Investment

I head some pundit on Radio 4 yesterday morning talking about Christie’s sale of 19th- and 20th-century works from the collection of the late Peggy and David Rockefeller, where Henri Matisse’s Odalisque couchée aux magnolias (1923) went for $80.8 million, a record for a work by the artist at auction. He was going on about an increasing appreciation of art, but this has bugger all to do with art appreciation - it's all about investment strategies.

If some of this vast and obscene amount of money filtered down to support burgeoning artists, then it wouldn't be so bad, That's not such a bad idea - a tax on art sales over a certain price to support bursaries and scholarships for artists. Say 10%.

However, then there are the practicalities - where would the tax be levied and on whom? The buyer or seller - logic dictates the recipient of the proceeds, but purchasers also pay taxes on bought items in the form of VAT. Would it be levied in the country of the seller/purchaser, or the country where the sale takes place? If the latter, you'd find sales taking place in tax havens. Difficult to implement, as the rich are adept at avoiding taxes.

Watery Wedding

Is holy water just homeopathy?

What with the royal wedding fast approaching, I wonder if anyone has ever done a PhD on media royal correspondents? It's a job that has always struck me as a bit of a backwater or a position that one gets after having screwed up in some other field of reporting.

The Wisdom of Crowds

On the recommendation of a friend, I've been reading a book called Super-Forecasting by Philip Tetlock and Dan Gardner, which is an antidote to Nassim Nicholas Taleb. The thrust of the book is that it has been proven with trials that there are people who have a certain way of critical thinking that consistently makes them wizards at predicting outcomes of events.

The book goes on to explain that in probability theory there is a certain validity in the wisdom of crowds - the aggregation of information in groups, resulting in decisions that are often better than could have been made by any single member of the group. This has spurred me into ordering The Wisdom of Crowds by James Suroweicki from Amazon (delivered yesterday).

While there are certain categories of question that the Wisdom of Crowds is unsuited to, using the result of the referendum, the chances of Brexit being a success are 52% for and 48% against. Given that most of the reasons given in support of Brexit are based on emotional arguments - or lies, as we experts call them - even the best estimate of success can be no more than 50/50. The question is, on the basis of a 50/50 chance of winning a bet, would you risk your house on what is in essence the flip of a coin? I’d need something more like 80/20, or higher, to risk all, which is probably why we normally have supermajorities in referendums, especially ones with such profound consequences.

Brexit may just be one of those questions that crowd wisdom is not suited to, but I'll only know once I've read the book.

Teachers' High Street Holidays

I'm getting heartily fed up of hearing people say; "Ah, but teachers work during their holidays." Heard it again on the radio yesterday during some discussion. Christ - they get 12 weeks holiday a year - I'd expect them to work for most of that so they end up with 25 or 30 days actual holiday, just like the rest of us. It's not as if they're paid any less for having 12 weeks holiday - I know, I was married to one for 10 years.

Whatever happened to car sunroofs? Decades ago there wasn't a car on the road without a plastic or glass pane that could be opened. Now you don't see any, except on classic cars or old rot-boxes. Was is the advent of the now ubiquitous air conditioning that heralded their demise, or the fact one now has to pay for any extras and a sunroof is an extra too far?

Went to visit Southport yesterday; the town where I was brought up. Lord Street was one called the most elegant street in Europe, but these days it comprises a motley array of charity shops, boarded up shops and a proliferation of pavement cafes. The latter is an innovation I never thought would be allowed by the council and does, I admit, give the place a pleasant, continental air, but if the high street is the gauge of a nation's health, then we're not doing so well.

A Man's Home is His Castle

Set off yesterday and had a look on Google Maps for the place we're staying and the venue for the wedding - Leasowe Castle in the Wirral - as I needed directions. Here was the result:

Wasn't looking forward to it, as there's no way you can get many people in the front room for a wedding and I wasn't keen on having the upstairs. front bedroom for over a hundred quid.

It transpired Google had made a mistake. This is the real Leasowe Castle Hotel...

It was built by the Earl of Derby - must have been his beach hut.

Couldn't have picked a better day for a wedding. Here's last night's sunset.

Ferrari Council Wedding

I find it strange how people vote along national lines in local council elections. I agree that some national policies filter down to the local level, like housing but, in the main, scaling down from national to local is not linear - different dynamics come into play. Local elections are about how your council tax is spent locally; national politics covers a lot more and not just how your tax is spent. I see no dichotomy in voting Conservative nationally and Labour locally, or the reverse.

Spotted on the way to Swindon this week. Not a delivery, as the lorry was a recovery vehicle.

Not the best advert in the world for a Ferrari. 

Off up north for a family wedding, leaving No.1 and No.2 Sons in charge of the house, so I may not post for a few days (although being away doesn't normally stop me). Glad we're going away as it's the Badminton Horse Trials locally this weekend and the place becomes a zoo - 130,000 people are expected, but lots of money into the area, so one can't complain.

Overheard while making the sandwiches for our journey:

Hay: "I'm not taking any bananas - they bruise too easily."

Chairman: "Typical millennial bananas."

Electric Attitude Soup

Overheard while sampling this week's batch of homemade soup.

Chairman: "Mmm - tastes very ....green."

Hay: "That'll be the broccoli."

Chairman: "Yes, I realise that. I was being kind. - it tastes like sewage. Don't forget I have that gene that makes brassicas taste like sewage."

Hay: "I can put some Stilton in it."

Chairman: "Please do, then at least it will taste of  Stilton with a hint of sewage."

One of our tenants has built his own electric bike. £250 for the bike frame, £260 for the electrification kit (front rim, hub and control panel) and £300 for the battery. He is an engineer though, so not an onerous task as far as he's concerned. He can apparently get 25 miles from one charge.

Did a Sort It Centre trip this week with a trailer-load of rubbish. When we arrived there were some 5 operatives watching over the proceedings, one of which, from his accent, was very obviously Eastern European. As we pulled up, he was ordered to help us while the others just sat on their backsides shouting abuse at him. 

Hayley had occasion to visit Sports Direct twice this week. On the first visit she was served by a young British girl who lacked even the vaguest semblance of customer service skills; didn't address Hay directly and never even made eye contact. On the second visit she was served by an Eastern European girl who couldn't have been more helpful and pleasant. 

Galileo

I was reading a BBC News article about the UK being excluded from the Galileo GPS programme once Brexit happens. This has naturally engendered some comment within Brexit circles and and I spotted yet another comment maintaining we were fooled in the '75 referendum.

I've seen a lot of this harking back to 1975 and saying we joined the EEC, not what it became. Harold Wilson in 1967 stated; “Whatever the economic arguments, the House will realise that, as I have repeatedly made clear, the Government’s purpose derives above all from our recognition that Europe is now faced with the opportunity of a great move forward in political unity and that we can — and indeed must — play our full part in it.”

Voters in 1975 were asked if they wanted to “stay in the European Community (the common market)”. But the debate was not simply about economics. The Yes campaign refer to the benefits for safety and security. The “political case” was “paramount”, said Margaret Thatcher. A few years before, Prime Minister Edward Heath had spoken of a “united Europe” and a “European destiny” – and in 1973 he stated in the Illustrated London News that “the Community we are joining is far more than a common market. It is a community in the full sense of that term”, citing the bloc’s ambitions in the field of environmental, social and vocational training policy. The Times editorial on referendum day referred in glowing terms to campaign speeches that had given a “sense of European development as an ideal”, and agreed we were part of a “European family”.

Eurosceptics imply the phrase “Common Market” was used by pro-Europeans to pull the wool over voters’ eyes. But, while the phrase appeared extensively in the No campaign leaflet, their Europhile counterparts use it hardly at all. Neither the Heath speeches nor the Times editorial cited above mention the phrase.

In 1970, Foreign Secretary Sir Alec Douglas-Home acknowledged – and seemed to welcome – that the institutions would evolve. The UK government’s 1971 White Paper said it was “inevitable” Europe’s external policies would broaden as interests harmonised, arguing the UK should be on the inside when that happened. Further new ideas were being sketched out even before the referendum: in 1972, EU leaders, including Heath, called for for an EU environment policy, economic and monetary union, and transformation into a “European Union”.

It is right to say the European Community has changed since the seventies, and not just in name. It is wrong to say that the nature of the project, and how it might evolve, were hidden from voters in the '75 referendum. The ironic thing is that most of the people using this argument weren't even around in 1975, and those that were are engaging in selective amnesia.

If you don't realise your argument is fraudulent, you are mistaken. If it is pointed out that your argument is fraudulent and you fail to check it, you are a fool. If you knowingly continue use a fraudulent argument, you are a fraud.

Forecasts

People don't trust economic forecasts, but many simply don't understand what they are. They’re a bit like weather forecasts – a prediction of what will happen in a very complex system for which you don’t have all the data (as it’s very complex). The further you forecast, the less accurate it is, and a small variation in one of the key metrics can have an enormous effect down the line.

The crucial difference between a weather forecast and an economic forecast is that with an economic forecast you can fiddle with reality; however, the forecast itself is based on the system being self-contained and not changing - you can't add a bit of rain or snow to a weather forecast, although anthropoghenic warming can have a long-term effect, but you can change interest rates or implement some quantitative easing within an economy.

You simply cannot look at an economic forecast and compare it with reality further down the line and say it was wrong when some of the levers have been adjusted during the time interval. A forecast only remains reasonably accurate if there are no material changes to the economic levers. It's a bit like saying your Waze ETA was miles out when you actually diverted from your intended route by an hour because of a traffic accident. Your ETA only remains valid only if you stay on your intended route and nothing unexpected happens. If you deviate, then you have to do another final ETA when you leave your waypoint.

Another thing to bear in mind is that the Treasury forecast is done by the Treasury. The Governor of the Bank of England, who sets interest rates, is not a member of the Treasury. He is independent and the Treasury cannot predict the actions of an independent entity in the setting of interest rates.

Supermarket Sweep

So Sainsbury and ASDA are to merge. Doubtless the argument of less consumer choice will be articulated somewhere, but with profit margins of between 1% and 3%, it's somewhat academic. However, Sainsbury has said it will lead to cheaper prices, so with margins that thin, you know who is going to bear the brunt - yes, the manufacturers. However, if the manufacturers get their acts together, they can simply refuse to deal with the new mega-market. Interesting times.

The problem with the big supermarkets and their focus on branded products is that we consumers have to pay for both the manufacturer's advertising and the supermarket's advertising - a double hit - meaning the products are high priced to start with.

You won't see Aldi's and Lidle's products advertised anywhere, except by Aldi or Lidl, meaning they are cheaper. Invariably their products are made by the same companies that make the branded products, but sold through Aldi and Lidl as a means of market extension. Many people (like me) don't give a damn about branding and just want a quality product at a reasonable price - we would never buy brands, if we can avoid it. Similarly there are people who are addicted to brands. The two markets will meet only rarely, so it makes financial sense for manufacturers to be in both.

Did you know that R and R Ice Cream (can't use ampersands in Blogger) is the largest ice cream maker in Europe and the 2nd largest in the world? You've probably never hear of them, but they make almost all of the supermarkets' own-brand ice creams.