The budget part one

It is budget time.
Not for the first time I would like to emphasise  the budget balance is not as important as the state of the economy.
Hence I am pretty much in agreement with ROSS GITTINS on what to do in the short term.

In the medium term I would implement most of HARRY CLARKE'S  suggestions.

As JOHN EDWARDS points out 4/5 of the problems of the budget deficit is because of revenue and this is where most of the 'improvement' in the budget is coming from with this government

Tonight we shall find out.

Puccini O mia babbino caro

Quite easily the best live version I have ever seen of the greatest aria ever written . Also possibly the best song Puccini has ever written and he wrote a lot

This lady has a sensational voice. The song and voice makes shivers go down your spine

Enjoy

Bravo Bravo

Around the Traps 8/5/15 UK Election edition

It is time for Around the Traps again.

Aussie,Aussie,Aussie,Oy,Oy,Oy

• Ross Gittins on no-more-shortcuts-to-budget-surplus , jobs-matter-more-than-balancing-budget , two-speed-economy-has-gone-away
• John Quiggin on going-early
• The Political Sword on the-saga-of-billy-gordon
• The Kouk on get-set-for-falling-house-prices-there-s-a-property-glut , the-rba-catches-up-with-the-invention-of-the-wheel-and-soft-economic-growth , masterchef-vs-master-economist
• Mark the Ballot on not-lot-to-report
• Kevin Bonham on poll-roundup-end-of-newspoll-as-we-know-it , do-proposed-senate-reforms-advantage-the-coaltion
• Nick Gruen on overton-window-overton-juggernaut-part-one , overton-window-overton-juggernaut-part-two, overton-window-overton-juggernaut-part-three
• Oliver Hartwich on all-that-glitters-is-not-a-golden-visa  Thanks Jim Rose
• Greg Jericho on will-joe-hockey-use-the-budget-to-stimulate-a-stalling-economy
• Bill Mitchell on Australian labour market
• Andre Elder on the-blind-spot
• Craig Froome on how-will-the-reduced-renewable-energy-target-affect-investment

Northern America

• Kruggers on us-external-debt-a-curious-case, explaining-us-inequality-exceptionalism , the-fed-does-not-control-the-money-supply
• Tony Yates on more-on-uk-austerity-responses-to-krugman-wren-lewis-and-others
• Edward Lambert on initial-claims-5-5
• JP koning on is-this-us-dollar-in-midst-of-longest-Wile-E-Coyote-moment Thanks Mark
• Menzie Chinn on trade-headwinds
• Mark Thoma on foreclosures-fueled-racial-segregation
• Elizabeth Kolbert on gop-war-on-science-gets-worse Thanks Mark
• Timothy Taylor on breakdown-of-us-corporate-profits
• Calculated Risk on demographics-are-now-improving , employment-report-comments-and-graphs
• Dave Altig on all-eyes-on-the-consumer
• Menzie Chinn on april-employment-situation-revisions-energy-extraction-manufacturing

Europe

• Simon Wren-Lewis on uk-election-it-was-mediamacro-wot-won-it , the-independent-union-and-utter-nonsense, the-imf-greece-and-economic-reality , when-to-go-to-bed-tonight , h-what-lucky-man
• Antonio Fatas on the-greek-drachma-is-back
• Stephen Morey on uk-election-prediction-this-weeks-result-wont-reflect-the-voters-will
• Chris Dillow on the-voter-turnout-paradox, why-i-voted
• Michael Reddell on greece-not-exporting-its-way-out-of-trouble
• Progrowth Liberal on osborne-economics
• Jim Rose on two-booms-two-depressions-british-and-irish-real-gdp-detrended-1955-2013
• Brad De Long on highlighted-optimal-control-and-fiscal-austerity-the-awful-record-of-the-conservative-liberal-democrat-government-in-britain
• Kruggers on british-sovereign-risk-2010
• Leo Barasi on the-strange-case-of-the-converging-election-polls , the-pollsters-have-to-show-they-take-this-disaster-seriously
• Bill Mitchell on Latvia, the miracle of the 10% population shrinkage
• David Andolfatto on austerity-in-uk

Asia

• Steve from Brisbane on china-and-drug-use
• Dani Rodrik on the-war-of-trade-models  Thanks Mark
• Brad De Long on the-debate-over-the-tpp
• Menzie Chinn on guest-contribution-asia-games-not-zero-sum

Wonk

• Noah Smith on wonks-give-up-on-economic-model-to-explain-everything
• David Andolfatto on understanding-lowflation
• Nick Rowe on why-cant-central-banks-monetise-something-else
• Tony Yates on more-on-john-taylors-vs-bernanke
• Kruggers on veg-o-matic-egonomics
• Carola Binder on firm-balance-sheets-and-unemployment-in-the-great-recession
• Galina Hale and Alexej Phillipov on inflation-targeting-advanced-developing-countries Thanks Mark
• David Glasner on cluelessness-about-strategy-tactics-and-discretion
• Timothy Taylor on global-income-inequality-in-decline , some-international-minimum-wage-comparisons , social-costs-of-financial-sector
• Barkely Rosser on was-there-ever-really-big-tradeoff-between-equality-and-efficiency
• Simon Wren-Lewis on was-anti-austerity-policy-politically-possible-in-2010
• Sanwichman on decisions-decisions
• Liam Delaney on how-paternalistic-should-policymakers-be
• Robert Waldmann on modern-macroeconomic-methodology-modern

 General

• John Holbo on were-the-nazis-right-wing-or-weimar-culture-the-insider-as-outsider
• Doverbeach on the poison of subjectivism by CS Lewisdoodle  , Is God a crutch
• Daniel Little on positive-organizational-behavior Thanks Mark
• Jed Lea-Henry on why the Armenian genocide matters
• Babette Francis on When will Turkey apologise for the Armenian genocide
• Ismael Seneca on economic-reforms-for-tunisia-in-2015-and-beyond
• Lord Keynes on debunking-marxism-101

Climate

• Steve from Brisbane on battery-power-revolution, slow-science
• and then there's Physics on the-impact-of-the-hiatus , tolerably-tepid , arguing-about-2-degree-c
• Hotwhopper on christopher-moncktons-latest-conspiracy-theory , uah-latest-beta-version-shows-lower-troposphere-has-been-warming-up
• David Appell on heat-changes-due-to-uahs-new-dataset
• Dana Nutticelli on overlooked-evidence-global-warming-may-proceed-faster-than-expected
• John Quiggin on is-powerwall-good-for-coal-and-nuclear , flogging-the-dead-horse-of-nuclear-power
• Kenneth Lee on ocean-and-climate-research-has-come-a-long-way-in-thirty-years
• Brave new climate on environmental-and-health-impacts-of-a-policy-to-phase-out-nuclear-power-in-sweden
• Skeptical science on pause-needed-in-global-warming-optimism
• Rabett run on 2-3-0-or-why-natural-sources-and-sinks ,why-jim-hansen-worries
• Science of doom on clouds-water-vapor-part-eight-clear-sky-comparison-of-models-with-erbe-and-ceres
• Rose Hackman on arctic-ice-retreat-scientists-climate-change
• Robert Stavins on assessing-the-energy-efficiency-gap  Thanks Mark
• John Cook on Ask-Me-Anything-Climate-Science-Denial

Andrew Gelman ( Mainly stats)

• forget-pdf-looks-much-better-makes-papers-look-like-kids-crayon-drawings-comparison
• a-causal-inference-version-of-a-statistics-problem-if-you-fit-a-regression-model-with-interactions-and-the-underlying-process-has-an-interaction-your-coefficients-wont-be-directly-interpretable
• criticism-criticism-criticism
• a-question-about-physics-types-models-for-flows-in-economics
• what-i-got-wrong-and-right-about-econometrics-and-unbiasedness
• Kaiser Fung on story-time-known-unknowns-and-the-endowment-effect-in-an-hbr-article-on-customer-data

Genial Dave Giles ( Econometrics)

• on-invariance-of-mles
• Mark the Graph on using-python-statsmodels-for-ols-linear-regression
• Marc F  Bellamare on You keep using that instrumental variable  Thanks Mark

Dianne Coyle (Quirky and Book Reviews)

• what-should-rule-the-world-after-gdp , its-the-power-stupid , why-havent-economic-statistics-improved
• Jim Rose on book-review-modernity-britain-opening-the-box-1957-59-by-david-kynsaton , book-review-seasons-in-the-sun-the-battle-for-britain-1974-1979 , book-review-crisis-what-crisis-britain-in-the-1970s
• Brad De Long on richard-thaler-misbehaves-or-rather-behaves
• Frances woolley on unbundling-the-ba

Vox wonk

• making-japan-place-where-women-can-shine
• common-sense-financial-crisis
• chinese-outwards-mercantilism-art-and-practice-bundling
• bribery-and-firm-performance-new-evidence
• son-preference-and-indian-child-malnutrition
• beyond-economic-voting-happiness-and-elections
• income-inequality-and-citizenship
• runs-opaque-markets-panic-1907
• strategic-under-reporting-banks-risk
• missing-piece-emu-puzzle
• labour-power-sets-neutral-real-rate

Negative Gearing

Given it is budget time negative gearing is in the news with some advocating it should be abolished for investing in property.
I beg to differ but first what is negative gearing? ( I should note most people from overseas need to told what it is as it seems very much an Aussie thing to do.)
It is THIS. Note however this is only for Australia. This is what Wikipedia says generally HERE.
Interesting eh!
So a person borrows money and pays out more in interest than they get for their return on the asset. Brilliant financial strategy. How many companies have adopted this? None!

Negative gearing changed a lot when the taxing of capital gains changed which has induced a lot of wealthy people to invest in property to reduce tax as SAUL ESLAKE outline in a very interesting speech.

Abolishing negative gearing on property makes little sense. why only on this asset class? Why not shares?

Way back in 20003 the RBA thought a good examination of depreciation in relation to property investments was worth a good look rather than the cutting back of negative gearing. I concur.

I do wonder why one can claim interest borrowing can be claimed against ordinary income and not just capital income.


Yeah yeah I should have added it is more likely an investor negatively geared will be looking at capital price increases rather than yield so lookout if prices level off let alone fall!

In what sense were the Nazis socialist?

This is a perennial question asked about the Nazi party in post war Germany. Were they a right wing party or simply another socialist party dressed in a different garb?

John Holbo writes a lengthy tome on this. Really interesting stuff.

Tamino hits the pauseists' for six

Tamino has a wonderful blog if you are interested in climate change.
He possesses a vast understanding of statistics and uses it to full effect.
He has challenged whether there is a pause or not in world temperatures.
In THIS article he slams any argument for pause for six.
He does more statistical tests on world temperatures than I have had hot dinners. He even excludes recent temperatures.

After doing all this he find no evidence whatsoever that there has been a pause in rising world temperatures.

Thus if you do not believe that world temperatures continue to rise you are either a blithering idiot, you do not understand statistics or you are a blatant liar!

Update
Here is and then there's Physics

Sinclair Davidson caught out AGAIN!

It was a wet weekend in Sydanee so I had plenty of time on my hands and at some stage on Saturday I linked to THIS article by Sinclair Davidson on Catallaxy.

Sinclair was obviously STRONGLY implying that Fairfax media was adopting the same tactics on tax as the Large mining companies and others such as Google. Microsoft Apple et al in minimising their tax rates.
Fairfax has an effective tax rate of 15.78% and He compared that to the 20.2% of Apple.

Wow I thought I did not know that Fairfax had the foreign branches , subsidiaries etc to engage in TRANSFER PRICING and other things. One Mining company apparently does all its marketing out of Singapore.
So naturally I looked at the Fairfax media ANNUAL REPORT.

The key table is  on page 92 of the  PDF.

Note a few things:

• It is very transparent
• Fairfax actually shows not only how much tax it would pay at 30% but why the tax it pays is smaller than that.
• Fairfax only has New Zealand as another country it has companies in. It is not known as a country for minimising tax
• The largest reason its tax bill was at 15.78% was capital gains not taxable. This had little to do with transfer pricing or any other vehicle used for dodging tax. It has a lot to do with managerial incompetence however.

So why would he imply what he has?

Perhaps he cannot read annual reports after all he cannot read either budget documents or ABS publications. I think we can rule this out however as to get the 15.78% figure you have to read the page I have spoken about. Even if a person doesn't understand what capital gains not taxable means  it is still pretty easy to see Fairfax has not indulged in any sort of transfer pricing or use of another country to minimise tax.

Perhaps he can but knows his audience cannot understand the above and will be inherently too lazy to examine the Fairfax annual report and thus he can make any accusation he wants to. He has form on goebbelsising and so he can allege anything he wants to.

He doesn't have a reputation to damage given his 'contributions' at Catallaxy and we have seen in the past he uses material that is inaccurate, misleading and thus plain wrong and just like this example it isn't hard to show that.

It is very very sad!