Perhaps not the world's greatest shock in Nature Geoscience 8, 880–884 (2015) doi:10.1038/ngeo2560 by Francisco Estrada,W. J. Wouter Botzen& Richard S. J. Tol. Hmm, one of those names is strangely familiar.
There's a press release from U Sussex: Professor Richard Tol is co-author... find that the upward trend in economic losses from hurricanes in the US cannot be explained by the commonly invoked increases in vulnerability and exposure... find that part of the trend cannot be explained by commonly used socioeconomic factors, but is consistent with an increase in the number and intensity of loss-generating cyclones that hit the US, possibly as a result of global warming. The authors estimate that US$2–14 billion of US hurricane losses incurred in 2005 may be attributable to climate change. Professor Tol said "Ha ha Pielke, stick that in your pipe and smoke it!" I may have made some of that up, but only a little bit. I'd tell you more but the b*st*rd thing is paywalled, so I don't need to find a more convoluted excuse for not reading it.
Institute for Environmental Studies, VU University, 1081 HV Amsterdam, The Netherlands
Francisco Estrada, W. J. Wouter Botzen & Richard S. J. Tol
Department of Economics, University of Sussex, Falmer BN1 9SL, UK
Richard S. J. Tol
Department of Spatial Economics, VU University, 1081 HV Amsterdam, The Netherlands
Richard S. J. Tol
Tinbergen Institute, 1082 MS Amsterdam, The Netherlands
Richard S. J. Tol
CESifo, 81679 Munich, Germany
Richard S. J. Tol
"I know that I am such a douche nozzle. However, statistical analysis is not the strongest skill among climate researchers. Sometimes this leads to an exaggeration of climate change and its impacts. Here, however, it appears that previous analyses, recently summarized in the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, have exaggerated the impact of population and economic growth on hurricane damages. Re-analysing the data, we find that there is a residual trend that looks remarkably like the trend in temperature. Oh, and I was an author on the IPCC AR4 WGII before I wasn't an author on the IPCC AR4 WGII"
The above quote is only in my mind. However, it would appear to be somewhat closer to the actual truth.
Consistent with is weasel words.
It would have been better if the authors had submitted their paper to an economics journal and thus subject it to scrutiny by editors and referees who understand economic growth and econometrics.
This was written as criticism of a recent paper by Burke et al published in Nature on economic impacts of temperature rise. The author of this criticism, is also a co-author on this economics-heavy paper published in Nature Geoscience.
Guess who (rhymes with lol).
Ha. Was going to add
but ATTP got there first.
[Tol is perhaps understandably not referring to the confusion around his own work; ATTP has the leisure to point out the problems with what Tol is saying. Its regrettable that the Beeb doesn't have the time. Its not that difficult. I think that they just wouldn't even consider doing so; they "know" the details of science are too tricky for their arts-school people? -W]
Matt "Northern Rock" Ridley thinks it's all good. Meanwhile,
[Ridley is a twat but not, I think, an interesting one. OTOH, NR is widely misunderstood; see for example http://www.forbes.com/sites/timworstall/2015/11/13/cerberus-buys-13-bil… -W]
Now we've got storm naming, that one was ABigGail
Next up, a Barney: purple dinosaur?
WC - You really ought to know better than to believe anything Worstall writes. I didn't see any mention of Northern Rock Asset Management in his Forbes article - you know, the bad bank. NRAM plc took the $50 billion in bad loans while Northern Rock was designated the good bank and was sold off.
So the good bank was able to sell off the good loans - yippee! The bad bank is still holding the garbage. And from this Timmy wants to claim the loans were actually good? In what world?
[Wiki says much the same: https://en.wikipedia.org/wiki/Northern_Rock -W]
Timmy's article was interesting, as far as a skim reading reveals the wiki hasn't caught up with the resale of the mortgages.
So, the assets were sound after all, though Gideon having organised more house price inflation probably helped, and the securitisation wheeze is apparently an ok idea.
The problem was implementation under Ridley, who managed to turn a reputable building society into a bank which was wrecked by a bank run. Perhaps his excuse is that the government didn't intervene in the cunning way Timmy now proposes? So much for free enterprise.
To quote wiki, "Under the chairmanship of Matt Ridley, Northern Rock had a business plan which involved borrowing heavily in the UK and international money markets, extending mortgages to customers based on this funding, and then re-selling these mortgages on international capital markets, a process known as securitisation."
From my uninformed viewpoint, a good way of bolstering house price inflation, a far cry from the safe and solid image of the mutual building societies. Perhaps I've got it wrong?
Oh, and wicked cousin Kevin seems to have it the wrong way round: https://en.wikipedia.org/wiki/NRAM_plc is about the 'bad-bank' of Northern Rock, and mentions "November 2015, the company confirmed the sale of £13 billion of mortgages and loans to Cerberus Capital Management, largely made up of its Granite portfolio. Cerberus immediately sold £3.3 billion of mortgages to the UK bank TSB." hence flogging them to The Broons' Bank.
What I don't understand is, "In 2008 Granite had a value of around £45 billion", so how come flogging it for £3.3bn is a good deal? No doubt lots of unmentioned or unmentionable factors.
[Hold on, you mean £13b, not £3.3b; that latter is just the sell-on; Cerberus didn't sell all of Granit on. Also I think (from the disparity with £45b, and the original source) that's only a part of Granit, not the whole; I've rephrased the wiki article to clarify -W]
Oh, and I still think that with that in his CV, Ridley is in no position to tell climatologists he knows better than them. Ditto Tol.
[Like I say, Ridley is a twat, because of what he says about GW. I don't see any need to invoke NR -W]
I guess one doesn't need to invoke NR to criticise Ridley, but his background there does say something about how he seems to view risks, and I found this comment/excuse from this interview rather enlightening.
I was chairman of Northern Rock and when I saw that… I mean, it wasn’t ridiculously overdone, the regulation, but there was a lot of it and I spent a lot of time with regulators and they would ask me many, many questions about credit risk. And they never asked questions about liquidity risk, which turned out to be the risk we were facing. Now that gave me false reassurance. It shouldn’t have done. I should have been clever enough to see through that and say: Hang on, we’re running a risk that you’re not talking about…
[He's pointing out that regulators are always ready, like French generals, to fight the last war. That's still true (and dangerous) today. I'm not sure why you're choosing that to use against him -W]
> [I’m not sure why you’re choosing that to use against him -W]
Partly, it just seems to illustrate how he can find any reason to shift the blame. The regulators may well have being fighting the last war, but I would expect the banks themselves to have been aware of other potential risks. Blaming the regulators, rather than themselves, seems rather weak. It might be better if the regulators were aware of all the risks, but I don't think that absolves the banks for taking risks that they hadn't properly assessed.
Also, if GW is anything to go by, people may well have been pointing out these other risks, and MR could have simply been conveniently choosing to ignore them. Certainly, if his position on GW is anything go, his view of risks seems to be "let's gamble on what I would like to be true".
[I think you're being unfair; or prejudiced, rather. You know you hate Ridley, so you read everything he says on the assumption that its all malign. But that gave me false reassurance. It shouldn’t have done. I should have been clever enough to see isn't shifting the blame; he clearly states that he should have seen. You appear to be saying that Ridley isn't even allowed to mention that the regulators got it wrong. Can you propose another form of words in which Ridley could have made the same (correct) point about the regulators, but which wouldn't cause you to think he was shifting blame? -W]
> [You know you hate Ridley, so you read everything he says on the assumption that its all malign.]
Hate? I think Ridley falls into the category of people for whom I actually feel little. Irritated possibly.
[Alright, I knew that was the wrong word when I used it. But hopefully you understand what I mean -W]
> [Can you propose another form of words in which Ridley could have made the same (correct) point about the regulators, but which wouldn’t cause you to think he was shifting blame?]
Okay, fair enough, he acknowledges that he should have been clever enough to to see. Could I write it differently? Sure. What is the (correct) point, though? The regulators missed some risks that - if they had highlighted them - might have helped to avert this? Okay? These banks still have risk committees and are still formally responsible, though. If you're someone like Matt Ridley who thinks (as his interview suggests) that there's too much regulation, it's overdone, and that it can misdirect market concern (although maybe he learned that afterwards) why do let what regulators say put your mind at ease?
I suspect we're just going to see this differently. I'm just imaging a similar interview in 10/20 years time when MR tells us how if only there hadn't been Climategate, if only climate scientists had been nicer to him, and how if only they'd been more certain, he would have taken the risks associate with GW more seriously. All of these things put his mind at ease that really there were problems with climate science and that we simply didn't know enough to start addressing what was clearly something about which we were still very uncertain.
[Amusing analogy. And I'm sure you're right: MR and his ilk - AW, whatever - will indeed find excuses for being wrong about GW. Is it valid though, as an analogy? Not really; the regulator is far more formal. BTW, I've just skimmed the interview. He has some valid economic points - about no-one being really in charge, perhaps - but there's a lot wrong, blurred, silly with that he says, IMHO. Its similar to what he says about GW, except on GW he's more ignorant -W]
[ Not really; the regulator is far more formal. ]
Okay, sure, but I think I would have been more sympathetic if he'd criticised the regulators without the "put me at my ease" comment. My point was certainly not that the regulations were all fine and that they couldn't have been more effective. It was more about how he chose to frame it. It comes across a little like someone who has an accident on an icy road and then say "but the speed limit was 60, which put me at my ease". Even if they added "I should have known better", you'd still think they were an idiot. You might argue that the Highway Code says that drivers should drive to the conditions, but I suspect that banks are also expected to consider risks other than those being highlighted by the regulators.
[but there’s a lot wrong, blurred, silly with that he says, IMHO. Its similar to what he says about GW, except on GW he’s more ignorant]
At least we seem to broadly agree :-)