When Singularities Become Serious

As a change from short items the link below is a longish and heavy duty post from “Don’t Shoot The Messenger” on Nouriel Roubini’s economonitor dot com site.

It is written by Edward Hugh and Claus Vistesen about Japan and its current economic situation which they judge is about to become more intricate and very difficult. 

They consider whether Japan is on the brink of a fundamental economic change that will inevitably impact seriously on both the international markets and economy.  The theoretical model is that of the effect of singularities in complex analysis.

The article suggests that Japan is not alone with these and related problems.  Reading the article there seem to be aspects that tell us a lot about the developing UK situation and the potential consequences.

As well as this, Japan is embroiled in a nasty row with China as to who has the territorial rights in areas of the South China Sea.  Oil and gas matters are involved as you might expect.  This could get rough and there are long memories of what happened between the late 1920’s to the 1950’s.

http://www.economonitor.com/edwardhugh/2013/02/12/japans-looming-singularity/?utm_source=contactology&utm_medium=email&utm_campaign=EconoMonitor%20Highlights%3A%20End%20Games

Japan is prone also to severe geophysical shocks as are parts of China.  These can be earthquake or volcano or severe weather events and can happen suddenly and with little warning.

One thing that will interest some is that apparently in Japan the old, of whom there are many and increasing in proportion have been largely stripped of their savings by the cheap money policies. 

This means imposing heavier taxes and increasing State burdens on the young to support the old in a declining economy in a shrinking world.

One way or another, this will not have a happy ending.

Are You Sitting Comfortably?

The three links below give an outline sketch to the availability of tracking devices around for routine use.

You can add to these a lot of other things, one way or another.

This is one reason why we have reverted to paying cash whenever possible. 

The trouble is that our records will show abnormal withdrawals of cash which may encourage Whoever It Is to step up the surveillance.

http://www.guardian.co.uk/world/video/2013/feb/10/raytheon-software-tracks-online-video

http://www.schneier.com/blog/archives/2013/02/automobile_data.html

http://www.bbc.co.uk/news/technology-21411335

At this stage I would like to declare that the reason for higher than average visits to the bathroom is the high fibre diet.

But Them Out There should already know that.

Inflation, Pumping And Pimping The Figures

In another age the meteorite strike on Yekaterinburg might have been regarded as a more reliable omen, portent or prediction than most of our earthly calculations.  It is the place where the last Tsar of All The Russia’s was murdered with his family.

Given some of the features of the present Russian economy whilst it should be a robust and promising land of potential plenty there are enough bad things to worry about.  It may not be as stable or as rich as we think with the current scale of criminality and huge capital outflows.

Money out in one direction means money in somewhere else.  Places the money has gone into are many of the off shore locations linked to the City of London around which money has flowed generating putative wealth and the associated London property market. 

The Russian money flows are not the only ones swishing around the back offices of so many financial corporations there are others as well.  Many are to do with oil and major commodities, others official money made unofficial and necessarily large sums of criminal gains from a variety of sources.

Our much maligned bankers are mostly simply innocents at large, like the one time bookie’s runners that used to stand on street corners receiving bets and sometimes even paying out to the winners.  They just accepted the bits of paper with scrawled words with cash and quickly paid them in to the bookie’s. 

What happened then was beyond their understanding and that of few others, notably the punters..  New laws on gambling took the runners off the streets and their children and grand children were forced into menial financial services.

Our Office of National Statistics (ONS) in the UK is tasked with reducing all the economic activity as money flows together will other recorded transmissions.  This, along with many other things, is turned into to some sort of rational collection of figures that is said to tell us what it all might mean. 

Fine minds struggle with the nature of date and its gathering to reduce it all to figures that are easy enough for the media and government to understand.  They make great efforts to tell us what they think.  The devil lurking in the detail is what is known to some as “garbage in garbage out”.

This is nowhere more evident that all the tales told, spin, explanations, calculations etc. on the subject of “Inflation”.  In this we should not forget “Deflation” nor all those contingent sets of figures that support or are necessary to what is defined as this or that.

“Alice In Wonderland” tells us that the more deeply you look into something then the more complicated, unstable and unpredictable it becomes.  The Treasury becomes The Red Queen, the Prime Minister the Mad Hatter and the Chancellor of the Exchequer the Dormouse.  The Governor of the Bank of England is, of course, the Cheshire Cat.

It was considered trying in this item to explain all the necessary complexities of statistics, the gathering of data, the problems of reducing the recent past to sets of figures and the many and various pitfalls of analysing all this to give a reliable picture of the present or the immediate past.

This would be too much for a basic post.  The great issue in reducing the financial economy to a small set of guideline figures is who they are intended for and for what purpose.  If it a government then it is subject to politics and in turn what this is subject to. 

One problem immediately is that the figures should fit the images to be presented and to match up with both conventional wisdom and the expectations of the past. 

If there are complications and some reduction is required this can be forced in one direction or another.

Today, however, this means in the whirlwinds of economic activity which no government can control or hope to control this can mean that the attempt to reduce facts to explanation and target settings can result in convenient fictions set in a framework of conventional thinking.

This is where we are in terms of what we think “Inflation” is at present because of the limitations and restrictions on the content and analysis of the present constituent elements in the relevant indices.  There is a lot out of the figures that bear on the realities of the functioning of the economy.

Quite simply, there are a number of areas of the economy where the UK has had gross inflation in the last decade or more.  In some areas prices have fallen, or at least have not relatively risen much.  There are the cases, notably with technical goods where you get more for your money. 

But the figures are loaded to not take account of many of the rapidly rising elements where costs, prices and charges have risen sharply and there are a lot of them that affect very many people.  These are often the same ones who have taken the bad hits on incomes.

Sooner or later all the fiat, funny and solely financial money was going to begin to impact on the more general economy and then bear on the indices.  These will be slow to respond at first, but if history is a guide upward movement will happen very quickly and in unexpected fields and maybe impossible to control or check.

We are all making bets but the winners will be few and far between and even for those the reality may be that the bookie’s have done a runner with the money.

Blinded By Science

In all the several rows about the meat supply, where it comes from and what it is there are calls for better regulation and the application of advanced scientific techniques to restore confidence.

This, of course, depends on what the scientists are asked to do, who pays them and who are those critical to their career progress.

At present, there is a great deal of disquiet about what is published and what is not as well as the standards of science employed.  In the West governments are mostly in thrall to the big firms with large scale lobbying impacting on decisions.

In the UK, most of the science is governed by the companies who commission it and a government that insists on commercial benefit as a criterion of funding.

In the news it seems that the Aintree Racecourse by Liverpool, home to the Grand National Steeplechase, has a contract with an abattoir that specialises in horsemeat.

This might explain why the supermarkets are busy "mending fences".

Calling Time On Company Law

When something becomes very large, far more complicated in form and goes well beyond local or even national governance then instead of being beneficial then it might begin to do the opposite with many unforeseen and uncontrollable consequences.

This kind of statement could apply to many and various things at present in the public mind, under scrutiny, causing controversy and where many people think that what has happened or is going on should not have done.

My latest suggestion on matters like this has been sparked by an item in Nick Shaxon’s web site Treasure Islands dot org on Monday 11^th February where he refers to Professor Prem Sikka’s article “UK Banking Reform Bill Won’t Curb Reckless Risk Taking” on the theconversation dot edu dot au web site.

Briefly, he suggests that given the way investment banking operates at the present time perhaps the only effective check may be to require Unlimited Liability for this type of financial organisation.  This arises from the way that those responsible for the losses entailed seem to lose little leaving others to pay.

For a while now the thought has been in my mind that the business basis of Limited Liability for shareholders has gone past its effective usefulness and the way it is employed as a device for fraud and malpractice and the distortions are now both damaging and potentially destructive. 

There may be some scope to retain it for a small number of very specific purposes but as a general facility for the conduct of business it has become hopelessly compromised.  The history of Limited Liability is a long and complicated one but there is a short Wikipedia article that gives a summary.

This is not just a matter of banking.  Looking around it occurs at all levels.  It would take a book to attempt to deal with this, or at least a long learned article that casts its net widely.  But what is essential is that while it does serve some as it is supposed to, this is now increasingly a minority element in a dangerous world.

Part of the problem has been how easy it has become to form companies in many places, how they are interwoven and how monies and liabilities are shifted to avoid scrutiny, regulation, tax  or where the activity is illegal, the force of law.

There is a huge amount of information now out there on the web about the large scale problems and the never ending stories of scandals, frauds and manipulation tell us how much has been and is badly wrong in so many sectors from mortgages to meat.

At lower levels, it is all too often that amongst the professions and supposed service sectors there is a lot of activity that enables bad service at too high a price without much in the way of protection for the individual and customer.

Even at the lowest levels the misuse of limited liability can be astonishing.  Companies House has registered hundreds of thousands of companies and a turnover that is increasing.  Many never submit accounts, many are struck off, many are simply devices for both illegal and dishonest activity. 

Yet almost none are investigated.  In many sectors if you look at who owns the shares and for what purpose it is increasingly rarely the ordinary single person and the norm is other companies or agencies looking to pure financial gain without bothering much about true accounting or the rules.

It is time now to recast our ideas about shares, company ownership, and the way it is may be working for some but not for either the many or society in general.

In its present form and in reality largely beyond regulation or the law it is time for Limited Liability to go and be replaced by a better and more transparent system.

But One Receiveth The Prize

Over the weekend our media has been in a tizzy about the BAFTA Awards,  The recent change of date for the BAFTA’s it is said has allowed it to gain a greater prominence, partly as a precursor to the Hollywood Oscars.  At the same time there have been the Grammies to excite us.

The BAFTA’s took place at Covent Garden at the Royal Opera House.  We can confidently claim to have washed our hands in the same basins as the stars, assuming that they do wash their hands.  As for the other facilities, it would be wrong to be bogged down in details.

A few months ago we had The Olympics, this is essentially another means for people to win awards, although on a different basis, unlike some media and arts awards there are many competing but few succeeding.  Between sports, the arts, literature and the rest our lives are awash with awards of one sort or another.

One of the major objectives of many, if not most, governments is to host a major sporting or other occasion and in the modern media world any group of potential prize or award winners can guarantee to have political leaders and heads of state anxious to make their acquaintance.

When any such thing is envisaged; whatever the state of the economy or the crises unfolding they have an imperative that transcends any other consideration.  For a choice example of this see the way the Winter Olympics of 2014 is being dealt with in Russia.

This brings me to the conclusion that the social and economic theories we have inherited from the past are essentially wrong.  We have been trying to rationalise and make sense of behaviour and impulses as grand designs on which to base our government and social behaviour.

In fact all it has been about is the winning of awards, prizes, praise and public adulation for whatever has been won, and by definition lost, in the great games of life. 

As the Earl of Birkenhead, formerly F.E. Smith put it in his Rectorial Address to Glasgow University in 1923 “The world continues to offer glittering prizes to those who have stout hearts and sharp swords.”

If it is the case that are economies and societies are based essentially on striving for and winning awards perhaps there should be a fundamental reshaping of policy to set out for the UK to become the international leader in this field.  Given our history in relation to this kind of thing it could be ours for the taking.

To begin with our honours systems and the structure of the peerage and gentry; there are possibly rich treasures to be found by exploiting these to the full.  A little tinkering, a few readjustments and a sensitive number of innovations and we could have the world’s rich and mighty forking out their billions for recognition.

At the lower levels we could institute facilities for the provision of honours, perhaps allowing trading in strictly regulated way.  Supporting all this, we should seek to construct and to monopolise systems and methods for awards and prizes across a wide field of modern activities.

Internally, this could be applied to many and various forms of community awards, using them as templates for equivalents that might be marketed elsewhere.  If financial incentives were made available through the UK’s network of tax beneficial off offshore territories it would create large inflows of capital.

If the government could persuade the Foreign Office etc. and Department of Culture, Media and Sport to come up to the mark there could be powerful central impetus given to a policy of creating UK power in the awards and honours fields, almost a Second British Empire.

We have much of our financial activity already built around the bonus culture and the biggest numbers.  Essentially, much of our management is centred on winning and losing in the shape of target setting and awarding what is defined as success.  Inevitably there are losers, but that arises from necessity.

Translating all these into a thorough going policy for the future would be a great deal easier and more readily achieved than all the plans for capital and other spending current.  It would be more easily measured and administered and would be and would be a self fulfilling control system to which we would all be bound.

The UK is already half way there in many respects; can it grasp all the prizes to be had?  Imagine, a 365 and 24/7 Awards Economy?  Do I get an award for suggesting it?  

Say one named after John Arthur Maundy Gregory (see Wikipedia)?

Marriage, An Unholy Muddle

Perhaps this is not the best place to discuss marriage, having had only one ceremony and that over five decades ago in another world.  It was a village Church ceremony, to avoid the need for conveyances and a journey into town for the Registrar.  It was the second of the day and almost closer in time never mind in form to the one pictured above. 

This enabled our congregation to enjoy the splendid flower arrangements made for the previous couple.  They wished to get it over early as they were off to an exotic location in Devon by first class rail, we were headed for somewhere closer and less costly.  Begin as you mean to go on.

In those days, despite all the assiduous romantic propaganda of the media of the time, as well as writers and necessarily the commercial interests involved it was common for people marrying to have a strong practical outlook on the business.  But time has moved on.

The essential problem in all the recent howling and raging in Parliament and the media is words and their meanings.  Clearly, what people see as marriage and the purpose of it differs between groups and too often there is a lack of clear understanding of what it means, never mind the history.

The original intention was to try to give a longish outline about what marriage has been and what it meant down the ages in the various elements of our society and how it worked in practice.  This would have taken a full scale essay so the point is made simply that the past may not have been what we think or assume from much of what we read in books.

The detail matters and having trawled around a very large number of families of all classes and different faiths, later census returns and the rest and with both social and economic structures in mind of the periods in question, the past is not what it is claimed to be and we should not assume too much from it.

What is striking and this has been mentioned before is that there two distinct elements, that relating to law and that to religion.  To be certain in law there had to be a contract or settlement, signed, sealed and delivered.  Then to fulfil the higher purpose and sanctity there was a religious ceremony. 

Unluckily, given ordinary human frailties, there was a lot went wrong which led eventually to State intervention with rules and regulation to ensure State law was complied with and to provide a common structure. 

All this proceeded on the basic assumption that “marriage” was between an adult male and an adult female and was likely to involve producing children.  As well as social laws bearing on this a great deal of probate law related to it as well.

Those concerned still had to proceed with care.  Once you were in you were in and it was made hard to get out.  If you had other arrangements then you were not covered in law or by the state.  During the 20^th Century all this began to change.

By definition this form of “marriage” was restricted and then never intended to apply to other types of partnership or personal arrangements of any kind.  There might be some of these where those concerned regarded themselves as good as married for practical purposes but they were still outside its scope and legal applications.

What has now happened is that we have a muddled set of compromises where “marriage” now legally assumes that it is the ceremony that matters in defining arrangements that are normally sexually based no matter who is involved.

The effect of this has been further discrimination in that all the other pairings of people living together, for whatever reason and in whatever form, are excluded from the legal benefits and advantages allowed to legal marriage, however socially useful or personally beneficial they are to the people involved.

To raise the question of “care in the community”, we have the strange situation that if this kind of care is carried out by State or private agencies there are ways and means of supporting it.  But if two relatives or friends come together for some form of support they can be excluded and in fact discriminated against at the present time.

Essentially, this is a complete nonsense.  What is needed if “marriage” is no longer confined to the earlier form of male plus female life or long term co-habitation or partnership is a wholly new basis of contract.  This would allow all forms of these to be State registered and acknowledged as part of our essential social and contractual personal arrangements.

So what is needed is something like a Mutual Arrangement Long Term (MALT) that adheres to an agreed form and meets certain simple but defined criteria.  A MALT might be a life contract or for a set period or related to set circumstances.

This can be between anyone, including all those adult categories at present excluded from marriage.  It would have particular advantages where care might be needed or in many small business arrangements. 

A traditional form of ceremony might be an additional extra option.  The basic duty of the Registrar would be to make sure the MALT was correct and the people involved knew what they were signing up for.  If a complicated contract was involved then legal advice should be involved.

As for religion, if a pairing was consistent with whatever faith group, denomination, religion, chapel, church or meeting hall they might belong to, that would be entirely up to those involved in relation to the ceremony to be held.  If such a group had its own definitions as to what “marriage” might be that is up to them.

Now, to check the diary, the anniversary must be soon.  This year we hope to be at a performance of “Alice In Wonderland”. 

At least it will have more logic than what is going on in Parliament.