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.