Evolution: Darwin or Deity?

Rather a surprising set of results come from The Economist’s Daily Chart for 5^th February, http://www.economist.com/research/articlesBySubject/displaystory.cfm?subjectid=7933596&story_id=13062613:

 

In Iceland about 80% of people believe evolution to be true

In Britain the figure is just under 75%

Germany 70%

Ireland around 65%

 

But

 

The USA around 40%

Turkey about 26%

 

There is a BIG gap between these latter two and the next lowest believing country, Greece, which stands at about 55%.

 

How does one account for that? Is this a sign of strength or of weakness? Does it matter?

 

All of these issues are discussed in the comments section at the end of this short article. Daily Chart view.

 

DW

 

Mad Madoff

Firstly, the relative trivia: have you noticed how the 12 year olds at the BBC are calling this man Bern’ard Madoff as if they were Americans rather than the B’ernard that we know?

 

Secondly, I have just found time to start reading up on some of the technical things that Madoff was or wasn’t doing with the $50 billion that he is supposed to have squandered. He is accused of running a Ponzi Scheme. However, in an article in the FT there is a fascinating piece in which they run through the thought processes of Wall Street wallahs as they studied Madoff and his mad cap work. They ascribed some fancy finance footwork to the man when he was clearly pussyfooting and not cutting a rug at all.

 

For example,

 

Mr Madoff’s returns appeared to many to be too good to be true (see chart below). But advocates claimed they were the result of a “split-strike conversion strategy” that used derivatives to minimise risk, while intelligence from his market-making business allowed him to time investments almost perfectly.

 

The SEC investigated Madoff in 2005 and again in 2007 and found nothing (the chickens in this scenario started to come home to roost this week too! See the whistleblower snippet below) so:

 

Several investors believed he might be front-running – illegally trading ahead of customers of the market-making division – but many stayed with him anyway. “He had a clean record from the SEC and it wasn’t our job to spot this,” says one.

 

Some funds offered a more complex explanation. Split-strike conversion enabled him to profit from periods of rising share prices by setting up what was called a “bull spread”. This involved buying shares in 40-50 companies to mimic the blue chip S&P 100 index, while using put options to protect against falls. The cost of these options was covered by selling call options, limiting the potential upside.

 

My reaction at this point was to think that if only he had been doing this sort of thing, maybe he could really have returned some of the profits that he did pay back albeit within a Ponzi Scheme: a bit like burglars and the like who put huge amounts of effort into their robberies that could just as well be channelled into something legitimate.

 

In a US Congressional hearing this week, a man labelled as a whistleblower in the Madoff case, sorry his name eludes me, made the point that the graph of Madoff’s returns fell on a straight and 45 degree line. This man went on to say that everyone else’s equivalent graph would rise and fall with or against or generally in tune with the market: here’s the link for the kind of graph that gentleman was talking about

 

http://media.ft.com/cms/aa499604-ebd3-11dd-8838-0000779fd2ac.gif You can see what he means and why he said he warned the SEC over a ten year period that there was something rotten in the state of Madoff.

 

There’s a nice time line summary of events here, by the way: http://www.ft.com/cms/s/0/cc1ceb9e-ebd5-11dd-8838-0000779fd2ac,dwp_uuid=b7a8d610-caaf-11dd-87d7-000077b07658.html

 

Regulators, lawyers and Parliamentarians have all tried to make these things impossible to get away with but Madoff is here, Satyam (who??? ... watch this space) surfaced around the new year in a cash reporting scandal in India. The Sarbanes Oxley Act from the US, for example, Corporate Governance rules in the UK for example ...

 

I imagine that a lot of people are wondering how Madoff can still be holding on to his flat in New York, reputedly worth as much as $7 million, when there are probably people who need a mere fraction of that just to live on ... but Madoff stole it from them.

 

Finally for now, you might care to remind yourself of the two basic types of Ponzi scheme I discuss on my web site: http://www.duncanwil.co.uk/ponzi.html Give me time to get back home and put together a summary of what people think they know about Madoff and I will include that on a revised or supplementary Ponzi page.

 

 

DW

 

The Dutch Cap?

Interesting what you can learn and I wonder if this is something that everyone else knew about except me.

 

In my course in Bangkok this week, discussing International Financial Reporting Standards, we talked informally at one stage about the credit crunch, 100% - 125% mortgages and remortgaging.

 

There was a Dutchman on the course and he said that in Holland, anyone taking equity out of their property as a result, for example, of a remortgage and who did NOT put that money back into the property in the form of an extension, new kitchen, new garage, upgrading central heating and so on, would be charged income tax on the money as if it were income and not a capital flow of cash.

 

I wonder why we don’t do that in the UK as I think we don’t; and how effective it is at limiting/controlling equity release schemes. I also wonder if it made matters worse by encouraging borrowers to gross up their requirements so that they effectively borrowed enough for their needs and to pay the tax as well. That is, they want, say, £50,000 but take £60,000 to cover their £50,000 AND the £10,000 tax bill.

 

 

DW

 

Thatcher, the daughter

Good! She's been sacked. Good. She's bleating now, or at least there is bleating in the newspapers on her behalf.

Loud, grating and with a speech impediment, Carol Thatcher gets on my nerves. Whenever she was due to appear on the One Show on BBC1 I changed channels. The same when the likes of Graham Norton appear too.

Would Thatcher be where she is without being her mother's daughter? Doubt it. So, as Harold Wilson would have it, ditch the bitch!!

Good riddance.

DW


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CB/BBC

Panorama on BBC 1 did a programme last week on swearing on the telly etc. I said, good. I said, I doubt anything will change as a result of it.

Well, I have had a good idea for change. I would like the BBC and probably ITV and Sky as well, to set up some new channel:s:

CB/BBC which is Cor Blimey BBC
CB/ITV which is Cor Blimey ITV
CB/Sky ... Cor Blimey Sky

They can put all of their swearing programmes on there, their nonsense "celebrity" programmes and their idiotic "reality" stuff. If people want to speak AmerEnglish they can go there too.

As for BBC 1, BBC 2 etc, they will then be free of low level standards. I don't mean that we need posh TV or anything like that, I mean i want entertainment, news and so on without worrying about anyone effing and blinding at me and expecting me to swoon over stunted gays and other ne'er do wells who exhibit neither talent nor charm.

Radio 4 is also in need of reform as we are now subjected to gratuitous swearing on there at virtually any time of the day or night. I don't want it and their infantile justification of it.

There: another top solution from yours truly.

DW


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Right to Die

There is that poor lady who has been kept in a persistent vegetative state for 17 years. It's been decided to the lady die.

Out of the woodwork people arrive to try to stop the process.

The point is, without artificial intervention there is no life. And the lady has been brain dead for 17 years so what is there to communicate with and to feel with?

Of course, someone with courage should have taken this decision 17 years ago.

DW


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