Furniture Links

Lampenwelt
www.lampenwelt.ch/quadled-6-flammiges-rail-schienensystem.html
www.lampenwelt.ch/designerleuchten/?order=price&dir=desc&p=
www.lampenwelt.ch/deckenleuchte-link-12-fl.html
www.lampenwelt.ch/geblasene-led-glas-deckenleuchte-loop-line.html
www.lampenwelt.ch/siebenflammige-deckenleuchte-puck.html
www.lampenwelt.ch/aussergewoehnliche-deckenleuchte-ocho-4-flammig.html
www.lampenwelt.ch/alida-led-deckenleuchte-4-flammig.html
www.lampenwelt.ch/dreiflammige-deckenleuchte-puck.html
www.lampenwelt.ch/innovative-deckenleuchte-flat.html

Dimensione
http://dimensione-directsales.com/en/homedesign/product/897-eliot/
http://dimensione-directsales.com/en/homedesign/product/259-lombardo-bed/

Thieme
www.sport-thieme.ch/Fitnessger%C3%A4te/Crosstrainer/art=2058809

Archiexpo
www.archiexpo.de/architektur-design-hersteller/schminktisch-1099.html
www.archiexpo.de/architektur-design-hersteller/modernes-bett-2903.html

IT Shops
www.arredamentibertola.it/

DE Shops
www.seipp.com/en/about-seipp/company.html
www.moebel-mahler.de/einrichtungshaus

Varia
www.philippselva.com/en/9-Products/16-The-Night-Collection.html#posizione
www.factoryoutletsitaly.com/Outlets/Lombardia/Varese/Verghera/128525/Cyrus_Company.aspx
www.vat19.com
www.moebel.de/schlafen/betten?rd=y

http://www.maxifleur-kunstpflanzen.de/kunstbaume/grune-kunstbaume

https://www.galaxus.ch/de/s2/product/lg-styler-s3rerb-dampfbuegelsystem-buegelsystem-6284035

https://www.klimaworld.com/monoblock-klimagerat-olimpia-splendid-unico-smart-10-sf-2-3-kw-monoblock.html

Inheritance Tax

The Swiss will vote on June 14 whether to introduce a national inheritance tax of 20% of estates above CHF 2 million.

The text foresees unspecified exemptions for entrepreneurs (which by some is interpreted as an exemption of CHF 50 million and/or a lower tax rate of 5%) and retroactive implementation.

Currently it is unlikely that the new law (actually change of constitution) will be approved by the population as polls indicate a majority against the proposal.

In general I favour much lower tax loads as currently imposed almost anywhere, nevertheless in principle inheritance taxes are probably relatively fairer than other taxes. However, if I could vote in Switzerland I would be strongly against it, because of the following reasons:

- Retroactive implementation

- No offset with other taxes (say reduction of income and wealth taxes by the same amount)

- Unfairness (different treatment of entrepreneurs and non-entrepreneurs)

- Rate induces evasion and optimization (5% is probably the rate where these effects starts to play)

Possibly also the high exemption rate is negative because it disenfranchises the richer members of society as they see only themselves contributing (and receiving very little in return).

If I were to design an inheritance tax for Switzerland I would support it with the following parameters

- 5% rate

- no or very low exemption (say 5x minimum state pension of CHF 14´100)

- no exceptions (for entrepreneurs or otherwise)

- everybody is taxed (also surviving spouses and charity)

- abolishment of wealth tax

Political Preferences

In a NY Times blog post ("Rand Paul and the Empty Box"), Paul Krugman recycles a version of the Nolan diagram and claims that the upper right right box in the diagram will hardly attract any voters.

This is diagram shown in Mr. Krugman´s post.

Essentially this is a version of the Nolan diagram, which David Nolan suggested in 1970, here is a version, which turns the original graph by 45° (for ease of reference and comparison with the above), from here.

Here is another version, visualized with examples, also turned by 45° by myself from here, which seems to confirm that even among politicians the upper right area is thinly populated..

Now I don´t have data for US voter preferences, but found the following for Swiss party preferences. Interestingly here four out of the seven larger parties are in the upper right quadrant.

Large dot: country average, single dot: individual canton

The parties in the various quadrants (major parties in bold including last voting shares:

• Upper left box / "Liberals" in Mr. Krugman´s diagram: Social Democrats (SP, 20%), Greens (Grüne, 7%), Communists (Partei der Arbeit), Evangelical People´s Party (EVP); note: EVP is probably rightly classified as centrist party
• Upper right box / "Liberterian" in Mr. Krugman´s diagram: Green Liberals (GLP, 7%), Christian Democrats (CVP, 11%), Conservative Democrats (BDP, 5%) and Liberals (FDP, 16%), note: both Green Liberals and Liberals are classical liberals
• Lower right box / "Conservatives" in Mr. Krugman´s diagram: Swiss Peoples Party (SVP, 25%), Democratic Union (EDU), Ticino Leage (Lega)
• Lower left box / "Hardhats" in Mr. Krugma´s diagram: Swiss Democats (Schweizer Demokraten), note: far right party not represented in national parlament

Given voter preferences, in Switzerland 27% of voters would fall in the upper left box, 39% in the upper right box and 25% in the lower right box (numbers don´t add to 100% as minor parties have been ignored) making it the strongest box.

Obviously Swiss voters preferences say nothing about US voters and Switzerland has historically had a long and successful tradition of classical liberalism. Nevertheless I would venture the guess that also in the US the upper right box is more populated than Mr. Krugman suggests.

Comparison of Large Lotteries (Largest Jackpots)

After comparing the payout percentage of large lotteries taking into account taxes (if any), we would like to show the largest jackpots observed in these lotteries taking into account the following:

1) Cash payment (US lotteries are marketed using annuity values)
2) Net of taxes (if any), highest personal tax rate of 35% assumed for US lotteries
3) Conversion into USD (using year-end exchange rates obtained from here)

Accordingly the values are not comparable with those seen on other sites (see here and here).

Max JP	DE-6X	EU-EJ	EU-EM	US-MM	US-PB	BR-MS	AU-OZ
	EUR	EUR	EUR	USD	USD	BRL	AUD
2012	19.1	27.0	190.0	471.0	384.7	244.8	112.0
2013	27.1	46.1	187.9	347.6	370.9	224.7	70.0
2014	26.9	61.2	190.0	230.9	242.2	263.3	30.0
Net of Tax	DE-6X	EU-EJ	EU-EM	US-MM	US-PB	BR-MS	AU-OZ
	EUR	EUR	EUR	USD	USD	BRL	AUD
2012	19.1	27.0	190.0	306.2	250.1	244.8	112.0
2013	27.1	46.1	187.9	225.9	241.1	224.7	70.0
2014	26.9	61.2	190.0	150.1	157.4	263.3	30.0
in USD	DE-6X	EU-EJ	EU-EM	US-MM	US-PB	BR-MS	AU-OZ
	USD	USD	USD	USD	USD	USD	USD
2012	25.4	35.9	253.0	306.2	250.1	119.5	112.0
2013	37.3	63.4	258.7	225.9	241.1	95.1	62.1
2014	32.7	74.4	230.9	150.1	157.4	98.0	24.5

The largest lottery jackpot in 2012 was Mega Millions (USD 656 million annuity value gross of tax), but both in 2013 and 2014 EuroMillions had the highest jackpot of USD 258.7 million and USD 230.9 million respectively.

For average jackpots, EuroMillions has the highest numbers for all three years.

Avg JP	DE-6X	EU-EJ	EU-EM	US-MM	US-PB	BR-MS	AU-OZ
	EUR	EUR	EUR	USD	USD	BRL	AUD
2012	5.3	15.5	54.5	42.6	70.4	18.4	15.3
2013	8.6	18.0	42.9	50.3	72.4	18.9	13.8
2014	7.7	23.3	49.2	55.2	61.4	27.0	9.3
Net of Tax	DE-6X	EU-EJ	EU-EM	US-MM	US-PB	BR-MS	AU-OZ
	EUR	EUR	EUR	USD	USD	BRL	AUD
2012	5.3	15.5	54.5	27.7	45.8	18.4	15.3
2013	8.6	18.0	42.9	32.7	47.1	18.9	13.8
2014	7.7	23.3	49.2	35.9	39.9	27.0	9.3
in USD	DE-6X	EU-EJ	EU-EM	US-MM	US-PB	BR-MS	AU-OZ
	USD	USD	USD	USD	USD	USD	USD
2012	7.1	20.6	72.6	27.7	45.8	9.0	15.8
2013	11.8	24.8	59.1	32.7	47.1	8.0	12.2
2014	9.3	28.3	59.8	35.9	39.9	10.1	7.6

Distribution of Federal Council Seats in Switzerland

There will be federal election in Switzerland in 2015 and one of the hot topics is already how the seven seats of the federal council will be distributed. According to Wikipedia

The Federal Council is the seven-member executive council which constitutes the federal government of Switzerland and serves as the Swiss collective head of state. While the entire council is responsible for leading the federal administration of Switzerland, each Councillor heads one of the seven federal executive departments.

By informal agreement, the so called magic formula, the seats of the of the federal council are distributed between the four largest party as follows:

In Swiss politics, the magic formula is an arithmetic formula for dividing the seven executive seats of the Swiss Federal Council between the four ruling parties. The formula was first applied in 1959. It gave the Free Democratic Party (now FDP.The Liberals), the Christian Democratic People's Party and the Social Democratic Party each two seats, while the Party of Farmers, Traders and Independents (now the Swiss People's Party) received one seat.The formula is not an official law, but rather an agreement amongst the rather large coalition of four parties. 

It has been suggested to modify the magic formula as follows:

• Allocation of two seats each to the largest three parties and one seat to the fourth largest party
• Allocation of the seats according to proportional allocation rules to all parties

In a previous post we discussed the different forms of proportional allocation rules and will no apply these to the Swiss federal council allocation. For this calculation we use the data from October 3, 2014 as published here:

The parties have been allocated to left (L), center (C) and right (R) and grossed-up to 100% (the difference to 100% is made up by a dozen of small and very small party votes):

Note than in Swiss politics the term "liberal" has the classical liberal (say Hayekian) connotation and not the US usage for left parties.

For the quota methods all four (actually three because Droop and Hagenbach-Bischoff quota are identical because of the large number of votes) yield the same allocation of seats, 2 to the left, 2 to the center and 3 to the right, details below:

For H-B and Imperiali the seats are fully allocated without the need to use the largest remainder (actually the Imperiali quota almost results on a overallocation of seats, a well known potential problem). The the Hare quota the one unallocated seat goes to the centter where the largest remainder is highest (0.79 versus 0.11 and 0.10).

For the divisor methods the calculation results as follows, also in all cases resulting in the same allocation, 3 to the right, 2 to the center and 2 to the left.

We will repeat the calculation for the individual parties in a future post, in which case there will be differences between the different methods.

It should also be noted that the magic formula is a broad agreement of the large parties for proportional representation in the federal council, but specifics have never been agreed, including

• voting threshold (four largest parties, 4% of votes, 5% of votes, none)
• apparentment to three blocks (apparentment is typical is Swiss voting systems, but generally only for the legislative)

Comparison of Large Lotteries (Net Payout)

We are comparing the payout to lottery players of six large lotteries.

EuroMillions (Europe): ticket price EUR 2.00, 50% of revenues are distributed to players, whereof 40.6% (20.3% of 100%) goes to the JP class, winnings are tax free (with the exception of Portugal, Spain and Switzerland)

Eurojackpot (Europe): ticket price EUR 2.00, 50% of revenues are distributed to players, whereof 48.0% (24% of 100%) goes to the JP class, winnings are tax free is some countries

Mega Millions (USA): ticket price USD 1.00, 50% of revenues are distributed to players, whereof 32.58% (32.58% of 100%) foes to the JP class, winnings are subject to 25% federal withholding tax and tax free in some states
(note that JP winnings are subject to the 35% highest marginal tax rate for ordinary income, but likely taxed at a lower rate for junior classes, for comparison sake we will assume 35% for the JP class and 15% for all other classes) 

Powerball (USA): ticket price USD 2.00, 50% of revenues are distributed to players, whereof 63.95% (31.98% of 100%) goes to the JP class, winnings are subject to 25% federal withholding tax and tax free in some states
(note that JP winnings are subject to the 35% highest marginal tax rate for ordinary income, but likely taxed at a lower rate for junior classes, for comparison sake we will assume 35% for the JP class and 15% for all other classes) 

Mega Sena (Brazil): ticket price BRL 2.50, 33.3% of revenues are distributed to players, whereof 62% (19.1% of 100%) goes to the JP class, tax is already incorporated as per below calculation
(note that the 33.3%  is a weighted average of 30.8% for the two senior classes and 44.0% for the junior class, 30.8% is the result obtained by calculating 32.2% divided by 104.5% and 44% is the result of the sum of 30.8% plus 13.8% divided by 104.5%, the 13.8% represents the imputed tax on the two senior classes) 

OZ Lotto (Australia): ticket price AUD 1.20, 55% of revenues are distributed to players, whereof 40.0% (24.75% of 100%) goes to the JP class, winnings are tax free
(60% represents the result of 5% multiplied with the ratio of 1.1 divided by 1.2 plus 55% multiplied with the ratio of 1.1 divided by 1.2, AUD 1.2 is the ticket price whereof  AUD 0.1 is the sales commission) 

This results in the following overview:

On an expected basis lotteries have obviously a negative value for the players, but apparently positive expected utilities. Having said this, Australian lotteries (here Oz) come in the first place followed by the European lotteries. The US and Brazilian lotteries offer poorer value, although the very high jackpots compared to other lotteries may improve the utility.

Copper Price Forecasts by Cochilco (2014 Update)

This is the third post in a series (2013, 2012) of Cochilco's copper price forecasting. Their quarterly forecasts can be found here.

As in previous years we compare
a) the deviation of the effective (average) copper price for a given year and and the spot price six months before the beginning of such year, with
b) the Cochilco forecast for the (average) copper price for a given year made six months before the beginning of such year and and the spot price six months before the beginning of such year

As can be seen in the graph there has been less volatility and Cochilco has been able to forecast the right direction for the last four years. Additionally and as typical for forecast the magnitude of the forecast is generally significantly underestimated.

Country Index-itis

Too many country indices out there. Just in the last few days I saw the following indices:

Global Peace Index (2014 version)

Good Country Index (2014, table from the Economist)

I´m questioning whether these indices have any real uses.

Separately, it seems they all end up with the same results with the Scandinavian countries, Switzerland and Canada/Australia/New Zealand in the top 10.

Patent Registration by Latin American Inventors and Applicants - Follow-up

In an earlier post, we looked at patent registrations by Latin American investors and applicants. Earlier this week there was an article in one oh Chile´s leading newspapers (El Mercurio) analying the same topic. While the results are broadly consistent, details differ substantially. Our assumption is that the main reason for the differences are the use of a different database: EPO in our case, INAPI (Instituto Nacional de Propiedad Industrial, the Chilean patent office) in the case of "El Mercurio".

We will only provide an update of the EPO numbers in the beginning of 2015.

World´s Largest Container Fleets

Alphaliner publishes a list of the largest container fleets. The top 10 fleets are are follows. The three largest fleets are from Denmark, Switzerland and France respectively. 5 of the top 10 are Asian operators, 4 European and 1 US. CSAV from Chile used to be in the top 10, but has over the years dropped to the 20th position and has just agreed to merge with Hapag-Lloyd.