Archive for the ‘Random’ Category

More Brexit planning assumptions

December 21, 2018

Man looks at unicorn and remains unconvinced

We have been asked for some further planning assumptions to go with the original set.  These are given below.

Asset prices

The optimistic assumption would be that Brexit does not happen or happens in a way that is not harmful so some of the correction is recovered from what had been priced in on that account.  So say a loss of 10%.  And the middle option would be 20%.

Investment performance

The most optimistic figure that has been canvassed is 3.5%, but this is surely too optimistic in the circumstances.  Say 3%, with a middle figure of 2%.


The question here is really what the difference between inflation and interest rates will be.  The BoE forecasts suggest a real interest rate of around -2%, as at present.  To be more scientific, real interest rates are currently something like -1.75% (0.75% Bank Rate – 2.5% inflation).  The BoE forecasts tend to imply a real interest rate of about -2%, but it would depend on how the rate was adjusted to counter inflation.  Say -2.5%/-2%/-1.5% for pessimistic/middle/optimistic.

As for inflation itself, the optimistic forecast would be that MPC manages to hold inflation to say 2.5% over the period, giving overall inflation of 13%.  So we take 22% as the middle point.

CS Pension

There seems to be no room for variation here.

State Pension

If one assumes 2.5 % inflation then the only room for growth even under the ‘triple lock’ would be if earnings rose faster than inflation.  The latest ONS figures show essentially no real growth in earnings over the period from 2005 (!), so one cannot expect any real increase there either.

Tax rates and allowances

Hard to see any room for giveaways here!

> 60 concessions

Too make things easy for ourselves, we assume that in the optimistic case these survive for the next 5 years, while in the middle case half of them do.


Table of assumptions (unless otherwise stated in real terms and for period 2019-20 to 2024-25)


The pessimistic scenario reflects a coherent view of unmediated Brexit plus asset price correction while the optimistic scenario also reflects a coherent (but unlikely) outcome where Brexit is rendered harmless.  It is hard to give such a definite interpretation to the middle scenario and as such it should be treated with caution.

The treatment of tax and pension changes  as proxied by >60 concessions is very likely insufficient–at the very least, one could consider allowances as being constant in nominal terms, thus reducing in real terms.

The present treatment also implicitly assumes that things remain as they are for the remainder of 2018-19, which is certainly open to challenge.


Planning assumptions for Brexit and after

December 17, 2018


Having grown tired of insomnia, our client has now fled the Civil Service and hopes to avoid starvation by a combination of his investments in bonds and equities, a Civil Service Pension (soon) and a State Pension (not so soon).

He writes:

Meanwhile, I need to make some concrete plans without knowing exactly what is going to happen around Brexit and indeed asset price correction generally. I would like some planning assumptions–the idea is to give a solid basis for planning on the basis that things should not realistically be worse than this.

Our advice is as set out above.  We draw on on the Bank of England forecasts.  These have been criticised on the grounds that:

i)  they take no account of any policy response;

ii)  they are phenomenological, based on observed correlations more than causal modelling.

The point about a policy response is that it can spread the effect out to different times or different people but cannot in general create value from nothing.  So this is really a question of distributional effects–who gets how much of the pain and when–rather than the quantum.

As for correlations, there are times when you need to produce numbers and don’t have time to model the economic universe in detail.  The effect size claimed is similar to that of the credit crunch of 2007/08, which is the nearest–if hardly most similar–comparator.

In summary, our advice would be to look not so much towards the destruction of value (something between significant and staggering) to be expected over the next year but at the effect changed circumstances might have on the revaluation of pensions.

Taking a rather more short-term view focused on the immediate future, our client says:

Applying this set of assumptions to my circumstances, I come to the conclusion that I would lose money that I can afford to lose, which is irritating but no worse than that.

There’s nothing like a satisfied client!  But we can hardly say we have always been in the Brexit loop.  On our first encounter, we took three days to work out what it was, and a further two to decide it could hardly happen.

This analysis has now been extended here.

Recommending a dictionary

December 14, 2018


We were asked by a Russian contact to recommend an English dictionary. I think I would plump for the Concise OED.

Naturally enough, both dictionaries of American English and dictionaries for learners of English are beyond my ken.  A very long time ago (probably before I left school) I got myself a Concise OED.  When I had worn that out I got a copy of the Chambers dictionary (in 1989) on the grounds that it had more words.  The corresponding Wikipedia article has a different opinion, but as they say it depends on how you count entries.

Anyway the single-volume candidates that a native (but non-specialist) English speaker would use seem to be the Concise OED and the offerings from Collins and Chambers.

I had a look at what was available in the shops today.  As for new words, the Concise OED had entries for hashtag and flashmob (as flash mob) while the Collins Reference dictionary didn’t (although it was published later).  It also had something useful to say about the stressing of controversy, while the  Collins Reference didn’t do pronunciation at all.  The large Collins was covered in cellophane while there was no sign of the Chambers.

Back home, I was able to compare some bits of the large Collins and the COED on Amazon.  The Collins annoyed me by including encyclopedia-style entries, which I don’t like, while for  the terms aorist and accusative the Collins tended to flap around giving examples while the COED gave concise, pointed definitions.

While I can’t judge how up-to-date the Chambers is on the basis of my 1989 copy, the definitions of aorist and accusative there are a lot better than the ones in Collins if not quite as good as the Oxford ones.

In general terms, I think that the Oxford dictionaries:

i)   have the most systematic infrastructure for capturing new words and usage;

ii)  have the best definitions and etymologies. (In fact I think that in many cases they have the natural definition since they were there first and other dictionaries have to work round it for reasons of copyright or at least embarrassment);

iii)  are taken as the default in libraries and schools.

So in general you would take the suitable size Oxford dictionary as your default and look to something else only if you had particular needs.  The Concise OED also happens to be cheaper than the other candidates.

Turning now to the Internet, if you’ve got a word that refers to something reasonably definite and you’re dealing with widely-used languages (like English and Russian), your best bet is often to turn to Wikipedia where you can see a picture/chemical formula/mathematical definition/Linnean binominal and compare what the corresponding articles say in the two languages.

Nowadays, if I find that I don’t know an English word it tends to be something I can either look up on Wikipedia or find in the Urban Dictionary.  And there are also resources like OneLook that will search the free online versions of numerous dictionaries for you.


Perm-36 at Pushkin House

October 4, 2018

This film looks very interesting, especially if you have visited the site as it used to be.  Aleksey Kamenskikh says:

It’s a brilliant film! Its author is my friend Sergei Kachkin.  The film itself is not about “politics at present”, it’s theme is “past perfect” of the museum: in 2013-14 Perm-36 was invaded by a pro-governmental group, its conception was radically modified. 

Sergei himself adds:  well, everything is politics and yes, Aleksey is right, my film is not about politics, let’s call it this way – about a human inviroment in nowadays Russia.

I will certainly be going along to this.  Event details are here.

Update:  there will also be a screening at QMUL the following day.  It seems as though you can also stream it on Amazon: 

In Search of Pavel Filonov

March 31, 2018


So when Tanya from Vologda kindly sent me a listing of the most popular Russian painters  to talk about, I was impressed by Filonov’s Udarniki (or Shockworkers) as shown above.

Some time later I thought I would buy a reproduction to hang on my wall.  Putting some combination of filonov and udarniki plus one of price print reproduction into Google did not yield anything.  But I did find out that the work was apparently also known as Eleven Heads.  

Searching with that title showed that you could buy reproductions on, but only framed versions could be sent to the UK.  That sounded expensive and inconvenient. So then I decided to see what might be available from Russian sources.

There turned out to be a variety of Internet shops selling reproductions of this picture and on the whole they expected you to collect though they could also deliver within the boundaries of Moscow or St Petersburg or possibly in the extreme case to the rest of Russia.

What most impressed me was the offering from Ukraine:


They had decided to turn it from portrait into landscape by chopping most of it off–a novel idea, one might say.

All seemed lost.  Then I thought of searching for an image rather than a name (in whatever language).  Putting the first image above led to discovering it was available from a place in North Shields called Spiffing Prints in a variety of sizes and finishes, under the name of Blue Faces.

Extreme patriotic excitement!

So I’m trying that.  The moral seems to be that if you are looking for an image you should search for an image and not guess at words…

What is this nonsense?

November 19, 2017


Following our earlier discussion, the BBC has published an article on the financial benefits of a university education, with some results as shown above.  But it’s difficult to know what to make of it, since they don’t say anything about data or methodology or (perhaps more realistically) give a link to where these questions might be covered.

Questions which are not answered include what data are they using, what years are they covering, what is the definition of these subjects, what students are they covering.

What data are they using?

The real question is income data.  If it comes from self-report, then you will get low coverage and also inaccurate answers.  If it’s HMRC data, then you might also get some regrettable inaccuracies and omissions and you will miss foreign students and UK students who went abroad after graduation.  There’s also a question about what coverage you get of UK students who don’t take out student loans.  The work is ascribed to Dr Jack Britton from the IFS and there is a recent IFS study that covers similar ground.  Perhaps it’s the same data…the same years…whatever.

What years are they covering?

Search me.

What is the definition of these subjects?

It is hard (for me at least) to work out the coverage of Medicine & Dentistry, Nursing, and All Medicine.  I suppose that All Medicine does not enter into combined, but you never know.  Then you could ask whether Languages is just Modern Foreign Languages, or does it include Classics, Welsh, Irish, Linguistics…and so on…

What students are they covering?

At a guess, it might be UK-based students who have done first degrees at UK universities and who can be followed up.  But then in some subject areas many of them will have done higher degrees and a PhD would probably depress earnings at the 5-year mark.


Finally, the figure above is interesting for its inclusion of the Open University, whose students may well be different on entry and retired on exit…

The value of adjectives

October 31, 2017


We apply our previous methodology, using the Indeed site that allows one to search for job postings according to particular keywords in a particular location and gives a summary in terms of numbers and estimated salaries. So we can compare these results for postings containing various adjectives popular in advertising, as shown above.

We see that more than a third of the jobs are exciting and more than a quarter are fantasticStunning and amazing are very close in meaning and in salary too.  Groundbreaking is rare but commands a massive salary premium while innovative is also well paid (but creative may well be a noun in some of these ads).

Lovely is the Cinderella here, both unpopular and ill-paid, as befits a word that belongs to human beings rather than advertising.


On disobedience

October 28, 2017


Fascist Italian police tired of growing their bellies demand your passport.

The management decide you can take on new staff as consultants rather than employees.

The boss decides you can take on his daughter, just because he says so, and she gets employee rights.

A hotel-keeper demands to see your passport just because she feels like it.

Your new employer sends you some demeaning documentation to fill in after you have conscientiously requested the contract terms before joining in the first place.

So, what to do?

I suppose as ever the things to do are keep calm, run through the options, realise what your objectives are, realise that it is you that you have control over, but first of all do not obey.

Do not obey

They want you to obey now, grieve later–when it’s too late.  But you can ask:

i)  what the requirement is exactly;

ii)  what the justification is;

iii)  for the points above to be put in writing;

iv)  for relevant rules/codes/enactments to be cited.

The demands on skills in logical reasoning and literacy may well be enough to defeat senior management, at least for a time.

Keep calm

If the enemy can reduce this to a direct conflict, they can pull rank and also accuse you of being irrational, irresponsible, unreliable, female…Let them explain why what they want is a good idea–they’re normally keen enough on the sound of their own voices–and help them to become thoroughly enmeshed in a paralysing mass of fabrications and contradictions.

Know your objectives

In a just world, your presentation of the facts should lead the enemy to a full realisation of their unworthiness and hence to death by self-castration.  /in fact, what you can aim at is them whingeing and whining and kind-of forgetting about it with an infantile display of ill-grace.  And that’s the triumph you’re aiming at.

You have control over yourself

Not over them.  Nor are they going to crawl away and die–they got where they are by shamelessness, treachery, bullying, and disregard of all decent principles.  Focus on your objectives.  Make it easy for them to whine and forget by suggesting a way out.  But a record in writing that they cannot wish away is also a good thing.


What they want you to think–but we know better








That looks interesting too…

October 27, 2017


Some more things to remember not to forget:

The Bathhouse:

Mark Bebbington plays John Ireland:

Angela Brownridge:

Bruckner Symphony No.8:

On valuing non-financial outcomes

October 25, 2017

We learned some interesting things about valuing outcomes from a talk about a Pro Bono OR project at a community centre in Chester-le-Street, County Durham today:

Equivalent value–the cost of an alternative activity that a beneficiary could have paid for in order to achieve the same outcome.

Contingent value–the self-reported value of an outcome by a beneficiary.

Revealed preference technique–the total cost to a beneficiary of attending an activity, including hidden costs such as childcare, clothing, equipment and travel, even if these things cost the beneficiary nothing.  [Even if no monetary costs fall upon the beneficiary.]

Travel cost method–an implicit method where the beneficiary indicated how far they would travel to obtain the same outcome.  The value is how much it would cost to travel this distance.

National surveys–the Family Resources Survey (FRS) or other national surveys indicate how much familes spend on average for certain activities/outcomes, which can be used as a value for a given outcome.