Watching the Euro

There is a fascinating article from Bronte Captial about the Euro Fix.

The story so far, if you’ve forgotten: the ECB can’t be a lender-of-last-resort to governments, because it isn’t allowed to (from memory, the Krauts say No). But in a transparent fix, it is allowed to lend to banks, if those banks put up suitable collateral. And it has said, lo, government debt, that is good collateral. And so 500 bn has been loaned.

Why, as a bank, would you want to buy shonky govt debt? Because dodgy Italian debt yields 6% or so at the moment, and lord knows what the Greek stuff provides. But the ECB loans are at 1%. With the difference yielding 5% pure profit risk-free (ahem), hooray. The downside, of course, is the long-term capital risk.

The Bronte article is speculating on the likely conflicts between the banks’ traders – who can presumably see the short-time huge bonuses coming out of the short-term profits, all sanctioned by the Euro-governments desperation to get the banks to buy the debt – against the Risk Dept., who probably don’t want to touch it with a bargepole.


* Britain and Europe
* It has to get worse before it can get better
* Greek PM drops trousers
* Eurozone: It’s Working, the Carry Trade is Working, Euro Saved!

Solar panels


We’ve finally got round to having solar PV panels installed. As you can see form the picture above.

The price of solar has been coming down, but still it isn’t economically viable without subsidy for us. However, the subsidy makes it clearly economically beneficial (to us) so combined with a guess that the ecological payback, which is far less clear, might be acceptable too, we went ahead. What finally tipped us into doing something was (a) the government announcing the end of the fat subsidy regime (of which more anon) and (b) a local group organising an installation firm for the village.


Let’s talk about the economics first. In the UK, this is all about the subsidy regime which is currently £0.433 / kWh for solar PV retrofitted, for an installation less than 4 kW. That compares with a cost of electricity from the mains per kWh (inc VAT) of ~£0.25-0.12 (depending on supplier, tier, phase of the moon, whatever). But since our energy needs are vastly less than our installed 3.5 kW, and we’re usually out during the day, most of the time we won’t be saving that money, instead we’ll be feeding stuff back into the grid. And I don’t really know what we get paid for that – casual conversation said £0.02/kWh, this says… its complicated. I can’t even remember if we did the 50:50 “deeming” deal spoken about there.

With all that, the payback time was put to us as being about 9 years. Since it cost ~£10k, that implies generating about £1k/year of power, which certainly exceeds our current bill. Given that price depends so heavily on the subsidy, these calculations only apply to the UK. We scrambled to get our installation in place before December 12th, when the subsidy was due to ~halve, but Solar tariff cut plan ruled legally flawed says that maybe that won’t be the cut-off date. It will be soon, though. Which is probably correct: the price is currently set too high, and its a cash cow for people with the installation.

Our system

DSC_8955-sunny-beam We have 15 Trina panels which are supposed to produce around 220-240 W each (so ~3.3 kW), a 3.5 kW inverter (Schuco) in the loft, wires leading down the the electricity cupboard, several isolator switches, and a meter thingy which we need to read sometimes and send in, in order to get our subsidy. Note that to get the good subsidy, you need a system < 4 kW, but we'd have struggled to get more panels on our (fairly small) roof. We were originally going to have 16, and a 4 kW inverter, but apparently the 4 kW ones are in short supply.

Most excitingly, we have a "sunny beam" Bluetooth power meter, which talks to the inverter in the loft, and draws pretty graphs of your power generated and £'s saved. Miranda in particular loves it, and consults it every day. She did want to take it away with her on a recent visit elsewhere, but we explained that Bluetooth doesn't have a range of 100 km.

Bronte Captial (that isn’t his best post on Trina, search around, you’ll find the rest) isn’t too impressed with Trina as an investment – indeed, he thinks that all panel makers are due to get squeezed. But that doesn’t affect me as a buyer.

The ecologics

Well, I dunno really. I’m assuming that, since it has to be subsidised, the total unsubsidised economic value must be negative. And therefore, using economics as a proxy for ecologics, the ecological value must be negative too? That is less clear; after all, we don’t cost externalities into our electricity costs.


* Upbeat energy were the people who did us, and others in the village. They seemed quite competent and got the job done.
* The eCoton posting with links to some (probably now obsolete) information.
* Misc pics of the installation; more.
* BP exits solar says Timmy. Shades of Bronte.

The stoat in winter

wiliiam-from-miriams-galaxy-s2-2011-12-18 17.57.43 I don’t think I’ve troubled you with a picture of me for a while, so here is one I particularly like, taken with Miriam’s Galaxy S2 (rush out and buy one now, its got our GPS in it, which is apparently far better than the competition).

If you look closely at my right thigh (and who would not wish to do so?) you’ll see the graze I got on today’s run at the point where I fell over an electric fence that I hadn’t noticed was there. Fortunately the ‘lectric itself was off. That was in the middle of the mad wiggly bit where I got totally lost trying to find my way back to the Thames, having got myself onto the wrong bank.

although I’m wearing a beer festival tee-shirt, I’m drinking port. Port by the fire of a winter’s afternoon is very pleasant.

The camera isn’t quite perfect – lens distortion has done something a bit weird to my head.

Common software engineering terms

Pony – something that the customer wants, and which might even make sense, but isn’t going to get done within your timescales. Might get done later.
Unicorn – Like a pony, but doesn’t actually make sense, so will never be done.
Zombiecorn – Like a unicorn, but it won’t die, no matter how often you prove that it won’t work.

But that is a very short post, so in no clear order:

Nitpicking others’ arguments is not the same thing as “critical thinking.” That involves nitpicking your own arguments.

from Bickmore’s Laws updates.

Timmy is amusing on The Great Norwegian Butter Famine. I’m not going to mention Durban, because it was a complete waste of time, as I said some time ago. Instead, I want Carbon tax Now! If you want to read someone more positive, try David Hone.

Mike Rose is having fun in Antarctica. The two Norwegians heading off into the wilds in search of butter look lonely.


* Http status cats

Rahmstorf, the Journo and the African drought

Bit of a weird one this, and I’m not sure it is all pieced together. I saw this via KZ, and of course was interested in what science R had got wrong, but KZ’s Werner Krauss isn’t interested in the science (explicitly so, see the comments). And it points me to RP Jr, whom he says “sums it up perfectly”, but experience suggests that is unlikely. And indeed, RP just uses it as an excuse to bash R and ride his favourite hobby-horses. Tellingly he too has no interest in the science. You’ll notice that he is very deliberately vague about what actually happened, which is a sure sign that he doesn’t want you to know.

It appears to start with an article (“AFRICA GATE The failure of climate scientists”) by Irene Meichsner (here I’m relying in part on an earlier KZ post, which I ignored at the time because it was in Foreign and therefore clearly not important. Google tells me it says): “The affair began with an article in the Frankfurter Rundschau, the web archive of the FR with the regret of the paper was removed. The article is also published by the Cologne Stadt Anzeiger , where the article is to continue to find. Apparently the article in the FR was reduced by the editors without this had been agreed with Ms. Meichsner.” So the original article has been removed by the FR; just possibly, because it was junk (WC, no relation of whom more anon, thinks so). But never mind, we can still read the KSA version and it looks like just another of the many dumb articles that appeared after the 2035/2350 Himalayan glaciers stuff, when every fool thought that sticking “-gate” on a story related to climate change made it true.

I know nothing of African drought. Wolfgang Cramer is sympathetic to Rahmstorf’s view (aha, but he too is German, it is all a conspiracy. But wait, IM is also German… aha, but WC is at PIK like R…) and says stuff like The first claim, but that the numbers were wrong about the increasing aridity… the claim itself is not new and has been refuted… [the claim] was the subject of a sensational newspaper article dated February 2010 in the Cologne Stadt Anzeiger and the Frankfurter Rundschau, which was withdrawn from the latter in April 2010 and corrected for good reason (caution: these words come from google translate. I’m not going to repeat that caution again). You can read more there, or probably find similar elsewhere (Deltoid blames in all on Leake, and who knows?). So much for the science.

The court judgement (which is the bit RP is so excited by, though you’ll notice he tells you nothing about it) appears to be that R must

to refrain from it (…) to create the impression that a) the applicant has written off by the blogger Richard North, by journalist Jonathan Leake;

and I think this, translated, means that IM had just copied junk from North and Leake. Which she probably had, given the way this stuff flows around the denialosphere. And also:

b) the applicant was the defendant by the editors of the Frankfurter Rundschau Please let Naaman should the applicant’s name from the blog post of the defendant, FR pulls product back to the IPCC remove ‘and name the Frankfurter Rundschau.

And I haven’t got a f*ck*ng clue what that is supposed to mean. Maybe someone who can read the original could help me?

There is a bit more:

Moreover, the defendant must pay the applicant € 511.58 plus interest and two-thirds the costs of the litigation over it… an action point of Mrs. Meichsner, namely the claim that it had “not read 4th Assessment Report of the IPCC,” the was rated as acceptable speech, so the costs are two-thirds to Mr. Rahmstorf and one third to the applicant.

and I think that last bit means that R saying IM had never read the IPCC report she was claiming to talk about was probably true. Either way, the court had nothing to sat about science.

Err, so there you go. Not perfectly clear, but R appears to be correct on the science, and the other stuff looks like trivia (disclaimer: R is at RC where I used to be).


* PIK responds
* Eli has some nice quotes from the EPA, who were challenged on their use of the IPCC report and vigourously rebutted those challenges.
* Von Storch invites you to discuss Extended peer review: Assumptions in Arnell’s article

Britain and Europe

(this post is mostly for my own future reference: so I can see what I thought now, without the distorting lens of memory. but you might care too)

So, we’ve vetoed the grand European dream, and they will go off without us. The papers, of course, personalise it, because they are rubbish and believe that none of their readers will pay any attention to stories about things rather than personalities. But while the Grauniad may try to frame it as David Cameron blocks EU treaty with veto (let alone “casting Britain adrift in Europe”) really this is our government, reflecting the will of parliament and, I think, the will of the people too. The FT, which is a real paper, does better.


Obviously, there is politics in all of this. so the Grauniad (left) can’t help but lead with a headline that implies this is all a disaster; and the Torygraph (right) that this was correct. Cast all that aside, and instead wonder what exactly was it that we vetoed? The G&T are far too busy politicking to bother tell us, and perhaps it isn’t even known – I get the impression this was more a mood-music kind of thing. The T says

Paris and Berlin are now expected to try to agree a treaty outside the EU that commits the eurozone members to new limits on their deficits, in an effort to restore financial markets’ confidence. As well as the 17 countries using the single currency, the nine other EU members could also sign up, making Britain the only member outside the “euro-plus” bloc.

which at least tells you what they’re going to do now, a bit. If this was (as billed) mostly a save-the-Euro meeting, then it isn’t clear to me why we were expected to join – we’re not in the Euro. Aside: when the Euro was being created, I wanted us to join. I’m less enthusiastic now, but still on balance I’d have liked us to join. In retrospect it is clear that what really needed to happen was for countries like Greece to not join – or at least, to not be allowed to lie about their national accounts. But the creation of the Euro was as much politics as economics – itself a bad thing – and so there was immense pressure to smooth over any problems. That was definitely Bad. But if Greece hadn’t been in, Italy wouldn’t have been either, which while economically good would have been politically very hard.

The real test of this, of course, will be the markets. There is a strange line from the Beeb, The reaction on the markets so far is not reassuring – but given the deal was agreed late friday night when the markets were shut, I don’t really understand that. And anyway the FT says After dropping in early trading, the FTSE Eurofirst 300… rallied to end the day 1.3 per cent higher, while the euro climbed the most against the US dollar in over a week… Italian and Spanish bond yields also fell sharply, as investors turned more positive towards the eurozone’s more embattled members but Germany’s 10-year bond yield climbed 13 basis points to 2.14 per cent. and it is hard to see that as bad.


PaulB has some nice stuff, trying to work out what really happened. Which all looks plausible. It looks like the real sticking point (other than unanimity would have lead to a new treaty which wouldn’t have passed) was the “Tobin tax”, but no-one is prepared to say so. Given the EU rules and structures, I doubt that tax makes sense. Timmy says so a lot, please read some of that before replying “of course it makes sense” without actually thinking about it. In particular, it really isn’t clear why Sarkozy was so violently anti-us.

So what exactly is the Plan for Europe? PaulB provises a link to something. Apparently We commit to establishing a new fiscal rule, containing the following elements: General government budgets shall be balanced or in surplus… which sounds a touch idealistic. We certainly can’t meet that, this year or next. Well, there is more, read it if you find such things interesting or comprehensible, but I suspect that the secret will be in the implementation. So I don’t know; I certainly haven’t read it all, and maybe the details aren’t fleshed out yet. PaulB’s guess The plan as it stands seems to be to calm down the bond markets with more or less believable promises of austerity, with the ESM – a slightly souped up EFSF – to contain any local difficulties seems believable – at least, as what they consider their Plan, I have no comment as to whether it is a workable plan. FWIW, even the Grauniads economic analysis says “Europe blunders into a blind, and dangerous, alley”.

What will happen? I don’t know. The people I read, who look competent (but hey, I can’t judge economic competence) think this isn’t enough, that the politicians can’t and won’t move fast enough. If I (from my position of ignorance) was proposing a plan (to save the Euro, not my Optimal Economic Plan), it would be: throw Greece out, which would be in their own best interests and would help terrify the likes of Italy into behaving. But now Italy has thrown Berlusoni out they have some hope, and some competence.

Addendum: looking more at the Grauniad, I find the moment when the nations of Europe came together to take a first step towards the long-cherished dream of political union – and as the moment when Britain began the long, lonely walk away. Maybe. But in that case Our Glorious Leader was correct to say no, because our parliament and (I think) our people do not share this long-cherished dream.


* Pix ripped off by searching Flickr for “stoat”, except for the one of me sculling, which is from the row-up to the Christmas Head
* The UK is as Isolated as Somebody Who Refused to Join the Titanic Just Before it Sailed.
* Charlemagne and Bagehot