Thursday, 24 October 2013

Talk : Islamic Finance

Interesting Cafe Sci talk recently entitled "Islamic Finance - Why? How? Dos it matter?" presented by Islamic Finance expert and former PWC partner Mohammed Amin

Amin gave an introduction to what banks and insurance companies do (such as converting low risk, low interest deposits into high risk, high interest loans and transfering risk from the insuree to the insurer)

He then outlined some of the practices that Shariah law prohibits:

RIBA (Paying or receiving interest)

GHARAR (excessive uncertainty)

MAYSIR (gambling)

between them these essentially prohibit conventional banking and insurance.

An example of a Sharia compliant loan is the "Murabaha" contract, which works as described in the example below :

1) Bank purchases £100 of, say, copper (or other physical asset)
2) Bank sells copper to customer for £105, with payment deferred for 12months.
3) Customer immediately sells copper and gets his £100
4) 12 months later, the customer repays the bank £105

Other examples of Islamic finance products were also described, such as Sukuk, which is a Sharia compliant version of company bonds and Takaful, which is an Islamic insurance model. The UK government is supportive of Islamic finance in order to encourage the financial inclusion of Muslims and also in the hope that London becomes a hub for Islamic finance products

A mancus or gold dinar of the English king Offa of Mercia (757–796),
 a copy of the dinars of the Abbasid Caliphate

The inital Islamic banking commercial loan products in the 1950s were often based on a profit-sharing model. Unfortunately, what often happened was the the loan recipients would keep a separate set of books showing that they were not making a profit, so the bank would make a loss. Unsurprisingly, these types of profit sharing loans are now much less common, although they can work in large companies that have the infrastructure to ensure good reporting of information.

Amin pointed out that the Islamic financial products were more complex in their structure than the conventional financial products and that the small customer base in the UK meant that it was difficult for Islamic banks to be competitive here. In contrast, in countries such as Malaysia, where there is a large Islamic banking sector, Islamic banks can be as (sometimes more) competitive than conventional banks.

He also commented that the idea that all money could be based on gold was "economically bonkers" as the availablility of gold grows much more slowly than the economy, resulting in deflationary effects (which is a bad thing)

Unsurprisingly, Amin commented on how Islamic scholars differed in their views somewhat, for example in what level of uncertainty made a transaction Gharar and it was also a surprise to hear that some of the financial products being sold by Islamic banks were only relatively recent innovations, in some cases only having being offered for the last decade or so.

In a response to a question about inflation, Amin said that his view was that inflation was caused by too much money chasing too few resources, and that this could happen in an Islamic financial environment as well as a conventional one. He also pointed out that a small positive inflation rate allowed some items, such as wages, to be greadually reduced without actually paying people a fewer number of pound notes.

Image Source : Wikipedia

Sunday, 20 October 2013

Why some politicians are viewed as untrustworthy

A post provoked by being sick and tired of misleading or plain wrong information coming from politicians and political groups. Apparently, its not just me - reports looking at the causes of voter dissatisfaction can be found here and here

Perhaps we can break the issue down by looking at the types of approach taken by politicians and political parties when misleading the public or otherwise behaving in an untrustworthy fashion.

Cherry picking and generally distorting data
Using hopelessly weak data to justify policy
Hiding or burying data and reports that are embarrassing
Not practicing what they preach
Rowdiness, heckling and bad manners
Answering the question they want to answer, not the one actually asked
Railroading important legislation through Parliament without scrutiny
Just being plain stupid
Living on a different planet


** Cherry picking and generally distorting data **

Dec 2013 : LibDems : Misleading Party Membership Tweets
New Statesman report on a Tweet from LibDem Press Office says "The Liberal Democrats are the first governing party in recent history to have increased its membership while in power" and links to a story saying:
"Figures released by the party showed that in the last three months of the year membership grew by more than 2,000 – wiping out reductions seen in the first two quarters of 2013. Overall the party will go into 2014 with over 200 new members – which is an achievement not matched by their Conservative coalition partners who have seen steep falls in paid membership since 2010."

What the Tweet (which talked about "while in power", remember) didn't mention is that the recent small increase in membership comes after a precipitous fall from 65,038 in 2010 to 42,501 in 2012.


Labour : Millibands misleading Unemployment Statistics
A rather wonderful article in the Guardian, points out a number of instances where senior politicians have said some very misleading things. Posssibly willfully, or (more worryingly) because they genuinely do not understand how to interpret basic data.

BFTF's favourite is Ed Milliband saying:
"Only crisis-hit Spain has higher numbers of young unemployed people than the UK"

without realising that this was a meaningless statistic. As the article sensibly points out :
The UK has a lot more of everything than most European countries, because it has a lot more people than most European countries. What matters if you're making a comparison with other countries is not how many under-25s are unemployed, but what percentage of them. In that regard, the UK is 10th best out of 27.


Oct 2012 : Employment rate of people aged 16-64(inc) who were born in the UK
A Tweet from Conservative Central Office showed the graph below :

The Tweet from CCHQ Press Office

The Chart the Tweet from CCHQ linked to

Crikey, thought BFTF, the Conservatives have done an impressive job here, the number of UK born people in work has almost doubled in just three years.

Then BFTF thought "Hang on, surely it would take many years, possibly decades to achieve that kind of huge demographic change"

Then BFTF noticed the scale on the Y-axis, which goes from 69.5% to 72.5% in 0.5% increments, making the change seem very large, when it is actually very small.

This is PRECISELY the kind of misleading information that results in politicans being viewed as untrustworthy.

There are two possibilities here:

1) CCHQ cynically manipulated the Y-axis scale to make the change seem artificially large.

2) CCCHQ do not know how to use Microsoft Excel and/or do not realise that the graph is grossly misleading.

BFTF is not sure which of these is more scary.

This is how the Graph looks with the Y-axis starting at zero:

The same data plotted with a Y-axis set to 0-100%

And this is how it looks with the Y-axis starting at 50% and going to 100%:

The same data plotted with a Y-axis set to 50-100%

Doesn't look so impressive now, does it?

Finally, would like to emphasise that this is not an anti-Conservative post, BFTF fully expects to see this kind of misleading information from all parties, more examples as and when they are seen.

Update 20th Oct:
Comment from No3 Son is that Conservative Central Office should "behave more maturely".

Feb 14 : Misleading and difficult to interpret graph in 2103 Infrastructure Plan
Check out the dangerously misleading chart on page 9 of the 2013 Infrastructure Plan, which is more realistically shown in this FT article.

. The report introduces the chart by saying the following :
"Most of the value of the [investment] pipeline is in the energy and transport sectors, worth over £340 billion of combined investment (as highlighted in the chart below, which shows investment on a logarithmic scale)."

Roughly how much larger is the biggest bar compared to the smallest bar?


Dec 2013 : More examples of shoddy graphs from Full Fact
Great article from FullFact here. BFTF notes in particular the misleading Conservative employment increase graph which can also be found here


** Using hopelessly weak data to justify policy **

Nov 2013 : Education Secretary using surveys by Holiday Inn as evidence
A report in the Guardian describes how the Education Secretary commented that:

"Survey after survey has revealed disturbing historical ignorance, with one teenager in five believing Winston Churchill was a fictional character while 58% think Sherlock Holmes was real."

Retired teacher Janet Jones challenged him on this using a Freedom Of Information request and, after several weeks, received the information that the statistics had come from a UKTV Gold survey and that they had no details on it. It also turned out that the phrase "survey after survey" referred to surveys by Premier Inn and an article in London Mums magazine. No evidence was presented that the surveys met the standards of the the British Polling Council.

BFTF notes that, irrespective of the accuracy of the statistics used, these stories NEVER have any historical context. Is the %age of kids who know who Admiral Nelson (say) going up? Going down? Nobody ever says.


** Hiding or burying data and reports that are embarrassing **

2014 : Conservative Party Archives
In 2007, David Cameron said "It's clear to me that political leaders will have to learn to let go. Let go of the information that we've guarded so jealously".

In 2010 the Conservative Party removed the publically accessible archive from its public facing website, erasing records of speeches and press releases from 2000 to 2010 - including, critically, those prior to the last election. The records were also removed from Google Search and from the Internet Archive. As of 31st Aug, points towards the UK Web Archive for "For old speeches, manifestos and news items", where around 40 records can be found, covering the period 2004 to 2014.

As of 31st Aug, the Labour Party website list of speeches also only goes as far back as 2010. BFTF notes that old speeches are not dated, which is unhelpful. Have challenged Labour party on this point.

In both cases, this makes it difficult to check BACK TO THE OFFICIAL SOURCE, what was claimed by these two parties prior to the last election, whether they have kept their promises and make a view as to whether their words can be trusted this time around.

Speeches (not sure how many) can still be found at


** Not practicing what they preach **

Dec 14 : Extravagance by the Lords
During a recent Palace of Westminster governance meeting, this happened :
"..a proposal to save taxpayers some money by making peers and MPs share a catering department has been rejected “because the Lords feared that the quality of champagne would not be as good if they chose a joint service”...The astonished chair of the committee, former home secretary Jack Straw, asked: “Did you make that up? Is that true?”
No, they didn't make it up. Yes, it was true.


** Rowdiness, heckling and bad manners **

Dec 13 : All parties at the Foodbank Debate

A post about this, very interesting, debate can be found here. But what really let the MP's down was they behaviour. The booing, jeering and general disorderliness would not be acceptable in any branch of business or industry, so why MP's think it is acceptable to behave so badly in a debate that WAS DEMANDED BY THE PUBLIC is quite beyond me. Some measure of the rowdinessm especially in the first hour, can be seen in the interventions that the deputy speaker was forced to make, as shown below:

Interventions by the Deputy Speaker during
the first hour of the Foodbank Debate 18 Dec 2013


** Answering the question they want to answer, not the one asked **

Oct 2012 : Conservative : Government ignores questions about airstrike killings
A post here explains how the US - which is the UK's closest military ally - has been using "double tap" airstikes in which an initial attack is followed up by a second missile that kills first responders and rescuers trying to save any wounded survivors from the first attack. This is a WAR CRIME.

BFTF challenged the government on this. The Government (when the eventually answered) chose not to address the issue of "Double Tap" airstikes at all and instead answered a different question entirely.



** Railroading important legislation through Parliament **

Oct 2015 : Tax Credit cuts pushed though Parliament with reduced oversight.
Oct 2015 : Prior to the 2015 General Election, the Conservative Party refused to say where the £12bn of cuts they intended to impose would actually fall, and in a Question Time debate, David Cameron strongly implied that Tax Credits and Child Tax Credits would not be hit.

Both of these credits allow people to keep some of their welfare payments if they take up work, with the credits gradually tailing off as the persons earnings rise. The intent was to remove the moral hazard whereby people had no incentive to take on low pay jobs because they would lose immediately be worse off because of the loss of welfare. They are not cheap, costing some 14% of the welfare budget, but according to the IFS, reducing the credits back to 2003 levels would take some 300,000 children into poverty, and reduce income by well over £1000pa for many of these working, but low earning, families. More info here)and here.

Having sailed through the Commons, the House of Lords has just rejected legislation to reduce Tax Credits, saying that the implementation should be delayed until until there is a plan for transitional protection. Senior Conservatives are angry that the Lords has done this, saying that the Lords should not vote against financial matters and that it raises "constitutional issues that need to be dealt with".

That would be true if the cuts has been mentioned in the Conservative Manifesto - but they were not.

It would have been true if the cuts had been introduced in a formal Bill - but they were not.

If would NOT be true if the cuts were pushed through parliament using a "statutory instrument" - which is what was actually used.
v According to author Ian Dunt :

"Statutory instruments mean you can quickly get a change to the law through parliament without the usual standards of debate and scrutiny. They are there to facilitate small changes in law which do not require much debate. But they have grown into a democratic menace, with governments regularly using them to sneak in substantial legal changes without submitting them to the will of parliament. But here's the good thing about statutory instruments: the Lords can vote against them"


** Just being plain stupid **

Nov 2013 : US bid to name “Science Laureate” hits snag.
A report from Arstechnica describes how a US proposal to have a "Science Laureate" to show the US public how important science is. The legislation was going through Congress pretty smoothly until Conservative Republicans hit the roof and demanded that it be pulled, despite it having Republican and Democrat sponsors. The commment that really caught NSB's eye was from Myron Ebell of the Competitive Enterprise Institute who said "There’s no way to make it would still give scientists an opportunity to pontificate, and we’re opposed to it.” (Thanks to @drkiki for the link)


** Living on a different planet **

In the wake of David Cameron off-shore funds scandal, Sir Alan Duncan, the Conservative MP for Rutland and Melton, commented thus in the house of commons:
"Shouldn't the Prime Minister's critics really just snap out of the synthetic indignation and admit that their real point is that they hate anyone who has got a hint of wealth in them?...May I support the Prime Minister in fending off those who are attacking him, particularly in thinking of this place, because if he doesn't, we risk seeing a House of Commons which is stuffed full of low-achievers who hate enterprise, hate people who look after their own family and know absolutely nothing about the outside world."

So you see, it is the little people who have to pay taxes for teachers, roads, policemen and hospitals - while the very rich can focus on making sure THEIR money stays in the family.

And let us pause for a moment here to remember that as the country was in the midst of global eonomic crash of 2008 onwards, there were MP's who thought the best way to demonstrate that we are all in it together was to claim expenses for moat cleaning.


Thursday, 17 October 2013

Talk : Who's afraid of groups and why?

Fascinating Cafe Sci talk recently entitled "Who's afraid of groups and why?" presented by Psychoanalyst and devout cyclist Prof Chris Evens (University of Nottingham, Institute of Group Analysis and Nottinghamshire Healthcare NHS Trust)

The Good in Groups
The talk examined the way in which humans are an intensely social species and how social groups have a role to play in promoting mental health.

To start with, Dr Evans tossed a small foam ball at a member of the audience and smiled at them. They smiled back and threw the ball back at him - which Dr Evans used as a demonstration of how people would almost instinctively react to others in a group and interact with them. It also demonstrated how much we expect to see certain reactions from others in a group, people returning a smile for example.Dr Evans explained that these social interactions were a key part of mental health.

The Cafe Sci Group in the interval between the talk and the Q&A

Dr Evans also mentioned how this needs for interaction meant that ostracism (a practice that oringinates with the greeks) is such a powerful threat

He pointed out that humans depend on groups for their very survival, noting that he would not be alive today were it not for his immediate family, farmers growing the food he ate, doctors treatinghim if he fell ill etc

As an example of how people turn out if they do not interact with human groups as a child, Dr Evans mentioned the strange case of Casper Hauser, who was allegedly kept in a cellar during his entire childhood

[BFTF does rather wonder about this story, struggling to see how a kid kept in those conditions would be able to walk up stairs, draw beautifully, see long distances etc as was the case for Casper]

Another example of how powerful and instincive human interactions can be was that of a ward of patients that Dr Evans had been involved with, and which contained patients with severe mental health issues such as believing they were dead, that they had no guts or that all the evil in the world was their fault. Sometimes toddlers were on the ward, as visitors, and it was fascinating to see how the faces of patients who were severely depressed and reluctant to engage with adults would light up as the small children approached them. To Dr Evans, this indicated that a very profound and basic interaction was happening here.

Dr Evans felt that we now engaged less in groups than used to be the case and were now "in a consumerist economy where we are purchasers of our own healthcare"

The Bad in Groups
On the other hand, as aspect of group behaviour that gave Dr Evans cause for concern was their ability to fall into mob behaviour patterns and violent behaviour. Dr Evans also referred to comments in a previous talk (by similarly soft spoken friend Prof Greg Hadley) on how the effects of war span multiple generations. Here is the relevant section of the BFTF report on Prof Hadley's talk :
"Prof Hadley explained that, in the case of Japan, the returning Japanese soldiers had not wanted to talk about their experiences overseas. This left the national narrative as being the one experienced by the women and children who stayed behind, a narrative of hunger, bombing and defeat.

The fact that the US lost the Vietnam war is one reason why many US police dramas of the 70s and 80s had a Vietnam vet with a tortured past as one of the characters.

Most troubling of all was the way in which returning soldiers who began to suffer PTSD (often several years after the end of the conflict) cause terrible stress in their families, and that their children can often grow up to show the same problems that their soldier parents had (e.g anger control, alcohol abuse) - thus repeating the cycle through multiple generations. One of the daughters of a Jordan crew member commented to Prof Hadley how she had felt that there was “a huge invisible B29 in the living room” throughout her childhood"

Prof Evans wondered whether we, in the UK, had yet truly dealt with the carpet bombing that was done in our name in WW2, often with little military justification.

Guernica, an example of what happens when groups go bad.

Another area that Dr Evans covered was that of measuring outcomes, as he had been part of the team that developed the CORE for scoring mental health treatment outcomes. Dr Evans felt this was important as, previously, highly paid professionals had been working behind closed doors without systmatic evaluation of whether they were always having a positive effect - and there had been a number of cases where the treatment given had not been harmful.

Prof Evans again voiced his concern that we were a society that it could "buy mental health an that mental health professionals can deliver mental health" and that the increase in individualism had meant that it was almost abnormal to be part of an organised group, adding that perhaps our "aspirations were very carefully fostered to be consumerist" and that the aspirations people used to give to the church or the football team, they now give to the TV. He referred to a famous study called "Bowling Alone: America's Declining Social Capital" which looked at the post-war decline in civil participation in the US.

Prof Evans felt that the factors that had caused this were the revolutions in computer and monetary systems,increased social mobility - and perhaps also a wish to move away from the kinds of groups that had been the cause of two world wars.

He also commented on the fact that, whilst there was also a great deal of advertising in the 1940's, it had been was more stratified, there was not the mass marketing that we see today where Porsches are advertised to those who can afford them as well as those who will never be able to afford them.


The Armadillo way?
Dr Evans gave an insight into the kind of "out-of-the-box" thought experiments that academics sometimes consider by wondering how people might view groups if, like armadillos, they always gave birth to multiple, identical, young.

An Armadillo

Open Dialogue
The really eye opening part of the talk was the description of the "open dialogue" movement from Finland. This approach to treatment emphasises seeing the patients in their own home, a prompt start to treatment reduced medication/hospitalisation and respect for the individual.

In some respects this is similar to the pragmatic approach taken in the developing world where a community might take the view that "yes, you have a psychosis, but we still have to get the harvest in" and give a person with mental health issues a role in society, rather than shutting them out - and where outcomes for patients with psychotic disorders are much better than in the West.

A fascinating article by filmmaker Daniel Mackler on his visit to a hospital that practiced Open Dialogue can be found here. Frankly, it is more important that you read that than reading the rest of this blog post.

To close this report, it's perhaps worth mentioning Dr Evans comments on the how different countries view groups. In his experience, groups such as villages are viewed much more positively in countries such as Greece than they are in the UK, although some aspects of village life were cut off for those perceived as outsiders (such as those of a different faith). And village life in Scandinavia was different again

And lastly, Prof Evans also talked about how creatures such as starlings clearly have a very strong group behavious built into them when they flock and that it felt as though human mob behaviour worked in a similar way, with people reacting to the behaviour of the few people directly surrounding them.

Flocking Starlings

Image Sources:

Tuesday, 15 October 2013

The Roses of Taif

BFTF is always interested in stories that challenge stereotypes, so was fascinated to read about the cultivation of the damask rose in the Saudi Arabian city of Taif

A BBC article describes how Farmer Saleh Al-Nimri and his team of pickers can harvest up to 40,000 roses in a morning with Al-Nimri commenting that "If we leave the rose until noon all its perfume will evaporate."

The distillation process involves boiling 20,000 heads together with some 60 litres of fresh water down to around 35 litres of rose water, with the premium product being the thin film of rose oil [know as attar] left floating on top, which sells for a whopping $40,000 a litre. It is only available in vials half the size of your finger and the scent of it knocks you out.

The Beautiful Damask Rose

Further information can be found in a very detailed and conprehensive article by Aramco which comments on how the flowering period only last for the month of April, with harvesting starting at dawn and being over by 7am, the fragrance released as the roses are cut filling the air.

The article also describes how the water based distillation process results in a different product from the alcohol based distillation routes taken in some other rose growing areas, such as the south of France.

It also explains how the mash of rose petals produced by the distillation is sold to local dairy farmers, whose cows then produce gently rose flavoured milk !

Taif is far from being a one-trick pony, as it were, and has a number of cultural attractions (see here), ranging from an Ottoman era fort to a beautiful Souk.

Related Links
Challenging the Saudi Government on their policies

Image Source : Wikipedia

Wednesday, 9 October 2013

London - Tiltshifted

Some pictured BFTF took from the London Eye, and then tiltshifted via TiltShiftMaker so that they make London look like a dinky little model city! (All pics can be clicked to enlarge)