Why are the banks paying so little UK corporation tax?

This paper explores the dramatic fall in receipts of UK corporation tax (UKCT) from banks, and the widening gap between the global corporation tax recorded as payable in banks' financial statements and the UKCT receipts recorded by the tax authorities. It reviews possible explanations, including changes in tax rates, in operating profits, in deductions which reduce taxable profits, and in the share of profit originating in, or recorded in, overseas jurisdictions. It assigns significant roles to tax-deductible asset impairments and to the allocation of profits among different jurisdictions. It suggests reasons why the recovery in banks' global operating profits may not be accompanied by an early sharp recovery in UKCT receipts

Stationarity and the term structure of interest rates: a characterisation of stationary and unit root yield curves

The nature of yield curve dynamics and the determinants of the integration order of yields are investigated using a benchmark economy in which the logarithmic expectations theory holds and the regularity condition of a limiting yield and limiting term premium is satisfied. By considering a zero-coupon yield curve with a complete term structure of maturities, a linear vector autoregressive process is constructed that provides an arbitrarily accurate moving average representation of the complete yield curve as its cross-sectional dimension (n) goes to infinity. We use this to prove the following novel results. First, any I(2) component vanishes owing to the almost sure (a.s.) convergence of the innovations to yields, vt(n), as n. Second, the yield curve is stationary if and only if nvt(n) converges a.s., or equivalently the innovations to log discount bond prices converge a.s.; otherwise yields are I(1). A necessary condition for either stationarity or the absence of arbitrage is that the limiting yield is constant over time. Since the time-varying component of term premia is small in various fixed-income markets, these results provide insight into the critical determinants of the stationarity properties of the term structure.Econometric models ; Interest rates

The dynamics of economics functions: modelling and forecasting the yield curve

The class of Functional Signal plus Noise (FSN) models is introduced that provides a new, general method for modelling and forecasting time series of economic functions. The underlying, continuous economic function (or "signal") is a natural cubic spline whose dynamic evolution is driven by a cointegrated vector autoregression for the ordinates (or "y-values") at the knots of the spline. The natural cubic spline provides flexible cross-sectional fit and results in a linear, state space model. This FSN model achieves dimension reduction, provides a coherent description of the observed yield curve and its dynamics as the cross-sectional dimension N becomes large, and can feasibly be estimated and used for forecasting when N is large. The integration and cointegration properties of the model are derived. The FSN models are then applied to forecasting 36-dimensional yield curves for US Treasury bonds at the one month ahead horizon. The method consistently outperforms the Diebold and Li (2006) and random walk forecasts on the basis of both mean square forecast error criteria and economically relevant loss functions derived from the realised profits of pairs trading algorithms. The analysis also highlights in a concrete setting the dangers of attempts to infer the relative economic value of model forecasts on the basis of their associated mean square forecast errors.Time-series analysis ; Forecasting ; Mathematical models ; Macroeconomics - Econometric models

Thermal Infrared Multispectral Scanner (TIMS): An investigator's guide to TIMS data

The Thermal Infrared Multispectral Scanner (TIMS) is a NASA aircraft scanner providing six channel spectral capability in the thermal infrared region of the electromagnetic spectrum. Operating in the atmospheric window region (8 to 12 micrometers) with a channel sensitivity of approximately 0.1 C, TIMS may be used whenever an accurate measure of the Earth's surface is needed. A description of this scanner is provided as well as a discussion of data acquisition and reduction

Does Looping Enhance Student Achievement?

The purpose of this study is to investigate the pros and cons of looping, while discovering its social and academic effects on student achievement. This was done by analyzing the standardized test scores in reading, language arts and math of a control group that did not loop and an experimental group that looped for one year. Results showed there was no significant difference in academic achievement between the group of students that looped and the students that did not loop in grades 4-5. There was statistical significance in the improvement of reading test scores from the students that looped. Although statistical significance was found in these scores, the effect size was very small; therefore generalizations regarding the benefits of looping are inappropriate

Acquirers' earnings management ahead of stock-for-stock bids in 'hot' and 'cold' markets

The accounting literature has found evidence that acquirers in stock-for-stock M&A have typically managed earnings upwards ahead of a bid. Other literatures have concluded that, when stock prices are high and rising, M&A is higher, more M&A is financed with stock, market sentiment and stockholders’ perceptions of information appear to change, and in these circumstances new (arbitrage) motivations for M&A emerge. This paper revisits earnings management ahead of M&A in the light of these findings, comparing experience in ‘hot’ and ‘cold’ markets. It finds that such earnings management is more pronounced in hot markets; that only in such markets are positive discretionary accruals commonly associated with positive abnormal returns on the announcement of earnings; and that in such markets – against the expectations from signalling theory – these positive returns are not reversed on announcement of a stockfor- stock bid. The results suggest that the economic benefits achieved by engaging in earnings management during hot markets are indeed significant: in hot markets, we estimate that on average share acquirers engage in working capital accrual management equivalent to over a third of the average acquirer’s return on total assets in that year; and that this earnings management is associated with increases in market value which are statistically and economically significant, enabling the bidder to secure control of the target with fewer shares

How to deliver an effective senior exercise class

In a time when people are living longer and more active lifestyles, we propose that we may be selling many of our seniors short by oversimplifying the design of group exercise classes. This article suggests ways of delivering effective senior exercise classes incorporating functional movement and sound conditioning principles applied to the older adult population.Funding for the interventions that this article was based on was provided in part by Carolina Meadows CCRC, Chapel Hill, NC, US

Frequency response in short thermocouple wires

Theoretical expressions are derived for the steady state frequency response of a thermocouple wire. In particular, the effects of axial heat conduction are demonstrated for a nonuniform wire with unequal material properties and wire diameters across the junction. The amplitude ratio at low frequency omega approaches 0 agrees with the results of Scadron and Warshawsky (1952) for a steady state temperature distribution. Moreover, the frequency response for a nonuniform wire in the limit of infinite length l approaches infinity is shown to reduce to a simple expression that is analogous to the classic first order solution for a thermocouple wire with uniform properties. Theoretical expressions are also derived for the steady state frequency response of a supported thermocouple wire. In particular, the effects of axial heat conduction are demonstrated for both a supported one material wire and a two material wire with unequal material properties across the junction. For the case of a one material supported wire, an exact solution is derived which compares favorably with an approximate expression that only matches temperatures at the support junction. Moreover, for the case of a two material supported wire, an analytical expression is derived that closely correlates numerical results. Experimental measurements are made for the steady state frequency response of a supported thermocouple wire. In particular, the effects of axial heat conduction are demonstrated for both a supported one material wire (type K) and a two material wire (type T) with unequal material properties across the junction. The data for the amplitude ratio and phase angle are correlated to within 10 pct. with the theoretical predictions of Forney and Fralick (1991). This is accomplished by choosing a natural frequency omega sub n for the wire data to correlate the first order response at large gas temperature frequencies. It is found that a large bead size, however, will increase the amplitude ratio at low frequencies but decrease the natural frequency of the wire. The phase angle data are also distorted for imperfect junctions

Tracking and data systems support for the Helios project. Volume 2: DSN support of Project Helios April 1975 - May 1976

Deep Space Network activities in the development of the Helios B mission from planning through entry of Helios 2 into first superior conjunction (end of Mission Phase II) are summarized. Network operational support activities for Helios 1 from first superior conjunction through entry into third superior conjunction are included