2019-05-18

Darn that undependable "climate change"

Poor Cody Petterson is despondent:

As a child, he had happily played and hiked among these statuesque conifers, which provide shelter to black bears and black-tailed deer. By the age of 37, he wanted to do his bit to conserve and repair the land.
But in the six years since he began, California has experienced severe drought, which scientists link to global warming, and 650 of Cody's 750 seedlings died.
Gosh, that's terrible. What's happening?
In California, the effects of climate change are ubiquitous - recent years have produced record-breaking temperatures, earlier springs and less reliable rainfall.

That would indeed be worrying, what does the per-location rainfall data say? Well, although 2018 was 50% to 70% of "normal" level, it seems that 2019 has already been up to 20% above normal - and there's more unseasonably late rain to come this week. Even worse, the data shows that 2018 was particularly dry in SoCal (25% of normal), and yet is still significantly above normal this year.

So the fact that Cody (or the article's author Georgina Rannard) makes the inference that "climate change" is causing irreversible changes to the California climate seems to be less than conclusively proven by the available data.

Incidentally [prediction] this year is going to be a really bad year for fires in California. We've had a wet, long winter to allow grass to grow and thrive. We're having a second, late, belt of rain that will feed the undergrowth. Fire season is going to start late, but when it starts there's going to be a staggeringly high amount of tinder and fuel for the fires.

  • Is this due to a change in weather? Sure! Very different from the past few years.
  • Is it due to "climate change"? Sure! The climate is always changing.
  • Is it due to man-made contributions? Definitely, but not the way you might think:
    It’s counterintuitive, but the United States’ history of suppressing wildfires has actually made present-day wildfires worse.
    “For the last century we fought fire, and we did pretty well at it across all of the Western United States,” Dr. Williams said. “And every time we fought a fire successfully, that means that a bunch of stuff that would have burned didn’t burn. And so over the last hundred years we’ve had an accumulation of plants in a lot of areas.
    (New York Times, by the way)

What's more, California has been very "successful" at preventing controlled burns, and preventing people from cutting down trees and brush near their houses to make their areas defensible against fire, which has resulted in a huge source of fire fuel right next to where people live. Great job, guys.

I assume the environmental lawyers all live in San Francisco and Sacramento, which are 95% concrete and immune to the consequences of their actions...

2019-04-27

CASSH 2018: feeling the squeeze

It's that time of year again, where "charities" are forced to release their annual accounts, and semi-numerate baboons such as your humble correspondent paw through the numbers to try to uncover a story. Today's tale is about "Consensus" Action on Salt, Sugar and Health (CASSH).

I have perused the CASSH 2018 accounts and noted in passing that no-one actually checks them. They're still referring to Blood Pressure (UK) as charity number 1059844 (page 2) - this is actually Wetherby Sports Association, they actually meant 1058944. I'm not surprised that the Charity Commission doesn't apply this level of rigorous scrutiny, but it's an interesting data point.

Anyhoo, the CASSH accounts are 50 pages long, and at least 30 pages is tedious self-promo on their salt- and sugar-related activities. News flash, people - nobody cares. The Charity Commission is skipping right to the end to check out the numbers, as did I.

And oh, what numbers. Props to CASSH for cutting their coat according to their cloth, they've basically halved spending on their main "awareness" activities year-on-year; £141K vs £251K. Nevertheless, their reserves dropped from £564K to £483K - down 15% in one year. Their accounts note:

A delay in payment of a large expected donation this Financial Year, plus the return to work of two employees who had been on maternity leave (with reduced pay), accounts for a deficit in income and a surplus expenditure, prompting action by Trustees. The Trustees reviewed the financial position and agreed to release funds from the reserves to cover all core salary costs until such time as the funding gap was filled, expected March 2019.
Hmm. And so we'll see a corresponding rebound in next year's accounts? Colour me sceptical.

Even with a sudden donation increase from £4K to £56K, and the aforementioned throttling of expenditure, the charity is still spending way more than it receives. Unless they can latch on to the teat of a government entity, they're going to run out of money in a few years. It turns out, shockingly, that most people don't really care about sugar and salt consumption, at least not to the point of spending their own money to reduce that consumption in others. Revealed preferences, darlings!

Good luck for 2019, CASSH. Looks like you'll need it.

2019-04-26

Marcela Trust 2018: not much charity, property speculation not working out

Dear reader, if you are still perusing my analyses of the accounts of the Marcela Trust (spending Octav Botnar's squirreled-away cash on trustee salaries and property speculation for a good number of years) then I can only admire your fortitude as I offer up this analytical tidbit based on their 2018 accounts.

Background for the casual observer: the Marcela Trust is sitting on about £80 million of money from OMC Investments Limited, founded in 1971, which seems to be from the former Nissan UK. Although a registered charity, they seem to be a bit tight with their charitable spending. In 2017, they spent £12K on charitable donations and £300K on trustee remuneration. Obviously this was a one-off, and we can expect 2018 charitable spending to resume at appropriate levels.

You know what's coming, don't you?

The Marcela Trust spent even less on charitable activities in 2018 compared to 2017: £11.5K instead of £12.2K. In practice, that's the same £7.5K grant plus a bit less auditor fees. Their spending on trustees was still around £300K, with a steady £225K going Mrs Dawn Pamela Rose (presumed family motto: "payment by results is for suckers!").

Again, this level of payment might be justified if the trustees' shrewd investment strategies in commercial property were paying off. Sadly, their fixed assets (mostly commercial property) took a hit of nearly £8M in the past year - that's nearly 10% of their total funds wiped out in one year. And this in a 10 year property bull market. Great job, guys. What happens when the next recession hits?

I repeat my observation from last year: this does not look like a charity. If I were the Charity Commission, I'd be asking some very pointed questions about the past few years' spending.

2019-04-22

Taking advice from Greta Thunberg

Suppose we were looking to build a bridge, say across Avon Gorge, to give us substantially more traffic capacity than the existing Clifton Suspension Bridge has. (The Dear Reader may insert their favourite joke about needing much more capacity for traffic leaving Bristol than for entering it).

It wouldn't be surprising that a lot of people would have strong opinions on what kind of bridge we should build. Imagine, however, that a 16 year old high school student was championing a bridge structure that comprised a sequence of road segments chained together and suspended from helium balloons. Imagine that such a proposal was lauded by at least 30% of the people involved as bold, innovative, and a wonderful example of youthful thinking, despite the fact that a first year engineering student could shoot the proposal as full as holes as a particularly perforated Swiss cheese.

That, ladies and gentlemen, is where we find ourselves with young Greta Thunberg.

Young Greta is clearly sincere , and cares deeply about the environment. Unfortunately, "sincerity" is as useful a factor in planning a 21st century industrial strategy as it is in building a bridge. If a bridge builder tells me that she "sincerely" believes it will support the expected peak weight of traffic in peak adverse conditions, and be durable for a lifetime of 50+ years, I will smile and nod; if anyone I care about will be traversing the bridge, I will then ask pointed questions about stress calculations, FEMs analysis, safety engineering analysis, and all the inconvenient hard science that lets us calculate at least a ballpark probability of the bridge suddenly failing and casting a few hundred people into the abyss. Nearly anyone can be sincere. To be correct requires actual maths, materials knowledge, ability to program R / Matlab / other mathematical tool of choice and produce a verifiable assertion, given generally accepted axioms, that the bridge will meet specs.

Somehow, I don't see this level of mathematical / physical / engineering rigour coming from young Ms Thunberg. Or her singer/actor parents, for that matter.

The correct response to Greta Thunberg and her parasitic (in every sense of the word) hangers-on is as follows:

  • Give us a practical - by which we mean can-be-implemented-with-existing-technologies - 20 year plan for reducing carbon emissions world-wide by X%.
  • Cover the top 10 current CO2 polluters; either assume they continue on current trend, or argue why they will change.
  • You cannot assume any existing technology improves by more than 4% per year for cost/efficiency.
  • Include the expected economic impact on the top 10 world economies.
Greta would (quite rightly) say: "I'm 16 years old, how could you possibly expect me to answer this?"

Greta käraste, if you can't be expected to answer the hard questions, why should we listen to your easy answers?

2019-02-07

Symbolic of California's struggle against reality - car insurance

Dear readers, it has been a busy couple of months, but I thought I'd check in after reading a barnstormer of a story from CALmatters. First, a little bit of background.

In October 2018, California Governor Jerry Brown signed the California Senate Bill SB 179, which created a new gender "nonbinary" designation for all forms of state ID - including, of course, driving licenses. This then gave drivers the option of listing their gender as nonbinary. Regular readers of the antics of the Californian government will be forgiven for not falling off their chairs at the realization that this has had some unexpected consequences.

It seems that as a follow-on, California's outgoing Insurance Commissioner Dave Jones issued a regulation last month prohibiting the use of gender in automobile insurance rating. One can speculate why he did this, but (judging from the self-centeredness of transgender people I've met around here) if I were a car insurance company, I'd be giving a hefty premium bump to anyone checking that box ; perhaps this was Mr. Jones' attempt to get out in front of that problem. Ten out of ten for forward thinking, minus several thousand for economic illiteracy - of which, more later.

The proximate effect: California's Department of Insurance has decreed that auto insurance companies can no longer grant breaks in insurance rates to teen drivers who are female, or charge young men more. So if you're a woman - in particular a young woman - in California looking to insure a car, you can expect your new rate to take a sharp move skywards:

[California auto insurers' rep] Frazier said the gender of teen drivers can result in an additional cost for boys or discount for girls of about 6 percent on their premiums.
Honestly, that seems low-ball to me:
The association also cited a 2016 Insurance Institute report saying: "Men typically drive more miles than women and more often engage in risky driving practices, including not using safety belts, driving while impaired by alcohol, and speeding."
Yep, I'd agree with all of that, especially for late teens/early twenties. Given that, a 6% male-over-female premium seems really low. I'd expect it to be more like 25%. We'll know for sure when insurance renewal rolls around and California girls start yelling on Twitter.

The real prize for willful ignorance or brazen lies, however, must go to the new Insurance Commissioner Ricardo Lara:

Lara supports that policy, saying in a statement: “Gender, race, ethnicity or sexual orientation are beyond your control, and it is not a fair or even an effective way to predict risk.
That's right, Ricky. Any insurance company could charge boys the same as girls with no additional risk, and quickly get every single boy in the country insuring their car with them, but they don't do so because they... like leaving huge sums of money on the table? Yes, that must be it.
Commissioner Ricardo Lara made history in 2018 by becoming the first openly gay person elected to statewide office in California’s history. Commissioner Lara previously served in the California Legislature, representing Assembly District 50 from 2010 to 2012 and Senate District 33 from 2012 to 2018. Commissioner Lara earned a BA in Journalism and Spanish with a minor in Chicano Studies from San Diego State University.
I guess he skipped all the finite math classes in high school. Or worse, he know's he's talking bollocks but simply doesn't care because no-one will call him on it.

Consider yourself called on it, Ricardo.

It's possible, however, that it won't actually work out in practice as Ricky intends. We saw how this worked out in Europe after a European Court of Justice ruling. [note: link from that notorious right-of-center rag The Guardian]:

But what has happened since the rules came into force? Instead of the gap between men’s and women’s premiums narrowing, as expected, it has actually widened. In 2012, men on average paid £27 more for a car insurance policy than a woman, but rather remarkably they now they pay £101 more – nearly a four-fold increase.
...
What appears to be at work is that car insurance companies set a price very much according to all the other data they can find on you – without actually asking your gender. So the quote you get back reflects the risks attached to your occupation, how much you drive, the sort of car you drive and whether you have made any modifications to the car.

Perhaps this is fine with Ricky - as long as there is the appearance of fairness, and he's protecting his favored class of people from reality, this is all Working As Intended.

2018-12-08

Life of an actuary: more exciting than you might believe

When I was in university and hanging around the mathematicians - those students who dedicated their life to math(s), and I use "life" in the loosest sense possible - the standard joke was that the really successful ones would get involved in professional gambling[1], most of them would be accountants, and the ones who couldn't handle the excitement of accountancy[2] would become actuaries.

At least two of the three were true. Approximately the majority of the mathematicians I knew ended up in accountancy or related consultancy, and the actuaries were definitely around the low end of the social scale in the subject. Given the starting point of a mathematics degree, that's a scale needing very fine calibration. Anyone who chose optional courses in computer science ended up working for Big Tech and making out like a bandit.

Today I stumbled across a site Be An Actuary, which is (as far as I can tell) not a spoof site. It contains invaluable advice and guidance on what to do if you feel that actuarialism[3] is your calling, and a critical piece of information is what a day in the life of an actuary is like.

Before reading these quotes, you may wish to equip yourself with a spoon[4].

So far today, I've researched the applicable accounting rules and written a report for a client who's acquiring a small life insurance company.
Be still my beating heart.
I am constantly asking myself "Does this make sense?".
I'm assuming that "this" doesn't apply to "my terrible career choice". But it should.
In a midsize company like mine, there is also opportunity to price a new product, which takes creativity, or respond to an insurance department inquiry, which requires communication skills and tact.
Or, in despair at my life, throw myself through a 10th floor window, which requires a good run-up.
I currently manage three reserving analysts and we spend most of our time doing reserve analyses and projects like catastrophe modeling, loss modeling for some of our low frequency/high severity lines, and supporting our Corporate Actuary as he writes Actuarial Opinions and Reports.
You should spend some time on serious introspection on how your life got to be this way.[5]

If you still have more than one eye remaining to view the remainder of this blog post, you're a more resilient person than me.

[1] Specifically, running the numbers games in the casinos rather than playing them.
[2] Yes, that's irony.
[3] Probably not a word, at least I hope not.
[4] Because it's DULL, you twit. It'll hurt more.
[5] Probably, you have Korean/Indian/Chinese parents and you paid more attention to their ambitions than your desires.

2018-11-02

Unionism in Silicon Valley - called it

Back in January I made the following prediction:

What do I think? Twitter, Facebook and Google offices in the USA are going to be hit with unionization efforts in the next 12 months, initially as a trial in the most favorable locations but if they succeed then this will be ramped up quickly nationwide. This will be framed as a push to align the companies to approved socially just policies - which their boards mostly favor already - but will be used to leapfrog the activist employees into union-endorsed and -funded positions of influence.

Sure enough, a bunch of Google staff walked out of work today, nominally to protest at ex-Android head Andy Rubin getting a cool $90M in severance after being accused of dubious behaviour with someone in a hotel room, which he denies:

Rubin said in a two-part tweet: “The New York Times story contains numerous inaccuracies about my employment at Google and wild exaggerations about my compensation. Specifically, I never coerced a woman to have sex in a hotel room. These false allegations are part of a smear campaign to disparage me during a divorce and custody battle. Also, I am deeply troubled that anonymous Google executives are commenting about my personnel file and misrepresenting the facts.”
For the record, Rubin sounds a bit sleazy even if you apply a high degree of scepticism to the exact circumstances of the event.

Let's look at the "official" walkout Twitter account, and wonder who's actually driving this organisation:

For posterity, the "demands" are:
  1. An end to Forced Arbitration in cases of harassment and discrimination for all current and future employees.
  2. A commitment to end pay and opportunity inequity.
  3. A publicly disclosed sexual harassment transparency report.
  4. A clear, uniform, globally inclusive process for reporting sexual misconduct safely and anonymously.
  5. Elevate the Chief Diversity Officer to answer directly to the CEO and make recommendations directly to the Board of Directors. Appoint an Employee Rep to the Board.
Points 1-4 seem pretty reasonable - but what does point 5 have to do with the rest of the list? And who would this "Employee Rep" be - a unionisation activist, perchance? $10 says I'm right. This is a classic tactic: take a reasonable area of complaint and use it as a Trojan Horse to sneak in the early stages of unionisation to the company.

Google allegedly employs very smart people. If only they exercised their critical faculties half as well as their intellects, they might be asking uncomfortable questions of the protest organisers about where point 5 came from and who the organisers have in mind to take on "employee rep" duties. I guarantee you that it's not Rob Pike or Jeff Dean.

2018-10-21

CASH / CASSH 2017 and the importance of attracting funding

Both my regular readers will recall my personal crusade to investigate the Marcela Trust and why UK "charities" such as "Consensus Action Salt for Health" (CASH) and "Action on Sugar" (different branch of same charity) are being funded to stop people eating bacon.

As part of this ongoing investigation I downloaded CASH accounts for 2016-2017 from the UK Charity Commission website. Saved a copy as well for future reference. The TL;DR:

  • Rebranded to Consensus Action on Salt, Sugar and Health (mission-merged title, happened some time after April 2016);
  • Notes that they're associated with charity Blood Pressure UK featuring long-time CASSH reps Katharine Jenner and Prof. Graham MacGregor (and they accidentally mis-cite the charity number, it's 1058944 not 1059844);
  • Blood Pressure UK burned through 30% of their funds in year-end 2017 (£210K to £140K) so it's anyone's guess how long this venture will last without a cash infusion;
  • CASSH brought in £50K in 2017 - down from £215K in 2016 - and spent £250K in 2017 - up from £153K in 2016. So they're down from just over £750K in funds to a bit over £560K. This doesn't seem very sustainable long-term
  • Basically, no-one is giving CASSH any significant amount of money. Tragic, really. I'd imagine that the general choke-off in government funds to "charities" is starting to bite.
  • About half their expenditure is in food salt/sugar surveys; seems that those surveys aren't translating into funding for action. No-one cares about what they find.
  • In summary, CASSH is going to run out of cash in the next 3-5 years unless they can find a charity or government agency with reasonably deep pockets to fund their surveys

Great quote from their annual report:

Andrea Martinez-Inchausti told attendees [of the CASH reception at the House of Commons, sponsored by Sir David Amess MP] that BRC members, such as Tesco and Waitrose, are committed to salt reduction but following initial reductions, further reductions in salt are posing a technical challenge.
Let me guess: no-one wants to eat food with near-zero salt?

In fairness, I'd note that a key difference between CASSH and the Marcela Trust is that the latter sends large chunks of its finances to a few directors in remuneration, whereby CASSH at least has the decency to avoid hosing money at its trustees. (I'm curious about where in detail the £120K of survey cash goes, but have no reason to believe it ends up in CASSH trouser pockets).

Ah, CASSH. It seems that trying to reduce sugar and salt consumption in the UK, or indeed world-wide, is very much a minority interest and not one than people are prepared to back with significant quantities of their own money. I'm sure people talk a good game, but their revealed preferences in funding show that they don't actually care. Sorry guys!

2018-10-06

Post Kavanaugh confirmation the Left loses its fecal matter

An hour or after Brett Kavanaugh was confirmed as the replacement for Associate Justice Kennedy on the Supreme Court I decided to trawl Liberal Twitter for the reaction. I was not disappointed.

Yes, I'd imagine it did. I wonder why history seems to be repeating itself?

Yes. They've given Republicans a significant boost in advance of the November mid-terms, where Democrats were previously indicated as performing well. Well done survivors! Bet you're pleased.

The Democratic party?

Also, the republic's legislative branch function of selecting the members of the judiciary.

It says "men can be just as blind to facts and the principles of justice as women. Yay equality!" Also "what's with the red suit, Reverend, are you trying to attract attention to yourself rather than your celestial Boss?"

Should we bring Bill Clinton's hands into the discussion then? How about (Heaven forfend) Joe Biden's?

I'm fine with making these cheap shots. The Democratic senators and associated mob who tried to lynch Brett Kavanaugh made this confirmation expensive enough for him and his family - and for Christine Ford, let us not forget. Let's have some symmetry.

2018-09-30

Mandatory women on California boards of directors: the potholes in SB-826

In a huge strike for equality[1], California has decreed that all-male boards of directors need to go the way of the dinosaurs:

This bill, no later than the close of the 2019 calendar year, would require a domestic general corporation or foreign corporation that is a publicly held corporation, as defined, whose principal executive offices, according to the corporation’s SEC 10-K form, are located in California to have a minimum of one female, as defined, on its board of directors, as specified. No later than the close of the 2021 calendar year, the bill would increase that required minimum number to 2 female directors if the corporation has 5 directors or to 3 female directors if the corporation has 6 or more directors.
Of course, there could be no material ill effects from this policy. Otherwise, I'm sure they'd have been addressed in the California Senate, whose members are clearly much more concerned with the financial health of their state rather than virtual signaling.

Speaking of which, I have a very attractive bridge situated between San Francisco and northern California which I'd be willing to sell to any interested reader.

Did anyone notice that this implies that it requires moderate-sized boards to move to 50% female representation within three years? I'm sure that this is excellent news for moderately-well-known near-C-level (tech, pharma) females in California. If I could buy shares in this demographic, I'd be all-in. However, a more directly accessible trading strategy would be based around the aforementioned set of California-based companies with 10 or fewer board members. Please note that this is not professional trading advice, you'd be crazy to trade based on the superficial research of a random person on Twitter, etc.

  • For any such company which already exceeds the 2021 criteria, hold.
  • For any such company which doesn't currently meet the 2021 criteria but will meet it with 1 additional board hire, sell if you hold it.
  • For any such company which needs to hire 2+ females to meet the 2021 criteria, sell short based on the predication of a 2022-2023 disaster
Bringing in people to the board based on gender is unfortunately disproportionately likely - based on ease of discovery - to incorporate vocal SJW-biased women who spend the majority of their time selling the story that "women are discriminated against in tech!" Now, this may even be true - in my experience, it's not, but that's another blog post - but by hiring these women the affected boards of directors are bringing aboard people whose primary interest is the "improve female representation in tech" narrative, rather than (say) "make this company work better and be more profitable". What could possibly go wrong?

In particular, any company hiring Anita Sarkeesian, Ellen Pao, Zoe Quinn, Brianna Wu, Erica Baker or other such vociferous campaigners in the context of this act is doing the equivalent of filling five of six chambers of a revolver with live ammo, pointing it at their head, and squeezing the trigger.

On the other hand, if a company's board can persuade one of its existing male members (ooh err) to "identify as female" then I'd go long on that company based on willingness to turn SJW rules back on themselves. What is California going to say? "Oh, you're not really a woman, you're just pretending?" According to the bill:

“Female” means an individual who self-identifies her gender as a woman, without regard to the individual’s designated sex at birth.
I'd imagine that any such willing volunteer would see a sharp bump in their compensation.

Practically, this incentivizes a medium-size board of directors which has at least one woman to trim excess (male) directors in order to bring them into compliance without introducing a potentially disturbing (female) member to the board. Expect to see the distribution graph of board sizes in California to take a leftwards lurch in the next couple of years.

Now, let's consider the perspective of a woman hired to a board of directors in a California-based company after this law is passed. How many people in the company will believe she was hired for her expertise? And how long will she hold the label "diversity hire" - even if the board actually hired her for her expertise? If I were a C- or D-level female executive in California, I'd be spitting mad about this devaluation of my expertise. But then, I'd bet that the lobbying for this bill came from the achievement-challenged section of the prospective candidates. "Damn my dubious merits, hire me because I'm kinda-female and very woke!"

[1] For non-British readers, this is irony. There may be more instances of this phenomenon throughout this blogpost.