Sufis not keen on certain free speech

I missed this event in the news, but YouTube (ironically) has coverage: Mr. Moulana Ghulam Ahmed Rabbani leading a protest outside Google's Dublin office:

"We have a right not to be insulted!"
[...]
"If this is not terrorism, what is the definition of terrorism?"

Er, I'm sorry Mr. Rabbani, but I'm afraid you don't actually have that right not to be insulted. Free speech (look it up) is the right to say more or less what you want. This may involve hurting someone's feelings. If I accuse a crash-for-cash solicitor of being a scum-sucking subhuman weasel then I'm going to hurt his or her feelings; that is, however, not a reason to restrict me from saying those things.

Define terrorism:

Noun: The use of violence and intimidation in the pursuit of political aims. Synonyms: terror

Hope this helps, Mr. Rabbani. For what it's worth, I don't seem much violence or intimidation from those publishing the insulting videos.

Kudos to the Irish Sufi Foundation that they didn't actually hurl rocks, set fire to things or assault people during these protests (oh, how low our expectations have sunk that this is grounds for praise). However, they need to realise that the Western World has standards of free speech that are very different from those in the Middle East, and living in Western societies means accepting these consequences.

Camelia Botnar Ltd - 2011 accounts

[ In which we look at Camelia Botnar Ltd's 2011 accounts and wonder how they continue to manage to turn only a small gross profit when their labour is free. We also note the continuing charitable donations to and interest-free loan from the Camelia Botnar Foundation and ponder on why they don't just net everything out. See Part 3 of the series for background.]

Camelia Botnar Ltd. (CBL) have just delivered their accounts for the year ending 31 December 2011. As promised, here's the analysis.

Key points:

• Compared to 2010, turnover and cost of sales were similar: 788K and 685K vs 759K and 636K, giving about a 4% increase in turnover but a reduction in gross profit from 16% to 12%. That's roughly what we'd expect if material costs were dominant rather than fixed costs.
• The entire operating profit plus a small amount of interest was wiped out by a charitable gift (89K), presumably to the Camelia Botnar Foundation in the same way that 2010 gifted most but not all of its profit (90K) to them. Note that this does not relate to the loan that CBF gave CBL, which still seems to be outstanding.
• Cash in hand dropped a little from 175K to 148K but still looks healthy.
• Amount due to creditors within 1 year was practically unchanged (180K). This is weird. It implies that the 180K of loans, nearly all (165K) from the CBF, was rolled over by a year. Why are they doing this rollover instead of extending the term of the loan over a number of years? Given a fairly steady business state, they're not going to be able to repay it next year without wiping out most of their cash in hand and donation to CBL; there's just going to be another roll-over. This looks like an artificial accounting structure to me, and I'd be fascinated to learn its purpose.
• Amount due to creditors beyond 1 year has dropped from 55K to 20K; the breakdown of creditors on page 7 implies they paid off about 35K of loan principal overall in 2011, 32K of which went to CBF.
• P+L account has remained static at 146K +/- 500 (due to 1K in tax paid in 2011). Looks like the CBL accounts are being carefully managed to balance out almost exactly neutral in profit. The 50K in share capital wholly owned by CBF is worth around 190K if CBL were wound up now.
• Tangible fixed assets dropped significantly, from 392K to 277K, due to 129K of disposals (near-matching depreciation on those assets). That looks like most of their TFAs are written off over 3 years, but for some reason they're not being replaced this year. Is this just a 1-year glitch, an efficiency measure, or are they actually anticipating scaling down operations?
• CBL continues to benefit from apprentices and supervisors from CBF working at no cost to CBL. And yet their profit margin continues to drop.

I'm now waiting for the Camelia Botnar Foundation accounts for 2011 to be scanned and uploaded by the Charities Commission. I'm itching to see how they're reporting their interactions with CBL. I'm also curious that their income of £3,230,568 is within 1% of their spending of £3,233,150; how have they managed this balancing act so well?

China - a slam dunk for investing?

Tom Stevenson in the Telegraph seems to think investors should be piling into China:

The average multiple of earnings at which Chinese shares trade is also standing at a historically high discount to the price/earnings ratios in Hong Kong and the rest of the Asia-Pacific region excluding Japan.
That seems unfair given that Chinese companies are just as profitable as their counterparts elsewhere. Either returns in China are not sustainable or they are being mispriced.

Or.... or there's some other consideration. I searched the entire article and could not find one particular word: fraud.

I refer the reader to hedgie John Hempton whose recent investigations into China-based firms have made fascinating reading. Whether you believe his conclusions or not, the many known frauds perpetrated by Chinese firms and the corruption of local politics and business have made one wonder at the wisdom of putting large sums of money into Chinese business when one has no idea whether the firm in question is reporting legitimate profits or is making it all up.

Investing in China may or may not be a good idea. But the discount that Stevenson notes can be at least partly explained by the concern that among the barrel of shiny, tasty Chinese apples there are quite a few which will turn out to be writhing with maggots.

So who is this clown and what's his interest?

Tom Stevenson is an investment director at Fidelity Worldwide Investment. The views expressed are his own.

An investment director wants you to invest in China and doesn't want to mention fraud? Interesting. What does his Fidelity Investments page say?

Tom Stevenson joined Fidelity in 2008 as Head of Corporate and Investment Writing. [...] The ideas and conclusions in Tom Stevenson's weekly column are his own and do not necessarily reflect the views of Fidelity's portfolio managers.

"Do not necessarily reflect"... but I bet the portfolio managers have been dropping hints over lunch about what a slam dunk China would be to invest in. Like, say Anthony Bolton:

He [Anthony] returned to fund management in April 2010 with the launch of Fidelity China Special Situations PLC

What does the Fidelity China Special Situations annual report say?

Investment Performance (year to 31 March 2012):

• Net Asset Value (“NAV”) per Share total return -18.5%
• Share Price total return -26.4%
• MSCI China Index total return -12.5%

Oopsie. Well, perhaps from here the only way is up.

A question on French tax rises

What makes them have less impact than spending cuts?

The BBC's Chris Morris noted that many of the Hollande government's policies come from raising taxes rather than cutting spending and compared with other countries in Europe pushing through painful austerity, "France is resisting such radical surgery".

France aims to raise an annual €20bn from the top 10% of taxpayers. The much-heralded 75% tax on €1mm+ earners will raise €200mm or so which is chickenfeed (1%). The rest of taxes include an abolished ceiling on wealth taxes, taxing capital gains as income, and a 45% tax rate on incomes above €150K.

With 65mm people in France, say about 70% of them are taxpayers. That's 45mm people, so all these taxes (€20bn annually) will come out of the income of 4mm people. That's €5000 per person, per year.

Would anyone like to argue that tax rises like this are not going to induce an extremely sharp slow-down in discretionary spending? How exactly does Hollande expect consumer service and goods companies to keep afloat when these taxes bite? Who's going to cover the cost of unemployment as they lay off workers?

Chris Morris, France is not "resisting such radical surgery". France is merely choosing to lop off an arm rather than a leg. The problem is, the gangrene is in the leg...

Big Oil funding propaganda!

Expect howls of protest from Greenpeace and friends about this deplorable use of oil money to fund popular propaganda any time now. No, really, any time now...

A new film starring Matt Damon presents American oil and natural gas producers as money-grubbing villains purportedly poisoning rural American towns. It is therefore of particular note that it is financed in part by the royal family of the oil-rich United Arab Emirates.

"Promised Land" aims to oppose the practice of fracking (injecting water underground to fracture rock layers and release natural gas), as made famous in the pseudodocumentary Gasland. It seems that the UAE Royal Family are not thrilled at the prospect of the USA achieving something close to energy independence, and are doing their bit to ensure a continuing high demand for oil (and thence high oil price) as long as the UAE reserves last.

We can't blame the UAE for doing this - why wouldn't they? - but I will be fascinated to see how the various environmental groups tackle this news. With whom should they side? I suspect most of them will adopt the subterranean ostrich approach in order to avoid their heads exploding.

Say what you like about British TV, we don't get shows like this

ABC's "The View" had ultra-conservative columnist Ann Coulter facing off against Whoopi "Guinan" Goldberg on the issue of race. It was quite the show:

GOLDBERG: Everyone was a segregationist darling , everybody was! White people were, they didn't matter whether they were Republican or not.
COULTER: Republicans were not...
GOLDBERG: Bullshit! Bullshit, I'm sorry! That's bull, that's bull
COULTER: No, no that is not... ok just read chapter 14 in the book, the first Republicans to be elected in the south
GOLDBERG: I listen to my grandmother, who was there! Who remembers what happened.
COULTER: Howard Baker, an aggressive integrationist, first Republican elected in Tennessee to the Senate, Winthrop Rockefeller, first republican governor in Arkansas, an integrationist.

Personally, I think British TV is the poorer for not having discussions like these. I can't conceive of a BBC programme that would invite Ann Coulter as a guest -- though I suspect they'd be just fine with Our Whoopi.

BBC producers: I would like to see a Question Time with Ann Coulter, Whoopi Goldberg, Ayaan Hirsi Ali, Richard Dawkins and Rowan Williams. You know you want to make this happen.

Non-taxpayers in favour of taxpayer money

I do try to keep from reading these pieces, but the headline Pioneering Traveller Community stands proud against cuts was so egregious that it drew me in, against my better judgement:

But the TRA's [Travellers' Tenants' and Residents' Association] pioneering work is now threatened by cuts to funding for community and voluntary sector groups and a proposed housing development adjacent to the Travellers' homes. The association's efforts to improve its residents' lives had been aided by having a constitution, which has allowed it increased access to charitable funds.
"Travellers don't want to be seen as if we were asking people for money," says TRA chair Patrick O'Donnell.

Well, maybe not, but I'm not seeing where the traveller community is putting much money into all the endeavours that this article lists. It seems that the community benefits from:

• attending local primary schools;
• full NHS GP and dentist access;
• internet connections and associated classes;
• monetary support for driving theory tests; and
• money for their residents' association

among others. They contribute... how much in taxes and NI? The article is strangely silent.

Now, each and every one of these schemes may be a good idea. However, their cost is borne either by local residents (via council tax) or nationwide taxpayers (where Government grants are used). For the TRA to complain about cuts is a little cheeky:

But MacNamara fears Traveller TRAs will suffer from council funding cuts. "If the TRAs and other stakeholders want something but the local authority can't afford it, then it's very unlikely to happen. That's the problem with the coalition government's big society idea, in a nutshell."

Well, the idea of the Big Society is that everyone contributes. What, exactly, is the TRA contributing back? Why should the desires of a group that pay no council taxes take precedent over taxpaying households trying to survive on the minimum wage?

Stable Way itself is in Kensington and Chelsea, just off the A40 Westway and within a stone's throw of BBC Television Centre and the new Westfield Mall at White City. One can only imagine the site's commercial value; it baffles me why the traveller community hasn't sold it and bought a larger and nicer plot of land somewhere less urban.

The obligatory bios of the journalists: Keith Cooper is a former deputy editor of the magazine Inside Housing. He is a PhD candidate at the University of Essex, researching autonomy and the Mental Capacity Act in the Department of Philosophy. Anita Pati seems to specialise in charities and cooperatives, and also wrote for Inside Housing. Inside Housing magazine is apparently the magazine for housing professionals, though it takes a little bit of reading to realise that its focus is actually social housing. So, fellow taxpayers, I think we can guess what kind of organisations form the bulk of its subscriptions and how tightly this would correlate with subscriptions to The Grauniad...

A modest proposal - the Chump Change law

Occasioned by a discussion of pointless spending changes at Mr. Wadsworth's, I present for public discussion "The Chump Change Law of Parliament":

No Member of Parliament may propose a spending- or taxation-related Bill which does not change spending or tax by less than £1 billion.

In the 20 months since January 2011, there have been approximately 320 Bills before Parliament which works out at 192 per year. A lot of these are not related to spending or taxation. Let's be generous and say that we allow time for 100 taxation/spending bills. The current UK deficit is well over £100 billion. If any Bill is intended to address the deficit, and fails to change things by less than £1 billion then it is just pissing in the wind.

I'm tempted to make a variant of this rule for the Budget: the Chancellor has 1 hour to deliver a budget raising £600bn and spending £700bn, therefore every minute talking needs to relate to a minimum of £10bn of taxation or spending.

Mitt Romney - not entirely wrong

Much fun has been had in the blogosphere with Mitt Romney's latest quote on aircraft safety:

When you have a fire in an aircraft, there’s no place to go, exactly, there’s no — and you can't find any oxygen from outside the aircraft to get in the aircraft, because the windows don't open. I don't know why they don't do that. It’s a real problem. So it’s very dangerous. And she was choking and rubbing her eyes.

The context for this was Mrs. (Ann) Romney's plane being forced to make an emergency landing after smoke filled the cabin.

Ok, so the idea of roll-down windows in a pressurised plane is ridiculous. Romney's a bit of an arse. But you know what? He's actually right - it is a real problem.

Case 1: the Manchester airport fire on British Airtours Flight 28M. The plane had an engine failure on takeoff which precipitated a fire. 54 of 131 passengers perished, many from smoke inhalation.

Case 2: Varig Flight 820 arriving at Orly, France. A fire started in a lavatory, likely because of a furtive smoker. The plane landed in a field short of the runway. 123 people (all the passengers except one) died out of 134, most due to smoke inhalation.

Case 3: Air Canada flight 797 inbound to Toronto. A fire started around the rear lavatory while in-flight. The pilot managed an emergency landing but 23 out of 41 passengers died when the fire had a flash-over, most as a result of smoke inhalation.

Smoke inhalation is a serious issue in aircraft fires. You're in a narrow tube adjacent to tanks of aviation fuel, breathing recirculated air. If a fire starts, you're breathing hot, thick, toxic smoke with no exit to fresh air available. For that reason, oil rig workers have smoke hoods but they are trained to use them; I guess the view was that smoke hoods would be worse than useless with panicking aircraft passengers. Having tried them out, I can report they are effective but require reasonable clarity of mind to fit and use; and if you're claustrophobic then you're sunk.

So Romney's not exactly wrong. It may not be practical to build a pressurised aircraft with windows that open, but the fact they don't open is indeed a real problem. I guess that actual facts don't matter this close to the election, however.

Who is Henning Mayer and what is he drinking?

CiF is on fine form today with Mr. Mayer, managing editor of Social Europe Journal, arguing that the current Eurozone crisis proves the need for even more European institutions:

My idea rests on three pillars: the necessity to democratise the eurozone, ideas for an "English grand committee" and the need to create a "federal" budget to have potentially more means to balance asymmetric shocks.

The "democratise the eurozone" concept involves yet another assembly of some form, though Mr. Mayer seems rather vague about what it might be, and how it might differ from the existing structures such as the European Parliament. One is left with the impression that either he has no idea what he's talking about, or he's trying very hard not to say what he's actually thinking.

Commentator Sussexperson picks up on a telling phrase that I missed on first reading:

Once you have such a parliamentary assembly it can also assume functions that national parliaments perform.
Is "assume" intended as a polite way of saying "usurp"?

I suspect SussexPerson hit the nail on the head there.

Mayer's true colours become more apparent when he talks about the "federal budget":

There will not be social security transfers or anything like this on the eurozone level but I nevertheless think it would be a good idea to have an additional eurozone budget democratically run by a eurozone parliament. Such a budget would be additional to the normal EU budget and could be financed through new taxes, for instance a eurozone-wide financial transaction tax.

Yes, my British pals, please give us your money! Instead of transferring tax money from the Germans and Scandinavians to the Greeks, we can take it all from the British banks, equities and pension funds instead. Who could possibly object?

Henning Mayer is one of the classic be-spectacled Euroweenies who have done so much damage to the ideal of European cooperation. He views the whole eurozone as essentially an experiment for his ideas, the opportunity to take ever more power and control and use it "for the benefit of all". His potted biography contains all the necessary clues:

Areas of Expertise: European Integration, Globalisation, European Social Model, Social and Economic Policy, Transatlantic Economic Relations, German Politics, British Politics
Qualifications: PhD (Comparative politics), MA (British and European Politics and Government), PRINCE2 Project Management (foundation level)

My rule of thumb is that anyone proudly proclaiming their grasp of PRINCE2 when not actually bidding for a lucrative government contract should not be allowed within ten yards of my wallet, and certainly never allowed to actually run any project more complex than a lemonade stand. Note the number and scope of areas in which he claims "Expertise". Would anyone here like to bet against my claim that Henning Mayer could be a case study for the Dunning-Kruger effect?

Women on the police front line

The wonderfully sardonic Sgt. Ellie Bloggs takes time out from her response role to tell Telegraph readers what it's like on the police front line when you're a woman officer:

Before I can grab my baton or pava spray, he has got me by the shoulders of my stab vest. I brace my arms against his. We spin, nose to nose against a shop frontage. The audience of kebab-eaters shuffles its feet. Ten years in the police, and suddenly this. How is this going to end?

Go read the whole thing.

Bloggs points out how far women in front line police roles have come in her ten years on the force, and how the fatal shootings of female PCs Bone and Hughes in Manchester (and before that, Sharon Beshenivskiy and Teresa Milburn being respectively killed and wounded in Bradford) have reflected the increasing female presence on the front line. She doesn't think the physical size differences are that important:

We are there to control, not to fight. Control is best achieved calmly, with numbers on your side.
Which is why, pinned to a shop window by a slathering drunk, things are not exactly going to plan.

For me, one of Bloggs's most telling remarks is that she is actually surprised when her PAVA incapacitant spray actually has an effect on a drunken opponent. It sounds as if the police could do with something considerably more potent instead. Unlike her colleague Inspector Gadget she's not a fan of arming all front line police officers, although she does think they need more firearms presence than they currently have. I'd agree with her assessment that there are plenty of good police officers who would be more dangerous to the public and themselves if they carried a firearm - it's not for everyone.

While we're talking about the police, how about Bloggs's kebab-eating audience? Why weren't they intervening to prevent a large thug from beating up a police officer? This 2010 BBC article on bystander intervention suggested that people were still prepared to intervene in violent situations; you would hope that they would be more willing to aid a female police officer since a) you're far less likely to get falsely accused of assault when a police officer is your witness and b) a large man is assaulting a smaller woman.

If you haven't already read Bloggs's Diary of an On-call Girl then run, don't walk (better yet, HTTP) to your nearest bookstore.

A couple of questions on the Bristol Pound

This genius idea that the main problem of the Bristol economy is that it's too easy to exchange goods and services with other cities:

The idea is simple: to encourage consumers to spend more of their money in the local independent shops that accept the one, five, 10 and 20 pound notes and stop money leaking out of the area to faceless multinationals, unknown shareholders or the discredited banking system.

Oh, I see, it's the large companies that they don't want any truck with.

The Bristol Pound website has the gen on the intentions and people behind this idea. I see that the dreaded nef make a showing, which already makes me think this enterprise is doomed to a messy end. Director Ciaran Mundy lets us know where he's coming from:

I love the spirit of the people in Bristol and crucially, the independent traders, retailers, artists, street traders, crafts people, restaurants etc. Bristol is often called counter cultural, and for me it's that which makes it feel so exciting a place to live and work.

Ah yes, the wonderful Bristol counter-culture He clearly doesn't care whether this works, as long as he feels he's sticking it to the capitalists.

Another of the team caught my eye:

Mark Burton
Research and Strategy. A doctoral student at the University of Bristol, Mark is using his research to instigate practical change towards a sustainable and just financial system. He teaches on the nature of the financial system and possible alternatives.

Take note, Bristol Pound participants, you're part of a geography student's Ph.D. studies, which is likely to be good material for his thesis and papers but I suspect you're going to get a teensy weensy bit screwed over in the process. You should at least ask him for co-author credit. And the School of Geographic Studies? Nothing to do with economics. I think we can see what he's going to regard as a successful scheme.

So, those questions that the Bristol Pound FAQ skirts around:

How are Bristol Pounds going to get into the hands of Bristolians?

I'd imagine that Lloyds, RBS, HSBC etc. are in no rush to put Bristol Pound notes in their ATMs. Most companies pay their workers using direct deposit. So someone, somewhere, has to seed each Bristol Pound note into the local economy. I see this being a bit problematic at scale. The most likely source listed on the Bristol Pound site is Bristol Credit Union, and I can't see many people with cashflow problems being particularly keen on cash with which you can't pay the trademan, mechanic, Tesco or Aldi.

Why would anyone choose a Bristol Pound over a Pound Sterling?

The only tangible benefit quoted in the article was from shops giving a few percent discount to Bristol Pound. Bearing in mind the shop's increased costs in managing and accounting for their dual currencies, I can't see them offering much here long-term.

What happens when the experiment peters out?

Bristol Credit Union currently promise to exchange money back to pounds for the small, small fee of 3%. Of course, I'd want to see evidence of the escrow account into which they pay £1 for each 1BP. I do like their comment: "This arrangement will strengthen Bristol Credit Union which has a clear social purpose to be a community anchor for the city, providing fair financial services for all the people of Bristol, and offering competitive, viable alternative financial provision for member benefit and not for private profit." Oh, Lordy. BCU is not strengthened in any way that I can see. They can't do anything with this backing money, it's essentially pledged as collateral for the BPs.

So how do electronic balances in BPs work?

Say I take a 100BP loan from BCU in BPs. Presumably they're going to be more keen to lend to people willing to accept BPs (hey, anyone looking for a loan without too many questions being asked? This may be a good place to start). BCU open an account for me containing 100BP, move £100 into their escrow account and I'm good to go. I can presumably withdraw BP notes from any BCU branch, and transfer BPs between my account and other BP account holders. But no major business (Tesco, Aldi, M+S, Next) is going to open a BP account - I can only pay other people. No bank is going to accept BP transfers. If I run short of £s, I have to exchange my existing BPs and pay 3%. Nice.

Where will the BPs end up?

Money normally circulates in the economy - from bank to person to store to person to bank, or some variant thereof. But there are going to be so few BPs relative to the population of Bristol, and so few participants, that after a few steps in the circulation the BP holder is going to be hard-pressed to circulate it to someone else without paying them for the privilege. I anticipate any moderately successful shop offering a substantial discount for the BP being an effective sink for BPs. Good luck trying to shed them at anything under a 3% cost.

This is a stupid idea. The only likely participants are the hard-of-economic-thinking middle class, already-struggling local class, and poorer people whom BCU sucker into taking out BP loans. It's going to be at best neutral for BCU, and exposes them to whatever fraud more economically knowledgeable criminals can come up with. It may make good material for Mr. Burton's thesis but introducing extra friction into an already-struggling local economy does no-one any good.

Insufficient power is not the FSA's problem

Following the LIBOR scandal - which, let's remember, happened on the FSA's watch - the FSA has made a submission to the Parliamentary Commission on Banking arguing that they need more powers:

...the FSA suggests exercising an appointment power over bankers whose information helps to calculate Libor, by adding them to its "approved person" register.
The agency would assess whether they were "fit and proper" people who had "honesty, integrity and reputation" before they took the role.

Really? They would have spotted that Bob Diamond was the kind of manager under whose direction a firm could have undertaken the rigging behaviour that happened with LIBOR? Is the FSA recruiting gypsy fortune tellers?

Let's read about their most recent successful public prosecution: Peter Cummings of HBOS:

However, the FSA has judged Cummings to be personally culpable in breaching Statement of Principle 6 of the FSA's Code of Practice for Approved Persons, by failing to exercise due skill, care and diligence in managing HBOS’s Corporate Division during this critical period.

Oh look! Peter Cummings was an FSA-approved person. So they signed off on his role. Good job, guys. That "approved person" register is really working out for you.

I'm being a little sarcastic. Really, though, all the FSA can check with their approved person register is that you're not a convicted criminal, don't have significant financial problems in your past (e.g. CCJs, directorship bans etc) and haven't admitted to connections with companies and people that are known to be dodgy. It's far from a panacea. All this Parliamentary Commission on Banking submission is intended to do is mark the FSA's intended territory. It will have no practical improvement on the financial system. At all.

That's not the only change they're trying to make:

The watchdog has called for "exemplary sanctions" and "forceful punishment" of bankers who are caught breaching regulations to make them an example in an industry where investigating malpractice is difficult.

So the known problems are with finding and proving malpractice, and the solution is to increase the punishment of malpractice? Sorry, chaps, I'm not seeing it.

[Incidentally, Telegraph subs, it's "LIBOR" not "Libor". LIBOR is an abbreviation for London Inter-Bank Offered Rate. "Libor" is not an English word. How's that English Literature BA working out for you?]

Playing the man not the ball in the Sarah Catt case

There seems to be some unease among Guardian journos at the sentencing remarks of Justice Jeremy Cooke in the Sarah Catt 38-week abortion case. Since it seems rather difficult to challenge them on legal grounds, they're trying out a go at the judge:

A judge who criticised UK abortion policies while sentencing a woman to eight years in prison for performing her own abortion at a late stage in her pregnancy is one of at least five members of the judiciary with links to a Christian charity which has campaigned for more conservative abortion laws.
There has been surprise at the severity of the sentence Justice Jeremy Cooke imposed on Sarah Catt...

That sentence, let us be reminded, was a sentence of 8 years in jail; in the normal course of things Mrs. Catt will be out on licence after half of that. Since the defence did not show that Mrs. Catt was anything but in her right mind and aware of the consequences of what she did, there was no option for a psychiatric treatment instead.

If Sarah Catt, in the same state of mind, had killed a baby who had just been born, she would have been looking at a murder charge and a sentence of life imprisonment. That sentence in these circumstances looks like 15 year minimum starting point to me. Catt actually got a 12 year sentence with a reasonably generous 1/3 off for guilty plea, so from where I'm sitting this sentence seems bang on. Of course, people like Simon Jenkins in the Guardian don't think any woman should go to jail:

What conceivable good can be served by such a sentence? It appears merely a gesture of abhorrent rage on the judge's part. He accused Catt of robbing "an apparently defenceless child ... of the life which he was about to commence".

He gets something of a shoeing in the the comments:

Gjenganger:
Putting people in prison harms them, their families and their children. For both men and women. If the crime is relatively small the effect may be disproportionate. For both men and women. Either argue for fewer and shorter sentences for 'minor' criminals of both sexes. Or admit that you care about women but not about men.

So why the concern about Mr. Justice Cooke? It seems that his dig at the modern day treatment of the 1967 Abortion Act ruffled a few feathers:

There is no mitigation available by reference to the Abortion Act, whatever view one takes of its provisions which are, wrongly, liberally construed in practice so as to make abortion available essentially on demand prior to 24 weeks with the approval of registered medical practitioners.

and, in the grand tradition of politics, the pro-abortion camp thought they'd take a pop at his character rather than the facts of what he said. Would anyone like to argue that we don't have effectively abortion-on-demand up to 24 weeks in the UK? Anyone? Bueller? If you read the 1967 Abortion Act then its provisions are clear:

If two registered medical practitioners are of the opinion, formed in good faith—

1. that the pregnancy has not exceeded its twenty-fourth week and that the continuance of the pregnancy would involve risk, greater than if the pregnancy were terminated, of injury to the physical or mental health of the pregnant woman or any existing children of her family; or
2. that the termination is necessary to prevent grave permanent injury to the physical or mental health of the pregnant woman; or
3. that the continuance of the pregnancy would involve risk to the life of the pregnant woman, greater than if the pregnancy were terminated; or
4. that there is a substantial risk that if the child were born it would suffer from such physical or mental abnormalities as to be seriously handicapped.

That, let me point out, is not the same as abortion-on-demand. There may be good societal reasons for the modifications that current practice have applied to this act, but they're not legal.

The reason we have Christian justices is the same reason we have Sikh justices, Muslim justices, Christian libraries, Jewish engineers, secular magistrates and pagan policemen. Our professionals are drawn from the whole population of the UK with their varying beliefs and creeds. As long as they do not come into conflict with their role (a Jewish butcher counter at Sainsburys refusing to handle pork, a Christian registrar refusing to marry same-sex couples, a Muslim taxi driver refusing to accept guide dogs) then what's the problem? If the journos in this article actually have anything to point where Mr. Justice Cooke is violating sentencing guidelines, by all means do so - and I'm sure Mrs. Catt's lawyer would be doing so on appeal. Otherwise, stop flinging faeces.

Incidentally, I wonder (and we'll never find out, which is good) what the religious make-up of the jury was? For, let us remember, a jury convicted Catt of the charge, not a judge. Wouldn't it be ironic if the jury members' beliefs were a mix of Christian, Jewish, Muslik, Sikh, Hindu, agnostic and atheist?

[ While we're here, with the journos trying to re-open the debate, let's have full disclosure. I believe that there's a good chance that Catt's dose of Misoprostol, while sufficient to cause an abortion, did not kill the child. In that case she would have given birth to a child who would have been entitled to full legal protection. Abandoning that child to their fate, or worse, would have resulted in a murder charge and a sentence that would likely have been greater than the aforementioned 15 year minimum term. I see Mrs. Catt's refusal to yield the location of the child's body as likely to indicate the worst of the possibilities for the fate of her child, and she should thank whatever deity she believes in that the prosecution did not go down that route. ]

Apple Maps - some work required

It was with no great surprise that I read this morning of certain deficiencies in iOS 6's Maps application that had become apparent. It seems that the data sources are not all they might be. I enjoyed thumbing through some side-by-side examples of the Apple Maps vs Google Maps. So who's to blame?

TomTom, which also licenses data to a range of other mobile manufacturers, defended its involvement.
A spokesman told the BBC that its maps provided only a "foundation" to the service.
"The user experience is determined by adding additional features to the map application such as visual imagery," a spokesman said.

Right: TomTom data is focused on navigating cars, not people. If you're using your iOS 6 device to guide your driving, all should be well. If you're on foot, less so.

The contrast with the demo images on Apple's site is amusing. At the iPhone 5 / iOS 6 launch everyone was wowed by the 3D images of San Francisco, but didn't note the following:

• 3D display eats battery life like you wouldn't believe;
• 3D display is only useful for large cities where the taller buildings form useful landmarks;
• "San Francisco" and "the world" are very different in size and complexity.

The lack of public transportation data has already been panned by big city dwellers, though I suspect this is not a general user concern. The individual mapping inaccuracies may be correctable, with time and a lot of human effort (and who's going to be motivated to do this? I guess we will be finding out how dedicated Apple fans are). The bad quality satellite images are more interesting; who the hell signed off on all the cloud-covered imagery of Scotland? There's plenty of good-quality modern satellite and aircraft imagery; see Google Maps, or Bing Maps, or Google Earth. Is Apple short of cash to purchase the modern and high quality imagery? If not, are they short of datacenter capacity to store and serve the data, or processing power to merge the various images into relatively seamless tiles?

Steve Jobs must be rotating at 10,000 rpm in his grave. The lack of attention to detail and quality are painful, and not at all what we normally associate with Apple. As far as I can see, Apple have really screwed the pooch here. People are going to back to Google Maps (once they launch an iOS Maps application, if they're so minded - if not, it's the regular website) until Apple seriously improves its data.

Perhaps this is how Apple is protecting its limited Maps serving capacity: make Apple Maps poor enough that not too many people use it...

Putting a Holder on bad news

I have to say, I was surprised to find Fox News regular Jim Geraghty writing in the Guardian. In fact, "surprised" doesn't really cover it. Not only is he writing critically of the Obama administration, he's slamming the first African-American Attorney-General of the USA, Eric Holder:

The initial headlines shouted that the IG report had exonerated Holder. That's one interpretation. But the portrait the report paints of Holder's management is deeply disturbing. Time and again, information and warnings about the operation's enormous risks flow from Arizona to Washington ... and suddenly, mysteriously, stop just short of Holder.

It certainly seems odd that Holder didn't know about an operation of this magnitude and risk. Either his underlings decided not to tell him, in which case he wasn't managing them effectively, or he made it clear to them that they were not to report bad news, in which case he was near-criminally irresponsible and should at the very least be fired.

Geraghty lets the official report tell most of the story:

[Holder] was not told in December 2010 about the connection between the firearms found at the scene of the shooting and Operation Fast and Furious. Both Acting Deputy Attorney General Grindler and Counsel to the Attorney General and Deputy Chief of Staff Wilkinson were aware of this significant and troubling information by December 17, 2010, but did not believe the information was sufficiently important to alert the Attorney General about it or to make any further inquiry regarding this development."

There's a general principle among honest people that a boss is responsible for activities that go on during his watch, even if he didn't know that they were happening. Bob Diamond of Barclays found it necessary to resign after the LIBOR rate rigging was uncovered, even though there was no suggestion he knew it was happening. People cheered his departure - why aren't the same people demanding that Eric Holder follow this example? Surely there can't be one standard for private citizens and a much looser one for public officials?

An equally troubling part of the Fast and Furious story is the use of executive privilege by the Obama administration to prevent the release of documents relating to Fast and Furious:

The presidential communications privilege applies to communications involving the president or his staff that immediately pertain to the president's decision-making process. [...] Deliberative process involves a broader scope of executive branch activity: discussions involving White House staff or within other agencies on legal or policy decisions that don't necessarily involve the president or his immediate advisers.
[...]
Holder asked Obama to invoke executive privilege over documents having to do with "the Department's deliberative process concerning how to respond to congressional and related media inquiries into that operation."

This seems to be clearly a deliberative process invocation, since the President was not involved in these discussions.

Obama is, as President, entitled to invoke executive privilege where he likes (and he has done so very rarely). However, like any other executive, he can expect the public to wonder what he and his officials are trying to hide when he does so. What exactly were the DoJ officials debating when the lid blew off Fast and Furious and people started demanding answers to why a US border guard had been shot dead by guns given away by the DoJ?

Award for top comment on this story goes to CitizenCarrier referring to treefrog123's snipe:

http://www.guardian.co.uk/profile/jim-geraghty Fox news contributor. Righty-ho then.
Ah! The ad hominem fallacy masquerading as a refutation! How refreshingly quaint and unexpected.

Marcela Trust part 3 - Camelia Botnar

[See Part 2 for the story so far. In this piece we delve into a charitable foundation and associated company, spend some quality time in the accounts and marvel at wage costs and profits. See Part 4 for the Camelia Botnar Ltd. 2011 accounts.]

Having established the provenance of the Marcela Trust money, I thought I'd dig into the companies and charities associated with it and its trustees. Top of the list were the Camelia Botnar Foundation charity and associated company Camelia Botnar Ltd.

Camelia Botnar Foundation - the charity

The Camelia Botnar Foundation is registered charity no. 277275. Their accounts for 2010 were received Sept 2011, so 2011's accounts should be along soon; I look forward to it. From the Charities Commission executive summary:

• Bulk of £2.8mm income is from investment (£2mm) and trading to raise funds (£760K) on £60mm of assets.
• Bulk of spending is "charitable activities" (£2.32mm) and trading to raise fund (£640K)
• 79 employees.

Here's a link to the Camelia Botnar Foundation 2010 accounts (980K PDF), let's see what's in there.

Trustees of the Camelia Botnar Foundation (hereafter referred to as "CBF" for brevity) are listed as B A (Brian Arthur) Groves, D P Rose nee Lawson (Dawn Pamela Rose), Dr M Lenz (Martin Lenz) and Miss N S L Malby (Natasha Sara Lara Malby). See my previous Marcela Trust post for details on these people. Of them, all but Natasha Malby are trustees of the Marcela Trust (and no other charities).

Main points from the primary accounting information:

• Camelia Botnar Ltd. is listed as a "subsidiary undertaking" - take note, this will be referenced later - and is hereafter referred to as "CBL" for brevity.
• The associated estate sucks up a fair amount of funds, which seems reasonable. OMC Investments Ltd. (q.v.) donated £100K for driveway resurfacing.
• A new (to me) entity is referenced - the OMC Endowment Fund which produced £5000 this year and £3220 last year, so my guess is that with a yield of a few percent the fund is about £100K in size.
• CBL turnover went up a few percent to £760K this year with gross profit 122K; this is over 16%, which isn't bad, but see the next point;
• CBL gifted 90K to CBF; CBF gives the workforce to CBL free of charge so it's not surprising they turn a good profit. I wonder where the rest of the money goes - materials? CBF had loaned 75K to CBL, which is repaying 20K this year.
• Their fund managers (Sarasin and partners) managed a 10% return on investments, compared to a 14.5% return from the FTSE All Share Index. I hope they didn't pay Sarasin much for a performance like that - oh look, £96.5K expense for Investment Management costs on £42mm of investments. That looks like a 2% annual fee. Nice work if you can get it. I'd stick them on a FTSE tracker and charge no more than 1%. The actual investment is 55% in UK equities, 40% in bonds and 5% overseas investments.

In the costs of charitable activities, establishment costs were £497K and staff costs were £1.5mm. 79 employees implies an average staff cost of 18K which seems about right; headline wages are 80% of this. 45 employees actually make things; the rest do "charitable activities" and 1 does "governance". The governance employee was paid £80-90K plus about £7K of pension contributions. Trustees were not paid. CBF holds £807K in the aforementioned OMC Investments Ltd.

So overall nothing inherently odd there. The most interesting point is that CBL receives 45 workers effectively free of charge (worth wages of about 700K, or nearly 100% of turnover), and still only manage to turn 20% gross profit. Is this because materials are the greatest cost? If so, it's a lousy business to run. CBF is paying 700K wages to CBL and only receiving 120K of profit (in various forms). So let's turn our attention to CBL.

Camelia Botnar Ltd - the company

Camelia Botnar Ltd is registered company no. 1646383. Directors are the aforementioned Dawn Pamela Rose, Natasha Malby and a new name Emma Louise Mitchell. With my curiosity piqued I ordered the 2010 accounts for this company from Companies House. They were brief, but confirmed the above numbers. However they were significant for the indications they gave.

Their debt is interesting. In 2009 they owed £100K to CBF; in 2010 this went to £165K. This is odd; their cash in bank and at hand has gone from £128K in 2009 to £175K in 2010. In other words they are keeping virtually all the loan as a cash float; net current assets are static around £175K.

What does their £759K turnover imply, if it all came from 45 craftsmen? About £15K of sales per craftsman. Their cost of sales was £636K - what was that cost made up of? Not craftsman wages, that's for sure. I presume it was almost all materials for sales - but 2009 turnover was lower and sales costs were higher, yet the steadily increasing cost of raw materials would have made us think that cost per sale would have risen in 2010. This has a whiff of peculiarity.

Tangible assets (plant and machinery) increased by 14K (36K additions minus 22K depreciation), stocks by 30K with a net book value of 79K.

I am extremely curious to know how their costs break down. What's their margin on their goods? Why is their profit margin so low given all the free labour and interest-free debt? What are they paying their directors, and in what form? Why aren't their sales being crimped by the recession?

Camelia Botnar Limited looks like a very inefficient business. It should be making a lot more money than it actually does, given the free labour that the Camelia Botnar Foundation supplies. I look forward to their 2011 accounts with which, dear reader, I shall regale you when they arrive.

Men of (Chinese) steel

It seems that the much-vaunted Chinese economic miracle may contain a considerable amount of commodity and credit fraud:

Chinese authorities are investigating a number of cases in which steel documented in receipts was either not there, belonged to another company or had been pledged as collateral to multiple lenders, industry sources said. [...] "The situation will get worse as poor demand, slumping prices and tight credit from banks create a domino effect on the industry."

In the rush to boost balance sheets, it seems that the Chinese banks and companies have not been as careful about loan collateral as they might have been. As a result, the steel collateral for loans either never existed, or is pledged to multiple creditors. Oopsie. Anyone want to bet against this situation being replicated across the entire economy? Steel prices, after all, are at a three year low - if this is the fraud being perpetrated with steel, what's going on with more valuable assets? What about paper assets, which are the easiest to forge?

The Chinese government clearly has no interest in exposing this fraudulent activity, unless it's a public execution of the business executives responsible as in the melamine contamination of baby milk. Eventually the fraud is going to reach a point where no-one with any common sense is going to do business with Chinese firms - or the Chinese government, which by that point will be indistinguishable from another commercial enterprise.

Mark Mardell: overpaid, overconfident and over there

The quality of BBC journalism varies, and is likely higher than the average (I'm a fan of Steph Flanders, for instance, though that's in no small way due to her father Michael Flanders, of "Flanders and Swan" fame.) However, their main USA correspondent Mark Mardell is a mendacious git - and we pay for his comfortable life in Washington D.C.

Exhibit one: Mardell's coverage of the Mother Jones "exposé" of Romney's remarks at a fundraiser in Boca Raton, Florida:

Mitt Romney's unguarded and undiplomatic remarks may reinforce the perception that he is an ingenue in the art of foreign affairs, with harsher views than he dare express in public. Still, what he has said is more likely to provoke reactions in the region he is talking about than at home, where many conservatives may share his views.

Let's review those remarks:

"The Palestinians have no interest whatsoever in establishing peace," he says, adding that "the pathway to peace is almost unthinkable to accomplish".

Hands up anyone who can name a prominent Palestinian politician who is promoting the two-state solution to the Israel-Palestine problem with terms that a majority of Israeli voters may accept. Anyone? Bueller? Let's remember what happened to Egyptian President Anwar Sadat when he signed the Egyptian-Israeli peace treaty. The two state solution has been in discussion since 1970 and has got nowhere. I think the situation is a little more subtle than Romney suggested - the main reason an Israel-Palestine peace is prevented is because those funding Palestinian politics (Iran, Saudi) have no interest in any form of solution. But as a soundbite it's not far off the truth.

The Republican candidate is shown saying that the 47% of Americans who back the president do not pay income tax and would never vote for Mr Romney.

That sounds about right. US (federal and state) income tax for a nuclear family of 2 adults, 2 kids filing jointly kicks in around $45,000 gross income, which is currently about £30K. Poor families are disproportionately likely to vote Democrat. Romney's best electoral strategy is to appeal to the middle-income swing voters in the swing states of FL, OH, NV, IA, WI, CO, VA, NH. The 2003 USA median household income was $45K so allowing for 9 years of inflation that should put it comfortably north of $60K in 2012. Romney's right.

Mark Mardell doesn't care about facts - he cares about portraying Republicans as out-of-touch. He, like too many of the mainstream media, carries water for Obama and the democrats without conducting the role of his profession to hold up the statements of all politicians for examination.

There's nothing you can't fix with a quota!

If by "fix" you mean "wreck". Peter Wilby, writing in Comment is Free, starts with a germ of a good idea - then proceeds to leap off the ledge of sanity and plunge down the side of the chasm of madness. How should we address the problem of less than 50% of Oxbridge entrants being state school pupils?

Oxbridge says it can't recruit more from the state sector until schools send them more highly qualified pupils. The schools say the pupils won't go – or won't aspire to go – until the universities appear less exclusive. Bold measures are needed to break this impasse.

A reasonable position to take; what bold measures did you have in mind, Peter? How should we encourage smart state school pupils to apply to Oxbridge in the first place, and how should we help them shine in A-levels and the entrance exams?

Suppose Oxford and Cambridge were to ask every state school to identify, at 15, its brightest pupils academically (one, two or three, depending on size). Suppose those pupils were given every possible support and guidance in A-level subject choice and teaching.

Wow. (Checks URL.) Yes, this still appears to be The Guardian. I can't believe what I'm reading. This sounds... elitist. I do see one or too teeny, weeny problems though. If the top pupils at Maths, Science, English Lit, History and French are not the same person, how do you choose two or three of them for this intensive study course? Draw lots? But, nitpicking aside, the kernel of the idea sounds good. So this gives us (finger in the air, say 2 pupils out of an average year of 200, so 1% - oh, the irony) 1% x 880,000 Year 13 A-Level students, i.e. 8800 "elite" pupils.

Looking at the Independent Schools Council 2012 report we find that:

• a shade over 90% of ISC school pupils go on to post-18 education, compared to a UK average of 48%; and
• there are about 42,000 ISC Year 13 (A-Level) students compared to a UK total of 860,000;

Oxford has about 17300 applicants for 3200 undergraduate places; 57.7% of admitted UK students came from the state sector. Cambridge has about 16000 applicants for 3400 places and one assumes a similar state/private split. So for Oxbridge we're looking at 6600 places and 33300 applicants.

Given that, what does Mr. Wilby recommend?

Suppose, above all, Oxbridge allocated to this pool of talent a fixed proportion of its places – initially, perhaps, 70%, but rising to over 90%, so that its UK intake became representative of the general school population – with those who did best at A-level getting preference.

70% of Oxbridge places is 4620 places - more than half of your "elite" pupils will be getting in by this method. You've shrunk the private sector students from 43% to 30% of the intake, so one third of private sector pupils who were able enough to be admitted to Oxbridge will be frozen out. Incidentally, what effect is this going to have on the admission stats of the remaining Russell Group universities - will you see a huge bulge in private sector entries there, squeezing out state pupils? What are you going to do about that? And it's a bit of bad luck for any state pupil who isn't selected for elite coaching. What about late developers who are bored by GCSE but shine at the more rigorous A-level studies? They'll face more acute competition for the remaining 30% of Oxbridge places with the higher-calibre private school pupils. Let's not even think what happens if you crank the 70% state sector minimum to 90%.

Wilby continues to throw out irrelevant facts to try to bolster his ideas:

Several research studies show that, on average, students from maintained schools perform better in degree exams than their fee-charging-school counterparts with the same A-level grades.

Yes. You'll note that Oxbridge has now more or less given up on A-levels and do their own entrance exams and interviews precisely to avoid this problem. Is there any study that shows to any reasonable level of confidence that state school pupils at Oxbridge perform better than private school pupils? I suspect the differences are noisy and subject-specific. And he addresses the unequal academic attainment of state schools thus:

Middle-class parents would clamour to get their children into comprehensives in disadvantaged areas in hope of them grabbing one of those precious places.

Oh Lordy. Where to start? There's a step function here, Peter. If your child is not number 1 or number 2 in their year (and relative rankings are generally volatile over years) you gain no advantage from this scheme. I'd wager a significant sum of money that this scheme would make next to no difference to school intakes.

Worse yet, Peter, this won't work. Speaking for myself and the high achievers I know, we are motivated by competition. We need to be studying a subject with several other people who are as good as or better than us. We are competitive, we need a spur to achieve and excel, and (friendly) rivalry provides this spur. Private schools achieve their success in part by creating a hothouse of high achievers who reach further together than they could by themselves. Trying to get 2-3 students to cram for two years is destined to fail miserably.

...this cannot be described as social engineering. It would be educational engineering.

This may be news to you, Peter, but engineering involves a significant amount of maths and rigour. Your half-wit ideas involve neither.

Mike Baker is unwell.

If he's just read this half-arsed poorly-thought-out piece, I'm not surprised.

Commentator agbagb points out the educational term that was mysteriously absent from Wilby's piece:

When I was a (bright, working class) kid in Birkenhead in the 60s and 70s, that's what Grammar Schools did - and the teachers that led that charge were largely Oxbridge grads who'd gone into (state) teaching, and whose mission was "talent spotting". But, as I recall, we then tossed all that away, and decided that Grammar Schools were themselves elitist.
Wow - that worked well!

If you want more state pupils to gain Oxbridge places, you have to improve the education given to them by state schools. This certainly will involve a certain amount of elitism and picking winners, but give the schools some extra money and let them do it themselves rather than imposing centrally-planned targets.

From time to time it is necessary to read the sentencing remarks of a judge

...to remind oneself how difficult, and how serious, their profession can be. The sentencing of Sarah Catt for aborting a near-term baby make me get down on my knees, thank God I didn't go into the legal profession, and thank Mr. Justice Cooke for taking on a task which few sober people would envy:

What you did was to end the life of a child that was presumptively capable of being born alive, by inducing birth or miscarriage. I am not able to accept anything much that you have told others about what occurred but I bear in mind all that has been said on your behalf in mitigation, in particular the fact that you are a good parent to your 2 children. However, but for the drugs intentionally taken, there is no reason to believe that you would not have been delivered of a healthy boy. Had he been born safely within a matter of days, and had you killed him after birth, you would be facing a charge of murder. Had that been the case you would have faced life imprisonment and I would have to set a minimum term to be served in prison with a starting point of 15 years, less discount for the plea and any mitigating factors.

Read the whole thing, courtesy of Jack of Kent. For sure we have out-of-touch, barking mad and near-criminally incompetent judges and magistrates, but Mr. Justice Cooke does not appear to be among them.

Cristina needs more fingers for her dike

The Beeb reports that Paypal is being forced to prevent fund transfers between people in Argentina. Funny, I thought that transferring funds between people was the raison d'être of Paypal. What prompted the change?

[The Argentina government restrictions on dollar conversion] has led to an increase in currency sales on the black market - but Paypal's exchange rates are better. Locals were setting up two accounts under different email addresses and transferring money between the two, exchanging local currency pesos for dollars in the process.
Under the new rules only one account per person can be registered within Argentina.

Because obviously the desire of people to exchange pesos for dollars is the root cause, right? We just need to prevent that desire from happening, and everything will be rosy.

Oh, maybe not:

Economist Eduardo Marty told the BBC that currency restrictions had been extended to all economic activities, from the export of goods to foreign travel.
"You have to apply for permission to import any goods," he said.
"If you need to travel abroad the government gives you a meagre amount of money. Sometimes they approve it at the last moment and people are forced to buy on the black market."

Wow. What possible reason could there be for people to be so eager to exit the peso into a harder currency? Well, other than a 24% (unofficial) inflation rate reducing the purchasing power of pesos by 20% per year. And the government adding the 15% tax on purchases abroad.

Cristina Kirchner is heading at flank speed for the rocks of economic reality. She can stick her fingers in the dike of peso integrity all she likes, but that dike is just going to keep springing leaks. No-one has any faith in the value of the peso, Cristina, and this is mainly because you spend so much effort trying to stop people (the market) finding out what this value is. Eventually you're going to run out of state assets to sell for dollars, and then paying for all your imports is going to be somewhat tricky. The final stop on the railway track you're on is Zimbabwe.

(As a matter of curiosity, why the focus on the US dollar? Is it just for ease of exchange? I'd imagine that the CAD or CHF would provide an equally solid peso-inflation-proofing of one's savings).

Marcela Trust, part 2

[In which we meet the Botnar family, discover an unpaid £250mm UK tax bill, and find that hating bacon doesn't pay the bills. Now available: Part 3, where we take a look at the accounts of the Camelia Botnar entities. ]

Following my original post on the Marcela trust, Tim Worstall's repost occasioned several comments including a very helpful one from Vinny Burgoo:

I came across Octav Botnar, Marcela's husband, while trying to identify an associate of John Bloom [...] Botnar was the brains behind Nissan UK, which expanded rapidly then lost its import monopoly and was eventually found to have systematically cheated the taxman for a decade or more.

So I did a bit more digging to try to ascertain the source and intent behind the sudden £70 million donation to the Marcela Trust in 2010 and what the connection to CASH was.

The Octav Botnar story

Octav Botnar died in 1998 in Switzerland, owing the UK Inland Revenue about £250 million in unpaid tax. It seems that the Inland Revenue were bringing a court case against him, but dropped it when it became clear he was terminally ill. Former Nissan MD Michael Hunt wasn't so lucky, getting 8 years in chokey for his part in the frauds while financial director and company secretary Frank Shannon got 3 years.

The prosecution said the fraud started in 1976 and lasted 16 years. Bogus invoices and 'sham' shipping agents in the Netherlands and Norway were used to inflate the costs of shipping Nissan vehicles from Japan to Britain by as much as 50 per cent, to conceal an extra profit averaging pounds 115 on each car and van.
The money was laundered through a Bermudan company and secret Swiss bank accounts. The cash then disappeared into a black hole - the term used by tax investigators who have failed to trace a single penny.

Keen readers of my original post will remember the company "Camelia Botnar Limited" and the charity "Camelia Botnar Foundation" which are both interests of Marcela Trust trustees, including Dawn Pamela Rose whose company OMC Limited contributed the £70 million at issue. It seems that Camelia Botnar was Octav and Marcela's daughter, and was killed in a 1979 road accident, hence the foundation of the charity. Marcela Botnar seems to be still in Switzerland, working for the Fondation Botnar in Basel (Elisabethenstrasse 15).

This made me wonder more about the source of the money and whether there might have been any connection to Octav's original fortune. OMC Investments Limited was founded in 1970 but wasn't called OMC Investments Limited then: they were originally Datsun UK Limited, changing name to Nissan UK Limited in January 1984 and OMC Investments Limited in 2007. OMC Investments Limited now has £69 million of share capital, nearly all of which is owned by The Marcela Trust since it was gifted to them in 2010.

It looks to me as if all the value in Octav Botnar's original Datsun/Nissan UK company, headquartered in 14 Buckingham Street, Westminster, was transferred to charity The Marcela Trust, also headquartered in 14 Buckingham Street, Westminster and sharing at least one trustee/director (the aforementioned Dawn Pamela Rose).

The Trust itself donated £800K to charities in 2010 - 500K to The Nuffield hospital which seems to have a link to the late Camelia, 200K to bacon-hating CASH and 100K to "Open Eyes" in Lausanne, Switzerland (which seems to be the interest of trustee Dr. Martin Lenz). I suspect that it's not a coincidence that Octav Botner lived most of his life in Switzerland - perhaps he had eye problems, perhaps Dr. Lenz was a family friend. But why would The Marcela Trust donate all that money to CASH? What's the connection?

CASH - kept afloat by OMC funds

CASH staff are all in the field of nutrition and cardiovascular health. The 2010 CASH annual report makes it clear that it is primarily a lobbying organisation, organising the 11th National Salt Awareness Week (I must have missed the first 10 of them, how guilty do I feel) and bugging various national and international agencies about salt. It is a registered UK charity with no trustees common to the Marcela Trust network, and in FY 2011 it raised 283K from all sources and spent 113K on Salt Awareness Week and various surveys.. Interestingly the accounts note:

The funding from OMC Investments Ltd (the Marcella[sic] Trust) which comprises a significant component of the income will cease in 2011-2012 leaving a considerable gap in the charity's resources.

With very little money coming from actual people (262K of the 283K came from OMC and the British Heart Foundation), and appearing to be pretty much an anti-salt lobbying arm of The Marcela Trust, CASH is clearly deserving of a their Fake Charities label - and with luck their £800K in the bank will run out soon; they estimated 3-4 years with the current reserves.

Who's behind OMC and what are they doing now?

Mrs. Dawn Pamela Rose, director of OMC Investments Ltd. and trustee of the Marcela Trust, seems to be also known by her (maiden?) name Dawn Pamela Lawson in her role as a director of Camelia Botnar Ltd. The manager "D Lawson" to whom The Marcela Trust paid £240K seems to be she. I suspect that administrator "N Malby" (£24K) is Natasha Sarah Lara Malby (age 36) who is similarly a Marcela Trust trustee and director of Camelia Botnar Ltd. Natasha seems to be a bit young to have any involvement in Nissan before things went "foom"; I wonder how she got involved with the Trust?

Dawn is a director of company QHH Limited (registed number 07637088) which appears to be a newly formed (as of May 2011) company with as yet unknown purposes and cashflow since no accounts have yet been filed. Brian Arthur Groves of OMC and the Marcela Trust is a co-director, so this isn't just a sole venture by Ms. Rose. I note in passing that Brian is nearly 80, whereas Dawn is a sprightly 56 years of age. Brian's directorship history includes Nissan Plant and Industrial Machinery Ltd., Debretts says that he used to be a motoring journalist before becoming advertising, PR and marketing director for Nissan UK Limited until 1988 (that must have fun when the Inland Revenue came a-calling for his colleague Octav Botnar) and his given business address is... 14 Buckingham Street, Westminster. Shocker.

QHH Ltd. registered address is currently COMEWELL HOUSE, NORTH STREET, HORSHAM, WEST SUSSEX RH12 1RD. Oh look! As well as OMC Investments Limited, Spofforths Private Client Services LLP is at that address - Spofforths are the accountants who signed off on the Marcela Trust accounts for 2010, so seem to be favoured by Ms. Rose/Lawson for her business arrangements. Presumably they are holding the company details and managing correspondence until an actual office is opened.

I wonder whether QHH Limited are is going to start engaging with OMC Investments Ltd, Camelia Botnar Ltd, the Marcela Trust or the Camelia Botnar foundation? If so, how and why?

Summary

The Marcela Trust is populated with people who have been and are involved with a variety of Botnar family enterprises. CASH is kept afloat by OMC money, but now that's gone to the Marcela Trust they have to live off their reserves. There's no indication where this £70 million in the Marcela Trust is going to go, but it seems that being a trustee can be a very lucrative quarter-of-a-million-quid-a-year gig, as Dawn Pamela Rose/Lawson could tell you.

The Marcela Trust donated virtually nothing to anyone in FYE July 2011. I am going to be watching with interest to see what the accounts for FYE July 2012 reveal, when they finally get published. What are they planning to do with the £69 million-odd of investments they are holding? If CASH isn't expecting anything, who is? To which charities are they going to be donating - and whom will they be paying fat salaries? What's going on at 14 Buckingham Street, Westminster - is anyone around to ask questions of Mr. Brian Arthur Groves or his representative there?

A rare voice of sanity on public pensions

This opinion comes from The Ledger Independent in Kentucky, USA, and is rare in that it actually captures the full range of people and organisations that are to blame for the current public sector pension crisis:

Taxpayers should be furious that lawmakers – through greed, mismanagement and inaction – have allowed this system to deteriorate. State employees should be equally as angry at the prospect that they may never collect the pensions they have been promised.

It perfectly captures my feelings on the current situation. Most^[1] public sector employees are angry that the pension deal they were promised when they joined will no longer be valid, taking an effective pay cut. Most taxpayers are angry that their prospective private and state pensions are shrinking rapidly when the pension rights accumulated by public sector employees, which are funded through their taxes, are protected. Not enough attention is paid to the weasel and financial illiterate state and national officials who agreed to these pension deals and never cared about whether there would be enough money in future to fund the promised payments.

This, incidentally, is what infuriates me when the BMA complains about rising contributions when the UK NHS pension system is in "surplus":

The BMA argues the NHS pension scheme is currently in surplus to £2bn a year, which is returned to the Treasury. It says: "Given that the amount being paid into the scheme currently exceeds the amount being paid out, there is no justification for further immediate increases. They equate to an additional tax on NHS staff to help pay for a economic deficit which they did not create."

Listen up, you financial illiterates. The reason the NHS pension scheme is in surplus currently is because of the steady increase in staff numbers - 20% increase in the 10 years 2001-2011. If you're so confident that the scheme is in surplus, let the NHS pension scheme keep that £2bn and accumulate it. But as soon as the pension scheme falls into deficit, it comes out of the pensions and salaries of the scheme members; the Government is no longer involved. Like that idea? Thought not.

[1] Those public sector employees in the UK who have retired or are about to retire are quids in - their deal is effectively untouched. This is not the case in the USA where public sector pensioners are paid out of current state and county budgets - if there's no more money, their pensions could well be directly at risk.

Greg Smith finally re-emerges

Ex-Goldman salesman Greg Smith has finally completed his book about life in Goldman Sach and publisher Grand Central is releasing it on 22nd October:

"Many people on Main Street distrust Wall Street right now, yet few can put their finger on why," Jamie Raab, publisher of Grand Central, said in a statement. "Greg Smith’s candid account of his years at Goldman Sachs does just that."

It has taken 6 months to write; either Greg is a two-finger typist, or (I suspect more likely) the Grand Central lawyers have been through the proofs with a fine tooth comb and a stack of red ink...

They're certainly not short on hype;

Grand Central considers the book a potential successor to "Liar's Poker"

I bet they do... I look forward to ordering my copy, and will endeavour to provide you, dear readers, with my thoughts on Greg Smith and whether he can hold a candle to Michael Lewis.

The Marcela Trust won't bring home the bacon

[Author's note: this started as a rant about bacon, but the more I dug up, the smellier this seemed. Anyone wanting to chase down the threads here and ask some pointed questions, do feel free.]

According to Consensus Action on Salt and Health we should be eschewing bacon as two rashers of bacon contains over half one's daily salt allowance.

They say that like it's a bad thing:

"For every one gramme reduction in salt intake we can prevent 12,000 heart attacks, strokes and heart failure," said Cash chairman Graham MacGregor.

The RDA of salt (an amount no doubt pulled out from between Mr. MacGregor's tofu-fed gluteus maximus) is 6g. We eat an average of 9g. So if no-one ate more salt than recommended, we'd save 36,000 heart attacks, strokes and heart failures. In a pig's eye.

So who are these Concerned Upstanding National Treasures at CASH?

CASH was set up in 1996 as a response to the refusal of the Chief Medical Officer to endorse the COMA recommendations to reduce salt intake, following the threat of withdrawal of funds by the food industry to the Conservative Party.

"Was set up". I note the use of the passive tense there. "Was set up" by whom, exactly? And who is funding them?

CASH is reliant on voluntary contributions in order to fulfil its expanding role such as running National Salt Awareness Week, producing and distributing resources etc. CASH is unique in its work. The role it performs is not undertaken by any other organisation, so your support is vital.
...
We are very grateful to The Marcella[sic] Trust and the British Heart Foundation for their continuing support of CASH.

Who are the The Marcela Trust and what do they want?

THE CHARITY PROVIDES SUPPORT TO SELECTED CAUSES IN LINE WITH THE CHARITY'S OBJECTS.

Could they be any more vague? And, oh look! Income for 2009 was £730K, most of it was spent. Income for 2011 was £0 and £14K was spent. Income for 2010 was £70MM and £800K was spent. WTF? The 2010 accounts confirm that these clowns have a £69MM balance.

It's quite hard to find out any information about what The Marcela Trust does; Google doesn't reveal much, and their entry on the Charities Commission site is rather unhelpful. Interestingly, The Marcela Trust contact address is 14 Buckingham Street, London - the same address as Guardian favourite the Institute for Public Policy Research. Perhaps they are next door neighbours? Or perhaps the IPPR knows more of what The Marcela Trust does than one might expect?

Taking trustee Dawn Pamela Rose as an example, a lady with a remarkably similar name is director of a number of "generic" names, including "OMC Investments Limited", "Camelia Botnar Limited" and (my personal favourite) "QHH Limited". Dawn is listed as living at Park Farm, Saham Hills, Norfolk. Oh look! OMC Investments Limited is also listing 14 Buckingham Street, Westminster as its contact address. What a coincidence. They seem to be into property investments in a big way. I wonder if any of that £70MM in the Marcela Trust accounts came from OMC's investments? Apparently so, according to the accounts:

During the year the Trust received a donation of 95.5% of the share capital of Omarca Investment Holdings Limited. Omarca Investment Holdings Limited is a dormant intermediary holding company which holds 100% of the shares of OMC Investments Limited. OMC Investments Limited's principal activities are property dealing, management, development and investment.

That seems very out of line with the Trust's previous fundraising and spending. I wonder what OMC intend it to be spent on? I note that staff costs (1 manager, 3 administrators) were £290K wages and salaries, plus about 10% of that as pension contributions. "D Lawson" (manager?) was paid over £240K and N Malby (administrator?) gets just over £40K. Nice work if you can get it.

Trustee Mark Robert Spragg from Teddington is a director of Zwischenzug Limited (apparently "Zwischenzug" is a chess tactic) based in Pinner. What do we know about Zwischenzug?

Their current status is 'Company not trading', and their founding director, Norman Mcmillan, has been the director of 2 other companies. Norman Hamilton Mcmillan is the only shareholder of Zwischenzug Limited [...] The company's current net worth is £20, and the value of their shareholders' interest is £20.

Wonder what he uses it for?

Trustee Brian Arthur Groves is a director of the Camilia Botnar Foundation which appears to be a legit and active charity - Dawn Rose's Camilia Botnar Limited company appears to be the same as Camelia Botnar Homes and Gardens which sells things made by the craftsmen and trainees employed by the Foundation. According to the Marcela Trust accounts he has a Guernsey-based company B G Consultants Limited, which is where The Marcela Trust paid him £85K in 2010, and presumably he doesn't have to worry about too much tax there. I'm surprised that the IPPR haven't let their neighbours know their feelings about tax avoidance.

I would be fascinated to learn what's going on with The Marcela Trust, these trustees, and their mesh of companies and charities. In my experience, the more an organisation tries to deflect interest about what it does, the more reason there is for people to ask pointed questions about it. Any journos out there up for a bit of digging around Companies House and doorstepping 14 Buckingham Street, Westminster?

Housebuilder wants money for building houses

The uncritical reporting by some British journalists -- in this case, Emma Rowley from the Daily Telegraph -- never ceases to amaze me. She's covering the speech of Steve Morgan from housebuilder Redrow at the RESI conference:

"Financing is the problem, the biggest issue of the day, but even if we were able to overcome the finance issue, planning is a massive obstacle," he said. "It's outside of London, where the principle of development comes into question."
...
He called for more Government support for the housing industry.

I bet he did. Oddly, it seems that banks are happy to lend at bargain-basement rates to those with substantial equity in their properties. This doesn't smell like a balance sheet problem. Rather, it bears all the hallmarks of the banks believing that a) residential property is overvalued and b) overextended home purchasers are likely to default on their loans.

Gah! I don't blame the housebuilders for trying to snaffle more Government cash, especially as current and past governments have been so willing to provide it. What I do resent is clowns like Ms. Rowley failing to do basic journalistic due diligence and challenge the housebuilders' assertions. Just how is the print media conducting indispensible journalism, again?

John Hoad from the Campaign to Protect Rural England is at it as well:

"The real problem is market failure," he said. "As a society we can't seem to create the situation where we value housing enough to invest in it long-term."

Wrong, John! We've created the situation where housing is overpriced, and now people can't afford and aren't prepared to buy it at that price. If there's a functioning market in a commodity, and the clearing price is below that which you think is correct, it's unlikely that the market itself is wrong. The CPRE wants to safeguard green belt land, thereby keeping high the price of houses at the edge of that land (the marginal commodity). If the Government plans to simplify planning permission go ahead, contrary to the CPRE wishes, those house prices will fall. Just how is that a problem?

Demented QE

Ben Bernanke is all out of ideas, so he signs off on another round of quantative easing. After all it worked so well the last two times, right?

The Fed said it will buy $40 billion of mortgage-backed securities per month in an attempt to foster a nascent recovery in the real estate market.

Oh Lordy. Look, Ben, the USA's housing market collapsed because it was massively overvalued. So far, so good. But ultra-low interest rates induce asset bubbles, and so the housing market (along with gold, oil etc.) is rapidly re-inflating. You don't need QE to force house prices up, they're rising rapidly enough already.

If you want to fix the American economy, you have to reduce the costs to American small and medium businesses of doing business (the large businesses generally have good lobbyists and are doing just fine). The current administration's plans (Obamacare etc.) are having precisely the opposite effect; uncertainty and worry about the future costs of employment are making them pull in their heads and wait to see what will happen. In the meantime we get no economic growth.

I think Ben Bernanke has no idea what to do, and is pulling QE out of the hat in response to the famous "Yes, Minister" syllogism: "We must do something, this is something, therefore we must do it." I note that he's never had a job that involves employing people or trying to make a profit.

Of YouTube and RPGs

A fascinating conflagration of noise and politics arose following the attacks on the US consulates and embassies in Libya, Egypt and Yemen. What does it all mean?

The Libyan attacks, which resulted in the deaths of 4 USA citizens including the ambassador and two Marines, received the most coverage. However, there hasn't been much coverage of how the attack was conducted:

Captain Fathi al-Obeidi, whose special operations unit was ordered by Libya's authorities to meet an eight-man force at Benghazi airport, said that after his men and the U.S. squad had found the American survivors who had evacuated the blazing consulate, the ostensibly secret location in an isolated villa came under an intense and highly accurate mortar barrage.
"I really believe that this attack was planned," he said [...] "The accuracy with which the mortars hit us was too good for any regular revolutionaries."

First, American citizens should be grateful to Captain al-Obeidi who by all accounts conducted the evacuation and protection of the consulate in an examplary fashion. But mortars are not standard equipment of the aggrieved citizen, and the ability to put mortar fire on a specific target in a city is not exactly handed out willy-nilly. The people behind these mortars were trained and knew exactly what they wanted to do.

Separately, it seems that the USA Embassy in Cairo was not as well protected as it might have been:

Ambassador to Egypt Anne Patterson "did not permit U.S. Marine guards to carry live ammunition," according to multiple reports on U.S. Marine Corps blogs spotted by Nightwatch. "She neutralized any U.S. military capability that was dedicated to preserve her life and protect the US Embassy."

If true, and I emphasise the if, it seems that the lessons of the 1983 Beirut Marine barracks bombing (which killed 241 Marines) were not learned:

The sentries at the gate were operating under rules of engagement which made it very difficult to respond quickly to the truck. Sentries were ordered to keep their weapons at condition four (no magazine inserted and no rounds in the chamber).

By contrast, read the account of Marines Jonathan Yale and Jordan Haeter defending an outpost in Ramadi, Iraq:

While Iraqi police fled, Haerter and Yale had never flinched and never stopped firing as the Mercedes truck -- the same model used in the Beirut bombing -- sped directly toward them.
Without their steadfastness, the truck would probably have penetrated the compound before it exploded, and 50 or more Marines and Iraqis would have been killed. The incident happened in just six seconds.

The individual threads of intelligence seems to weaving a tapestry that talks of a pre-planned Al-Qaeda attack in Libya. One has to wonder at how the Libyan and Egyptian populaces managed to co-ordinate an attack on Tuesday, when Friday is the traditional day that the imams and mullahs at the mosque denounce the infidel act of the week. Who was riling up the masses?

Separately, I'm amazed that there hasn't been a suicide bombing or shooting at YouTube headquarters yet ,although their takedown of the film today may have helped. What's fascinating is the back story of the Coptic Christians who appear to be behind the inflammatory film. I wouldn't go as far as the supine US Embassy in Cairo in denouncing the use of free speech to offend Muslims:

The Embassy of the United States in Cairo condemns the continuing efforts by misguided individuals to hurt the religious feelings of Muslims – as we condemn efforts to offend believers of all religions. Today, the 11th anniversary of the September 11, 2001 terrorist attacks on the United States, Americans are honoring our patriots and those who serve our nation as the fitting response to the enemies of democracy. Respect for religious beliefs is a cornerstone of American democracy. We firmly reject the actions by those who abuse the universal right of free speech to hurt the religious beliefs of others

but one has to wonder whether the Copts have finally managed to get some payback for the dreadful persecution and killings that have plagued them over the past few years.