What do I think of the Robin Hood tax?

A good friend of mine asked "Nick, as the only banker I know, what do you think of the Robin Hood Tax? Does it make practical sense, or is it only supported by greenies like me who have no actual concept of how the system works?"

Well, I guess I have to start any response by saying I'm a very lowly employee at a very big bank. It is easy to find out which one, but I don't speak on behalf of them, or the banking industry as a whole. I'm writing as an individual. I don't want any media reports saying, "investment banker speaks out against Robin Hood tax"!

I've just been to the Robin Hood tax website, and as explained there the proposal seems to be:

- 0.05% tax on all bank transactions that do not involve an individual

- 50% of the revenue goes to domestic causes

- 50% goes to international eg poverty, climate change etc.

Apparently this will raise £250 billion a year, which assuming a US billion (rather than traditional UK billion) is £250,000,000,000.

The first thing to say is the use is irrelevant. The way the tax system works is a government raises money, and then chooses what to spend it on. So saying this will raise the money for climate change, or reducing poverty, or anything else specific is silly. You could say it will raise money to pay for benefits, or pay for the military, or pay for ministers cars. The money is just money.

So there are three separate issues here:

1) Should the UK government spend £250 billion more?

2) Should it raise this money in tax or reduce spending elsewhere, or some combination?

3) Is the right tax to introduce this tax on financial transactions?

I don't have much to say on 1 or 2. Clearly there are many good things in the world to spend money on, and the government cannot spend on them all. Just because something is very good does not mean it should be paid for out of taxation. Some things cannot be funded, and some things are best supported by charities or the private sector rather than government. Which things these are is a matter for political debate and people differ on these - there isn't a correct answer.

However we have recently seen in the news 20 economists write an open letter saying the budget deficit should be reduced, and the right way to do it is to reduce spending rather than increase taxation.

So back to 3. I just went to look at the 2009 budget and apparently the total UK income from all sources will be £496 billion (Budget 2009 page 12). This means that this tax will allegedly raise the same amount as one half of all uk taxation this year - or more than income tax and national insurance put together. On a related note, Barclays just announced their profits for the year, and they were a record amount - 11.6 billion.

The reason I quote these sums is that money does not come from nowhere. It doesn't magically appear out of thin air. If you tax me buying a chocolate bar, the tax either comes as extra money I spend, or money the shop does not receive. This money would have to come from the banks, as it is inter-bank transactions. If Barclays made 11.6 billion in profit, then all of their profit, and all the profit of 23 banks of equal size would all go into paying this tax. This seems an impossible result. So I think amount of money quoted as being raised is completely unbelievable.

Now I will assume that the promoters of the tax have done their calculations right for the volume of world financial transactions. If this amount of money cannot be raised, then all that can happen is volume of financial transactions is reduced. Now, you might argue this is a good thing - but everyone should be aware that this will be the primary result, reducing the volume of world financial transactions, not raising the huge amounts of money quoted.

0.05% does not sound like much, but it is a lot. We might trade an instrument called an "Interest Rate Swap" and be aiming to make five basis points on a good trade, and making this much is difficult. Five basis points is five hundredths on one percent. So while 0.05% of a deal might not sound much, this would be our entire profit on the deal. The result would be we would make almost no deals, because it would be almost impossible to make enough to pay the tax.

Would it hurt the world economy if we stopped making deals? Well, it would certainly hurt the British economy. When Barclays announced it was paying £2.7 billion in bonuses, those bonuses are taxed at 50% by income tax, and a bit more for national insurance. So over half of it is already going in tax. The rest of it presumably is either spent, in case it provides jobs, or is invested, in which case it funds companies by being invested in their shares, which provides money to build more shops or factories, which in turn provides jobs.

Secondly you have to ask what was the point of the interest rate swap. Typically we might make such a trade because of supply and demand issues for money. Pension funds might want to invest some money for thirty years, so it covers their liabilities, whereas companies might only want to borrow money for 10 years because that is how long they thing it will take them to pay back for a new factory they are building. If no-one wants to borrow money for thirty years the pension fund has to accept a low rate of interest. If no-one wants to lend money for 10 years the company has to pay a high rate of interest. By a bank swapping between these products it matches supply to demand, and means the pension fund gets a better rate of return, and the company pays a lower interest rate, which is good for everyone.

Also notice that if the tax came into effect, if this transaction was done, the bank would have to pass the tax on to the pension fund or the company.

So what is my conclusion?

Firstly, I don't think I am wise enough to comment on this question as to what the government should spend our money on, or whether they should raise money through taxes or reduce spending.

Secondly, numbers being talked about for the amount of revenue raised are ridiculous, and just will not happen.

Thirdly the primary effect of this tax will not be to raise the amounts of money talked about, it will be a huge reduction in the volume of financial transactions. This may or may not be a good result, but no-one proposing the tax is talking about this.

So I think the intended consequences of the tax will not happen, and the unintended consequences could be huge and harmful, and clearly have not been thought about properly by the people proposing it.

A coincidence?

This is the timeline leading to a result which shocked and delighted me. See what you make of it.

October 28, 2008: Picture it. 6 months ago. October 28, 2008. Justin Buzzard, a pastor in San Francisco posts on his Blog about a plan for reading through the Bible in a year. In Oxford, England, I was changing what I was doing in my personal bible reading at the time and decide to follow his plan, which gives certain readings for each day, and if you miss a day, you just skip them, you don't "catch up". I can't remember why I was even reading his blog.

December 14, 2008: I start going out with a lovely girl called Cat. Now I should explain something to those of my friends who aren't Christian. If a Christian starts "going out" it should always mean they are coonsidering marriage - it is a time to get to know each other better, and considering if marriage is right.

May 13, 2009: Justin Taylor, another American blogger posts about a book called "The Water of the Word" about praying for your wife (even if you don't have one). I think it looks interesting so order a copy, but it is only available from Amazon in the US, so order it (and forget about it - shipping takes a long time).

June 24th 2009 10.00: I start working on my to do list for the day. I'm expecting a courier delivery, and the buzzer to my flat is broken, so I leave a note on my letter box asking the courier to call my phone if he gets no response from the buzzer.

June 24th 2009 11.00: The aforementioned lovely Cat sends me a txt message asking how my quiet time is going. Again, let me explain the jargon. It is common for Christians to spend some time each day on their own reading the Bible, and praying, in response to Jesus in Matt 6:6. This is often called a "quiet time" as it is quicker to say than "personal time of bible reading and prayer".

All strands join together

June 24th 2009 11.00: I had been slow in getting started so start reading. The verses for the day from the Bible in a Year plan are 1 Corinthians 7:1-19 and Psalms 116, 117, and 118.

I start reading the 1 Corinthians sections and it is a passage all about marriage.

Just then the phone goes and it is the postman (not the courier, who I'm still waiting for). He has a parcel which won't fit in the letter box. I go down and get it, and it is the book I had ordered 6 weeks before, about praying for a wife (which you may or may not have).

I decide to read a bit. I read the Preface, which is all about praying as you read through the Bible.

I read the first prayer which is based on Psalms 116, 118, and 121, two of which are the very Psalms I was going to be reading that day.

Coincidences (in the sense of the word meaning things which happened together):

• The book on prayer for a wife arrived on exactly the same day nas I was reading a bible passage about marriage.
• In fact it happened at the same time, on the same day.
• Which happened after Cat reminded me to spend time reading the bible and praying
• And the first prayer was based on 2 of the three Psalms I was looking at, also on exactly the same day
• And I was actually at home that day rather than out at work
• And because I was expecting a courier, I had left a note out, so the book actually got delivered rather than going back to the sorting office
• And I was expecting a courier because I was expecting a wedding gift for another couple to be delivered
• And I hadn't chosen the passages, they were from going through the whole Bible linearly (Old Testament and New Testament) in a year, form a scheme starting 6 months before.

I know a lot of my atheist friends will argue convincingly that I should look at all the coincidences that didn't happen, and it was nothing special. Now, I've got a degree in Mathematics and Computation from Oxford, and work in proprietary trading in investment banking, using Mathematical and Statistical market models. I'm fairly happy with statistics. And I know it could be a coincidence, I won't claim otherwise - but my response to it all? It has to be the Psalm that wasn't in the prayer, Psalm 117:

Psalm 117 (in it's entirety)

¹ Praise the LORD, all you nations;
extol him, all you peoples.

² For great is his love toward us,
and the faithfulness of the LORD endures forever.
Praise the LORD.

How to spin in modern jive

I originally wrote this for a friend of a friend who was just starting at Ceroc. The mutual friend came back saying it was so helpful that the new dancer was almost spinning better than her, so I thought I would share it.

How to spin in modern jive

Spinning is one of the most common difficulties for ladies in Modern Jive (ceroc/leroc/mojive ...) but it often doesn't get taught in beginners classes, so a lot of people, both guys and girls have trouble with it. Here are a few suggestions that might help - they are put together from suggestions in classes over the years from a lot of teachers in dances including modern jive, street dance, jazz and swing. I've especially appreciated classes from Nina Daines and Nickely Burke on this in the past, so big thanks to them.

The key to all the tips below is practice. My street dance teacher used to start every class with a warm up which included a sequence of left and right single and double spins. Getting it ingrained in your muscle memory, even for good dancers is the key.

The first thing is to identify the problem that you are having. This might be:

1. Travelling (moving) when you don't intend to, rather than spinning on the spot
2. Wobbling when you spin
3. Getting really dizzy
4. Not being able to get round as often as you want to (for double, triple spins etc.)

The most common mistake, which can cause wobbling, travelling and dizziness is looking down. When you do this, your head moves off centre, and your head is a really heavy part of your body. All of the weight being off centre starts you travelling, and if you try and correct can lead to wobbling.

So the most important thing you can do is practice keeping your head up. The best way of doing this is to pick a spot on a wall slightly above eye level and practice spinning while looking at the spot. This forces you to keep your head up, and your eyes open, which with practice solves a lot of problems. Ideally you want your head, neck, spine, hips, and the ball of the foot you are spinning on to all be in one completely vertical straight line. Keeping your head up will nearly always get you in this position.

The next most common mistake is trying too hard. People think they need to spin really quickly so throw themselves far too hard into it, which then throws them off balance. When you are practising, and even while dancing, try and spin gently. You normally have two beats for a spin, which is usually enough for a triple spin, so concentrate on making your single spins slow, smooth and controlled, rather than trying to whip around.

My little spinning exercise goes like this. First think about a spin to the right.

The Preparation

(this is a lot easier to show than to explain in writing)

1. Step forward with a small step onto your right foot, bending your knees slightly so your weight is down.
2. Bring your left arm straight out to the left, and your right arm bent in front of you to the left slightly below shoulder height (like a figure skater preparing to spin).
3. Then in one smooth movement bring your weight forward and up, as you slide your left foot together to your right foot, and bring your hands so they are central in front of you. At this point you should have your feet together, your head up, all the weight on the ball of your right foot, and your head and body in a nice straight line to a balanced position, with your hands palms down, slightly separate just in front of your chest. Don't spin yet - just practice this movement, making sure your feet slide together and you are balanced. The most common mistake here is lifting your left foot up your leg or leaving your leg sticking out.
4. Now try the same but mirror imaged onto your left foot. Practice both of these until you naturally move up into a balanced position on either foot.

The Spin

1. Do exactly what you did for the preparation, but bring your left arm in a little bitfaster, and let the momentum start to carry you round. Concentrate on keeping your head up. For the moment, don't worry about getting all the way around, a half or even quarter turn is fine, smoothness and balance is the key.
2. When you start to stop turning, bend your knees (a little bit) again and lower your heel to stop. Check your feet are still together.
3. As you get more confident, bring your arm in faster, and spin a bit further round. If you ever get to where you are wobbling, slow down again, and spin less quickly and less far.
4. Once you are back on balance consistently speed it up again.

Again, practice doing this taking turns on either foot. This will mean you'll be able to spin both ways, and will stop you getting too dizzy when you practice.

Spotting

Once you are confident with single spins you want to practice spotting. This both stops you getting so dizzy, and lets your neck muscles give you extra momentum.

1. To see what spotting is like, look at a single spot, just above eye height.
2. Now start to shuffle round a spin, keeping your head looking at that one spot. You should be able to shuffle your feet about half way round a turn, and your body slightly less while your head looks at the spot.
3. When you can't move any more, bring your head around a whole turn so you are looking back at the spot. So there is only a short time while your head is looking away. When you are dancing this spot will normally be your partner.
4. Do the spinning exercise as before, to the left and right, but a bit slower than you were before and with spotting this time.

Double, triple spins etc.

I'm not that great at these, but I have a couple of tips.

Firstly, to do doubles your singles need to be rock solid. If you can't do a single spin consistently with no wobble then by the time you get twice round you'll be half way across the room. So make sure your basics are really solid.

Secondly, sometimes it is just a confidence issue. This is likely to be the case if you can always get one and 3-quarter turns but can never get two. In this case, I recommend trying for a triple - often you will do a perfect double and fall over on the triple, but you got the double! Once you realise you can do doubles (or triples) or whatever, then it is just a matter of smoothing them out.

Gifts of knowledge and teaching are separate

I was reading Systematic Theology[1] and something struck me I have never seen before. Gifts of knowledge and gifts of speech are separate. Forgive my slowness, for it seems obvious in retrospect. Someone can have huge understanding, but no teaching ability, or huge teaching ability and no understanding. And unfortunately we tend to equate the two.

Why unfortunately? This leads to problems when we assume that teaching ability is the same as understanding. Who have you learnt most from? It has probably been those with most teaching ability but not necessarily the most wisdom. We learn our understanding of God moderated through the most entertaining preachers (and now bloggers), and get our knowledge of cars and motoring from Jeremy Clarkson. At the risk of invoking Godwin's Law, the supreme example of someone who could teach without wisdom was Adolf Hitler. Or perhaps more controversially Plato (Moron). His arguments are weak enough every first year Philosophy student can find flaws in them, but he does write well.

This led me to a deeper understanding of James 3:1-2. Do pray for those with the gift of teaching. People (including me) will listen and believe almost whatever they teach, and if they lead little ones astray the consequences are severe.

Now I wonder how do we find those who have gifts of wisdom without gifts of teaching? To learn about programming I read entertaining and informative programming blogs like Jeff Atwood's, but if I want to find programmers gifted with knowledge who don't communicate well, then I look for impressive programs and find out who wrote them. Know them by their fruit.

The same should happen in church. I should seek out those people whose godliness I admire, and if they aren't the best teachers I should just be a better learner.

[1] Chapter 52, page 1021

What I want ... a digital filing cabinet

I have a dream. And so does Mark Dalton. And so do lots of people when you search for this. And hopefully by sharing it, someone will come to my rescue and make the world a better place. 

What is this huge dream .... ? It's a filing cabinet that does everything for you. 

I have too many old bills and letters that I don't want to throw away, but have no space in my filing cabinet. Having decided that keeping them in paper form was too inefficient I decided to scan them but this is so slow I put it off. Let me go through the process so you feel my pain.

Plug in the scanner (I can't leave it plugged in because it seems to interfere with my boot sequence).

Wait for the Lexmark software to notice it.

Pick up a bill (2 sheets).

Open the lid.

Put sheet 1 on the scanner. 

Carefully manually line it up with the glass.

Close the lid.

Go to "scan" in the software.

Choose advanced settings.

Choose "scan as A4".

Choose "more than one page".

Choose OCR.

Click OK.

Choose "send scanned image to file".

Click Scan Now.

In the file dialog choose type PDF (because it forgets this is what I always choose).

Choose my USB drive (because it always defaults to "my documents" on the C drive)

Click through to an appropriate directory.

Choose a file name (which probably involves taking off the scanner so I can check the date and add it to the file name). Put back on scanner, close lid.

Sit and wait while it scans (only 30s, but not much else I can do).

Open lid.

Remove page, and place on the floor for recycling or shredding.

Place page 2 carefully on the glass.

Close lid.

Click scan now.

Wait again. another 30s.

Open lid.

Remove page.

Close lid.

Click "No I don't want any more pages".

Wait for OCR to complete.

Stop typing this blog post while Abbyy FineReader (OCR software) steals my keyboard focus.

Hope I haven't typed anything that would interrupt the OCR process.

Breathe a sigh, and wish I had that 3 minutes of my life back, and decide I'll put off scanning the rest of a pile for another day.

You probably didn't want to read that, but I didn't want to do it. Lots of these steps could be improved in small ways but let me dream the big dream.

Imagine a box the size of a laptop, with something like the lid of a professional photocopier on top, but it only needs to be A4 size. I walk up to it, put the document on the feeder, and hit a big green button. All the sheets feed through the feeder in a second or two, and I either walk away leaving it in the "to be recycled" pile or collect it and shred it.

The machine scans it both sides at maximum resolution and in colour, after all storage is free, and saves it to the hard drive as an incoming image. Maybe from my fingerprint on the button it knows it is me scanning it. Then in the background a number of things happen. After all, this box is idle most of the time. 

It runs the document through OCR. It auto rotates it to the correct orientation, even sorting out pages I fed through upside down or back to front. 

It works out from this if it seems to be more appropriate to be a photo (JPEG) or PDF. If JPEG it adds appropriate tags from the date of scanning, and maybe some image recognition. If a PDF, it merges the OCR text and image together and stores to the hard drive. 

The built in google desktop like functionality in the box indexes it. It also does "more like this" analysis similar to google images and google web. 

It then encrypts it to store it, so if the machine gets broken into I don't lose confidential information, like I would with a filing cabinet. They key is securely stored with my password, but optionally recoverable depending whether I think the risk of forgetting or the risk of the service being compromised is greater. The input queue is then securely wiped of the original.

It connects to a free online digital signing service (through it's wireless network connection to my home network) and signs the document with the date, so I can prove in court I had it when I scanned it.

Most importantly, I don't have to wait.

Later on I come back and want to find my bill. I connect to the machine from my laptop. Did I mention the cabinet connects wirelessly to my home network seamlessly. I go to its web interface (secured appropriately), and look for "gas bill". 

It finds a number and presents them in chronological order, most recent first. 

And also offers "more like these" functionality. However it does it I can always find my document. I can tag it with tags, like I can with my gmail to make sorting easier, but I don't really need to.

If I'm worried about the hard drive, I can synchronize it with a directory on my laptop. Or stick a DVD-R or CD-R into the box's built in drive which automatically burns me a backup copy. Which I can restore from seamlessly if I need to replace the drive, and it merges in, not overwrites.

But most of the time all I do is stick in some sheets and press a button.

Google, Canon, Lexmark, Xerox, Apple - where are you? When can I have one? All of this functionality already exists, it just needs a good designer(are you listening Jonathan Ive?) to stick it all together.

P.S.

This post deserves a confession. I had a previous job working for a Canon research lab in Human Computer Interaction. Why didn't I think of this then? 

Irony is ...

Finally tidying your bedroom, which has needed doing for months, and finding at the bottom of the pile on the floor your "To-do list" notebook.

No Country for Old Men

Warning ... spoilers below. Don't read on if you are worried about having the film ruined for you.

I just went to see "No Country for Old Men", the latest Coen brothers film. I really enjoyed it, but we all came out looking a bit bewildered. I was thinking about it on the way home - mostly pondering "What was that all about then?" and I thought I'd jot down the thoughts, before I forgot them, or they could be influenced by anyone else's opinion.

I've never read any Camus, but I believe his early philosophy was that the world is meaningless and one tragedy is that humanity goes around trying to enforce meaning on the world. The film seems to have a lot of the same philosophy - a psychopathic killer goes around killing for no good reason, and there is no obvious conclusion to the film. The killer complains that people always say to him "you don't have to do this", which seems like an objection to people trying to attach meaning to his actions.

A couple of times the killer gives someone the option of tossing a coin. The first time a shopkeeper calls the toss correctly and is not killed. The second time the person refuses to call it, and we do not find out if she lives or dies. At another point in the film someone asks "are you going to kill me" and is answered "that depends - did you see me?" All this is very reminiscent of Schrödingers Cat, where a cat lives or dies based on a random quantum event, and until that event is observed the cat is in a superposition of alive and dead.

Agreements seem important - the killer goes to kill the hunter's wife merely because he said he would, which I think can be taken as a reference to physical laws. In combination with the quantum reference above, this seems to lead to a conclusion that our scientific world ruled by laws and quantum events is essentially meaningless.

Further reinforcement comes from the character of the Sheriff. All through the film people are trying to stay alive, attaching meaning and value to life, but the one character who reaches old age and retires seems depressed and entirely unsure of the purpose, which may be a comment that atatching meaning to life is foolish.

It reminds me a lot of the book of Ecclesiastes in the Bible. Firstly from the refrain that everything is meaningless. Later on in Ecclesiastes (2:24-26) the Teacher says "A man can do nothing better than to eat and drink and find satisfaction in his work. This too, I see, is from the hand of God, for without him, who can eat or find enjoyment? To the man who pleases him, God gives wisdom, knowledge and happiness, but to the sinner he gives the task of gathering and storing up wealth to hand it over to the one who pleases God. This too is meaningless, a chasing after the wind."

Many of the few areas of satisfaction we find in the film are when the Sheriff is eating, drinking, or finding satisfaction in his work. Interestingly though the one who gathers and stores up wealth to hand it over is the hunter, who we would assume to be the hero, and the one whom he hands the wealth over to is the psychopathic killer. So is the killer being set out as the one who pleases God, or even God himself? Perhaps the Coen brothers are saying that any God who constructs a random universe where people live or die by quantum events can be equated to a psychopathic killer.

We also see one other character who gets a happy ending - a boy who helps the serial killer out of grace, and is given some money and does not die.
"Remember your Creator
in the days of your youth,
before the days of trouble come
and the years approach when you will say,
"I find no pleasure in them""

Throughout the film there is a recurring theme of dogs being killed or placed in similar situations to humans, reminiscent of Ecclesiastes 3:18-21: "I also thought, "As for men, God tests them so that they may see that they are like the animals. Man's fate is like that of the animals; the same fate awaits them both: As one dies, so dies the other. All have the same breath; man has no advantage over the animal. Everything is meaningless. All go to the same place; all come from dust, and to dust all return. Who knows if the spirit of man rises upward and if the spirit of the animal goes down into the earth?""

And the hunter spends the film trying to protect the money, and fight death, only to inevitably fail. Eccl 9:11 "I have seen something else under the sun:
The race is not to the swift
or the battle to the strong,
nor does food come to the wise
or wealth to the brilliant
or favor to the learned;
but time and chance happen to them all. "

The film ends with the Sheriff saying "and then I woke up" and we are thrown bluntly into the final credits. Reminding us that it was a film, and despite the apparent meaningless it has an author - the Coen brothers. So maybe they are to be equated to God in the world of the film. For despite the apparent meaningless, everything in the film has been included by their careful design.

I've just re-read Ecclesiastes looking for these quotes, and there is much more that seems to chime with the film. I think I'll let this book, one of my favourites in the Bible have the last word on what the film is about ...

"When I applied my mind to know wisdom and to observe man's labor on earth—his eyes not seeing sleep day or night- then I saw all that God has done. No one can comprehend what goes on under the sun. Despite all his efforts to search it out, man cannot discover its meaning. Even if a wise man claims he knows, he cannot really comprehend it."