Do addicts need help…

…or do narcissists need mocking?

IN my last year on Wall Street my bonus was $3.6 million — and I was angry because it wasn’t big enough. I was 30 years old, had no children to raise, no debts to pay, no philanthropic goal in mind. I wanted more money for exactly the same reason an alcoholic needs another drink: I was addicted.

Our Galtian Overlords ladies and gentlemen… And oh it gets better…

The first year was really hard. I went through what I can only describe as withdrawal — waking up at nights panicked about running out of money, scouring the headlines to see which of my old co-workers had gotten promoted. Over time it got easier — I started to realize that I had enough money, and if I needed to make more, I could. But my wealth addiction still hasn’t gone completely away. Sometimes I still buy lottery tickets.

What bizarre behaviour, worrying about money and occasionally gambling, I’m sure none of my readers could possibly sympathise.

Will Half The UK Be Obese Before 2050? Are The Press Credulous Nincompoops?

No. Yes. For fucks sake, what is wrong with the media? Lots, I suppose, but I’ll concentrate on their innumeracy and credulousness for now. I will also cover their prejudice and scientific illiteracy. Which is a lot to do in under 1000 words, but when you’ve such densely packed stupidity as our Obesity Crisis Bleughly etc. you can really go to town.

First, a little history lesson: in 2007 a report commissioned by the government stupidly predicted that if people continued getting obeser at the same rate by 2015 36% of males and 28% of females would be obese. By 2050, 60% of males and 50% of females would be obese. By the end of the century everyone would be obese and robots would need adamantium reinforcements to maneuver the nation’s vast bulk. A nightmare scenario, I’m sure you’ll agree. Here’s the chart:

British fat

Yesterday, the National Obesity Forum stupidly updated that stupid extrapolation. Rather than half of Britain becoming obese by 2050 they believe this will happen much sooner and that we need to something about this. Especially for the children. It’s always for the children (or the women). Their report helpfully recommends negging on fat people, bullying children who don’t like PE and the creation of government sinecures for ex-Forum busybodies. 

To come up with their dread warning, they’ve used an extra five years of data from the UK to update the projection above. It’s a projection not a prediction because of the data they leave out. If they included data from the US their scaremongering would fail and these busybodies might have to get real jobs: America’s stopped fattening. We don’t need to hypothesise about how fat we could get, we know. None, none more fat.

America fat

Something that can’t go on forever, won’t. That’s a simple thought, but scaremongers know when you’re scared you don’t think. Waistlines can’t expand forever. Eventually a population has to stop getting fatter and now we now know when this happens. America, the land where everything’s big, is no longer the land where everything’s getting bigger. When a third of a society get obese obesity levels off.

Predicting that half of Britain will become obese, when we’ve recently discovered the obesity event horizon should earn you derision. Instead it gets you wall to wall coverage. Incapable of crunching the numbers, the press report as fact a ludicrous projection using incomplete data and biased methods. I don’t want you to confuse my anger with surprise, this is par for the course. Innumeracy and credulousness covered, let’s talk about the press’s prejudice and scientific illiteracy.

Being fat is unhealthy right? Wrong. Okay, not fat, but being obese is bad, right? Wrong. Dead wrong, in fact. And I have a meta-study to prove it.

final_cochrane_logoThe words “I have a meta-study” should inspire joy or dread, depending on your position. A meta-study is a study of studies and they’re incredibly useful. You can read more halfway down this old post on how they save lives and reveal truths that might otherwise be hidden.

We’ve been looking at obesity for a very long time, and lots of individual studies have been done, but each has its own problems and each has its own margin of error. Collating several studies allowed researchers to look at 3 million subjects, from 12 countries, and use only the best data to assess the effects of weight gain on health.

The results might surprise you. They found that people with a Body Mass Index of 18.5-25, the “healthy” people, have higher mortality risk than every group of people up to BMIs of 35. The obese were less likely to die than the “healthy” people and the overweight people were significantly less likely to die than the “healthy” people.

Pick a random 5’4″ woman weighing 8 stone (remember to say hello). She has a higher mortality risk than a 14 stone woman of the same height (say hello to her too). You might be incredulous, you might even be angry: but I have a meta-study.

The below table isn’t very layman friendly, but click through to the paper, or read this op-ed, if you don’t believe me. I’m not saying you should gain weight, or lose weight, I’m saying that weight is a particularly poor indicator of health and that you should care about your weight a lot less. Especially care less about other people’s weight.

m_jrv120009t2

Not only are predictions of a looming obesity crisis based on nonsense maths, they’re based on nonsense science and reported by a nonsense press. The press are incapable of holding people with a shiny pdf and a slick press release to account. Because of this its all too easy for people to be bullied and for public health (physical and mental) to suffer.

Merry Christmas everyone!

A propos this, I thought I’d also say Merry Christmas.

Thank you for sticking around as this blog’s changed and my output has declined and become more erratic. I still love writing but I’m more cynical than ever before, and it can be easier to get that out of my system on twitter. I was going to post a spirited defence of Love, Actually but I can’t be actually be bothered now, too much food to eat, drinks to sink and friends and family to see. So until 2014 (or until I get bored of my family) have a Merry Christmas and a Happy New Year.

In which the @ONS sends me to the pub

The Office for National Statistics is working to improve its website which is great. One of the big advantages the American blogosphere has is the St Louis Federal Reserve’s data website FRED. It is much easier for them to find useful data. For example, I just spent 30 seconds making this graph. It’s the rate at which people quit their job:

fredgraph

This ease of data access makes it easy to tell stories. You can see the recession marked in grey and the recovery. But you can also see that for all the talk of success in the United States people are still more scared to quit their jobs than even the most pessimistic point of the mid-2000s expansion.

Easy access to data makes it easier to tell stories and to stop politicians and the media misleading you. If anyone says “optimism has returned to the US” I can point to this graph and say “eh, I don’t think so.” The ONS’s website is not easy to use but they’re working on making it easier. I wasn’t sure if I could make the above graph from the ONS data so I tried. Come on a journey with me in which I fail and end up in the pub.

I searched for “Quits” on the ONS which sent me to a 2003 pdf of Job Separations. The term “Voluntary job separation” is the ONS term for quits so I searched for that which sent me to this 2009 pdf on “Economic and Labour Market Review” from which I got this graph:

SeparationsUK

That’s not quite what I want. So I kept digging. About 10 minutes in now. But I’ve got a source Labour Force Survey, great! I google “Labour Market Survey” and go to this page:

Useful

Which isn’t particularly useful. If you search Labour Force Survey on the ONS website you get to a long list of search results but eventually get to this page titled “Labour Market Statistics, November 2013” and this page of 66 different data tables across (for no particular reason) three pages.]

I find the labour force flows tables under supplementary tables. It must have been 30 minutes now. I can’t find quits but I do have separations. Well I say that. What I really have is a combination of people moving from employment to unemployment and inactivity from one quarter to another and a bodge to turn that into this roughly analogous graph. It’s not quits, it’s a separations proxy, but it’s all I’ve produced.

UK Separations

Chris has a good post using the same data set here, showing that it’s completely doable to use the ONS website. It’s just not very much fun. What can I tell you from my graph? Not a lot, I can’t be bothered after all that work. I’m going to the pub.

beer

It is worth pouring an hour of your life into this Adam Curtis piece

While the old institutions that grew up over the past hundred years to protect us now find themselves unable to comprehend or cope with the new systems of power. Politicians, regulatory institutions, intelligence agencies, the mainstream press, the police, the BBC, the colleges of academia- all of them, as McClure said in 1903:

They do not understand

And cut off from the real power struggles – these old institutions are starting to prey on each other. Leaving us both confused and undefended.

One newspaper editor writing about the loss of the independence of the farmers a hundred years ago summed up the new system: 

“The farmers farm the land, and the businessmen farm the farmers.”

Maybe today we are being farmed by the new system of power. But we can’t see quite how it is happening – and we need a new journalism to explain what is really going on.

 

People who have died a violent death in UK immigration detention centres

Posted without comment.

People who have died a violent death in UK immigration detention centres (*suicide) Siho Iyugiven (27), 5/10/89*, Kurdish, Harmondsworth Kimpua Nsimba (24), 15/6/90*, Zairean, Harmondsworth Robertas Grabys (49), 24/1/00* Lithuanian, Harmondsworth Mikhail Bognarchuk (42), 31/1/03*, Ukrainian, Haslar Olga Blaskevica (29) 7/5/03, Latvian, Harmondsworth Elmas Ozmico (40) 12/7/03, Kurdish, in hospital from Dover Kabeya Dimuka-Bijoux, 1/5/04, DRC, Haslar Sergey Baranyuk (31) 19/7/04*, Ukrainian, Harmondsworth Tran Quang Tung (35), 23/7/04*, Vietnamese, Dungavel Kenny Peter (24) 7/11/04*, Nigerian, in hosptial from Colnbrook Ramazan Kumluca (18), 27/6/05*, Kurdish, Campsfield Manuel Bravo (35), 15/9/05*, Angolan, Yarl’s Wood Bereket Yohannes (26), 19/1/06*, Eritrean, Harmondsworth Eliud Nguli Nyenze (40), 15/4/10, Kenyan, Oakington Muhammed Shuket (45), 2/7/11, Pakistani, on way to hospital from Colnbrook Brian Dalrymple (35), 31/7/11. Colnbrook Ianos Dragutan, (31), 2/8/11*, Moldovan, Campsfield Khalid Shahzad, (52), 30/3/12, Pakistani, on train from Colnbrook Alois Dvorzac, (84), 10/4/12. Canadian, in hospital from Harmondsworth Prince Kwabena Fosu, (31), 30/10/12, Ghanaian, Harmondsworth Tahir Mehmood, (43), 26/7/13, Pakistani, Pennine STHF Remembering also Joy Gardner (40), 28/7/93, Jamaican, killed by police while being deported Jimmy Mubenga (46), 12/10/11, Angolan, killed by G4S guards on BA flight (via Close Campsfield)

People who have died a violent death in UK immigration detention centres (*suicide)

Siho Iyugiven (27), 5/10/89*, Kurdish, Harmondsworth

Kimpua Nsimba (24), 15/6/90*, Zairean, Harmondsworth

Robertas Grabys (49), 24/1/00* Lithuanian, Harmondsworth

Mikhail Bognarchuk (42), 31/1/03*, Ukrainian, Haslar

Olga Blaskevica (29) 7/5/03, Latvian, Harmondsworth

Elmas Ozmico (40) 12/7/03, Kurdish, in hospital from Dover

Kabeya Dimuka-Bijoux, 1/5/04, DRC, Haslar

Sergey Baranyuk (31) 19/7/04*, Ukrainian, Harmondsworth

Tran Quang Tung (35), 23/7/04*, Vietnamese, Dungavel

Kenny Peter (24) 7/11/04*, Nigerian, in hosptial from Colnbrook

Ramazan Kumluca (18), 27/6/05*, Kurdish, Campsfield

Manuel Bravo (35), 15/9/05*, Angolan, Yarl’s Wood

Bereket Yohannes (26), 19/1/06*, Eritrean, Harmondsworth

Eliud Nguli Nyenze (40), 15/4/10, Kenyan, Oakington

Muhammed Shuket (45), 2/7/11, Pakistani, on way to hospital from Colnbrook

Brian Dalrymple (35), 31/7/11. Colnbrook

Ianos Dragutan, (31), 2/8/11*, Moldovan, Campsfield

Khalid Shahzad, (52), 30/3/12, Pakistani, on train from Colnbrook

Alois Dvorzac, (84), 10/4/12. Canadian, in hospital from Harmondsworth

Prince Kwabena Fosu, (31), 30/10/12, Ghanaian, Harmondsworth

Tahir Mehmood, (43), 26/7/13, Pakistani, Pennine STHF

Remembering also

Joy Gardner (40), 28/7/93, Jamaican, killed by police while being deported

Jimmy Mubenga (46), 12/10/11, Angolan, killed by G4S guards on BA flight

(via Close Campsfield and Alex Marsh)

Everything you never knew you wanted to know about Islamic Central Banking

iran.

This is cool! [1] Hassan Rouhani talking about monetary policy? Could I be any more excited? No.

Despite inventing zero, arabs have no use for it, [2] at least not when it comes to central banking. Lending money at interest is haram in Islamic finance so the use of interest rates to control demand as is normal in the west doesn’t apply. So does this also means that unlike in the UK and the US there is no danger of interest rates going to zero and the economy entering the liquidity trap?

Most reporting on Iran focuses at its very high inflation but nobody is paying much attention to the tools used by the central bank. This is understandable, inflation has skyrocketed and the central bank has no independence and is controlled by the Iranian state. My rhetorical question is largely irrelevant at the moment, but if we look at the tools Iran’s central banks uses the question is likely “yes”. I think we should look a little at the tools of Islamic central banking anyway as they give us a window into a world of central banking with interest rates or a zero rate problem.

To begin, a little history. The first Islamic savings bank was established in Mit Ghamr in 1963 by Ahmad El Najjar, an economist. In the 1960s Nasser was trying to modernise egypt and so the bank kept secret its overtly Islamic nature. Riba – charging interest – is haram so the saving bank operated on a profit share basis. Today, the much larger Islamic finance industry – in 2011 $1.357 trillion of shariah-compliant assets existed globally – has a variety of alternatives to charging interest.

Islamic finance seeks to avoid unearned income, which is seen as exploitative. Instead of lending money and charging interest, which is seen as just transferring risk, risk is shared through a variety of mechanisms; as profit sharing (Mudharabah), safekeeping (Wadiah), joint venture (Musharakah), cost plus (Murabahah), and leasing (Ijar). This can be illustrated with an example: Unlike in western finance a mortgage transaction does not involve interest payments. Instead the bank would arrange to buy the house from the seller and sell it on to the buyer at a profit with payments arranged as installments.This arrangement is called Murabahah and is the most relevant for our discussion of central banking.

Sukuk is also an important concept too. This is similar to a bond in which interest is regularly paid on a principal. However, because riba is haram in Islam it cannot be structured like this. Instead sukuk imply a transfer of ownership and can look like a form of repurchase agreement. You agree to repurchase something at a certain price over a certain period of time. This echoes previous posts of mine of what saving really is. Interest rates are just symbolic, what is really happening is people buying durable things today with an expectation they will be able to sell them on for more in the future. Interest rates are our way of expressing that, Murabahah or Sukuk are another. The latter seems clearer and more honest on the mechanism actually.

(At this point, I do want to point out to all the snooty economists, engineers, mathematicians who mock post-modernism…who’s laughing now?)

So what does all this mean for Islamic central banking? The most prominent method of controlling monetary policy is the control of the profit rates allowed by banks when they lend, the Mudharabah discussed above. Anything from an 18% to 20% on non profit-and-loss sharing arrangements, and slightly lower on profit-and-loss sharing arrangements. In a country shrinking around 5% a year finding a 20% return implies a high rate of nominal GDP growth which is split between negative growth and even higher inflation.

We can see that the implied maximum profit rates require very high growth in nominal incomes and we also see very fast growth in the monetary base. Entering into a profit-and-loss agreement will guarantee you a high nominal return in a low growth environment and monetary growth is high to accommodate these contracts. There is no reason however that the profit share cannot be set to a lower number. This would amount, via the Kalecki equation, [3] to a monetary tightening and NGDP and inflation would both have to decrease to accommodate this lower allowable rate of profit. Weirdly a shrinking of the nominal profit rate could increase it in real terms. Money is weird.

This piece from Cato, caveat lector, says that Iran stopped publishing information on its money supply in March 2011, at the time they showed continued very rapid growth in the money supply. If Rouhani has changed this that’s great. The country’s monetary policy at the moment is chaotic but once the chaos fades it will be useful to bear in mind how Islamic monetary policy works. The details in this post are broad sketches only. I took lots from these documents [12345] and I’m not sure of their quality. This is an area where I don’t even know anyone who might know an expert, so any input in the comments or on twitter is welcome. Likewise please share this as this might get picked up by someone better informed than me.

_____

[1] Yes. Cool. You’re here aren’t you?

[2] Yes. Persian or Iranian is more appropriate but I’ve been looking for a chance to use that line since I drafted this post months ago. UPDATE: As Lorenzo tells me, actually the Indians invented zero as a concept, the Arabs were miles behind. More here.

[3] I’m making the Kalecki equation  [1, 2, 3] do some heavy lifting here, but I think that’s right…