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Here are some economic trends I think are important.

Globalisation -

a) ability of goods and services, capital and people to move anywhere in the world

b) technology transfers from rich countries to poor countries that allow firms in poor countries to mass produce products for sale to rich countries or each other

Automation

the ability of machines to perform tasks with out human control or physical effort - ranging from simple automated production processes through to more complex processes requiring manipulation and processing of data during the production process in order to produce a final good or service

Betterment

The ability of an automated process to have access to the best control systems, the best information, the best expert system or the best design of outputs through the use of non-rivalous software.

Western Productivity

The slow and slowing growth in how much valuable work people can do in rich parts of the world.

Aging

The average age is increasing almost everywhere. In poor countries this is largely because children are living in to adulthood more often. In rich countries it is because adults are becoming old more ofren. Everywhere the demographic pyramid is becoming more of column with equal numbers of people in each age band.

Enrichment

The poor are becoming less poor. Global Income Inequality is falling. Many poor countries are getting richer and many, many poor people in poor countries are getting richer. By 2030 there will probably be as many people in China who earn more than the average European wage than there are people in Europe.

Energy Prices

A world with abundent, cheap, clean energy is a very different world to one with shortages of energy and energy that is expensive or polluting. Personally I think we're about to enter a long period of steady reductions in energy prices and steady improvements in the amount of energy available and the cleanliness of that energy but I could be wrong.

Climate Change

We're already released so much carbon dioxide in to the atmospher that we are already going to have significant climate change. Change presents opportunities and challenges but I think globally rather more challenges than opportunities come from climate change.
 
 
 
 
 
 
Some quick throughts on Trumps first 100 days proposals. He should strike fast before House Republicans remember that they hate him.

http://www.npr.org/2016/11/09/501451368/here-is-what-donald-trump-wants-to-do-in-his-first-100-days

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For those of you watching in black and white the pound is now at its lowest level against the US dollar in 31 years, trading this morning at $1.2757.

That's below the value it touched just after the EU Referendum result.

This isn't a result of Brexit. This is a result of us *talking* about Brexit. My guess, for what its worth, is that if we ever get round to actual Brexit we'll see the pound worth more or less one US dollar. Its high over the last twelve months was 1.55. Dollar parity would see the pound worth 2/3rds of its value a year ago.

You'll start to see this in inflation figures over the next few months. The next Bank of England quarterly inflation report is due on the 3rd of November and this will be the first one where the whole period is after the referendum and the fall in value of the pound. Anything that is imported, anything where large parts of the components are traded in dollars and anything involving lots of oil will get more expensive.

The FTSE 100 share index, made up of large multi-national firms, so not really a great measure of the UK economy, rises to a near record 7,000 points. It is traded in pounds. In dollars, it's down 2% this year. Basically people with dollars are taking their valuable dollars and buying cheap pounds to buy shares in FTSE 100 companies at a bargain. Apply the same logic to other UK stock indices.

If you are able to negotiate yourself a payrise now might be the time to start. Or if you're a pensioner with a triple locked pension and investments in the FTSE 100 sit back and crack open a bottle of English sparkling wine.
 
 
 
 
 
 
This post was written before this weekend but not posted as I've been away from keyboard.

Autum is upon on and in time honoured tradition it is time for my much loved Strictly Come Dancing blog - the blog where psephology dress in tails and forecasting executes a slow Samba role. After an initial "But who are these people?" unpromising start the inclusion of Ed "Glitter" Balls and a record breaking opening week mean that Strictly this year is shaping up to be classic.

Usually I like to do my first predictions before the first week of the dancing and then revise them after I've seen them dance but a genuine lack of knowledge about some of the contestants and my deep imperative to comment on the Labour Leadership election between two obscure backbenchers no one had ever before meant that I didn't.

This is the first year in which the first round of scoring has seen no couple score less then 20. Initial quality of dancing has been high and pretty even. I think this year's competition will be much more open than previous years.

Anastacia and Brendan

Anastacia is genuinely a global superstar, if you live in the 2000's and listen to a different genre of music from me. She'll be pushed by the ever competative Brendan "Hot" Coles. Her Cha-cha-cha was well received with 28 points putting her in 5th place on the leaderboard. Does she have the combination of stunning dance moves and heavy weight lovability to get to the final. I think not - she'll fight through to the closing stages but will be eliminated before the final.

Claudia "Just Dance" Frangapane, is the smallest and youngest and most gymnastic of the this year's contestants and the most reminiscent of Chelsee Heeley. She is paired with new dancer AJ Pritchard. Rightly marked down by Head Judge Len for her unwarranted gymnastic interludes she managed a creditable 8th. It's difficult to comment on the abilities her partner brings to the show but my general rule in Strictly is don't bet heavily against Olypians. They are popular with the public, know how to train and have a determination to win. Unless they are Victoria Pendleton, in which case no one loves them. Difficult also to judge the dancing her in amongst the gymnastics. My big note on the evening was that she'd telegraphed one of her tricks very clearly. I'm going to reserve judgement but my gut says, if she can dance a Cha-cha-cha she wouldn't be tumbling.

Daisy "Daisy" Lowe is a model which to be honest isn't a field I've taken much interest in since the heternomative culture of the 1990's told me I should fancy Claudia Schiffer and Cindy Crawford. She's paired with Aljaz Skorjanec, a former winner and a dancer and choreographer I really rate. She topped the leader board with 32 points after a delightful waltz. Before seeing her dance I wouldn't have expected her to make the final. My view is that models aren't all that popular with the voting public. But someone who can dance as well as Daisy has surely got to be in the final. I don't think she'll win but she's my first finalist.

Danny "Flasher" Mac. When I first saw Danny Mac I had an instinctive, irrational dislike of him. Finding out that we was an appearer on Holyoaks only made my dislike of him instictive and rational. Discovering that women of my acquaintance were public prepared to admit to finding him sexually desirable, well, let's just say no one came out of that well. Danny has Oti as a pro-dancer. I like Oti, I think she has potential as a dancer. Their score of 31 for a rather loose limbed cha-cha-cha was flattering but put them in to second on the leader board. Let's see how he does with something that requires him not to smarm. He ought to be a contender for the final with a score of 31 but I don't like him even if he is good so I'm going to put him down to go out a few rounds before the final.

Ed "Glitter" Balls is paired with Katya Jones one of a number of new professional dancers this year. I love him. I salute him. Ed Balls. But he's out of place. By far the worst dancer over the weekend he finished bottom of the leader board on 21. Ed Balls. Difficult to see him lasting beyond the first dance off I suspect we'll next hear of Yvette Cooper's husband when he returns from the wilderness to lead Labour to a stunning election victory in the second general election of 2020.

Natalie Lowe this year is paired with famed ginger jumper Greg "the Ginger Jumper" Rutherford. Despite early problems getting his legs to move slowly and not in a straight line Greg managged a creditable 27 points putting him in 6th place. One again, through a double whammy of being an Olympic athelete and not Victoria Pendleton the Ginger Jumper's staying power should not be underestimated. Easily a contender for the semi-final.

Judge "Judge Not Lest You Be Judged" Rinder. Flamboyant does not do justice to Judge Rinder's Cha-cha-cha. Strangely persuasive also doesn't do justice to his cha-cha-cha. 25 points and joint 10th place with Laura Witmore probably does do justice to his cha-cha-cha. Charisma, entertainment, energy and a celebrity appearance by Benedict Cumberbatch about the time the trailers for Sherlock start appearing will keep him in till the half way mark. After that, he'll be up against good dancers in the dance off. I have to fully own that I do not warm to Oksana for reasons I can not put my finger on.

Laure Witmore. I have never heard of her until Strictly. 10th on 25 points was probably a fair return to opening efforts on Saturday night. Paired with another of the new pro-dancers. I don't see Witmore doing better than mid-table mediocrity.

Lesley "Delorian" Joseph, in the able and long suffering hands of last year's 4th placed Anton de Beke gave a surprisingly moving waltz which I thought was a touch undermarked at 23 and second from bottom. Likely to make it through a few weeks on the basis of being surprisingly not awful.

Louise Redknapp was the whirlwind crush of my generation, the pin up of the early 90's before the Spice Girls and All Saints. Musical and popular and charming she's paired with perhaps the best professional dancer in terms of choreography. I'm not sure she'll win but I'm sure she'll be in the final.

I like Janette Manrarra - she's a another of the professional dancers who takes a three dimensional approach to teaching, and performing with her celebrity. Melvin seems like a jolly chap but I don't think he has the natural affinity for dance that is needed to get much beyond the half way mark.

I quite like Naga Munchetty as a news anchor but she's a bit awkward. A competent opening dance saw her comfortably off the bottom of the leaderboard. Pasha Kovalev has a decent track record of getting his celebrity partners through the rounds but I don't think he's every really gotten someone several weeks futher then they ought to have gone, or done something that changes the game. He's solid but not spectacular as a partner. I predict an earlyish exit once the definate no hopers have been cleared out.

Ore Oduba, of whom I had not heard, was the surprise delight of Saturday night. A good dancer with some charisma I loved his first dance. I immediately thought he'd make it to the final.

Tameka Empson fills the roll of Surprisingly Good at Dancing for a Large Lady this series. Eastenders usually gives someone a good voting base. Anyone who can "surprise" the audience by being a competent dancer whilst overweight and cheerful can coast in to the second half of the series. For a value of coast that involves working really, really hard to get fitter and dance better and remain cheerful.

Will Young and Karen Clifton. If Will Young doesn't win then I will be very surprised. Musical theatre veteran Will is paired up with one of the better professional dancers to form the second power couple of Series 14. He comes with his own fan base. One that I think largely crosses over with Strictly's fan base. Karen has steered some less then awesome dancers to a decent places. Now she's paired up with someone who can actually dance in his own right I expect Will will be straight through to the final and is my pick to win.

So, my predictions for finalists, Will Young, Louise Redknapp, Ore Oduba, Daisy Lowe and Greg Rutherford. I think Will Young will win.

First out, sadly I predict Ed Glitter Balls will be first out.
 
 
 
 
 
 
I have been surprised by energy things over the last week.

Firstly, I'm surprised that OPEC appears to be getting its act together to control supply and therefore increase prices.

http://www.bbc.co.uk/news/business-37502538

I'd largely decided that either (or both) the Saudi's had lost control of the price setting process within OPEC or they were trying something that would take a few more years to either work or not.

The agreed cuts in production are relatively small, and come at a time of fallling demand for oil. Oil, despite increasing sharply in price today is still around the $50 a barrel level. Less than half the $110 barrel recent peak. We've also yet to see if the dirty work of allocating the cuts in production amongst members will happen.

I don't think this changes my general assumption that oil and gas will remain significantly lower than recent highs for at least a few years because OPEC are unable or unwilling to drive up the price significantly. But that assumption is now on the watch list.

Secondly, I've been surprised by how quickly solar generated electricity costs are falling. Record low prices in the Middle East of $23 per MWH or £18 (compared to £50 $65 in the UK at the moment or £100 $130 for Hinkley Point C.

http://blogs.platts.com/2016/09/27/solar-prices-point-to-middle-east-future/

http://rameznaam.com/2016/09/21/new-record-low-solar-price-in-abu-dhabi-costs-plunging-faster-than-expected/

At $23 per MWH solar electricity is cheaper than the gas you would burn in CCGT to generate the same volume of electricity. Which leaves a lot of value left over to build complementary infrastructure like High Voltage DC transmission cables, or storage. It also makes places like the Middle East pretty attractive for high energy intense industries.

This doesn't appear to be a trend only in the Middle East. Latin America (also close to the equator) has seen sharply falling solar prices.

I'm not sure what's driving this. My guess is that solar generation balance of plant costs are falling but I'm not sure why.

My current assumption for solar electricity is that I expected the costs to fall by 1-2% year on year for a decade or two leading to cost parity with other grid sources in good locations over the decade 2020-2030. Looks like I might have to keep an eye on this assumption too. I think there is a virtuous circle operating in solar generation where learning curve effects and economies of scale make marginal production cheaper as total production increases so it could be that solar generation is about to fall more steeply in price than I anticipated.

Thirdly, I'm surprised to discover I might be making a small personal investment in some solar panels of my own so I need to go an remind myself how the Feed-In Tarrifs work.

My assumption had been that as I lived in a ground floor flat in Victorian tenament building in Edinburgh my own personal experience of renewable generation would be limited. Again, one to watch.

So, it's been a surprising week in energy.
 
 
 
 
 
 
My Lovely Wife has been away in Holland on a singing holiday. The Captain and I were left to our own devices for the week. MLW left on Monday morning. We continued to have visitors. BB and one of the Captain's grown up cousins were staying. BB took the Captain to school on Monday and Tuesday and collected him on Tuesday. We headed round to my dad's for tea on Monday after he had picked up the Captain. Sunday saw BB and my nephew going to see a rather good comedy magician called Pete Firmin. He for some reason reminded me of George Formby. Or at least how I imagine George Formby would have been. Had he been a comedy magician. He was entertaining.

We also went to see Chris Turner, a cousin on the other side of the Captain's cousin. As Robin Williams might have put it O Cousin of My Cousin.

http://www.christurnercomedy.com/about/

Chris is a philosphical stand up and freestyle rapper. He makes me think and his show is multi layered and many textured. It also had a picture of the Captain's cousins in the bath.

On Wednesday I went out for dinner with my dad and his oldest friend. Couple of beers in Summerhall then grilled meaty delights in Hanedan's. Good to see my dad's mate.

Grown up cousin left on Tuesday. BB left on Wednesday.

I had many early nights and did about a dozen loads of washing and cleaned the bathroom. The Captain and I went for a ride on our new tag-a-long tandem. It works but it will take some getting used to.

University update - BB has a place at university. Not her first choice despite getting an A* in the subject she's planning to study. Hey ho. She'll enjoy where she's going.

I was very impressed by how quickly and forcefully she reacted to not getting her first choice. It took her less than two hours to sort out a place following what I know would have been a great disappointment to her. When it mattered she executed. I'm very proud of her for all the hard work she's put in and very pleased that it has worked out well in the end.

I watched Deadpool last night whilst MLW was out at choir. It was perfectly acceptable. The actiony bits were action-packed. The promised levels of sarcastic witty banter were wittily sarcastic. The darker tinged plot was tinged a touch darker than I might have expected from a superhero movie. It had a begining, a middle and an end and competently started in the middle, moved to the begining and worked up to the end. I quite enjoyed it.

I feel like I might have missed something. I'm not a comic book fan or a fan of superhero fiction so I'm probably not seeing amusing subversions of the genre or I'm underestimating the appeal of a character I'd not heard of till I saw him on the side of a bus. I fully accept that I may not be the target audience for the film. It provided a good level of diversion and entertainment after a long week Captain Wrangling
 
 
 
 
 
 
For a book related meme - read on.

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There are too few of these things. Here is one.

1. Do you like blue cheese?

I do. I like cheese very much generally. I like blue cheese a lot. Particularly sweeter blue cheese. I am very fond of the quote from Lenny Henry's Chef "Blue cheese; the perfect combination of bug and cow."

2. Have you ever smoked?

I have never had the habit of smoking tobacco. For a little while when acting in a play I tried out a pipe. I have smoked the occassional cigar but usually only so I could share one with a couple of attractive girls I know who like them. I don't think I've ever smoked a cigarette.

3. Do you own a gun?

I do not own a gun. Nor do I think it likely that I ever will. My step-dad owned one or two rifles.  I quite enjoy target shooting and clay pigeon shooting and I'm not bad at it. I think it strange that a meme should ask if I've owned a gun. It is a rare thing in my culture. It's like asking if I've ever owned a donkey.

4. What is your favourite flavour?

I joke with My Lovely Wife that every thing tastes better with cardomon. I like the taste of slow cooked lamb, or peppermint, or beer. I like sweet things. But my favourite taste is the taste of a passionate kiss.

5. Do you get nervous before doctor visits?

No and I try to put the medical team at their ease.

6. What do you think of hot dogs?

That I regret not having a traditional hot dog when I was in New York but that was probably a good idea on health and safety grounds. I prefer a sausage in a bun to frankfurter in a hot dog bun. The idea of a hot dog is surely greater than the actuality of a hot dog whereas a sausage in a bun is surely the greatest of humanities achievements.

7. Favourite Christmas movie?

It's A Wonderful Life or Die Hard.

8. What do you prefer to drink in the morning?

Rum but I make do with coffee. No, but seriously, I prefer tea in the morning along with a pint of sparkling water.


9. Do you do push-ups?

Yes, I do, at the gym. I can't say I care for them overly much, or they for me.

10. What’s your favourite piece of jewelry?

My favourite piece of jewelry that I own and wear is a pair of cufflinks that my wife bought me as a wedding present. My second favourite are some cufflinks that my daughter bought me as a birthday present. I'm not much of a jewelry person other than cufflinks.

11. Favourite hobby?

Improvised comedy.

12. Do you have A.D.D.?

No.

13. What’s the one thing you hate about yourself?

Oh, if only there were one thing.

14. Middle name?

I think it essential to have one. Mine is a closely guarded state secret and I go by the initial of D.

15. Name three thoughts right now?

Interest Rates.

How odd the financial reporting at work is and what is it that I'm not seeing that makes it make

Leadership from a distance.

16. Name 3 drinks you drink regularly.

Beer.
Coffee
Fizzy Water

I'd like to say rum, whisky and daquiris but we are not Hemmingway. We love adjectives too much.

17. Where's the question?

If this is a question, when was the answer?

18. Current hate right now?

I am trying not to hate anyone at the moment. It is difficult because I think many people are reveling in three things that I despise:willful ignorance, destruction and shifting the blame and they are doing all three at the same time and doing it for selfish reasons. But they won't be persuaded by my anger, wrath will not turn aside wrath, so I must do the work of trying to understand the emotions that lead them to be lazy and violent and irresponsible without losing sight of the fact that that is actually how they are behaving.

19. Favourite place to be?

I really like living in Edinburgh - I think my favourite place to be is the Meadows, in the early morning, on my way to an adventure of any duration, that will end with me returning home.

20. How do you ring in the New Year?

Usually with a bottle of champagne and a flask of whisky, standing on the Meadows watching the fireworks over Edinburgh Castle.

21. Where would you like to go?

I'd like to visit San Deigo. Not that I partiucularly wish to visit San Deigo but many things in my life would make more sense if I had been to San Deigo.

22. Name three people who will complete this?

I have no idea.

23. Do you own slippers?

I do but I don't wear them often.

24. What colour shirt are you wearing?

I am wearing a shirt that is multi-coloured. It has thin stripes of white with dark blue, light blue, deep red and mauve.

25. Do you like sleeping on satin sheets?

I do not think I have ever slept on satin sheets. Are they easy to wash?

26. Can you whistle?

Yes, loudly. You just put your lips together and bellow.

27. Favourite colour?

Yellow.

28. Would you be a pirate?

No, I have no love for violent criminals who disrupt global trade.

29. What songs do you sing in the shower?

Flowers on the Wall by the Statler Brothers

30. Favourite girls name?

Other than the names of my daughter I like Charlotte and Sophia.

31. Favourite boys name?

Other than the name of my son I like Thomas and James.

32. What’s in your pocket right now?

A ten pound note.

33. Last person that made you laugh?

K who is the junior sales and marketing person at work.

34. Best toy as a child?

An X-wing.

35. Worst injury?

I once broke my thumb, but perhaps the worst injury was my right knee when I fell off a ladder six years ago. That slowed me down for years.

36. Where would you love to live?

If not Edinburgh then Barcelona, Orkney or the Far North of Australia.

37. How many TVs do you have in your house?

Two televisions.

38. Who is your loudest friend?

An old friend from university who has gotten me through more difficult times than I had any right to expect of her and has a track record of saying the wrong thing very loudly.

39. How many dogs do you have?

I have no dogs. I do not think I will ever own a dog. I do not hate dogs but I do not love them either.

40. Does someone trust you?

Yes, but I can't tell you who.

41. What is your favourite movie?

The Duellests by Ridley Scott, staring Keith Caradine and Harvey Keitel and based on the Joseph Conrad novella.

42. What’s your favourite sweet?

Trebor Extra Strong Mints

43. What’s your favourite sports team?

The Scottish Rugby Team

44. What song do you want played at your funeral?

Flowers on the Wall by the Statler Brothers? Something from my wedding and Sit Down by James.

 
 
 
 
 
 

I doubt that Hinckley Point C will ever generate a megawatthour of electricity.

I'm not saying that it definately won't happen but my money is on it not happening.

It's a risky project. Building nuclear power stations is difficult and fraught with technical and political risk. They are vast, difficult and very regulated construction projects with plenty of scope for things to go wrong. They are also subject to risk of legal challenge or outright civil disobedience actions from opponents.

It's expensive in interesting ways. At a budgeted £18bn for construction it puts a lot of money at risk for EDF and any of the investors. Which include both the French and Chinese state. They should be looking at the project execution risk and worrying whether £18bn will buy them a working power station. My view is that they won't get a working power station for £18bn and might not be able to get a working power station at any money.

It's also expensive in terms of the price for any electricity produced. £92.50 / MWH in the 2012 market was expensive. That strike price is index linked and estimated to be £120 / MWH. You can buy onshore wind today for about £60 / MWH. The price of that is falling. As is the cost of solar PV.

Now there is some value in having a diversified energy supply. What would we do if we discovered that all our new wind turbines had a latent defect or that solar PV caused cancer? I'm not sure it's worth paying double the going rate for electricity.

So, it's a difficult project that represents a financial risk to its investors and a bad deal for consumers.

And it won't be finished for ten years, probably longer.

By which time technology and the economics that go with that technology will have moved on. Solar PV will be cheaper, wind will be cheaper, I'd expect storage to be cheaper. All available in small increments. The oil price looks like it won't get much above the value implied by the long term cost of US fracking - so about $80 a barrel. In 2012 oil was above $100 a barrel.

if you can't build the project unless you can sell the power at £92.50 plus then I don't see how you can build the project.

This was true in 2012. I mean that had the plant gone ahead when first planned we would be looking at a one third complete power station that had started as expensive and was now out of the money but we'd have been committed to it. We now have four more years of information about the likely trajectory of energy prices. By the time the UK government conducts its review we'll have another year, perhaps two of information.

If my major premise about energy prices (that over the coming decades they are capped by the cost of fraking and then the cost of solar PV) is correct then Hinckley Point will look like a worse idea with every quarter that passes.

 
 
 
 
 
 
Things I'm watching to see if Brexit is as bad economically as I think it's going to be.

1) FX rates, particularly the GBP:USD rate and the difference in movement between GBP:EUR and GBP:USD. Brexit will be uncertain for the UK and probably very bad, pushing down on the GBP. If people start to think it will drag the rest of the EU down with it then the USD will strengthen and the Euro won't
2) Petrol prices - the first time voters will feel Brexit in the their pocket will be next week when petrol prices go up and the weak pound makes dollar denominated oil more expensive.
3) Inflation figures in the quarter July-Sept. Again, driven by the weak pound I'd expect inflation to start nosing up a little
4) Job creation figures for the same quarter - if they are flat we are probably heading for a recession.
5) Quantative easing of some sort by the Bank of England - I believe the stock phrase is "organised support". Volumes, timings, and take up
6) Balance of payments - we already have a balance of payments problem, weak exports compensated for by inward investment. Will the investment keep coming?
7) Our credit rating with the other ratings agency - have the priced in all the bad news already?

Politically I'm watching for some pressure to be put on us. Possibly by ourselves. Not words but actual events.
1) The Calais frontier being moved back to England (watch for footage of drowned toddlers washed up on the beaches below the White Cliffs)
2) The Spanish government blockading Gibrator. (On some pretext. Looking for drugs or petrol smugglers.)
3) A pretty clear offer that Scotland can remain in the EU and therefore that if the UK leaves it will cease to be the UK
4) The Loyalist marching season in Northern Ireland getting out of hand.

What else should I be keeping an eye on.