Tuesday, 28 April 2009

Looking bad for Pakistan

The Taleban are reported to be within 70 miles of Pakistan's capital, Islamabad. It appears the Pakistan government is about to be somewhat inconvenienced and may even have to evacuate. The situation should be considered parlous.

Most likely the government would relocate to Karachi, which is in any event a bigger and more significant city, located 600 miles south down the Indus river valley. This would put them well outside the Taleban's area of influence and should preserve the regime for a while longer.

Look out for helicopters on the roof on a TV screen near you.

Link:
BBC article

Monday, 27 April 2009

UK asylum system is cruel

The Children's Commissioner for England, Sir Albert Aynsley-Green, head of the publicly-funded but non-departmental body tasked with ensuring the UK's compliance with the United Nations Convention on the Rights of the Child, has today produced a report claiming the UK is cruel to asylum-seeking children.

He has found instances of children being pulled from their beds in the middle of the night, searched by strangers, being told they have five minutes to pack all their worldly possessions and taken away in urine and vomit-smelling vans, leaving behind pets and sometimes essential medicines such as asthma inhalators.

Clearly this is cruel - very cruel, and it's utterly wrong that any UK authority should be acting like this.

But the cruelty starts much sooner than "deportation night". It starts when the asylum-seeking family is first granted access to the United Kingdom. They are put in a process of application and appeal and stays of execution and more appeals which lasts years. No-one arriving in the UK who manages to utter the words, "I claim asylum," will be here for less than two years - during which they will be fed, housed and their children educated - all at public expense.

And the claim to asylum is probably doomed to failure. A fundamental tenet of the 1951 UN Convention on Asylum is that the asylum-seeker must proceed DIRECTLY to a safe country, ie, must stop and claim asylum at the first safe place they come to. There are no dangerous countries adjacent to the UK; any asylum-seeker must perforce pass though or over several safe countries to get here.

So to give the asylum-seeker any prospect at all of being granted asylum is false hope, and therefore cruel. It would be better to turn asylum-seekers around at their port of entry and return them to the most recently visited safe country, which in turn may pass them back along the line to the first safe place they reached.

The false hope is made even crueler by the fact that many well-meaning but deluded individuals will lobby in the UK for the asylum-seeker to be allowed to stay. The asylum-seeker will of course immediately sink deep roots into the country, starting by fervently supporting a football team and putting their children into the local school. The local church is also a priority as it gives access to the local bleeding-heart liberals and men and women of the cloth who are difficult for the authorities to ignore.

All this root-sinking does work from time to time, and as a result the other asylum-seekers are encouraged to fight harder, to believe they will never be deported, and to encourage others of their compatriots to come here and help them in their fight.

Indeed, the mayor of Calais, Natacha Bouchart, has blamed Britain's asylum and benefits system for "imposing" thousands of illegal migrants on her town. She points out that the asylum seeker is given accommodation and receives £31 to £40 a week according to their case, when the annual salary of the average Eritrean is around £136. She is understandably angry that her town has to fork out £12m a year to deal with the hoards of would-be immigrants who congregate at the port.

A blanket refusal to provide asylum would be a better and even kinder option.

One could also consider setting up transit camps to accept refused asylum-seekers, in amenable nations. For example a camp in South Africa could accept asylum-seekers from Zimbabwe until such time as return to Zimbabwe was safe. Another such camp in the Afpak region would be a good idea. Where it was deemed that the country of origin was not intrinsically unsafe a travel voucher could be issued on arrival at the camp. This would avoid antagonising our near neighbours by returning migrants to them.

Links:
Children's Commissioner's report
Text of the UN Convention
Mayor of Calais blames UK authorities

Friday, 24 April 2009

British government's credit rating at risk

How long can the UK government hold onto its AAA credit rating (or Aaa if you're a Moody fan)?

Have a look at this table for government budgets for the last few years.


The desperately bad state of our finances should leap out at you. Borrowing, which has been a constant theme of Labour's administration, has lurched out of control - this year it is projected to be FOUR TIMES last year's budgeted amount. Meanwhile government revenue is expected to fall to an amount not seen since 2005.

These are not the numbers you would expect of a AAA rated organisation and many commentators are expecting a downgrade.

What happens then?

Well, the government's borrowing gets slightly more expensive. However that isn't the real problem. The real problem is that most buyers of AAA debt do so because they are legally required to do so, for example pension funds typically hold 40% to 50% of their assets in AAA bonds and not only could they not buy more government debt if the UK is downgraded, they would have to dispose of what they have.

This would severely limit the government's ability to sell bonds and they would have to raise interest rates to make them more attractive to those buyers still allowed to buy them. The possibility even exists that HMG would fail to sell enough bonds and simply run out of money. Then they would either seek an emergency loan from the IMF, or attempt to print money, ie, the Treasury would sell bonds directly to the Bank of England which would pay using money created out of thin air. However, this would be both hyperinflationary and illegal under the Maastrict Treaty.

What's really needed is a radical cut in government spending. Gordon Brown and Alistair Darling don't seem to have the stomach for that.

Wednesday, 22 April 2009

Budget 2009

So, Alistair Darling has just delivered his second budget and the highlights are as follows:

Government debt to be £175bn this year, £173bn in 2010, £140bn in 2011, £118bn in 2012 and a mere £97bn in 2013. As a measure of AD's forecasting skills note that he forecast this year's debt as £118bn only four months ago in his November 2008 pre-budget report.

His "growth" forecasts for GDP are -3.5% this year with the recession bottoming out by the autumn, then +1.25% for 2010 and +3.5% for 2011. Again, not really believable.

On inflation he reckons CPI will be 1.0% by the end of this year and RPI will be -3.0% by September, rising to zero next year.

Income tax on those earning over £150,000pa will rise to 50%. This breaks a manifesto commitment.

Booze and tobacco duty will rise 2% from tomorrow. Fuel will rise 2p from September.

On the plus side he has extended the stamp duty "holiday" on houses costing less than £175,000 until the end of the year. He also plans to get stalled housing development projects moving by throwing some money at them. He seems to have missed the obvious point that building even more houses won't help the housing market recover (there are currently 1,000,000 empty homes in the UK, btw.)

There were some tax breaks for business.

Also the amount you can put in a cash ISA will rise from the current £3,600 pa to £5,100 - from October for the over-50s, and next year for everyone else. It's not obvious why he has chosen to penalise younger savers in this rather petty manner.

Old people are also getting an improved winter fuel allowance: £260 for the over-60s and £400 for the over-80s. The savings allowance for pension credits rises to £10,000 - ie, you can have that much and still get pension credits.

There will be a £2,000 "scrapage" allowance for cars over 10 years old.

There was lots of guff about better regulation of the finance industry, including for the first time, Hedge Funds.

As a budget I'd sum it up as a nothing-budget by someone who has got nothing left to give, has spent every penny and maxed out the national credit card and now is just throwing tiny scraps to his pet causes while waiting for the inevitable axe to descend.

David Cameron gave a good response speech and referred to New Labour as the "government of the living dead," which seems about right.

Red book here.

Tuesday, 21 April 2009

Inflation negative, deflation?

The inflation numbers for the year-to-March are out and exciting the commentariat with a leading minus sign. Viz;

CPI: 2.9%, down from 3.2% last month.
RPI: -0.4%, down from 0.0% last month.

So are we in the dreaded deflation?

No, not really. The RPI number is massively artificial. The RPIX number (which is RPI not including mortgages) is +2.2%. The reason RPI seems so low is because the Bank of England base rate is at a record low of 0.5% making mortgages cheaper, especially for those with tracker rates. The temporary cut in VAT is also dragging down the number.

Meanwhile you only have to look in the shops to see that food is going up, clothing is going up, and petrol is back into the mid-90s per litre and may break the £1 again soon.

However that leading minus sign is causing great excitement for those who don't bother looking behind the numbers.

Links:
BBC article
Inflation report from ONS

Abbey offers 3.5 percent on your ISA - Beware!

Britons are allowed to put £3,600 cash per year into a tax-free Individual Savings Account (ISA). The most generous rate on offer at the moment seems to be from Abbey (prop. Banco Santander, Spain) at 3.5% - compared with less than 2% from HSBC, or 3% from Halifax (prop. Royal Bank of Scotland (prop. Lloyds TSB)).

The offer from Abbey may look good but let's not forget that this is a risk premium. The last bunch of banks to offer over-the-odds were Icelandic, and where are they now?

Abbey has recently had its rating downgraded to C- and its stable-mate Alliance and Leicester to E+. (link)

Now I don't believe that the British government would let these High Street names go bust but if the ultimate parent, Santander, were to experience problems it's not clear which government could or would bail them out.

So this isn't good news...

The Brazilian financial daily Folha de Sao Paulo reports that Santander faces large losses from car loans, known as Brazil's "subprime". Fears are mounting that Argentina, Ecuador, and Venezula may opt for populist measures and even outright default if the downturn endures. (Link)

Tuesday, 14 April 2009

TrueCrypt: For those with something to hide

If you have something to hide on your PC this blog recommends TrueCrypt. Get it here...

http://www.truecrypt.org

It's a free, open-source, data encryption package which provides you with a new drive letter; all files copied to the drive are automatically encrypted. There is an underlying data file with the name of your choice. The encryption standard is very high; it supports 256 bit AES (Advanced Encryption Standard) which is generally thought to be uncrackable (and anyone who can crack it would never let on by cracking anything for anyone else.)

And better, TrueCrypt even provides you with the option to hide the fact you have hidden something. Basically you can set up a drive within a drive with two different passwords. Under coercion you hand over the first password and simply deny that there is a second password; obviously the second password is where you have your really secret files. There is no way anyone can prove that there even is a second password.

I'm always amazed when I hear news along the lines of, "such and such was found on somebody's computer," when it is so easy to hide files. If you have anything to hide - then hide it. And if haven't anything to hide then hide something anyway just to take the heat off the rest of us.

The Afpak situation

Link

"Afpak" is Afghanistan-Pakistan. With Al-Qaeda and the Taliban moving freely between the tribal areas of the two countries it no-longer makes to separate them. Pakistan is currently in a state of civil war; the opposing sides are the pro-West government and the Islamo-fundamentalist "tribes". In a substantial part of the country, the North-West frontier abutting Afghanistan, the rule of law does not apply.

Let's not forget that Pakistan has 100 nukes and the means to deliver them. Back in 1994 in South Africa as the ANC was about to take over from the Apartheid regime the decision was taken to dismantle the few nuclear warheads they had and transport the sensitive components to the USA for "safe-keeping". America has never given them back, and never will.

If the current government of Pakistan looks like losing the civil war it would be a good idea to ship their nukes out before Al-Qaeda takes over.

Thursday, 9 April 2009

Bob the Blunder

Assistant Commissioner Bob Quick


Meet Bob Quick, until this morning head of counter-terrorism at New Scotland Yard. The picture is of him arriving at Downing Street to brief the Prime Minister on a top secret anti-al Quaeda operation, waving around his top secret papers as he gets out of the car.

Downing Street of course is often full of photographers with powerful lenses. Bob should have known this because...


Caroline Flint: former housing minister


...Caroline Flint, back in May last year, did exactly the same thing - wandered along Downing Street with her paperwork showing. For her it was embarrassing because it showed the government was trying to persuade people to buy houses while all along knowing prices were going to fall.

President Reagan once did much the same. He carried a folder with a secret codeword on the cover in full view of the press. The press didn't pick up on it at the time but it was still deemed necessary to rename the operation in question; also embarrassing.

It's more than embarrassing for Bob Quick though. He blew a major operation with his casual attitude. He forced the police to move before they were ready. Some terrorists may have escaped the net. His resignation was right and proper.

Some links:
Caroline Flint shows her briefs
Bob Quick quits

Monday, 6 April 2009

Future screens

Just an idle thought...

The trouble with any putative 3D computer or TV screen is that the greater the apparent depth of field the narrower the viewing angle. The ultimate 3D screen is your bathroom mirror where you have to position yourself precisely for best viewing.

TVs are often viewed by several people at the same time so will need a shallow "depth". Computer monitors are generally only viewed by the user; a deeper field is therefore possible.

So, future screens will have an extra adjustment. In addition to brightness and contrast they will need a depth control.

Friday, 3 April 2009

The day after G20

The dust settles, the Obama-fest moves on, a few panes of glass in the City are repaired and soon it will be like the G20 were never here.

They'll be back in twenty years - too soon, I think.

And what did they do while here? Well, they met formally from 10am to 3pm with a break for a decent lunch. Each leader spoke for eight minutes and then they decided to solve all the world's problems by throwing money at them. One trillion dollars has been pledged, with the IMF the big winner with a $250bn boost in the form of "Special Drawing Rights".

And one of the G20 has already been into the cookie jar. Mexico has secured a $47bn line of credit, and here's where it gets interesting. In the past the IMF handed out money with one hand and pain with the other. Their loans were strictly conditional on the recipient adopting deflationary policies, cutting spending and generally giving up the profligacy that got them into the mess in the first place. But not this time - Mexico has been treated very leniently.

And last night on Channel 4 News we see Lord Mandleson, UK Business Secretary, and Tsar for the re-election of our useless Labour government, say the stigma has gone from taking loans from the IMF. Why did he say that, I wonder. Is he softening us up for when the UK government has to go cap-in-hand to the IMF? Looks like it.

Of the "big idea" - the world currency, little mention. China, especially, is desperate to have something other than US dollars in which to hold its trillion dollar cash pile. It has managed to offload $100bn by injecting it into the IMF. As for the rest, can they afford to buy the entire United States yet?