.  The other traditional safe havens of government paper are providing very low yields.

While company earnings are down they are nowhere near as bleak as the stock markets would indicate. Dividends are somewhat down but also do not match the decline in valuations. Now I see that sales volumes are also not as far reduced as the valuations and that margins are generally holding up. But the first lot of dividends I have received in 2016 convince me that while absolute values are down, the “yield” based on current valuations has actually increased.

Of course markets can still go down. But the drop in earnings will be far less than the loss of valuations that has already taken place. P/E ratios are beginning to look quite attractive and if earnings can hold up in line with sales volume, I expect that dividends will still provide a good “yield” through 2016.

As the IMF puts it:

Low oil prices provide a window of opportunity to undertake serious fuel pricing and taxation reform in both oil-importing and oil-exporting countries. The resulting stronger fiscal balances would create space for increasing priority expenditures and/or cutting distortionary taxes, thereby imparting a sustained boost to growth. In a number of low- and middle-income countries, energy sector reforms aimed at broadening access to reliable energy would have important development benefits.

Maybe I am just an optimist, but new company budgets – especially those for the year starting April 2016 – are now factoring in some of the 70% drop of oil price as being sustainable (typically an oil price of $45 as being taken as a “safe” but sustainable level). That leads me to expect a change of mood and a corresponding change in markets in the second quarter of 2016.


It’s Happy New Year (again)

February 7, 2016

red fire monkey

Danish revelations about Snowden suggest Swedish charges against Assange were trumped up for rendition to the US

February 5, 2016

The ridiculousness of the Swedish charges against Assange have always left with me with a sneaking suspicion that there is a very murky back story lurking somewhere. On the surface it just seems like Swedish feminism gone mad. But the Swedish Justice system does not pursue even murderers with the viciousness with which it has pursued Assange. It has seemed like just another crazy, paranoid, conspiracy theory to think that it was all engineered at the request of the US authorities to try and get Assange (by extraordinary rendition) to the US. But it does not look like such a crazy theory any more.

Assange and Wikileaks have been a thorn in the side of the US authorities. Just as Snowden and his associates were. The UK government was very active in helping the US authorities try to get hold of Snowden and his associates. It has now been revealed that by the Danish Justice minister that the Danish government of the time led by Social Democratic prime minister Helle Thorning-Schmidt was also ready to allow the rendition of Edward Snowden to the US on the flimsiest of paperwork. The FBI had requested the assistance from all the Scandinavian countries and it is pretty clear that Sweden and Norway and probably Finland would also have cooperated.

With the level of Danish cooperation with the FBI for the possible rendition of Snowden now being admitted, it does not seem that far fetched that Sweden, with its desire to join NATO, would also go to extraordinary lengths to be in the “good books” of the US.

The clear intention of the Danish government to cooperate with the US over Snowden suggested that Scandinavian governments “would probably do the same with Julian Assange”, were he to travel to Sweden to face rape allegations

I begin to suspect that the framing of charges against Assange – on extremely flimsy grounds – after the prosecutor’s office had first declined to proceed was a ruse devised at the highest levels of Reinfeld’s government to get Assange to the US via Sweden and gain a number of brownie points while doing so. Perhaps Assange has good reason to be paranoid.

The Guardian:

A US government jet was lying in wait in Copenhagen to extradite the whistleblower Edward Snowden if he had come to Scandinavia after fleeing to Moscow in June 2013, the Danish government has revealed.

……. Søren Pind, the justice minister, wrote to Danish MPs (pdf): “The purpose of the aircraft’s presence in Copenhagen airport is most likely to have been to have the opportunity to transport Edward Snowden to the United States if he had been handed over from Russia or another country.”

“I must note that my answer was not adequate at this point,” he wrote in the letter, dated Thursday 4 February and revealed by MPs on Friday. “Usually, information of this nature is confidential because of Denmark’s relations with foreign states. In view of the impression that my earlier answer may have created, I think it proper to inform parliament thereof. The US authorities have also been informed.”

Nicholaj Villumsen, MP and foreign affairs spokesman for the Red Green Alliance, said: “It is grotesque that the then government put the interests of the United States above citizens’ freedoms. They violated fundamental democratic rights. We owe Edward Snowden a big thank you for his revelations of illegal US mass surveillance. Denmark should therefore in no way participate in the hunt for him.”

The clear intention of the Danish government to cooperate with the US over Snowden suggested that Scandinavian governments “would probably do the same with Julian Assange”, were he to travel to Sweden to face rape allegations, Villumsen said. Assange’s insistence that he faces a risk of extradition was a central aspect of his appeal to the UN working group on arbitrary detention, which on Friday ruled in his favour.

Time for Sweden’s Moderate Party to show some courage

February 5, 2016

At the last general election in September 2014 the Moderate Party led Alliance lost its mandate to govern. That passed to the Red/Green combination of the Social Democrats and the Environmental Party who still needed the support of the Left (Communist) Party to become a viable minority government.

Currently the Swedish Parliament has 349 members from 8 parties.

Social Democrats – 113, Moderates – 84, Sweden Democrats – 49, Environment Party – 25, Centre Party – 22, Left Party – 21, Peoples Party – 19, Christian Democrats – 16.

Swedish political landscape 2014

Swedish political landscape 2014

In December 2014, the Moderate led Alliance entered into a “collusion of the cowardly”, called the December agreement, promising to allow the Red/Green group to govern. The Alliance was dominated by fears of getting the unwanted support of the right wing Sweden Democrats and they had a new party leader in Anna Kinberg-Batra. She was still finding her feet, which meant that the cowardly wing of the Moderates (in my perception led by Tomas Tobé) got their way.

Fortunately one of the smaller alliance parties, the Christian Democrats, refused to ratify the December Agreement at their convention in October 2015, and that finally killed it. Though the Moderates now lead the Social Democrats in the polls, the establishment still prefers to abdicate its responsibilities as an opposition.

Moderates now largest party in the polls

Even though – and probably because – the Sweden Democrats have indicated that if the Alliance present their own combined autumn budget this year they will – without preconditions – vote for it to ensure its passing, the Moderates are still vacillating about presenting such a budget which could actually be passed and remove the Red/Green government from power. They seem to prefer to present separate party budgets which will surely lose than to present a combined Alliance budget which might well win. They are just too scared to be seen to rely on support from the Sweden Democrats, officially or not and even without preconditions.

My definition of cowardice is when actions are subordinated to fears. Courage is when fears are subordinated to purpose.

The December Agreement and the present vacillation of the Moderates is an almost classical case of cowardice. It is time they grew a backbone and started opposing the Red/Green/Communist nonsense that they are letting go through by default. It is time for Anna Kinberg-Batra to put her foot down and exhibit a little bit of courage.

I pay my membership dues to the Moderate Party – even if I am not very politically active beyond voting.


Dumbing down “Top Gear”, Assange and other miscellany

February 5, 2016

Noted in passing –

  1. I doubt I shall watch the reincarnation of BBC’s “Top Gear” as often as I did the Clarkson/May/ Hammond version. Not only because of the dumbing down represented by having Chris Evans as the main presenter but also because, I suspect, he will have difficulty to add value. Now with Joey from Friends (Matt LeBlanc) joining Evans, it increases the dumbing down and reduces the likelihood for value addition even further. In the BBC TV show “Bake Off”, the two giggly presenters add no value at all and are an embarrassment, but the substance for the show is provided by the two judges Mary Berry and Paul Hollywood. With Evans and LeBlanc, I don’t see where the substance can come from.
  2. So the UN has come out in favour of Assange. Of course this is not binding on either the UK or Sweden but the moral high ground goes to Assange. The UK has a point that as long as the Swedish arrest warrant remains in force they have no choice but to implement it. The whole case is driven by a feminist prosecutor in Sweden on very flimsy statements (with little or no evidence) from the self-proclaimed victims, long after the alleged offences took place. That was after the public prosecutors office had first decided to drop the case for lack of any evidence beyond the statements of the alleged victims. But in Sweden it is politically incorrect to drop a “feminist cause”. This leads to a bit of a dilemma for the Swedish media and the establishment in that UN statements are also very politically correct. The clash between the prosecutor’s feminist correctness and the correctness of solidarity with all UN statements should be interesting to observe.
  3. Saudi Arabia is said to be ready to put troops into Syria (in support of Turkish troops?), but don’t expect them to support any Kurdish groups or to act against any ISIS factions fighting the Kurds. The Russians are  not amused. Meanwhile the Syrian regime is preparing to retake Aleppo.
  4. Markets have gone well below the the bottom I was expecting (oil price $30 and Shanghai Composite at 3100 or less), but my guess is that we are not far from the bottom. P/E ratios – especially for those companies who are maintaining their earnings, now look positively attractive.
  5. The French are accepting reality and the power of the internet. They are officially proposing to revise the spelling of some 2400 words: “They include the deletion in some words of the hyphens and the circumflex. The accent disappears from above the letter i and u in certain words and not from the letter o”.
  6. There is no evidence that organic foods are any better for health than non-organic foods. I find the whole fad about “ecological food” rather ridiculous and just a marketing gimmick to charge higher prices. I usually say nothing when somebody tries to promote “ecological food” but I am usually thinking “why do you insist on displaying your gullibility?”
  7. It is a leap year and the 2016 Indian budget will be presented on February 29th. Lots of advice from every one but I think the budget assumes greater importance in the current depressed state of the global economy. One of the few potential bright spots which could help change the global mood would be an expansionist budget – but that does not come without risk of galloping inflation being unleashed. I think the choice is for either subordinating all actions to global fears or to try and lead the way out of the morass. My fear is that it will be a sad wishy-washy thing which tries to satisfy all and ends up doing nothing.



Self regulation for would-be terrorists

February 3, 2016

Found on the net:

self regulation

It’s the honour code.

If only Airport Security could work that way —

If you are dangerous, 

You must not board

John Cleese – “Political correctness creating 1984”

February 2, 2016

That “political correctness” is oppressive is self-evident. It is the tool that the liberal left have been using – with some success – to shut down opposing views by stifling them. Political correctness is nothing more than trying to control other people’s behaviour (and sometimes even their thoughts). More often than not, for the mob applying pc to shut others up, it is a sign of their abdication of thought. It is a shame that so many young people on college campuses just follow the herd rather than thinking for themselves. But nearly always, the instigator of a pc campaign will be a left leaning activist who would deny others the freedom of thinking.

Now even John Cleese has been moved to attack the political correctness that so dominates university campuses.

EntertainmentBritish actor John Cleese, of Monty Python fame, says the enforcement of political correctness has come at the expense of comedy. 

In a video for Big Think, Cleese speaks specifically about college campuses, where he says he’s been warned not to perform because “any kind of criticism or any individual or group could be labeled cruel.”

Cleese also recalled something said to him about the issue by London psychiatrist Robin Skynner, with whom he’s worked on two books about psychology and psychiatry.

“[Skynner] said, ‘If people can’t control their own emotions, then they have to start trying to control other people’s behavior.’ And when you’re around super-sensitive people, you cannot relax and be spontaneous because you have no idea what’s going to upset them next,” says Cleese.

He adds, “The whole point about humor, the whole point about comedy, and believe you me I”ve thought about this, is that all comedy is critical … All humor is critical. If you start to say, ‘We mustn’t; we mustn’t criticize or offend them,” then humor is gone. With humor goes a sense of proportion. And then as far as I’m concerned, you’re living in 1984.”

Jerry Seinfeld made the same point last year:

…. “I hear that all the time,” Seinfeld said on The Herd with Colin Cowherd. “I don’t play colleges, but I hear a lot of people tell me, ‘Don’t go near colleges. They’re so PC.’”

Seinfeld says teens and college-aged kids don’t understand what it means to throw around certain politically-correct terms. “They just want to use these words: ‘That’s racist;’ ‘That’s sexist;’ ‘That’s prejudice,’” he said. “They don’t know what the hell they’re talking about.”


Giving money to Roma beggars is not a good idea

February 1, 2016

Virtually every supermarket in Sweden has a Roma beggar siting outside at the entrance – in all weathers and even when it is -20ºC. About 90% of the thousands in Sweden are thought to be from Romania. Train and bus stations are also well covered. Certainly their presence is almost ubiquitous. The urge to drop any loose change I may have into their bowls is heavily tempered by the conviction that this is well organised begging and is actually a well-oiled “enterprise”. My perception from my limited observations is that the pitches for each beggar are allocated somehow, that they work shifts of about 4 hours per individual and that each is equipped with a mobile phone. They seem to be dropped off and picked up from their allocated positions by car. It seems they are overwhelmingly from Romania, taking advantage of the EU’s free travel arrangements. They are not, I think, receiving any welfare payments.They usually congregate and live in trailer parks, camp sites or other common land in – mainly – run-down caravans.

A petrol station carpark where dozens of beggars live. Photo: The Local

The Roma beggars in Sweden are far less wretched than the beggars I am used to seeing in India but their situation is still pretty awful. Presumably it is not as bad as they would have it back in Romania. Nevertheless my gut feeling has been that putting money in their begging bowls is not a good thing since it can only lead to the conclusion that “begging works”. I suspect that giving money to these beggars will only make it a “successful enterprise” and can only entrench and promote that enterprise. The enterprise will only be discouraged and stop if it is unsuccessful.

The report from a government enquiry has just been published and it seems to support my gut-feeling that giving money to the “begging enterprise” is not a good idea.

The Local (SE)Swedes should not offer cash or welfare services to Roma beggars asking for money in the streets, the lead investigator behind a key national inquiry has said.

Sweden’s national coordinator for vulnerable EU citizens, Martin Valfridsson, presented the findings of a major government begging inquiry on Monday alongside equality minister Åsa Regnér.

“I don’t think [giving money to beggars] is what helps individuals out of deep poverty in the long run. I really believe that the money is more useful with organizations in the countries of origin,” he said.

Sweden has experienced a surge in EU migrants – mostly part of the Roma community from Romania and Bulgaria – begging on streets around the country in the past year.

“We see that the number of vulnerable EU citizens have increased sharply. It’s EU citizens who don’t have the right to welfare in Sweden. In 2015 there were up to 5,000 vulnerable EU nationals in Sweden with a small dip after the summer. Of those around 70 are children,” said Valfridsson.

He also suggested that offering places in schools to children of EU migrants could lead to more vulnerable families bringing their children to Sweden while begging in the Nordic country.

“I don’t think we should generally offer schooling to these children,” he said. ……..  Valfridsson further discouraged municipalities from making campsites legally available to Roma travellers.

“That creates new difficulties. Society helps reestablish those slum communities we have worked so frantically to get rid of. The message is that you’re allowed to come here, but if you do you must live here legally. Society must have a strict approach to that you’re not allowed to settle on someone else’s land,” he said.


Gravitational “constant” is not constant but varies periodically

February 1, 2016

Newton’s gravitational constant, G, is surprisingly variable and varies periodically. The period is 5.899 +/- 0.062 years which is the same period by which the length of day varies and is also about half the 11 year solar cycle.

The reasons for this are unknown and speculations about currents in the earth’s core and magnetic effects abound.

The simplest explanation is that it is the same magic which causes gravity (and calling it space-time does not reduce its magical qualities) which also causes the solar cycle and is also the same magic which governs the movement of the earth around the sun and the corresponding length of day.

John D. Anderson, Gerald Schubert, Virginia Trimble, Michael R. Feldman, Measurements of Newton’s gravitational constant and the length of day, EPL 110 (2015) 10002, doi:10.1209/0295-5075/110/10002

Abstract:About a dozen measurements of Newton’s gravitational constant, G, since 1962 have yielded values that differ by far more than their reported random plus systematic errors. We find that these values for G are oscillatory in nature, with a period of P = 5.899 +/- 0.062 yr, an amplitude of (1.619 +/- 0.103) x 10^{-14} m^3 kg^{-1} s^{-2}, and mean-value crossings in 1994 and 1997. However, we do not suggest that G is actually varying by this much, this quickly, but instead that something in the measurement process varies. Of other recently reported results, to the best of our knowledge, the only measurement with the same period and phase is the Length of Day (LOD – defined as a frequency measurement such that a positive increase in LOD values means slower Earth rotation rates and therefore longer days). The aforementioned period is also about half of a solar activity cycle, but the correlation is far less convincing. The 5.9 year periodic signal in LOD has previously been interpreted as due to fluid core motions and inner-core coupling. We report the G/LOD correlation, whose statistical significance is 0.99764 assuming no difference in phase, without claiming to have any satisfactory explanation for it. Least unlikely, perhaps, are currents in the Earth’s fluid core that change both its moment of inertia (affecting LOD) and the circumstances in which the Earth-based experiments measure G. In this case, there might be correlations with terrestrial magnetic field measurements.

A set of 13 measurements of G exhibit a 5.9-year periodic oscillation (solid curve) that closely matches the 5.9-year oscillation in LOD measurements (dashed curve). The two outliers are a 2014 quantum measurement and a 1996 measurement known to suffer from drift. The green dot is an estimate of the mean value of G after the 5.9-year periodicity is removed. Credit: J. D. Anderson, et al. ©2015 EPLA

A set of 13 measurements of G exhibit a 5.9-year periodic oscillation (solid curve) that closely matches the 5.9-year oscillation in LOD measurements (dashed curve). The two outliers are a 2014 quantum measurement and a 1996 measurement known to suffer from drift. The green dot is an estimate of the mean value of G after the 5.9-year periodicity is removed. Credit: J. D. Anderson, et al. ©2015 EPLA

Physics is impossible without final recourse to various magics; Big Bang Magic, gravitational magic, weak force magic, strong force magic and electromagical magnetics. There is something very inelegant – bordering on ugly – when modern physics needs over 50 different “fundamental” particles and unknown, unseen, undetectable forms of dark matter and dark energy to make their models feasible.

If there is a fundamental particle then there can be only one and it is called the Ultimion.


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