It is Obvious

Chris Rick has got altogether too much to say

Archive for July, 2011

It is too easy

Posted by chrisrick13 on July 28, 2011

It is obvious: it always needs the extra question

Today British Gas announced that it had made £270m profit, down 54% from last year.  It also announced that without the price rises it would be selling gas at a loss in the second half of this year.  In general the media people seem to judge this as a reasonable profit.

Its owner, Centrica, made £1.3bn profit.  This itself was down 19% on last year.  So this vast profit was seen as something reasonable on the other activities that Centrica carries out.  At least there was no outcry that Centrica had made too much money.

So where did Centrica make its money?  Selling gas to British Gas.


It is obvious: it always needs the extra question which we seldom get.


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Posted by chrisrick13 on July 28, 2011

It is obvious: someone has had a heck of party over the last few years

I am still watching too much tv.  Last night one of the channels showed this number.  I saw only a bit of the article as I am constantly surfing to find something to watch.  One day I will give all tv up.  This number represents the total UK debt if all the hidden little nooks and crannies are cleaned out and put on view.  I didn’t see who came up with this figure so it has an unreliable provenance.  It represents pushing on for 4 times the nation’s GDP.

If you consider that a debt level of 85% represents a certain debt/default cycle, unless you are Japan, then we have a problem.

I can 4-cents-a-passenger-mile that for you.  For every man, woman and child in the UK that is £83,333 or nearly £200,000 per household.

I could pay that tomorrow, but it would make a heck of a hole in my pension savings accrued over a lifetime.  However the reality is that I will have to pay that over my remaining years, one way or another.  Thus it is likely that my heirs will get little, so making them pay as well.

It is obvious: someone has had a heck of party over the last few years…it wasn’t me though.

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What’s the weather like?

Posted by chrisrick13 on July 26, 2011

It is obvious: you can lie to most people and get away with it

I watched the announcement of the increase in GDP of 0.2% in open mouthed amazement.  There would have been a lot bigger increase but for the good weather!

Roll back 6 months.  The 0.5% reduction in GDP would have been a lot less but for the…bad weather!

I waited in vain for the enquiry about what type of weather was needed from the assembled press.

If there is one thing that the English are famous for, it is our obsession with the weather.  We talk about it so much because it changes so much.  Remember the weather forecast from the Fast Show?  Every day it was ‘Scorchio’ – not in this country.  So you might expect that over the last couple of hundred years we would have organised our economy such that the effects of ‘warm’ weather are minimised?  Unlike with cold weather people are not stopped from doing things, they do a lot more different things.  The economy still rolls on.

The announcer did not look comfortable.  I wonder who put him up to it and why?

It is obvious: you can lie to most people and get away with it because it seems they are not listening

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Greece – still

Posted by chrisrick13 on July 22, 2011

It is obvious: there is now a plan in place to ‘save’ Greece

I’m going walking in France in two weeks.  I haven’t got my Euros yet and they have just gone up.  On past performance there is plenty of time for the Euro to drop in value before I go.

I have to write this before Notayemanseconomics gets in with his analysis or I will not be able to write anything.  I have heard two cautionary words over the last 24 hours.  The first was a German expert who said that the amount of write-off taken by the private sector was effectively zero and that the measures announced were a fudge.  The words might fool me but they won’t fool the people who invest money for a living.  The second was a comment, partially echoed by many others, to the effect that it was now up to Greece.  He clarified it by saying that Greece had to make its measures stick and return to growth.

Growth is the enemy.  We have managed the current world order by growing our economies.  The earth is finite.  At some point growth will stop permanently.  That day is not too far away.  For the near future growth looks like something that will be hard to achieve.  However for Greece it has already predicted it will shrink its economy by more than 4% next year.  What of the year after?  Greece is being given (I will avoid the word ‘lent’) more money to enable it to survive for the next two years.  What then?  There is reduced expenditure by the government…almost matched by the reduced income.  Even at lower interest rates Greece will not be able to start paying off the increased debt in two years.

I wonder that nobody has asked any of the architects of the plan what happens in two years.  With a shrinking GDP how will Greece pay off the, nearly doubled, debt that it has which it can’t service today?

I would like to think I am wrong and won’t need to mention Greece again, but it will be constantly mentioned until a bigger country comes along with the same problems…and demands the same treatment.

It is obvious: there is a plan in place to ‘save’ Greece…how long for and has anyone thought to ask the Greek people?

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Memory Lane (1)

Posted by chrisrick13 on July 21, 2011

It is obvious: you can fool most of the people most of the time

I remember the introduction of the Euro in 2002.  The government supported the idea of joining the Euro but decided that a referendum had to be held.  How lucky that was for them.  I also remember the opprobrium that was poured on those that opposed joining the Euro.

In 1999 Gordon Brown decided to sell half of UK’s gold reserves, and foolishly told everyone thus driving the price down.  It is known as Brown’s Bottom as he sold at the lowest gold price over the last 33 years.  The gold went for $250 and ounce and yesterday the price topped $1600.  I have some sympathy as gold sits in a bank vault and does not do much.  It costs to keep it.  He converted the money to foreign currencies that at least do carry interest payments.  Only where is that money?  Alas, he spent it.

Do you remember Vince Cable losing half his job for saying he was going to go to war with News International?

Do you remember Labour and Conservatives not daring to mention the word ‘cut’ in the run up to the election?

Do you remember Brown’s ‘Golden’ rules?  The sustainable investment rule limited government debt to 40% of GDP.  In 2008 it was over that and predicted to rise to 70% over the next two years.  Where is it now?  There was also the rule that forbade borrowing other than to invest.  However the comparison period was moved back two years to allow the government to borrow £18bn to spend.

It is obvious: you can fool most of the people most of the time, but if you don’t they’ll forget anyway

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Greece – again, again

Posted by chrisrick13 on July 21, 2011

It is obvious: nobody is trying to help Greece out of its problems

In The Times was an interesting article about what we would have to do in this country to match the ‘austerity’ package that Greece is currently enacting, or at least is saying that it is enacting.  We would have to find £207bn.  This is equivalent to 16p on income tax and getting read of the department of justice and the department of business.  Also the government would have to sell half of all the property it owned.  Don’t forget that this is the second such package.

This says two things.  First, if we don’t remove the deficit and start to pay back some of the debt then that is exactly where we are headed.  Second, do you really think that the Greek people will go fo that?

Greece got into this mess by lying about the state of its economy and spending without thought.  (Sounds a bit like Labour during its term in government.)  So the statistics it recently produced on future GDP are likely not very accurate.  It will be much worse than they say.  The figures quote a reduction in GDP of 4.4%.  Can I emphasise that the ‘bailout’ consists of doubling the debt, reducing expenditure and increasing income so that growth will enable the debt to be repaid.  This is not a bailout it is renting a lifejacket to a drowning man and then taking it back an hour later if he hasn’t learnt to swim by then or reached land…which is a hundred miles away.  It is a delaying tactic.  He is going to drown.

The interest rate on Greek 10-year bonds has reached 40%.  Roll out the rule of 70 and you see that the debt doubles every 21 months.

It is obvious: nobody is trying to help Greece out of its problems, so who is being helped?

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I’m unemployed (7)

Posted by chrisrick13 on July 19, 2011

It is obvious: the system is corrupt

I have done a daring thing.  I signed on today and did not tell them that I had been abroad.  If they had been paying me benefits then it would surely have been fraud.  On that front the benefits people sent me a letter inviting me to submit any evidence I had to support my claim.  Given that it is a matter of record and I gave them it all in my appeal letter, I wonder that they are writing to me.  I hear of massive benefits frauds in the press and I am impressed.  Getting any money is nigh impossible, getting large amounts must take considerable skill.

Today I handed in my diary, a copy of the last one with the dates changed.  I signed a bit of paper.  The lady clacked at a keyboard and told me I was done.  The appointment was 7 minutes late.  While sitting there I didn’t notice anyone actually doing anything.  There was no mention of jobs during my time there.

So I have circumvented the job-hunting record process.

I have also been looking at the people signing on at the same time as me.  I am not seeing familiar faces.  Either they are all getting jobs or have given up the dispiriting process

I understand that after a period out of work they put you on a course to help you get work.  I will ask to be put on a Java course.

It is obvious: the system is corrupt and deliberately so.

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Still nice work if you can get it

Posted by chrisrick13 on July 19, 2011

It is obvious: rewards are not based on performance

As I had been on holiday for 10 days I bought a copy of The Times to read while waiting for my car at the garage.  I had not looked at tv while away other than to watch stages of the Tour de France and while falling asleep in hotels while driving to Florida.  The US is certainly living in a different world to the one we live in if the news is anything to go by.

The Times was full of gems.  I noticed that the ITEM Club had reduced its forecast for GDP growth for this year from 1.8% to 1.4%.  This group is supposedly independent of any influences and uses the same economic model as the treasury.  It is well-respected and full of mega-brains.  Half way through the year they have reduced their forecast by 20%.  It is a staggeringly large revision.  It is amazing that it has taken them this long to admit they were wrong.  What is of greater concern is that the Treasury is using this model for all its planning.  All government policy will out by 20% as a result.

Perhaps an even greater problem is that it started off predicting growth of 2.2% so they are actually 36% out.  I was predicting less than 1% growth so I am performing better than the Treasury model.  We have had .5% and .1% growth.  We will be lucky to get growth for the rest of the year.  Perhaps .1% and .1%.  So for the year it will be close to .8%.  If I am right then the model will have been 66% out.

For the 2012 and 2013 numbers they must have abandoned the model and got The Brothers Grimm in to write it for them.

It is obvious: rewards are not based on performance…you first need performance to base it on

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Spend, spend, spend

Posted by chrisrick13 on July 19, 2011

It is obvious: spend your money on quality not complexity

I watched a stand-up comic last month doing a long story on buying a Hoover.  In the middle of it he commented on the power dial.  He wondered if anyone ever set it to half-power: perhaps I’ll only do half a job today so I can come back tomorrow and do the half that I didn’t do.  Perhaps you only want to clean up half the dust so you can have a longer look at the other half.

I have a Hoover that I have had for a long time.  When the children were younger I had to get them out of the room for their own safety before I turned it on.  I have never run it on anything other than full power.  It also has a nifty set of tools to go on the pipe.  Some smaller brushes so I can do less area for the same effort and a neat slotty thing that will suck up money from narrow gaps.  I only use them once a year when I clean the car, or at least I look for them when I want to hoover the car.  I don’t find them until a week after the event when they creep out to taunt before going and hiding ready for next year.

Maybe 10 years ago our microwave broke.  It had a control panel that would easily have managed the Starship Enterprise.  It cost over £150 and might have been £200 – I forget.  It lasted about 5 years.  I replaced it with a Goodman, who I thought made speakers, that cost £25.  It has two dials.  One is a timer the other is one of those power reducing switches.  My wife gave me hell for some long time.  She didn’t notice that the power rating was higher than the Starship Enterprise model had.  After a month she quieted down when she noticed that things still cooked just as well and in less time.  I think we have set the power to ‘defrost’ on a couple of occasions.  Last year it had not stopped working but was starting to rust and had to go.  I had a tip from a friend.  When you have used it, leave the door open for a while.  There will be a lot of moisture in there and letting it out into the kitchen prolongs the life…especially as I would never take the time to wipe it down.  We bought a new one that cost £38.  Only two dials again.

If I was to suggest an improvement it would be a mechanism to ensure that the rotating base always stopped in the same place as where it started.  Whenever I put a jug in, it always stops on the other side making it very difficult to get out.

We have washing machine.  It has 6 buttons and a temperature dial.  It is an expensive one but the control panel is much reduced from the previous one.  I always put it onto temperature 30, reduced spin and on.  There is a tray with 3 slots for liquids.  I just put a cup of liquid into one of them.  About 3 years ago the brushes wore out on the motor.  I got a man in who replaced them for £50.  He reckoned that I would get another 6 years easily and he would be back to do it again.  Rather than a control panel I would prefer an easy access panel to replace worn bushes.

I have an oven with two temperature dials for the two parts of it and 4 buttons.  I have never used the buttons and can count the number of times I used the bottom oven on my digits.

I have wandered the house looking for unused functions and features: there are a frighteningly large number.  Not least of these is the computer I am sitting in front of.  There are 5 round buttons at the top that I have never pressed, then a row of 17 keys that are seldom visited.  A lot of the keys have 3 possible functions that are operated by holding down the shift or func keys at the same time.  There are also a lot of functions that can be accessed by holding down other key combinations that come from Windows.  They may be very useful but are seldom used and so don’t stick in my mind and are therefore functionally useless.  I once learnt half-a-dozen useful ones and went around watching people and casually mentioning the super things that could be done.  Not one person knew of any of them and only a few could reliably tell me which function key you used to put the display out to a another screen or overhead projector.

I am quick so these lessons of complexity have only taken me about 40 years to learn.

It is obvious: spend your money on quality not complexity, but how do you recognise quality?

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Burn baby, burn

Posted by chrisrick13 on July 18, 2011

It is obvious: spending money is easy

I have been away in the US visiting my son.  We did a lot of memorable things, including travelling 30 hours in the car together.  If you have children and want to find out about them, this is the way to do it.

The main reason for time in the car was driving from Washington DC to Florida to watch the last shuttle launch.  We had already seen one and wanted to say “we were there” for the last one.  Each launch costs about $1bn.  We watched a lot of money going up in smoke – literally.  What were they doing this time?  Mostly delivering groceries to the Space Station.  A heck of a delivery charge.

I am a supporter of space flight, but we have missed the chance to go to the asteroid belt and grab all the resources we might need for the foreseeable future from there.  However I might ignore products that came out of the space program (teflon, ‘foil’ blankets, and many others) as valuable as they were.  More value was the engineering advances that NASA has made since it got its act together when 3 Apollo astronauts died on a launchpad in a module not even destined for space.  The advances in the engineering method made after that have permeated every bit of engineering since, throughout the world.

But what of that cost? 140 launches = $140bn.  Was it worth it?  Yes it was with no doubts whatsoever.  This leads me to the UK spending $320bn on Quantitative Easing.  Could we not instead have spent $300bn on 300 shuttle launches ourselves?  Not all the money goes up in smoke.  Most of it would have gone into salaries of UK citizens spent in this country.  A lot more useful to us and the human race than benefits payments.  Any number of inventions would have come from it.  The expertise gained by our nation would have been huge.  We could have taken satellites into space on a commercial basis many times.  Likely QE would not then have been needed.

It is obvious: spending money is easy, as easy as spending it on the wrong things.

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