“Global warming” on vacation as July temperatures rival last November

July 10, 2015

Reality seems quite different to the fanciful computer models of the alarmists. Where has the imagined global warming gone? Of course “global warming” is not something that can be experienced or observed. Global temperature is an artefact. It can only be calculated from “adjusted” and “homogenised” data where the past has been cooled and continues to be cooled with every year that passes. The algorithms used to adjust and homogenise real data seem to be designed to produce pre-determined results. From raw temperature data, there is no evidence of man-made global warming.

We had 3 days here in Sweden over 30ºC last week. The fantasists began talking about a “heat wave”. Since then it has felt like March or November. The maximum today will not exceed 13ºC.

(Note that in the UK, on one day last week – and based on one temperature reading at an airport – it was claimed that it was the hottest day for 200 years. Even if the sensational conclusion was correct – which it was not since it was hotter in 1976 – it would only demonstrate that it was hotter 200 years ago and long before man made emissions were of any significance).

DagensNyheter:

November Chill – in the middle of July
The summer warmth is conspicuous by its absence. And the mercury can hardly get to more than 12 degrees in Stockholm. It is as cold as last November.

The summer warmth will have to wait a good long while. Low pressures are relentless in Sweden – and today it is colder than in a long time. The temperature in Stockholm just before midday is about 12 degrees. It is as cold as the beginning of November last year.

“This is unusually cold and far below the normal temperature”, says Eva Strandberg, meteorologist at SMHI.

It does not appear that it will be much warmer anytime soon. “During the next 10 days or so it does not look like there will be any high pressure. The unstable weather will dominate and perhaps with a few days up to 20 degrees. There is a continued risk of showers”, says Eva Strandberg.

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Greek proposal is for European taxpayers to provide €5,000 handout per person

July 10, 2015

Why did Tsipras bother with the referendum?

The Greek proposal now is for much the same reforms that were rejected by the referendum. Except that now a debt write-off of about €54 billion is also demanded. That is about €5,000 for each of the 11 million Greek population to be funded by the taxpayers of the other European countries. It is not cash in hand of course but whether handout of cash or cancellation of debt, it costs the same.

The proposals are to be approved by the Greek parliament today and even if the hard-left vote against, it should go through with the help of all the centre-right votes. I suppose it will all get approved – with French pressure – on Sunday. But the bottom line is that every Greek citizen will effectively be getting a handout of €5,000 each from other European taxpayers.

It is not debt relief after a natural catastrophe or a war that is being asked for. It is debt relief for mismanagement. It is debt relief for earlier profligacy – for a bloated public sector which awarded itself generous pensions at 55; for years of  tax evasion and corrupt big projects. And it was done during a period when other more prudent European countries were considering raising the retirement age. Some of that profligacy will be corrected but far from all of it. This bailout is unlikely to suddenly bring “good housekeeping” to the Greek house. It will not prevent Greece from being constrained and stifled by the Euro straitjacket. Further bailouts will be needed.

For the Eurozone it will be a patch-up exercise for a fundamentally flawed common currency system. It is fundamentally flawed because it is being seen as a tool to bring about political and fiscal union when it should just be a natural – and inevitable – consequence of political and fiscal union. In the long run the Euro has to be shrunk or dismantled. Debt relief for the Greeks now is a precedent that establishes it will always be on the table for future mismanagement.

Past bad behaviour being rewarded for the sake of a grandiose concept of a Holy European Empire.

 

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French socialists trying to rescue their Greek comrades

July 9, 2015

That Yanis Varoufakis was a marxist economist is no great secret though he likes to call himself a libertarian marxist. (I have no great opinion of the black magic of economists in general and especially since they are all theorists which backcast but can never make a forecast. But a marxist economist pushes the bound of credulity).  His forced resignation from the post as Finance Minister was the token, cosmetic gesture made by Tsipras to the creditors. Syriza is a strange blend of socialism and marxism and nationalism. Among the group of creditors it has become apparent that the French socialists are going out of their way to try and save Tsipras and they are desperately trying to help Tsipras come up with a good “socialist” plan that can pass muster with the other creditors.

Now it seems that French econmists are actuually helping Tsipras draft proposals which must be presented today.

BBC: 

The Greek media have reported that financial experts from France are helping Greece put together its reform plan. It’s a story that has been backed up in the French press too.

But France – which has taken a largely conciliatory tone towards Greece – has denied any of its officials were involved.

AFP quoted one un-named official as saying: “France wants to help things along and very much backs an agreement, but in no way are we helping them draft the proposals.”

That French officials will not be acting in the name of France is obvious. But it is equally obvious that French nationals – acting in an “unofficial” capacity, but with the probable knowledge and blessing of the French government – are helping the Greeks to draft their proposal.

Good luck to them. But the best for all is for Greece to leave the Euro and stay in the EU.

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Chinese crash gives new investing opportunity

July 9, 2015

The 2015 Chinese stock market crash has different drivers but resembles the 2007/2008 crash in investor behaviour.

Many domestic Chinese investors made a great deal of money with the recovery in late 2008/ early 2009. My guesstimate is that any real recovery from the current crash cannot come until the 6 month freeze just introduced on large stockholders selling shares is withdrawn. But since investing in the Chinese market is now possible through a variety of funds, there is an opportunity coming. My estimate is that the bottom is when the Shanghai Composite Index is driven down to about 3,100 at which point the market will be grossly undervalued. The opportunity will come in the subsequent “bull” market when stocks will be driven up into “overvalued” territory again.

I am a strong believer in “track record” and that past behavioural patterns repeat or, at least, change very slowly.

My investments are far too small to be of any significance in the big picture. My strategies are therefore all based on detecting and riding the waves of behaviour exhibited by others. And so I will be looking to making some investments in about 4 – 6 months with a target of 30-40% growth over the following 6 months.

China investing opportunity

China investing opportunity

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No evidence of any global warming in robust Arctic and Antarctic ice extents

July 8, 2015

After 40+ years of an imagined, man-made, global warming, the ice extent at the poles and in the Greenland Ice Sheet seem pretty robust – individually and collectively.

No further commentary is necessary.

Arctic Ice Extent – 6th July 2015

Arctic Ice Extent 6 July 2015

Arctic Ice Extent 6 July 2015

Antarctic Ice Extent – 6th July 2015

Antarctic Ice Extent 6 July 2015

Antarctic Ice Extent 6 July 2015

Mass of Greenland Ice Sheet 

Greenland Icesheet mass 2015

Greenland Icesheet mass 2015

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Cosby admitted in 2005 that he was a sexual predator

July 7, 2015

No further defense is possible.

Why are the courts delaying? Why not put him in the same cell as Rolf Harris?

Reuters:

Comedian Bill Cosby testified in 2005 that he had obtained Quaaludes with the intent of giving the sedatives to young women in order to have sex with them, according to court documents unsealed on Monday. Cosby, 77, made the admission during testimony in a civil case brought by a former Temple University employee, Andrea Constand, who alleged that Cosby tricked her into taking drugs before he sexually assaulted her.

The case was settled for an undisclosed sum in 2006 but the documents in the case were unsealed on Monday after the Associated Press went to court. ……….

Cosby testified that in the 1970s he had obtained seven prescriptions for Quaaludes, the brand name for a sedative and muscle relaxant that was widely abused as a recreational drug in the 1970s. 

“When you got the Quaaludes, was it in your mind that you were going to use these Quaaludes for young women that you wanted to have sex with?” Cosby was asked in the 2005 deposition.

“Yes,” he replied.

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For whom the Euro tolls

July 7, 2015

Without political and fiscal union coming first, currency unions do not work.

In fact currency unions place a rigid constraint on freedom of action in the political and fiscal arenas. History has far more examples of failed currency unions than of any successful ones and – nearly always – the successful ones are because political and fiscal union has come first. The UK, USA, Federal Germany and the USSR are (or were) firstly political and fiscal unions which allowed for a successful common currency. Currency union is not a tool which enables political and fiscal union. It is political and fiscal union which allows currency union.

It is the believers in the Holy European Empire (in Bonn, Paris and Brussels) who think they can use the Euro to force the union.

The failed examples range from the

  1. New England colonies who each printed their own money but which was acceptable at par in all 4 states till other colonies outside the union started printing the money as well. Massachusetts withdrew and introduced a silver standard. (???? – 1750)
  2.  The Latin Monetary Union which was a French inspired ego-project based on a silver/gold standard and joined by Belgium and Switzerland. It was later joined by Italy, Greece and Bulgaria. But it could not cope with fraud with silver content coins as the gold standard was introduced in other countries since it had a fixed exchange rate between gold and silver (15:1). It was formally founded in 1865 and came to an end with WW1 but officially only in 1926.
  3. The Scandinavian Monetary Union started in 1873 but became dormant in 1905 and came to an end officially in 1924. It worked for a while but could not withstand the variation of inflation in the different countries which led to a string of devaluations and dumping gold in the open market and rebuying it at much lower fixed rates from the unofficial Central bank.
  4. The East African shilling bringing Kenya, Uganda and Tanganyika (and later Zanzibar) started in 1922 pegged to Sterling. It survived independence of these British colonies but could not withstand the depreciation of the British Pound when the Sterling Area collapsed in 1972.
  5. The CFA (African Franc) was started in 1945 in the French colonies of West and Central Africa and is still in use. It was pegged to the French Franc and  is now pegged to the Euro. Even if it may have contributed to currency stability it is one of the key reasons why economic planning for the very diverse developing countries of Central and West-Africa has become impossible.

There are many other examples, but the simple conclusion is that without political and fiscal union already existing, a currency union is not a way of imposing such political or fiscal union. If there is diversity among the countries involved and if fiscal and political measures need to be different in different regions, then currency union is far too rigid and can only promote political dissatisfaction and populist revolt.

And so it is with the current Eurozone. There is no political or fiscal union and currency union is being used (by some) as a tool for trying to impose a political union. The countries of the Eurozone are far too diverse politically and fiscally to be forced into a common shape by a common currency. The Eurozone is wishful thinking. When Marxists in Greece want to try their experiments it cannot possibly be reconciled with capitalist regimes elsewhere.

Any country which needs to exercise political and fiscal freedom cannot – actually must not – subject itself to the strait-jacket of a currency union. Greece should never have joined – or been allowed to join – the Eurozone. Cyprus should never have been allowed to join either. Currently, of the Eurozone countries, Finland, Latvia, Lithuania, Malta, Portugal, Slovakia, and Spain would be better off without the political and fiscal constraints that is set by the Euro. Kosovo and Montenegro have adopted the Euro voluntarily but they are not constrained in quite the same way.

As far as Greece is concerned I hope they leave the Euro (and remain in the EU for now) and so kick-start the process of bringing the grandiose, but untimely, Euro experiment to an end.

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Cameron is the unlikely winner of the Greek referendum

July 6, 2015

There will be millions of words written about the Greek “No” to the conditions set by its international creditors and what it means. But what strikes me is that the only real winner is David Cameron.

For Greece and the EU it is a lose-lose situation. If the creditors soften their conditions, the Euro and the EU loses. If the creditors stand firm and Greece leaves the Euro, the sanctity of the Euro and membership of the Eurozone is gone forever. My view remains that the best for Greece and the EU is for a return to the drachma, an EU which shrinks its ambitions and a dissolution of the Euro.

If the creditors now soften their conditions and a Grexit from the Eurozone is avoided, it will demonstrate that the IMF, ECB and EU conditions will never be the final word again for any member country. Each will always have the option in any negotiation of calling a “referendum” to reject the terms. Any negotiation by a member country with the EU can use a referendum to finally reject an EU position. Any country can then reserve the right to put any EU Directive to a referendum and EU Directives will become merely guidelines to be accepted or rejected by member countries at will.

If, on the other hand, a Grexit does occur and the fatally flawed Euro experiment begins to come to an end, it will be emphatic evidence also that the entire concept of a new Holy European Empire is something only in the minds of a very few in Bonn and Paris and Brussels, but is not shared – at this time – by the general population (represented by the general Greek public). It is a concept either too far ahead of its time or possibly which will never be real. At any rate, for this time, it would demonstrate that it is fundamentally flawed.

And what strikes me is that this helps David Cameron both within the EU in his quest for renegotiation and even for treaty change. It even helps him domestically. He has had an issue of credibility in that he has called for an In/Out referendum where he will surely have to call for an “In” vote. His problem lies in being able to show that he has won enough during negotiations to justify an “In” recommendation. But now, with the Greek precedent, he can even demand the most drastic changes in Europe without being thrown out of any room. He is likely to get changes which were unthinkable yesterday. He can even go to a referendum ostensibly demanding an “Out” as a negotiating ploy, get an “Out” vote and then return to the negotiating table. He can call a second or even a third referendum (and if a bankrupt Greece can carry out a referendum within a week then surely the UK can manage something similar).

Referenda are now just a step in the EU negotiating process.

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A drastic haircut for Greek middle-class as savers are set to lose 30% of their deposits over €8,000

July 4, 2015

The Greek problem is very complicated I am told. It is an ideological battle between right and left, I also read. It is austerity versus profligacy. But I think it has been unnecessarily “complexified”. It is not about which ideological gods are to be worshipped but it is about good house-keeping. It is essentially, basic “home economics” applied to a household of 11 million people. It is about how a deeply indebted household with expensive habits and many non-contributing members is to continue. It is about what lenders are justified in demanding from the household to continue lending. It is about abdication of responsibility by the householder. It is about lending to a prudent householder or to one who will neither clean his house or commit to good house-keeping.

Whichever way it goes at the referendum tomorrow, there is going to be a great deal of pain for the “middle class” who have paid their taxes and have managed to save and who keep their savings in Greek banks. Those who don’t usually pay their taxes (and I have seen one estimate that these are around one third of those who should be paying taxes), keep the “black” economy thriving and they don’t usually bother with banks. The visible rich probably pay a significant amount of the taxes they should but they keep their money mainly outside of Greece (but probably in the Eurozone or in dollars). Since Tsipras came to power they have been quietly getting out of the Greek banks. They are well aware of how all depositors in Cyprus had their savings in Cypriot banks arbitrarily written down over one day while the banks were closed. The very rich of course are well versed in all methods of tax evasion and they are not so stupid as to have kept their money as deposits with the Greek banks.

The total Greek debt is about €328 billion which is about €30,000 per capita. In theory if €30,000 could be confiscated from every Greek citizen, Greece could be debt free. Of course if creditors accept that some level of debt write-down is inevitable – and this seems unavoidable – they will certainly insist that Greece and its banks also accept a “haircut”. The question becomes how much debt write-down is necessary and how much of that will be confiscated by those with substantial deposits in Greek banks. If the IMF analysis is to believed (and they have been wrong many times) then the debt must be reduced by around €60 billion for a growing(?) Greek economy to have a chance of servicing the remaining debt.

Yesterday a report in the Financial Times (since vehemently denied by Syriza) stated that a swingeing 30% of all deposits over €8,000 would be confiscated. As a comparison the Cypriot haircut finally became a dissolution of Laiki Bank and the confiscation (with part conversion to equity) of 47.5% of all deposits above 100,000 euros in the Bank of Cyprus. There are not enough deposits at Greek banks of over €100,000 to milk and hence the figure of €8,000 seems credible.

The critical point is how much debt can 30% of these deposits wipe out. Suppose the lenders agree to write-off (or write down) debts equivalent to about €30 billion. Then Greek savers would need to cough up an equivalent amount if the IMF target of €60 million is to be reached. That is about €3,000 per capita. Greece has an average monthly wage of about €1000 per month (2014). Of course unemployment is high and it is not the average wage earner who exhibited the profligacy or evaded taxes which created the Greek debt mountain. From Syriza’s perspective, confiscating the money of the rich would be best for this purpose. But since that may not be within reach, it is better to soak the middle-class than the bulk of their supporters who are average wage earners or unemployed.

So whichever way it goes in the referendum tomorrow, the middle-class in Greece are going to get badly hit. They are in for a full Brazilian wax job and not just a neat short back-and-sides.

 

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Is embarrassing Gujarat data holding back the Indian Health and Nutrition Survey?

July 3, 2015

According to the BBC, the massive undertaking that is the Indian Health and Nutrition Survey has been completed, should have been released in October 2014, was last issued in 2007 and even has an encouraging story to tell. But the data on Gujarat is not an edifying tale in comparison to other states. Economic growth in the state has not translated into any major advance compared to other states. In fact the Gujarat performance is worse than most. 42% of all children are stunted and half of all children are malnourished.

Is the report too damaging to Modi’s Gujarat story? And is it therefore being held back by Modi’s public relations managers? The official position is that the methodology is being reviewed. But it is more likely being held back to somehow massage the Gujarat figures. It will be difficult because copies of the completed – but not officially released – report are now available widely.

BBC:

Good health data is rare in India. The last time the country published a comprehensive, state-wide survey was back in 2007. So why hasn’t a vast survey of women and children carried out by the Indian government with the UN agency for children, Unicef, been released?

India’s so-called Rapid Survey of Children was a huge undertaking. Almost 100,000 children were measured and weighed and more than 200,000 people interviewed across the country’s 29 states. The final report was due for publication in October last year, the BBC understands. Yet, more than half a year later, the important body of data remains secret.

Leading development economist Jean Dreze describes the delay in publication as “an absolute scandal”. “All the neighbouring countries including Bangladesh, Nepal, Sri Lanka, Bhutan, Pakistan and even Afghanistan have up to date nutritional surveys,” he says. “It is hard to account for a 10-year gap without attributing some sort of political reluctance.” …..

Looking just at the overall figures, India’s reluctance to publish the survey is rather surprising. It shows the country has an encouraging story to tell. Indicators of malnutrition are still very high, far higher than most African nations, but they are improving. Ten years ago, two-fifths of children under five were underweight, now it is more like a third.

However, the survey confirms large and enduring discrepancies between states, including the continuing strikingly poor performance of the Indian prime minister’s home state, Gujarat. As chief minister, Narendra Modi ran the state for more than a decade. His general election campaign was based on the promise that he would do for India what he had done for Gujarat.

Is anybody surprised?

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