Friday, 23 February 2018

Up The Down Staircase

There have been items in this blog about property in the past and a recent one on leasehold and freehold which mentioned CDO's and their role in the general property markets. Tom Brammar in CapX says that UK welfare is a CDO with property as its junior tranche.

Here is the article. referred to above. Considering that this a very difficult and intricate area of finance he does well to keep it readable and relatively simple, note the word relatively, and does tell you  what a CDO is and for.

It is claimed that there are ways and means of dealing with the issue of parents or grandparents property that manage or minimise tax liability. You need to have the right lawyers for this and the set up they recommend. This may not be to everyone's taste. And the tax hawks will be hovering over every clause and footnote.

At one stage he says:

"To put it another way, let’s imagine a significant house price correction happens. (I know, it’s not possible, houses only ever go up in valuebut just humour me.) Taking the example I outlined above the implication for UK government’s liabilities for the welfare system would be horrendous."


And counting....

Thursday, 22 February 2018

I Spy

Many decades ago I was interrogated by experts who had been flown in from London. A crucial file had gone missing and all, albeit less than a dozen of us, high or low in rank, shared the experience. Still a teenager, inevitably I had an opinion, telling them to look down the back of the safe and there it was, intact but very dusty.

There was great relief among those concerned, especially the officer on the hook, because I had explained it was not his fault but very easy to do. As they had to blame somebody it was my chief who took the hit, not just for ignoring suggestions to that effect, but for having the safes too far from the walls.

One thing I came away with from that and other matters that arose among our happy band, was some idea of what the intelligence was all about and its complexities. It explains why at present watching TV, what passes for comment etc. on all this raises a giggle often and laughter a few times as well.

So what of young Jeremy Corbyn when he were a lad and wandering the wilder shores of politics in the 70's and 80's? It was a lot more exciting than the boring old Conservative and Labour Party ward party meetings endlessly arguing about protocols and who should stand in the next local elections.

There were a lot of Jeremy's around. To be one of them you needed the right accent and social status. Working class rebels might have been the stuff of fiction, but they were not really wanted in the action groups. Like Jeremy the parallel Jeremy's were anxious to talk to and help anyone who hated the Brit's.

One evident truth for them was that East Germany was the vision for the future for European states. Their sports persons were winning medals and the BBC liked their media set up, it suited their ambitions. Stalin was a sort of St. Peter to the gods of Lenin and Marx, and don't mention Trotsky the Left's Judas.

WW2 had bequeathed large intelligence etc. organisations to the Cold War in the East and West and by Jeremy's 21st birthday they were much bigger, very active and prodding about anything and everything. They needed to make work to justify their ramblings. At the time, I wondered if they even checked out birth certificates never mind the marriages.

In particular they were chasing about and interacting with each other. I suspect the flow of information was immense, a great deal of not very good analysis, a lot of opinions claimed to be facts and all sorts of spurious and inaccurate information relevant and irrelevant. It kept them in work and on track for a public service pension.

My security problem was my sense of humour. When my rugger mates, who included a former Intelligence Corps man, and I had a few jars nearby one December, it seemed a good one to go and sing Christmas Carols outside the HQ of MI5, I think it was "It Came Upon The Midnight Clear" that really wound them up.

Personally, I have a sneaking suspicion that Jeremy was and is not all be seems to be. Could he in fact be a tried and true British agent himself, long ago required to gain entry into all those enemy strongholds? By a twist of fate he was elected an M.P. unexpectedly and has had to carry on the charade ever since.

He is more George Formby than George Smiley and as in the song hoping to get to the top. But when Big J, as he is known, is playing darts in the public bar of the North London Oddfellows up by Highbury and Islington Underground Station and is asked how are you going to pay for all the spending he promises, he will have a ready answer, if not a ukulele.

His inspiration would be Karl Marx. In the New York Tribune of 25 August 1852 he had a long article on The Chartist Movement in Britain. This was a populist movement for the franchise for all, annual parliaments and radical changes in taxation and government spending.

Marx did not like The Whig Party at all and quoted a leading Chartist to the effect that they should be swept away together with all their policies and proposals being the neoliberals of the time. One of their ideas was to abolish the Window Tax, a reform that had been accomplished.

This had been law from 1696 to 1851. It was " An Act for granting to His Majesty several Rates or Duties upon Houses for making good the Deficiency of the clipped Money [Chapter XVIII. Rot. Parl. 7&8 Guil. III. p. 5. n. 4]".

The Whigs, an upper class party who lived in large houses for the most part claimed that the purpose of the Act no longer applied so it should go. With it went a tax income that was relatively reliable from the property owning class.

Jeremy, I think, looking at the possibilities of the various forms of property taxation, will be proposing a window tax any day now. Keep looking in the foreign pages of the Prague Business Journal.

You read it here first.

Wednesday, 21 February 2018

Waist Matter

In the matter of food and drink I am a self appointed expert. This is because I have consumed so much for so long that it might be opinion but there is a very large sample of meals to draw on.

This one deals with sugar and is from Science Daily and titled "Researchers Challenge Claims That Sugar Shifted Blame To Fat" related to the squabbling about responsibility for the weight problems of humanity.

It is a common place that a high proportion of the population is carrying more weight than we did in the past. Look about you and consider also that few people walk anywhere and spend more time sitting down.

Humanity, as ever, when faced with something not quite right is quick to find somebody or something to blame and often a lack of reason is involved. At one stage we were blaming fats in the diet and it seems that sugar may be the big one.

Along with this came the idea that the makers of sugar products somehow conspired to blame the fats because they knew all the time it was sugar. Historians who have investigated find that this is not the case. I am not surprised.

I have had a taste for sugar ever since I can remember. My many dentists will confirm this. Because of rationing and price there was not much to be had in my early years. But when supply increased and prices were less then my demand was there.

Breakfast cereals, three spoons of sugar in the mug of tea, afters for all meals and occasional treats and snacks in between. I toured the chocolate factories of the land, was loyal to old products and avid to try the new. Inevitably, it all had to end.

I was not alone and seem to have been at one with the huddled masses all at it in the same way. We all liked the stuff, wanted it and thought it good for us and nobody said any different.

We were supported by the marketing men who told us it gave the energy for the day and comfort to allow us to sleep. A Mars bar a day etc. see the advert's on youtube. As for fats, if you ate a lot of fat you got fat, obvious wasn't it?

Anyone for rhubarb?

Sunday, 18 February 2018

Breathe In Cough Out

In the media, especially the "news" papers, a good many items these days are sourced from web sites that often are not attributed. Science Daily is one favourite to be raided.

This is one I picked up when checking it out entitled "Consumer and industrial products now a dominant urban air pollution source".

"We've reached that transition point already in Los Angeles,"  It might explain some other things.

The conclusion is:

McDonald said. He and his colleagues found that they simply could not reproduce the levels of particles or ozone measured in the atmosphere unless they included emissions from volatile chemical products.

In the course of that work, they also determined that people are exposed to very high concentrations of volatile compounds indoors, which are more concentrated inside than out, said co-author Allen Goldstein, from the University of California Berkeley.

"Indoor concentrations are often 10 times higher indoors than outdoors, and that's consistent with a scenario in which petroleum-based products used indoors provide a significant source to outdoor air in urban environments."

The new assessment does find that the U.S. regulatory focus on car emissions has been very effective, said co-author Joost de Gouw, a CIRES chemist. "It's worked so well that to make further progress on air quality, regulatory efforts would need to become more diverse," de Gouw said.

 "It's not just vehicles any more."


There is another thing, how many people are paying a good deal of money out for stuff they do not really need?

Thursday, 15 February 2018

Little And Big Bangs

The next bust is a subject for all those who like to comment or predict about the what, when, where, who etc. and think they have the answer.  The fact is that some do, many don't, some nearly get there and most of us just sigh wearily and are left to pick up the pieces.

This is complicated by the chances of the bust not being confined to one part of the government and financial world but hits several sectors hard and a real big bang multi bust can hit the lot. All that money you saved for a rainy day is washed away by the rain.

A sector that looms large in the UK at present is the property where a lot has been going on and there are suggestions of much of it being unstuck and hitting the big hitters hard and where it hurts, in the wallet. We will all get hit but who bothers about us?

The Commonhold and Leasehold Reform Act of 2002 was said to be one that would sort out the many and various problems in the owning of property, especially in the Leasehold sector. It did not succeed being the legislative equivalent of putting lipstick on a the face of a pig.

In the years since things are not better they are at least just as bad and arguably sometime as lot worse. Clearing up after the Grenfell disaster for example is made more difficult because of complexity of the holdings of the development.

Builders of new houses have taken to using leasehold again which is increasing the problems. Many of those empty properties, especially in London, have complicated ownership tied into business structures with several levels of ownership usually ending up in a tax haven were information cannot be accessed.

For those with leaseholds wanting to know who exactly owns their freehold this can involve a grand tour of the world only the cruise ship all too often sinks before making port. A common feature is a front office firm doing the freehold necessary, this owned by another entity, say a Limited Liability Partnership, owned in turn by a family trust or perhaps something else.

A great many retirement developments, for example, are not aware that the listed owner of their freehold is Deutsche Bank. Yes, that big German one that is hopelessly in debt and whose problems could trigger the next world multi bust. It is the implications of these that are the nastiest threat.

Because among the financial traders there are financial gizmos called CDO's or Collateral Debt Obligations which are bought and sold by all sorts of other traders, almost all working out of computers located here or there and tracking through tax havens.

Our freeholds are among the securities packaged into these things. Which means that if they get lost, disappear into the ether or simply vanish from the records then we may never know who owns the properties concerned. Those recalling the US sub prime crash will know what happened next when titles to property were lost never to return.

The gloom mongers already point to the UK property market as being a high risk sector and ready to go down. If the ownership to properties is not sorted out it will never go up again.

Tuesday, 13 February 2018

History Sweet And Sour

The Britain bashers have having another go on the subject of slavery referring again to the 1830's compensation of the former slave owners. The £20 million (from one source) is said to be 37 plus billions in modern money. It was and is a lot of money whether you think the comparative 21st Century equivalent is more or less, given the intricacies of comparing money values for two very different periods in history.

We are all to blame apparently and should grovel. I have a problem with this in that none of my known ancestors owned slaves being of the lower orders in the UK of that time and before. I suspect that they did not eat much sugar, if only because of price. The sugar tax of the early 19th Century was one reason and an important item in the government budget.

The Abolition Act of 1833 to end slavery in the colonies came at one of the most turbulent periods of our history. Between 1829 and 1841 there were six general elections. Governments came and went and in 1832 Earl Grey put through the Great Reform Act which preceded it. Because of the crisis relating to the Great Reform Act the Abolition Act came in its train.

The electorate, despite reform was still only a small proportion of the male adult population and far from being representative. The Act itself in detail was not a good one, political compromise and fudge are always with us. The former slaves became indentured apprentices for six years and for them it did not seem much of a difference. The slaves wanted wages and it simply led to further unrest.

The troubles and the decisions in terms of the indentures and compensation seem to be illogical and inexplicable to us in the 21st Century. But the saying " follow the money" has a real meaning in this case. Only the money was difficult to follow as there wasn't much to be had, sometimes none at all at times when hoarding was rife.

In looking at the subject one of the surprises I had was the returns submitted by plantation owners stating their wealth for the purpose of taxes and death duties etc. The figures put on the slaves for market value seem to be far higher than the reality of plantation life would allow as well as the mortality statistics.

The answer lies in the levels of borrowing by very many of the plantation owners and at rates of interest that were high, which is not surprising given all the risks. Crops might be good or bad and often the latter. A great many owners failed and their bankers took over the property, usually to sell, but some kept the better ones.

The compensation was to allow the write off of slave values on the books to be matched by created funds. We are back now with the familiar sight of a money go round and to find out who were turning the wheels takes you to Threadneedle Street and the streets around it in the City of London. This was not the only problem.

If the plantation workers were to be paid that meant hard cash and it was hard to find and sometimes not to be had. This was a period when the supply of specie, the actual coinage based on silver and gold, was often short of demand, trouble enough in itself.

When spasms of hoarding or severe shortage occurred the economy would crash and revolutionaries would take the streets. The 1830's was the age of "Captain Swing". With population increasing and people coming down from the hills to the towns the situation was becoming much worse.

Who would a serious financial crash in the West Indies affect as well as the plantations?  Well, most of the House of Lords, quite a few in the House of Commons and in the government itself. If £20 million went out to the owners of slaves, it might not go to paying wages but it went a long way to propping up the estates of many of the aristocracy etc. and their banker associates.

Meanwhile back in Hampshire the landed class Magistrates were transporting the relations and friends of our families to the new colonies as convict labour for offences against the game laws, stealing a sheep or punching the estate foreman on the nose.

And in our case for burning the local workhouse down.

Monday, 12 February 2018

Casting The Vote

The marking of 2018 centenary for when the first women were eligible to vote has been dominated by the claims that the Suffragette group of women devoted to violent action etc. are the ones to thank. As so much of the "history" is drawn from the media of the time it is not surprising, it is easy to source and to deal with.

One large group of women who were felt to deserve the vote were those who between 1914 and 1918 went into the factories and service industries to take the place of men who had joined the Army and Navy. There were others as well who deserved it.

When young I knew a number of people born in the period 1860 to 1890 who were adults during the time of the Suffragettes. In those times past people used to talk to each personally about all sorts of things. It was always interesting to hear of their pasts. It does not make me a primary source perhaps but it does give some insights.

One lady I knew well, see above, from an ordinary working family was highly convent educated, multi lingual and a governess to families of high standing. She was stranded behind the German lines on the invasion of 1914 and during the war worked for French intelligence. Other women in her family were educated and became head teachers of elementary schools etc..

In their communities they became active in the advancement of the young in education and learning and in reform in general for the betterment of the labouring class. In 1940 they were responsible for working to help the French stranded in England and were thanked by De Gaulle.

The Liberal Government coming to power in 1906 had a lot to deal with. The Lord Salisbury Conservatives had made some reforms but there were too many problems to be dealt with in too little time, given the difficulties in the mining and other industrial areas, rapid economic change, the imbalances in the constitution, the radical changes in foreign policy and the demands of Empire.

In 1882 Gladstone on taking office said that it was his mission to pacify Ireland. He failed to and by 1914 the problems had increased and become more complicated. He also fudged The Egypt Question that led the UK into more liabilities. The 1884 Electoral Reform Act had been a compromise that created more problems than it solved, none of which has been dealt with by 1914 when this may have been on the long list to be addressed; not least because of the reform of local government.

There were high level pressing issues especially in Ireland. Before 1911 the Liberal Government had real problems. In the Tory House of Lords about two hundred peers could paralyse the Liberal Government. They attempted this with Lloyd George's Peoples' Budget of 1909. The reality before then was that the Lords would block a franchise bill giving the vote to the labouring class of men and to women, even the highly educated and property owners.

It took a lot of time and politics to deal with the problem of the House of Lords and in the meantime the activist and violent suffragettes fouled the nest. In attacking the government and members of the House of Commons they were alienating people who might have wanted to give the votes to women.

Similarly, out there in local communities, sensible, responsible and educated women working and housewives, busy in their churches and home areas and some at national level who wished to vote but under no circumstances wanted to be tarred with the Suffragette brush and its violence. They became a silent majority.

One reason is clear. The open London of the day had become home to numbers of extremists, anarchists and others. There is the famous coverage of Churchill at the Siege of Sidney Street in 1911 (see Wikipedia) as police and army fought on the streets to deal with anarchists in alliance with criminals who defied law and order.

By 1911, Lloyd George had finally managed to have his budget passed, and the House of Lords had been taught a lesson. So what new reforms could have been put forward that year? The extension of the franchise might have been one of them. It would be difficult to give it to the men labourers while excluding women entirely.

But this was no longer a simple matter of right or justice or fairness or a straightforward next step in progress. In the minds of most people, the Suffragettes had become linked to the anarchists from Eastern Europe, revolutionaries and the criminal gangs that had come to take over some of the poorest districts of the large cities.

Did Lenin when in London in 1908 ever take tea with the Pankhurst's or any of their friends? Look at the "Workers Socialist Federation" in Wikipedia for some interesting reading on this part of political history that seems to be forgotten.