The Decline of the Left

riting in Business Standard today, Surjit Bhalla has a table of the vote share of the CPI and the CPI(M) put together. I thought it would be useful to see this data as a time-series, so here is the result.

Click on the graph to see it more clearly. Each circle is a data point. The dashed line is a (robust) regression with a shift in the intercept in 1991, reflecting the fall of communism. As we can see, the fall of communism seems to have gone along with a loss of vote share of 1.3 percentage points for the Left.

The latest result is a bit worse than the trend line might have suggested: tactical factors went a bit against the Left. At the same time, the CPI and CPI(M) leadership can take heart: the latest result is not all that far from the historic decline of the left, so this does not suggest that the leadership made particularly large tactical errors. What they are perhaps up against is historical forces.

The red coloured plus sign is the linear extrapolation for 2014; the slope implies losing roughly 0.13 percentage points of vote share each five years. (The statistical signifiance is weak; it’s a t stat of -1.52).

Here’s the R code which you can experiment with:

library(MASS)
dates <- c(57,62,67,71,77,80,84,89,91,96,98,99,104,109)+1900
vshare <- c(8.9,9.9,9.4,9.8,7.1,8.7,8.6,9.1,8.7,8.1,6.9,6.9,7.1,6.8)
post1991 <- dates > 1991
m <- rlm(vshare ~ -1 + dates + post1991)
summary(m)
m$coefficients[1]*5 # lose this much each gen. election

png(”ic.png”, width=550,height=550, pointsize=16)
par(mai=c(.8,1.1,.2,.2))
plot(dates, vshare, type=”p”, xlim=c(1957,2014), xlab=”", ylab=”Vote share of CPI + CPI(M)”)
lines(dates[1:9], fitted.values(m)[1:9], lty=2, lwd=2)
lines(dates[10:14], fitted.values(m)[10:14], lty=2, lwd=2)
abline(v=1991, col=”red”, lwd=2)
points(2014, m$coefficients %*% c(2014,0,1), cex=3, col=”red”, pch=3)
text(1966,9.1,”Regression line pre-1991″,cex=.7)
text(2003,7.3,”Regression line post-1991″, cex=.7)

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Silver premiums and fake spots

Interesting resurrection of a Kitco post from October 2008 about silver premiums. There was a lot of heated words and a bit of sillyness. In October 1000 oz bars were quoted @ 69 cents and 1 oz Eagles @ $6.99. Now it is 19 cents and $1.99.

For those who would only trust physical, the smart play was 1000oz bars @ 69c. I’m not sure what the buyback discount is in the US, lets say 1% under the so-called “fake” spot. So sell the 1000oz bar and lose 15c and then buy Eagles at $1.99. Total cost = 69c + 15c + 1.99 = $2.83, still way cheaper than $6.99.

Also, reading back over those posts there seemed to be a view that there was a difference between “industrial” silver (1000oz bars) and “investor” silver (1oz coins). In the Perth Mint’s Depository by far the most popular physical form held in allocated storage by individual investors is the 1000oz bar, not coins, simply because it is the cheapest. From my point of view a 1000oz bar IS and investor product.

As to the view that COMEX is some sort of “paper” price “disconnected” from the “real” physical price. Arbitrage in the professional market keeps COMEX price in line with spot price for physical. The fact is that huge quantities of 1000oz physical silver bars change hands at this “fake” spot price.

It is interesting that commentators who were making a huge deal about the big premiums on coins and using this as proof of the fakeness of COMEX and that it meant the end of the world and silver was going to the moon etc etc are now very quiet about the reduction in premiums. If the low premiums are mentioned, it is as an aside and no conclusions are drawn. They really shouldn’t have been making a case for investment in silver based on premiums (as that just reflects manufacturing capacity shortages) but on the spot price (which reflects real shortages of the underlying physical).