Friday, 18 November 2016

watch out for puddings

On holiday my wife and l were eating with another couple one evening.  The guy was okay, he was another cyclist, but l didn't get on too well with his wife.
It got to the pudding stage and her cheesecake wasn't right.  There were a couple of specs of red on the plate, possibly someone had cut themselves in the kitchen.  She wasn't happy, which was fair enough. 
There was a bit of a conversation about this.  If it was blood some of it might have been on the plate before the cheesecake went on it.  Blood might have soaked into the biscuit base.  She could end up ingesting it.  She might catch something nasty.  With that in mind she was trying to attract a waiter. 
I asked her if she minded if l cut the cheesecake in half.  "No" she said, "I'm sending it back, l don't want you messing about with it.  That's rude." 
I shrugged but let it slide, "So is the way you have just talked to me" I thought.
The waiter took it away. 
"So you're still having the cheesecake?"
"What do you mean by that?" She said.
"Well" I said.  "I've worked in kitchens.  If you're busy or don't care you just change the plate over and send the same thing out again.  Also, everything costs, you don't want to throw things away unless you have to."
"Oh," she said.  "They wouldn't do that sort of thing here."
A cheese cake / the cheese cake, came back out of the kitchen.  She looked at it.  She studied it HARD.  I could see her wracking her brains to remember what the last slice had looked like. 
For an uncomfortable 15 minutes the cheese cake remained on her plate, uneaten, with everyone pretending that they hadn't noticed.
I used to be an auditor.  You learn not to trust anyone.
I felt a bit bad about putting her off her pudding - but bearing in mind the cheesecake could have made her sick did l really have a choice?

Tuesday, 8 November 2016

Private sector rents are likely to rise - increasing demand for social tenancies

Politics seems to always be a victim to the law of unintended consequences.  In the summer the budget had measures to dampen down house price increases (to help people buy), but the consequences are likely to be making it more difficult to rent!
According to Savills, the estate agents, Britain will see steep rent rises over the next five years in rental prices.  This is due to the government campaign against buy-to-let investing in the budget.  Moves to put people off buying to let (to cut the demand for buying houses and thereby slow down house price rises) will constrain the supply of rental homes.

Savills, have said that London tenants face a 25 per cent increase to their rents over the next five years; renters elsewhere in the country will not fare much better, with a predicted 19 per cent rise!  The result is that rental growth is now set to far outstrip house price growth.  With the benefit of hindsight the moves to curb house prices probably were not needed any way.  Brexit uncertainty will probably do that all by itself.

“The rental growth is largely driven by the mismatch between supply and demand,” said Lucian Cook, director of residential research at Savills.  He added that moves to damp the buy-to-let market – which have included a stamp duty surcharge and plans to limit tax relief on mortgage interest payments – are pushing investors towards “higher yielding, lower demand markets”.  this means the areas of highest demand such as London, face tightening supply. 
What is worrying is that JLL, another estate agency group, also forecast steep rental growth, predicting a 17.6 per cent increase across the UK by 2021, with London rents rising 19.9 per cent, far outstripping predicted rates of inflation.

In a world where many cannot afford to buy anyway, renting looks like it is going to get harder too!

Tuesday, 25 October 2016

Mourinho has a special talent - but it has nothing to do with football

Jose has a talent he has learnt from the master - Sir Alex.  It has nothing to do with diamond shapes, 4-4-2, or playing three across the back.  it has to do with deflecting criticism.
They have a technique for what to do when they get things wrong that works very effectively.  (However, l don't think it works as well for mere mortals.)
The technique is very simple.  They get angry.  They get angry with the opposition, the referee, the fans, the players or the press.  On one occasion when beaten by Southampton Sir Alex got angry that the shirts were the wrong colour - he blamed the kit man.  It wasn't that they were complete rubbish, his players "couldn't see" each other!
On Sunday Jose got angry at the opposition boss for "humiliating" him.  I'm sat there shouting at the TV, "you humiliated yourself - you sent out an ill prepared team with the wrong tactics and you failed to sort it out at half time."
However, l have to acknowledged that the masterstroke worked yet again.  The press focus was on what he said in the other guy's ear - not on Jose's abject failings as a manager.

Sunday, 16 October 2016

Bradley Wiggin's cough sweets, and the rules that don't apply to Team Sky.

There are rules in cycling that means the last riders to finish are out of the race if they are too slow.  On Spain's equivalent of the Tour de France last month some Colombians went off like a dose of salts and dumped Team Sky and a few minnows off the back and out of the race.
Following discussions over night the rules were changed and Team Sky were back in.  No surprise really one set of rules for Team Sky and one set for everyone else.
It didn't surprise me therefore that Team Sky were able to push the rules to the max and get Bradley Wiggins on the 'cough sweets'.  I must say, I took it with a pinch of salt when after keeping quiet about using corticosteroids for years, when challenged Bradley Wiggins said he took them for a pollen allergy to get him onto a level playing field with other riders.

For the uninitiated, we're talking about Triamcinolone.  It belongs to a powerful class of drugs called corticosteroids. It prevents the release of substances in the body that cause inflammation. We are not talking about an over the counter something or other for hay fever.  We are talking about something at the extreme end of treatment.

Bradley had medics administer him with the powerful corticosteroid triamcinolone in 2011, 2012 and 2013.  Following these 'boosters' he went on to win the tour de France and other big events.

When l say boosters, the impact of taking triamcinolone is potentially one hell of a booster!

The 'side effects' according to some former professional sports users are:

* better recovery after exercise - a really important benefit if you are in the tour de France cycling up to 150 miles a day for 3 weeks
*  quicker recovery from injury - a really important benefit if you are in the tour de France cycling up to 150 miles a day for 3 weeks
* and fat burning to get your weight down (for the same amount of muscle power the lighter you are on a bike the quicker you go)  - a really important benefit if you are in the tour de France cycling up to 150 miles a day for 3 weeks

In my view before his most important races of his life he gained himself an unfair advantage. Team Sky insist the drugs were medically necessary to deal with a pollen allergy that aggravates Wiggins’ asthma condition - however the medication he had was extreme, way beyond a bit of anti-histamine.  Also, why was there no medication needed for this allergy before 2013, and why did the problem go away when Bradley quit the top end racing and started to take it easy? 

Tongue in cheek, a couple of top cycle sprinters, tired of certain riders taking potentially performance enhancing drugs on the excuse of having allergies, have said if this is a 'disability' they should quit the pro-tour and try the Paralympics!

The killer question for me is that if Bradley felt there was nothing to be ashamed of why was there no mention of taking Triamcinolone in his 300 page plus autobiography that went into almost forensic detail about his health and diet?

I have been a bit of a cynic since Lance Amstrong.  Now days l think if someone is so good it is hard to believe, perhaps it is?

Thursday, 1 September 2016

We are too busy avoiding failure to be successful

When I was 11 my teacher Mr O'Farrell started up a chess league table and put me at the top because l was the best player in the class.  I enjoyed playing and l liked playing fast and trying new things.  Every now and again I'd lose a game.  What l found was that no one l beat would give me another game.  They said openly it was because l was a better player and they didn't want to risk dropping down the table.  I ended up after a term of playing 6th in the league.  In fact the whole thing silted up in the end because no one would play anyone for fear of dropping down the table.  I gave up too because l couldn't play anyone half decent because they were refusing to play.  My form playing for the school nosedived from lack of practice.

It crossed my mind that this year l took part in half a dozen cycling events l had not much chance of finishing.  l wanted to push my limits and see how far round l could get distance wise or how many hours cycling l could put up with.  I gave up on a couple, narrowly missed the time limit on a couple, and just completed the other two within the time.  I could have looked back at the experience as failing 4 times out of 6.  l could even have avoided any kind of failure by going for less challenging events in the first place.  I am glad l didn't.  Having a go taught me far more about my limitations and where l needed to improve than playing safe.

As for the chess league, most of my class mates in the story didn't go on to much success.  You need to fail sometimes to learn and they didn't take those risks.  The one success they might be looking back on is where they finished in the chess league when they were 11.  Personally, I'd much prefer to fail now and again and achieve more success overall.  Sometimes we are too busy avoiding failure to be successful.

Thursday, 21 July 2016

Likely inflation jump will hit the poorest 10% of the population twice as hard as the richest

Pre-Brexit things were just starting to look good.  For me as a local government employee l was pleased about a 1% per year pay deal that was going to provide a real terms pay rise to claw back losses since 2008.  a 1% pay rise looked pretty good in a world of 0.5% inflation.

The 12% drop in sterling post the brexit vote has already caused fuel costs to start rising and inflation is now expected to increase quite rapidly.  Forecasts of 3% inflation now by the end of 2017 are common.  This is coupled with a forecast drop in economic activity caused by businesses and consumers being nervous and worried about the future.

The two things combined have raised a spectre we haven't seen since the 1970s, "stagflation".  Stagflation is economic stagnation (recession) and rising inflation combined.

Workers won't have a lot of muscle to shift pay increases above the current 2% level if the economy is shrinking.  Inflation rates of potentially 3% per year by the end of next year will therefore hurt.  For public sector workers on a 1% for 2 years pay deal, this will really hurt.

Things will be worse for people on benefits - a number of benefits are to be frozen for four years.; other benefit changes will create real-terms cuts, e.g. the lowering of the benefits cap.  The IPPR think tank estimate that an inflation jump will hit the poorest 10% of the population twice as hard as the richest.  At the pre-brexit inflation rate of half a per cent the impact of benefit changes were mitigated.  A 3% inflation rate will cut a much bigger hole in the value of benefit payments in real terms.

The only group to be insulated is pensioners.  The triple lock guaranteeing them a minimum of wage inflation, price inflation or 2.5% would kick in.  However, Cameron did say the triple lock might be unaffordable in the aftermath of Brexit...The International Monetary Fund estimate that even in a good brexit scenario public borrowing will rise by 0.7%.  This implies that Brexit rather than saving the government £350M per week, will cost it £270M per week.  With these kinds of costs needing to be met Pensioners may need to watch out too.

The only scenario for lower inflation played out by the IMF in its latest forecasts is if economic activity crashes badly enough that it will dampen inflationary pressures!  However, this is hardly a good news story either.

If only people hadn't wanted to meddle with something which was actually working reasonably okay - but don't get me started on that one!

Friday, 19 February 2016

Economics, Donald Trump and the Pope

I was very interested to hear the attack on Donald Trump by the Pope.  The Pope is a man who lives in the Vatican - a country surrounded by a wall.  He singled Mr Trump out as a bad person for wanting to build a wall along a US border. 
A few hundred years ago an attack like this would have been serious stuff, a bit like the ex-communication of Henry VIII for having too many wives.

Donald isn't exactly one of my favourite people but l couldn't understand why a religious man like the Pope was targeting him so fiercely.  Surely, there were bigger fish to fry when it comes to 'bad' people, why was "the Donald" his target rather than Vladimir Putin, ISIS or President Assad for example?

With so many war crimes and human rights violations at the moment (e.g. Syria, and China) why was the Pope so angry about the idea of Donald building a wall to stop latinos illegally entering the US?  Afterall, isn't illegally entering the US a bit sinful? 

In any case, this is hardly the worst policy Donald has in mind, but most people would say Donald is hardly the most evil politician on the planet either.  I was mystified - why wasn't the Poop tweeting about the Russians bombing hospitals in Syria instead?

For me, a lot of life comes down to money statistics and I had a look at the BBC website to look at the statistics:

"Latin America accounts for 483 million catholic church members, or 41.3% of the world total.  Of the 10 countries in the world with the most Catholics, four are in Latin America."

I then had a look at the Economist to follow the money: the Economist in 2012 estimated the Church had an income of $170 Billion per year.

Crudely speaking Latin America could be worth say, $50 Billion of the total annual pot, equivalent to a revenue of $1 Billion per week.

If a good few Latinos are pleased by the Pope's sound bite and decided to put an extra 10% in the collection on Sunday that would be a $100 million a revenue boost.  If they kept it up we could be talking $ Billions.

I'm not suggesting the Popes follows the money like I do.  I'm just noting there aren't as many putting into the collection plate each week in Syria or China as there are in, Mexico and a couple of other places south of the Mexican border.  It is a possible explanation for the Pope's interest in Mr Trump? 
I just do the numbers, l leave the drawing of conclusions to others.

Sunday, 31 January 2016

If you want a lilac pen you deserve what you get!

Apparently Tesco charge twice as much for their standard pen if you buy it in lilac.  There were politicians on Radio 4 calling this discrimination against women.

I say two things - 1. Grow up!  2. Isn't it a bit sexist to assume only women like lilac pens?

What amazes me is that we have MPs who either naïve, or are attempting to patronise everyone by saying it is an issue.

It isn't an issue it is economics.

How does pricing work?

It is very simple, there is only one product that is remotely likely to be priced based on what it costs.  The standard product.  Examples are:

the economy / basic / family range in the supermarket.  This is a tin of beans for 18p or a can of soup for 24p etc.

a clear plastic biro (not a lilac one).

the first week of the season in a hotel

the small unglamorous small engine car,

a second hand car rather than a new one

and the best example - the most simple basic coffee in a coffee shop.

These are the basic items aimed at people who only want to pay what they have to.

What l want to go onto is something economist call signalling.  If l buy at the standard price I am signalling l don't want to pay extra.

The other prices, e.g. the prices for the seats at the front of the plane, the cruise berth with a balcony, the room with a view, the lilac coloured pen, the Heinz Beans, the Mercedes Benz or BMW, or the frothy mothy chocky locky coffee with marshmallows and yoghurt; are meant for people who want to signal something different.

These prices are for people who are signalling "I want something better and l am willing to pay for it."

By them paying double for their coffee just to get 2 marshmallows on the top, for example, they are enabling the shop to sell everyone else a coffee for half the price.

Is charging double for a lilac pen discrimination?  Not at all.  Some people choose to pay double.  There is a price if you want to feel special, and if you want to pay it go ahead - otherwise buy a clear plastic pen.