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?