The Five Blogs of Christmas II – True Romance

On the Second Day of Christmas, my muse has inspired me to a rather long cinematic reflection

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I am something of a sucker for romantic comedies. Recently for instance, I have been re-watching When Harry Met Sally and I will occasionally dip back into films such as 13 Going On 30, a minor classic in its own way. Yet at the end of the day, these do not much reflect reality – not for the conventional reason that “things never go as serendipitously in real life” (true though that is) but rather, because life is not really about first love at all, its about first break-up and, if you are lucky, the second romance.

Hence I keep to hand what I refer to as the Canon of romance films, several of which I have forced upon my friends at critical moments of their love lives, when I feel particularly inclined towards interfering in a slightly passive-aggressive way (even your best friends never really want to hear you true opinion about their love interests, despite asking; so best keep dumb and use alternative methods of expressing yourself like “hey I haven’t watched Fatal Attraction for ages!” and hope they get the hint about their slightly menacing ex who walks around with a kitchen knife hovering dangerously).

I also feel that each of the Canon speaks to me, each in their different ways, about key asymmetries in love, as in life. More than anything, the criteria for entry into this hallowed list is that it cannot be a simplistic “happy ending”, just as real life cannot be. Despite being listed as “romantic comedies”, these films leave you feeling unsure, as they should. So here are some of the must-sees before understanding one’s own romantic existence.

500 Days of Summer (2009)

500 Days of Summer (2009) - IMDb

This is of course the best example of romantic “asymmetry”. 500 Days really captures that post break-up introspection when you look back and think “well shit, I got that completely wrong!”. The cognitive dissonance between what you thought was happening and what, in fact, had occurred is one thing; but even more critical is the dissonance between what you perceived and what the other perceived over the same matter. The missed half-glances, the unheard comments, these are the seeds of your own romantic destruction.

Two human beings will never understand each other, of course; this is a Cartesian truth. But in our minds, the possibility of meeting minds is the basis of all hope for love. This film demonstrates the fragility and, frankly, the unlikelihood of such a situation. You will never truly understand your other half so do not waste your time trying.

Definitely, Maybe (2008)

Definitely, Maybe. I don't think anyone ever imagines on… | by Tita | Medium

Perhaps a strange choice as judged by the “happy endings” criteria, but bear with me. Officially, Definitely, Maybe ends with the “right” girl being picked by protagonist Will Hayes (and I admit, Will speaks to me due not only to his romanticization but his ability to live his life through contemporary politics and get lost in “moments” such as Bill Clinton’s indictment). But actually this is not doing the film justice: on a basic level, Will does not even end up with the woman who is his daughter’s mother, breaking at least one element of conventionalism.

But the more poignant issue are his three female options. The (I think unwitting) genius of the film is the way that whilst the narrative pushes the viewer towards accepting April as the “right girl”, actually most people end up having differing opinions. I know people who have watched it and wished he ended up with Emily, his college sweetheart, or Summer, the robust intellectual (for the record, she gets my vote).

The point being made is that whilst one can – indeed, should – believe in “true love”, this is not the same as believing in one true love. If you are lucky, you may go through life meeting half a dozen people who are the right one. They are all your true love, depending on where you are; and they are all set apart from the majority who are all wrong for you; but true love does not hinge on a single individual. Romantic choices are real, after which it is only practical choices which matter. In that sense, this is not a “happy ending”.

那些年,我們一起追的女孩 (2011)

那些年|柯震東吸毒全面遭封殺彎彎婚後12日街頭激吻重挫形象

Somewhat torturously translated as You Are The Apple Of My Eye, 那些年 captured the hearts and minds of cinema goers not just in Taiwan but also Mainland China when it was released, which from a socio-political perspective actually provides some insights as to how similar life is on the ground for young people between China and its renegade province, probably to the shock of all. But the schooldays nostalgia is only one theme: the other is living with the what-might-have-beens in life.

The unhappy ending is in a sense obvious, since despite all the dramatic interaction between the main characters, they do not end up together and the girl gets married to some nondescript other (any person you still harbour affections for will always end up marrying someone nondescript, that’s a golden rule). But this film really pokes in the eye the peculiarly Asian adherence to hyper inflated romance, and the world of the grand gesture which is often assumed to trump all. In reality of course, people will make practical choices and they will also move on; if you do not nail down someone in that romanticized moment – which is possible – then your window closes. And then you are left exactly as a window leaves you: peering in from the outside at what might have been, but without really know anymore if the vision inside is quite what you think it is.

You do then however, have to laugh and make fun of yourself, and it.

The Break-Up (2006)

Watch The Break-Up | Netflix

This is actually a quite brilliant and disturbing film, even in its funny moments. It really changed my view of both Vince Vaughn and particularly Jennifer Aniston, coming as I did from a childhood of watching her being the annoying and selfish Rachel in Friends (and yes, they were on a break). The film has the dramatic tension of an Arthur Miller play, with some scenes of such deep pathos that one might think that Vaughn (who co-wrote this after being mostly the straight man in comedy classics such as Old School) had reached straight into your own past and pasted its contents on screen.

I think the main takeaways from The Break-Up are that even those who are each other’s true loves (see above) can and often do break up. Being right for each other does not make being a success a foregone conclusion, and life may contain numerous right people, many of which end up being “failures”. Neither does failing with someone diminish their “right-ness”. The other point the film makes is that break-ups are tragedy microcosms, full of the specific choices one makes at given moments in time. Life, overall, is precisely about such choices and fate is decided upon these tosses of a coin. When Gary chooses not to go to the concert at the end, of course you could take a step back and say “oh well, he is emotionally repressed and incapable of expressing himself or being brave enough to put himself on the line”, and that is partly true. But in fact, his decision is being made by the finest of margins, whilst trying to make sense of a maelstrom of emotions. He doesn’t know where he is, where she is, where this is going. Why would he?

The Break-Up is a great film for rewatching, precisely because despite knowing the ending (they do not get together, although there is a hint of promise) you cannot draw yourself away from a horrified fascination. It is like watching Macbeth. This makes it a classic.

The Last Kiss (2006)

The Last Kiss - Movies - Review - The New York Times

Another heavy-hitter even amongst the Canon – albeit this one mainly for guys rather than girls. Almost every scene and every subplot in is packed with poignancy: seeing your ex at an event with your group of friends; the intensity that a newborn baby brings to up-end your life; the moment a friend with benefits suddenly needs something more. Most of all, the group of slightly ageing, obligated men deciding to run away from it all to go on a road trip, only to slowly realise they cannot and drop away one by one. These are the stories of our lives.

As far as the true romance goes, the main themes that are confronted include the existence of temptation, how to deal with it, and the fact that after such major exogenous shocks, it will all never be the same again. People in relationships change from being their other half’s “superhero” to just another normal person, in the same way that parents do so in the eyes of their children over time. Real love therefore – if it exists at all – is where you work through all those trials and tribulations to get to the real, sustainable stuff at the other end. Only there will you find whether it works or not. Whilst the end of the film does proffer hope about things working out, the important point is that this is no longer the old love, like a snake shedding its skin, Love 2.0 has to be ever changing and new. Love is a shark, it needs to move or it will die.

I must also add that The Last Kiss contains one scene, where the protagonist is slowly being caught in a lie by his other half, which churns the stomach of every guy I have sat through this film with. There is that moment of “uh oh”, the rapid calculation over at what point the lie needs to change or one has to cut losses and come clean. This battle is at the very heart of the male psyche.

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There are a few other honourable metions: When Harry Met Sally (1989) does have some great moments (including the assertion that guys cannot be friends with girls without sex playing a part – which is true). 13 Going On 30 (2004) is once again about choices – the only way you can get back your past is apparently through magic fairy dust (in other words, you cannot). A more recent film was How To Be Single (2016), which almost reaches Canon status in its assessment of modern urban romance and optionality, but I am unclear at the end as to whether this is supposed to be a happy ending or not. It’s a pretty good watch though, and the formula for total units of alcohol consumed between two parties and whether this means they will sleep with each other is a good one.

The long and short of all this is, I am a romanticized person – probably overly romanticized if anything. Yet the Canon demonstrates that it is the romanticization which causes the greatest problems and is the riskiest approach towards love in the first place. It is perhaps the only area of human existence where the majority of people, who are otherwise conservative in their choices, suddenly become gamblers and indeed will bet again and again. It is inexplicable; and therefore the Canon may make the inexplicable just slightly more explicable.

Lockdowns (still) don’t work

Austria back to total lockdown, vaccines mandatory from Feb | The Standard

As several countries slide back towards the spectre of Covid-21 lockdowns, this is perhaps an opportune moment to consider whether we actually learned anything from Covid-19 and the policy reactions around it. On the face of it, the answer would appear to be a firm “no”, as governments continue to react on the basis of at best short-term considerations and at worst, aesthetics.

Some time ago on another blog (Noah Smith on Substack), whose contents are interesting if rather pre-2016 in their globalism, a piece was posted on why lockdowns were so great. But the real gold here was in the comments, and I unashamedly publish one such comment in its entirety below, which makes the point valid then but even more so now: lockdowns never work because they are always closing the stable door after the horse has bolted. There is no viable way for most countries to get lockdowns right and effective. As a result, it is not very clever to try.

The commenter (presumably an Arsenal suppporter, disappointingly), retorts to Smith’s article thus:

The problem with this article – and with lockdowns in general – is that they assume they can control exponential growth. It’s been pretty well established that in most cases COVID-19 follows a logistic curve (in terms of cumulative cases and deaths). In order to stop a spike in cases and deaths you need to two things to work out for you. Firstly you need to get the timing of the lockdown correct and – more importantly – the lockdown has to take R below one.

There are some very big issues with this approach. One is that all three lockdowns, COVID infections (i.e. day 0 of a covid case) have peaked before lockdown measures took place. Professor Simon Wood of the University of Edinburgh has done some excellent work on this. It appears that we are as good at timing lockdowns as investors are at timing the market.

Secondly and more controversially, lockdowns are not effective in reducing infections. They do not work. If we examine the November lockdown we see that there is only a small decrease in infections after a lockdown is imposed. In the March and January lockdowns, infections were already decreasing in the days before lockdown and the R value was also decreasing prior to lockdown. Lockdowns may increase the rate at which R decreases (dR/dt), but the evidence for this is slim at best. For evidence of all of this, see the two graphs from Simon Wood.

Further evidence for lockdown 3 can be found here. On a more local level, we see such proof for this again and again in the failed local lockdowns in Leicester and the north of England. In London, cases were increasing rapidly in certain boroughs towards the end of the November lockdown. While the B117 variant and schools being open may have been factor in this, it further weakens the case for lockdowns. A collection of 35 papers have also reached similar conclusions

Despite all of this evidence against lockdowns, let us assume that they work to some extent. In order to justify them, the government must demonstrate the benefits of the lockdown outweigh the costs. Miles et al examined this and found that the “lowest estimate for lockdown costs incurred was 40% higher than highest benefits from avoiding the worst mortality case scenario at full life expectancy tariff and in more realistic estimations they were over 5 times higher“.

It appears that there are only two viable approaches to fighting COVID-19, the first being the “zero COVID” approach used by Taiwan, South Korea, Australia and New Zealand. The other option is the light touch approach of the US (Texas and Florida in particular) and Sweden. Anything in-between is likely to lead to more job losses and non-COVID excess deaths while doing almost nothing to slow down this disease.

All of these are fully sourced and the sources worth a read. To add to his comments, in retrospect the “zero COVID” approach is also not working, and the examples the author cited at that point have come to be bitten severely with ongoing local lockdowns and major disruptions to life. It seems unlikely that even Australia would continue advocating the “Australia method” these days, and that is before discounting the fact that Australia and New Zealand were able to impose such lockdowns rather uniquely given their island status. A democratic society which is not an island will find these extremely hard to bear.

In reality, even China is now talking about having to come to terms with COVID as something one lives with rather than something one conquers. With the latest Omicron variant demonstrating new levels of mildness in symptoms, we are almost certainly at the point where everyone will have to agree on tolerance towards the virus. Hopefully at least something will have been learned of the last two years, but perhaps this is asking too much.

The Five Blogs of Christmas I – Humble Servants

Since I have been rather remiss in updating my thoughts, and since blogging should be a discipline, in this week between the holidays I will attempt to collate some of the more idiosyncratic thoughts keeping me awake – most of which are unrelated to politics, economics of football. Like apples for health, I will aim to serve up one a day.

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A subject that has always fascinated me is that of the “humble servant”: figures in history who are merely subjects of a dynastic line, but whose dedication to that dynasticism is unfettered, pure and often more intense than the dynasts themselves. These are people serving an institutional cause, rather than either their own or even that of a nation or group. They are the behind-the-scenes powers, the civil servants and private secretaries, the bureaucrats, the imperial governors and administrators, the statesmen, the grand chamberlains, the chancellors. Often, they are the most ideological and committed members of a regime. They are what royal and imperial longevity are based on. They are also the touchstones of the “Great Men” theory of history, for which I have much time.

My favourite example is that of Eumenes of Cardia, Alexander the Great’s private secretary, a lone Greek amongst Macedonians and – sort of – a member of the Diadochi. Eumenes fought against the odds to carve out his own power in in the Hellenistic world, but did so due to his commitment to not just Alexander III but the Argead Dynasty more broadly. He understood well, more so than many of the Σωματοφύλακες (whose rank he, as a Greek, could never join), the necessity for both continuity and integration in the newly created empire, in order for it to remain tenable. On some level, he recognized, rather as elements of the British establishment did of America in the decades after 1918, that the civilizational propagation of the Greek world, even under the semi-barbarian auspices of the Macedonians, was preferable to its decline. To his very end, Eumenes proclaimed the rightful rule of Philip III and Alexander IV, infuriating Antigonus even as he commanded his adversary’s respect. Meanwhile, the Argead’s themselves were far from covering themselves with glory, undeserving in many respects the services of such a dedicated figure.

The other name which springs to mind is that of Armand Jean du Plessis, the Cardinal Richelieu. One of a number of cardinals serving the then-nascent House of Bourbon (Richelieu was to be followed over the next century by the Cardinals Mazarin and Fleury as chief ministers to respective Kings), Richelieu is commonly known as the villain in The Three Musketeers. Yet in fact, Richelieu played a crucial role in consolidating the power of the French monarchy under the weak and ineffectual early reign of Louis XIII, effectively inventing the modern Westphalian diplomatic system, coming out on top in the Thirty Years War and displaying the kind pragmatism – with regards Protestants for instance – which keeps kingdoms functioning. Ironically, it is in the BBC’s unfaithful adaptation of The Three Musketeers where Richelieu’s commitment to the institution of Bourbon monarchy are conveyed with most nuance; and despite the slander of Dumas, he never harboured dynastic ambitions of his own, instead being the target of various conspiracies on his life. Richelieu’s vision of Bourbon rule, and of the country’s pathway to greatness vis-à-vis Spain and Austria, makes him in many ways the father of modern France.

Armand Jean du Plessis, Cardinal Richelieu - Wikimedia Commons

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Having solicited my various learned friends, including through a WeChat group dedicated to obscure topics of historical interest, I have compiled a longer list of those who fit the bill of the noble “humble servant”. The qualifications have to include having a clear, identifiable dynastic regime to serve (rather than merely a nation or people – this is not about “patriotism”); being clearly non-dynastic themselves; and ideally their credentials resting not simply on high-profile military laurels, but rather that of being the power behind a desk. If they died for their troubles, that is an added bonus. The fact is that all institutions, be they political regimes or parties, institutions such as schools or universities, sports clubs and associations, and even corporations and work places, need these selfless and tireless counsellors and ministers. The lucky few have had them.

A dozen more humble servants (in somewhat historical order):

  1. Li Si 李斯 (3rd century BC)
  2. The Prophet Daniel (arguably 2nd century BC under the reign of Antiochus IV Epiphanes)
  3. Seneca the Younger (1st century AD)
  4. Zhuge Liang 諸葛亮 (3rd century AD)
  5. Yelü Chucai 耶律楚材 (13th century)
  6. Tokugawa Ieyasu (16th century)
  7. Thomas Cromwell (16th century)
  8. Pitt the Younger (18th century)
  9. Talleyrand (19th century)
  10. Metternich (19th century)
  11. Bismarck (19th century)
  12. Zeng Guofan 曾國藩 (19th century)

Honourable mentions: Stilicho and Belisarius, two great generals keeping the Western and Eastern Roman dreams alive through difficult times. However both purely military men, as was Prince Eugene of Savoy. Others, such as some of my personal favourites the Earl of Bute and his influencer Henry St John, the Viscount Bolingbroke (both for their services to George III), or Jacques Necker did not achieve quite enough in their own life times. By the time of democratic politics of the 20th century, statesmen no longer really qualify as humble servants since they are mostly no longer sustaining dynasticism, so De Gaulle, Churchill and Roosevelt are out. No room here for Dominic Cummings, either. Good men all, but not quite on the list.

“Success” against the virus ≠ zero deaths

Covid beach

One of the most fascinating aspects of the reaction to Covid-19 in the West, has been the near-perfect alignment between the political Left vs Right, and the sides of caution vs courage. Almost without exception – after a few early weeks of confusion – those who favour big government and intervention, also favour lockdown, wearing masks, almost permanent health screening and continued economic dislocation. Those that favour small government, lean towards Swedish-style herd immunity, and want an end to the lockdown and for people to just get back to work. Anecdotally, there are very few people crossing over at all, which I find remarkable.

In East Asia, by contrast, the response has been uniformly lock-step: everyone tolerates intrusive government and everyone supports the (virtue-signalling*) wearing of masks. Expats in Hong Kong, for instance, have felt heavily the weight of – effectively – racial prejudice for their differing attitudes on what constitutes “best practice”. All pretense of those traits of modernity – self-reliance, independence and adventure – which were driving urban Asia forward have vanished as these societies demonstrate their true colours of sheepish governmental dependency and open embrace of social closure.

The economic debate has raged for some time. Just to take headlines from recent days, one side (rather too gleefully for my liking) posits “Four reasons state plans to open up may backfire — and soon”, while the other retorts that “The lockdown left is no friend of the working class”. But for me the most pernicious rhetoric is that of men like Andrew Cuomo, whose popularity is premised on the logically fallacious claim that:

“ … if you ask the American people to choose between public health and the economy, then it’s no contest. No American is going to say, ‘accelerate the economy at the cost of human life.’ Because no American is going to say how much a life is worth.”

In this assertion we see the defeatist and absurd idea that lives should be protected at all costs. The fawning view that “Asian countries focused on containment in a bid to minimise mortality” has been accepted as the rightful moral goal of virus policymaking. The economics debate is fruitless, since it pits logic against emotion; but the moral point is important.

The analogy between Covid-19 and the common ‘flu is compelling and purposefully misunderstood: it is not a biological parallel per se, but rather one of social morality. It is an impossible and unnecessary task of government to eliminate death from natural causes. There is such a thing as “natural attrition” from disease and old age; and the ‘flu, which kills tens of thousands each year in the UK and US, remains the last bastion of socially accepted, blameless death on a large scale. The ‘flu is not like dying from traffic accidents, which might arguably be prevented; it is natural process of life and if this virus does not come to get you, the next one will. To try to prevent this is to commit yourself to a problem with no solution other than feeding an unquenchable appetite for resources – and in turn would ultimately spell the end for universal public healthcare which would be burdened intolerably by the expense. I will say this again: an acceptable level of deaths from Covid-19 in the UK should number in the tens of thousands before severe economic dislocation is necessary; several times more again in the US. “Success” was never, and should not be measured against, negligible mortality – for this virus or future ones.

Both Trump and Boris have thus made significant errors in their response; but the error was not so much their technocratic plans on testing and quarantines. Rather, the biggest blunder they made was to allow the narrative to move on to the grounds of protecting all life. From inception, both governments suddenly found themselves on the hook for an unachievable and undesirable objective: limiting deaths to zero or almost zero. This put them on a hiding to nothing and set a terrible precedent for both – though Trump and the US is likely to escape a touch more lightly. But Trump has also made a rod for his own back with his China rhetoric – since however true it is that the virus came from China, externalizing the cause, rather than making people accept it as a normal part of existence, strengthens their belief that “success” means stopping it like one would a foreign invader.

By the same token, for the first time in my recent life, I now no longer feel China is necessarily the long-term “winner” it might be. The government is very nearly promising its people protection against the unprotectable, setting expectations that may not long from now see them demand healthcare instead of military expenditure. All very well, but it will build no independent Great Power status like that.

I for one do not believe we should – or will – inhabit a world where major viruses lead again and again to the necessity for lockdowns. By the same token, neither do I believe that we should inhabit a world “safe” from such lockdowns only through constant testing, screening and health surveillance. Instead, we simply have to become a society of humans capable of digesting the idea that death is a fact of life; deaths from viruses and other natural causes, all the more so. To be constantly worried about death of this nature (as opposed, for instance, to war) is to be petty, parochial and apathetic, unable to see the bigger picture. I liken it to a company whose employees and management are constantly focused on cost-control and the bottom line; all the while forgetting the visionary focus on growing the top-line. Such a company is one living in the past, occupying the twilight of its existence, not looking to the future. It constitutes a lack of ambition.

Speaking personally, for all the distress and heartache that any disease or event incurs, I would rather not live in a society which exerts its time and resources, however good the intention, in trying to protect its people from life rather than encouraging them to jump into it. I would always favour courage over caution. Perhaps in this, I have finally discovered my true, core, Toryism.

 

* Curiously, a piece written by Jason Ng, an anti-government activist and lawyer, which vocally disapproved of expats during the virus and pretty much specifically called for expats to wear masks in order to “show solidarity” with locals – the very definition of virtue signalling – has been taken down from the Hong Kong FP website where it had been posted.

Just how rich is Tottenham Hotspur, really? Not very.

Daniel Levy

With the virus having suspended football, this seems like a good moment to finally sit down and look at exactly how “rich” Tottenham Hotspur is as a football club, and therefore think about the question of how much we can afford to spend.

The Swiss Ramble recently performed its annual analysis of Spurs’ finances, and it is an exercise I like and admire very much since it attempts to put into perspective the club’s performance and context amongst the elite. Yet it has a major limitation, which is that it focuses almost exclusively on “profitability”, as this excerpt shows:

Swiss Ramble

Source: Swiss Ramble twitter account

The problem, of course, is that profitability tells us very little about cash available, since the items on the P&L (including the profits after taxes) are mostly not real cash items. Instead they are filled with such concepts as depreciation and the gains recognized on the sale of players as assets. Essentially, these are accounting items. And I find it a dangerous way to look at a football club because it raises false expectations about how “rich” we are and therefore how much we should be able to pay for transfers.

I prefer to apply a financial perspective by looking at football clubs as one would any other business, through the company’s balance sheet and cashflow statements. The balance sheet gives us a sense of how indebted the company might be. But more importantly I like to look at the cashflow statement for a few reasons:

  1. Real cash items – the cashflow statement gets rid of non-cash items such as depreciation and replaces it with real cash such as capex
  2. Transfers – it more accurately captures the actual money going in and out on transfers including all hidden costs as well as payments spread over time – a £60m fee paid over three years should be seen as such and not lumped into one number
  3. Stadium investment – it captures all hidden costs but also allows for financing raised against the project, ending the “the stadium pays for itself” speculation.

Helpfully most financial accounts break down transfer spending in quite some detail, which in turn allows for me to get to my core concept: the pre-transfer free cashflow (“PTFCF”). For this I take the net cash inflow / outflow, and add back transfer spending which I assume to be discretionary. This brings us to a calculation which tells us how much “spare” money we would have available to spend in a given year, if we had wanted to.

Taking the June 2019 figures, this metric then allows us to judge – somewhat – our performance in the transfer window.

Pre-Transfer Free Cashflow by club for year ended June 2019 (£m)

PTFCF 2019

We can see from this analysis that Tottenham came a fair way off Man Utd, Chelsea and Liverpool (and one assumes Man City, who do not publish a cashflow statement or give any notes to their Intangible Fixed Asset investments). Arsenal were the big losers of last year given their Europa League participation, and Chelsea show themselves as doing well despite not qualifying for the Champions’ League. To be clear, generating a negative cashflow (just like generating a loss) does not mean you have no money to spend; only that you must do so unsustainably out of your “savings”, which will show up on the net debt (which we will get to).

If we look at the year prior, this becomes even more stark, and highlights the fact that Tottenham, contrary to some assertions, was under real financial pressure during the stadium building process starting in 2017.

Pre-Transfer Free Cashflow by club for year ended June 2018 vs net transfer investment for the following year (£m)

PTFCF 2018

Note: Since transfer spending runs July-June and mostly occurs during the summer transfer window, a June 2018 year ending is best contrasted with the June 2019 transfer spending.

At this point, Spurs were actually incurring a substantial negative PTFCF due to stadium costs, not least since much expenditure for large capital projects is paid up-front, for land acquisition and so on. Man Utd and Chelsea spent far more than they were generating – one might say generously, “investing for the future”; Liverpool were spending about as much as they might expect; and only Arsenal were spending significantly below their capacity, buoyed no doubt by the knowledge that they were not in the Champions’ League. Indeed Tottenham’s tiny net expenditure of ~£3m was quite flattering under the circumstances.

In fact, if we look at how Tottenham have performed on average against the rest of the Top Six (excluding Man City), we have had a tenuous few years.

Three-year rolling average Pre-Transfer Free Cashflow (£m)

PTFCF 2015-2019

On a rolling three-year average, the other clubs have managed a PTFCF of around £80m per year over the last five years, whereas Tottenham, having clawed our way into contention by 2016, have actually seen the gap widen again in the subsequent years. In other words, we really are not that well-off, are some way behind the other Big Six teams, and cannot spend the money on transfers that some fans seem to believe we now should. The stadium remains a massive gamble and has to succeed as a standalone business for us to begin making up the difference with the other clubs.

To cap things off, let us just look at the “savings”. A net debt position is typical of most companies and football clubs are no exception. Furthermore, the ratio of that debt to net assets or ‘shareholders’ funds” shows the relative indebtedness of a business.

Top Six clubs net debt (£m) and gearing for year ended June 2019

Gearing and net debt

On both measures, Tottenham are more precarious than our peers. Not only is net debt larger in absolute terms, carrying with it the funding for the stadium; but alone amongst the Big Six, our gearing is at more than 100%. No doubt much of the stadium borrowing is ring-fenced to a degree, and probably operates on a project finance basis; nonetheless the cost of the debt will weigh Spurs down through interest payments for some time – and the analysis gives a sense of how much better off Man Utd really are than us, for instance. Daniel Levy, who is no stranger to this situation, will clearly not be minded to let spending get out of hand.

Some of this will be well-known and obvious to observers. The reason I raise it is the danger of football fans demanding spending beyond what is possible – and Spurs have been particularly under the microscope for this. The Swiss Ramble’s analysis – whilst perfectly legitimate and technically correct – conveys a very misleading impression over our financial clout. Headlines about record revenues and profits on the P&L, lead to questions (from those who should know better) of “where has all that money gone?”. In the end, Spurs just are not yet that big a club, and whilst I am confident that we will reach our goals, it will still take some time before we can splash out.

 

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Browsing the internet after posting, I came across the University of Liverpool’s football finances website, which has recently just posted about Premier League club values for 2018-2019, which, whilst doing some equally interesting things,  has rather fallen rather into the same trap. Their proprietary “Markham Multivariate Model” is based on net profit adjusted for one-off items, but unadjusted for non-cash items. The formula is quite off-the-wall in other aspects too but I will let that lie for now.

Nonetheless it leads to what I think is just as unhelpful an output (below), saying:

Spurs overtook both Manchester clubs at the top of the table on the back of reaching the Champions League final, a fourth-place finish in the Premier League and a wage bill barely half that of Manchester United.

UoL club valuations

Even from the eyes of a purely financial investor, this cannot be true. Spurs’ true hidden value, if you want to see it this way, is the stadium value and its future earnings but as far as I can see this has not been captured by Markham. If you strip that out, however well managed our wage bill is, a DCF of Tottenham vs the other clubs would not come to this conclusion. My opinion: head in hands.

What Covid-19 mortality might look like if we all counted like the Germans

Germany Covid

One of the less covered aspects of the Covid-19 crisis has been the wildly differing ways in which countries – and within the US even states – count the dead. This in turn has made comparability between countries almost meaningless, with very little to be learned between the numbers of deaths in Italy for instance, and those in Sweden. And by the time you bring China into the discussion, comparability ceases even to be mentioned. The singular failing of the WHO is not failure to combat the virus (which it has little power to do), but failure to at least coordinate consistent numbers. On this basis alone, the WHO has been a fiasco.

The problem is that how one counts deaths, even though it sounds like it should be scientific process, is actually an art. There will always be huge amounts of subjectivity in interpreting whether a virus like Covid-19 constitutes the “primary cause” of death, or whether it is merely a “contributary factor”. The discipline with which a group of medical practitioners understand and stay within guidelines on this reflects all sorts of local conventions and culture. Generally, one might assume that the more technocratic a society is, the more strict they would be.

Step forward Germany. Throughout recent months, German numbers have been hailed as an example of what good governance should look like, with early testing being seen as key. Yet if you look at the details, a puzzle is presented: although German total deaths are much lower than that of France, for instance, its total numbers of infections are almost the same.

Total Covid deaths

Note: mortality rate defined as reported Covid deaths as % of total infections “Non-German Europe” are countries coloured in red; Source: Worldometer.info

All the good governance in Germany would, one assumes, mostly have led to lower deaths through lower infections, yet this has not occurred. Rather, the gap between total deaths is partly filled by the differences in counting methodology. In fact broadly speaking “Greater Germany”, encompassing Austria, Switzerland and Denmark, together average a mortality-to-infection rate at around one-third that of Non-German Western Europe (and this is already distorted by the fact that in Switzerland, non-German cantons are reporting much higher mortality than their German brethren).

So what is going on? Whilst I have no doubt that the Germans are doing better, they are not doing that much better. But at present, if there is a difference in counting methodology, I also have no doubt that I would lean towards the German over the non-German way. What then would the UK and other countries’ mortality rates look like under the German system?

First, I have assumed a simple re-basing of these mortality rates to the Greater German average, creating a like-for-like “Germanic deaths” number for each country. This lowers them substantially. “But”, I hear you cry, “is the German healthcare system not better?” Well, perhaps it is – though in fact there does not appear to be much consensus on this from various authorities. But let us say for the sake of argument that there is a qualitative difference, we might use a simple proxy such as the number of hospital beds per capita to readjust this number and make it more apples-for-apples.

Greater Germany Covid

Source (for beds): Nationmaster.com

Greater Germany does have a better-than-average provision of hospital facilities, particularly in Austria and in Germany itself. Taken together, the Germanic average of hospital beds per capita is higher than most other Western European countries, although France is also quite high. If we then adjust the “Germanic deaths” number upward again, by the number of beds, we have an indicator of what German-style Covid-19 death counts might look like.

European Covid like for like

Note: “adjusted” figures adjusted for hospital beds per capita compared to Greater Germany

Despite making this adjustment upwards, non-German Covid-19 deaths, whilst higher than Germany’s (and almost certainly correctly so), are still substantially below the current reported numbers. In other words, if the UK used German-style death counting, its numbers of Covid-19 deaths might be about half the current number and possibly well below. The same applies to all other countries in the region. I would posit that this is the basis of real comparability, not the published statistics.

Of course, this is all back-of-the-envelope stuff and many will complain that this does not take into account all the nuances of each country’s policies and virus reactions. But there can be no doubt that:

  1. Each country is counting in a different way;
  2. If the UK were counting along German lines, reported deaths would be much lower; and
  3. Conversely, if Germany were counting along UK lines, their numbers would be higher.

However taking into account what has been happening in each country, if I were to guess at who’s numbers are a better and more accurate representation of the real situation, I know where my money would be. But then, I am Austrian.

 

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(For reference I did the same analysis incorporating the Asian OECD statistics, which seem remarkably similar to Germanic numbers. China in particular, whatever else is may have covered up, has a stringent policy of how it reports Covid deaths and the region as a whole would likely be similar. However the outcomes from this analysis did not move the needle enough to start having to justify commonality between Asia and Europe)

Asia OECD Covid

How Labour continue to be over-represented

As an addendum to my previous post, I have been poring over the numbers again and it struck me as notable that the Tories, despite never having dropped below 30% of vote share in modern times, have often won fewer than 200 seats whereas Labour, despite having dropped below 30% on at least two occasions (1983 and 2010), have never breached this psychological nadir. This year, again, they were forecast initially by the exit poll to weigh in at around 191 seats, but somehow managed to scrape in at 202 in the end.

In any first-past-the-post system, the winners will always benefit disproportionately and this is as true of the US electoral college as it is of Canadian ridings or British constituencies. For instance, people complain about Trump’s electoral college over-representation in the last presidential election in 2016 but forget that Obama benefited from a vote-to-college exaggeration twice before him, as did Bush and Clinton etc. This is simply an inherent function of this kind of system, and might be considered a sort of “winner’s dividend”. However what also appears to be true is that in Britain, the Tories have traditionally always had to “work harder” for their majorities than Labour, the result of a structural and psephological imbalance between the two parties’ support.

To highlight this, I have looked at how many votes per seat each party has had to win for their large majorities, comparing the Tory landslides under Thatcher and Boris, vs the Labour landslides under Blair. Even adjusting for total vote (in 2019 terms), the Tory majorities were much harder to come by:

Number of votes required per seat won by landslide winners (thousands, 2019 basis)

Majority winners

Note: in order to create a like-for-like comparison, I have adjusted the raw votes per seat upwards to the 2019 total vote numbers since the electorate has grown larger in absolute terms over time

To turn this around, if we look at how poorly the losers of those elections fared, one can see how under-represented or not they are in defeat. Again, the numbers show Tory defeats being much worse than Labour ones, which manifests itself in how the Conservative Party was at below 200 seats for the whole period between 1997 – 2010, something even Michael Foot and Jeremy Corbyn have not managed.

Number of votes required per seat won by landslide losers (thousands, 2019 basis)

Majority losers

Lastly, I look at the “tipping point”, in other words how the parties fare when close to each other – for instance in the two hung parliaments that we have had this decade. Extraordinarily, in both cases the Tories, despite being the winners of each election, still had to accumulate more votes per seat than the defeated Labour Party, turning the entire concept of a “winner’s dividend” on its head. By way of comparison, John Major’s slender absolute majority in 1992 only just saw the Tories needing fewer seats than Labour.

Number of votes per seat required in close elections (thousands, 2019 basis)

Close elections

At the very least this shows that the tipping point is well above the natural 50/50 threshold between the two parties. With the Tories having won a swathe of seats across the northern Labour heartlands, and with the impending promise of boundary changes, this could evolve somewhat; until it does though, Labour can relax in the knowledge that as a starting point, the electoral system still somewhat favours them.

The long arc of Tory progress (and why the SNP can be ignored)

Cameron Boris

On election night, I – unlike some around me (they know who they are) – was not losing my head. I had reasonable confidence of a substantial Tory majority, and had even put my money where my mouth was – being a buyer of a Tory majority at 44 in the spread betting markets. I had one central thesis: that the British electorate does not produce hung parliaments when there is a clear choice before them. Rather, hung parliaments only occur when the parties cannot distinguish themselves from one another (1974, 2010), or when they are unknown quantities (2017, pre-war). By this logic, Boris was in a good position to win outright.

This was despite the best attempts by the media to misread the polls. Like sub-par generals, journalists are always doomed to fight the last war, and the pollster who did “best” last time always exercises a disproportionate influence on their discourse the next time around. This year it was the YouGov MRP’s turn for lazy writers to place too much faith in, never remembering that no one pollster has ever been the “most accurate” twice in a row. In the event, the polls-of-polls were all broadly correct.

Of course there are other points of note about the Tory performance. On the one hand, there can surely be no denying Theresa May her contribution to breaking the Red Wall, and perhaps it really needed two heaves to get there; on the other hand, the media narrative on Boris being unpopular was I think well wide of the mark. Amongst key voter demographics, Boris was a positive, not a negative, and not just in contrast to Corbyn. Anyone who witnessed the acceptance speech by Ian Levy, the winning candidate in Blyth Valley, or to the reactions in Workington or Darlington, cannot doubt how central Boris was and how well he played on the doorstep as a loveable scamp who transcended class in his determination for Brexit.

Yet hidden amongst all the shock and turmoil lies a more profound truth: the Tories have been quietly improving their standing amongst the electorate for the last twenty years. Indeed the party have improved on their share of the vote at every election since 1997. They have also improved on their absolute numbers of votes since 2001 (the one surprise here being the considerable popularity of John Major even in 1997).

Conservative Party vote share and vote totals since 1997

Tory progress

This has not always translated into increased numbers of seats, due to the vagaries of the electoral system. 2017 saw Theresa May lose seats even as she surged to the highest vote share since Thatcher’s first election in 1979. William Hague, too, managed only a single net gain in 2001 despite a whole percentage point increase in votes. But set against this is the extraordinary fact that the party have now managed twice, in three elections, to work its way out of a hung parliament and back into a majority – a particularly difficult feat.

The cherry on the cake, of course, is that for those of us who lived through the dark days of the 1990s, we live to see a Tory government now likely to rule for at least fourteen years, and maybe nineteen. And whereas every other administration has won their biggest victories at or near the beginning (1945, 1966, 1983, 1997) only to see a long slow decline, somehow we have endeavoured to our greatest moment so far at the fourth time of asking, after a decade of being in power and all the scrutiny that comes with it. This is unprecedented and we are I think, allowed just a moment of self-satisfaction.

Majorities won by successive single party governments since 1945

Majorities

The one dark cloud being touted is Scotland. It will prove impossible for Boris not to yield to the SNP for a second referendum, they say. Yet for my own part, I reject this media interpretation. We should be clear that the SNP, whilst doing well in absolute terms, underperformed their own expectations and their previous results, and ended the night a slightly disappointed party. At 45%, their vote share was notably lower than the milestone 50% that they achieved in 2015, at the height of their post-referendum popularity. In seats, too, they failed to obtain the psychologically important 50 seats which they had set for themselves, and which would have cost Ruth Davidson a chilly outing in Loch Ness.

SNP and Conservative Party vote shares since 2015 vs support for Scottish independence

SNP

Source: Scottish independence polling from YouGov / The Times

Reading overlying themes onto partisan performances has its limitations. Reading Brexit results onto Tory or Labour support is impractical, for instance. But this is less so for one-issue parties such as the SNP or the Brexit Party. Their secular decline in their vote share since 2015 reflects the commensurate decline in popularity of the Scottish independence proposition over the same period. Much as the SNP have made headlines with the help of simplistic reporting, they are actually worse off than they have been in the recent past.

And here, given the success of my previous theory, is my second one: the popularity of independence in Scotland correlates directly with the efficacy of government in Westminster – not the nature of that government or its political colours, just plain ability to govern. Hence why the build up to 2014, with a coalition in place, led to one peak; the minority of 2017-2019 another (as were the mid-to-late 1990s). But I predict that as Boris gets his feet under the table and gets on with life, Brexit included, Scottish sentiment will begin to recede. Boris need not pay such calls for independence any heed, and all credit to him, he seems to be headed this way.

Support for Scottish independence (1978 – 2012)

Westminster effifacy

The progress that the Conservative Party has made since the mid-1990s is a tribute to various leaders, each in their way: William Hague for his “night shift”; Michael Howard, the man who arguably saved the Conservative Party with his performance in 2005; David Cameron and his decontamination; May and the recognition of the new tectonic plates of class and economics; and finally Boris, who with his ambiguity over Brexit somehow captured the skeptical but generous spirit of the age. Even Iain Duncan Smith was a useful placeholder. The fact is that this 80 seat majority is a tribute not just to Boris’ political skills, but rather to a long, slow, and painful rebuild which for all its highs and lows, has seen indomitable progress towards power. Just what the Conservative Party has always been about.

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A slightly self-congratulatory update (2 Jan 2020)

First, it seems this theme of long term progress has been picked up by various commentators, such as Martin Kettle at the Guardian, who notes that:

“The Tories have now formed four governments in a row. Remarkably, they have increased their share of the vote for the last six elections. They have 200 more MPs today than in 1997. Those who sit for seats in the north and Midlands have got most of the attention, and rightly so. But the tightening Tory grip in parts of the south that were once marginal also matters. The Tory advance across Wales is dramatic. And they remain a player in Scotland, something Labour can barely claim. They are UK-wide again. And they now have a new generation of MPs who can shape their party.

Secondly, there was an interesting graphic from the Financial Times talking about the Tories and the working class:

However whilst the FT was trying to make the point about Tory inroads, much of this graphic simply demonstrates the underlying improvement in performance, which would naturally eat into traditional Labour voters since Conservative success basically equates to Labour decline. Either way, the choice of 1997 as the starting point is notable and the story a component of what I outlined above in the original post.

Pochettino, Rationalism and St John the Baptist

“There was a man sent from God, whose name was John. The same came for a witness, to bear witness of the Light, that all men through him might believe. He was not that Light, but was sent to bear witness of that Light. That was the true Light, which lighteth every man that cometh into the world.”

John 1:6-13

The news of Pochettino being “relieved of his duties” was one of those events which, while an enormous shock at the time, with every passing day become more and more comprehensible; such that having had a couple of weeks to digest, it now seems the most natural thing in the world. Then Mourinho arrived so quickly that, as the Taoist saying goes, “if you use a sharp enough knife, the cow does not even know it is dead”.

The reason that a certain section of the fans – the majority, I suspect – were so saddened at Poch’s departure was because of how much we had all bought into “the Project”. Almost five and a half years is a life time in football today, and for parts of that, it really did seem that he was the one who had come to lead us to the Promised Land: a new stature, a new stadium, and an end to the trophy drought. Yet it had been clear for a long time that Pochettino also had limitations – limitations which, frankly, may yet prevent him from really becoming a top class manager anywhere else, even if he were to have more resources.

First amongst them was that he never really displayed tactical nous, and was instead a system manager. He belonged, in his way, to a tradition which places the system above all else, a tradition which can be traced from Guardiola, Bielsa and Wenger, all the way through Poch down to the likes of Eddie Howe and Ralph Hasenhüttl. System managers – perhaps we can call them “Rationalists” – when they are right, are irrepressible: their teams play throughout the season as a single unbroken line, constantly possessing, attacking and scoring, not punctuated by the mere whistle of referees starting and ending matches. The end of one game and the beginning of the next is seamless. This is what makes them so resilient and machine-like – scoring against them does not really achieve anything more than insects hitting the windscreen of an onrushing car. When it works, individual moments of adversity make no impact on a team’s mentality or emotion.

Against these Rationalists are the Empiricists, the school of management which takes each match as it comes and deals with them one at a time, often with tailored tactics for specific parts of the pitch or even windows of time. In this tradition belongs Mourinho above all others, the man who makes double substitutions at half-time and who famously defeated Pep’s Barcelona in 2010 with ten men. But there are others: Ancelotti, Allegri and Conte for instance; Marco Silva and, I would guess, even Big Sam. Italy was always the home of tactical men such as Lippi and Trap, with little acceptance of outsider Rationalists such as Sacchi. With them, the moment and the match are everything: these teams win cup semi-finals and finals, derbies, and top-of-the-table clashes. By and large, a siege mentality is useful; but so, too, is the ability to discard players when needed. In a sense, it favours a little bit of the under-dog.

The problem for the Rationalists is that when trying to make the system work, there is a fine line. Success is magnified by compounded success; but loss is likewise exaggerated. There is no “middle”. For an Empiricist, your last game can prove you right; for the Rationalist, only success over a long period can justify the seemingly rigid adherence to the system. Poch did not make substitutions. He did not, until near the end, introduce formational changes. He remained loyal to players at all times. More than anything, he was not good at incorporating new players and needed the constancy of his core group, pressing them repeatedly to come up with the same goods, game after game, season after season.

And this would have been fine, if players had rotated. But the iron law is that either the players have to be freshened up … or the manager does. But there was a further dichotomy with Poch which was that he was so dogmatic that he struggled to bring in new players at all. I believe there is every truth to the claim that he rejected new signings during the summer of 2018, because he did not feel they would fit. Additionally, he did not have a great track record of new signings anyway after the departure of Paul Mitchell in 2016. His teams were always thrown by resets such as summer breaks and even normal international breaks – form was always randomised after such events like the dice in a game of Boggle. Yet at the same time he refused to introduce new talent, meaning the squad was tired out. It was intensity without any possibility to refresh.

Which brings us to what Pochettino should be seen as: not as the Saviour, but as St John the Baptist, crying out in the wilderness before the coming of the real thing. Poch understood that for a few seasons he had to ignore the noise of fans and media and demands for silverware, and just concentrate on stature. The rest would come. He was specifically the right man for bringing Tottenham out of being a probable-top-six club to a regular-top-four one – a role he may be destined to repeat, since if he were to join either Man Utd or Arsenal, they would rightly want this particular trick repeated. His five years at Spurs were a necessary time and place, and he leaves a platform ideal for the next step, whether that be under Mourinho or anyone else. He fit that stage of Levy’s development plan perfectly, and in retrospect, it was never likely to be anything more. Much like Bielsa, he may be destined to never achieve true greatness; and much like St John, he may not himself be the True Light, but rather be destined for undignified decapitation.

Pochettino

Nonetheless St John has his retinue of true followers and believers, and good luck to them. There are those who might want the Rationalist system despite the tactical rigidity and squad management. These are perhaps the purists, though they are destined to be as tangential as the Mandaeans. For myself, despite the initial shock, I am all for the man who may well turn out to be the True Light.

In nomine Domini, Amen

Of China, Brexit, and Consumption Downgrade

Britain China

“Consumption downgrade” has been a term bandied around the China-watching community for over a year now. The idea is that slowing income growth has begun to restrict middle class spending, whether it be on luxuries or the day-to-day. Analysts point to disappointing results from JD.com and NIO, the growth of lower-class commerce platforms such as Pinduoduo and VIP.com, and even the rise of social media such as Toutiao in support of this assertion. The anecdotal reporting, accurate as ever, interprets this as households actively downgrading: yesterday buying a Mercedes, tomorrow buying a Geely.

Yet I would posit a different theory. Whilst around the edges, some downgrade of consumption within individual households may hold true, by and large the evidence points the other way: luxury car sales are forecast to grow at a healthy clip of 9%, for instance, which whilst a slower than the previous decade (the market is clearly maturing) is hardly indicative of like-for-like belt-tightening. Rather, what we are seeing is a stratification of Chinese development, where the likes of Pinduoduo actually serve not the middle classes of today, but the newly emerging consumers of lower-tier cities – “the other 50%” as it were. And here, there is genuinely noteworthy, namely that it now appears many of these newer middle classes may never reach the same level of affluence as the pioneers in Shanghai and Beijing (sketched out theoretically below):

Consumption downgrade

Consequently it is the weighted average of the total incremental growth – in other words, of all the new consumption coming online – which is getting lower. Individuals however are still spending in-line with the past, and even still upgrading. The fact that lower-tier cities may not emulate the top cities is of course some cause for concern – but it is hardly unusual by OECD standards. It merely means that whilst luxury still has a market, mass premium and even mass common have more exciting times ahead. This is important, since is supports signs that Chinese growth remains surprisingly robust in the face of recent headwinds, and in particular that nominal GDP (at this stage in the cycle a far more relevant indicator than real GDP) is stubbornly consistent at 8%+.

On the other hand, “consumption downgrade” has been alive and well in OECD economies for some time now. One need simply look at the emergence of the sharing economy to see it in action: Uber, Airbnb and WeWork are all examples of capacity-sharing which reflect the fact that today’s younger people will never have what their parents had. However trendily dressed up as a “lifestyle” choice, it is not; if given the option, the majority of Uber users would rather have their own car; Airbnb customers would rather be able to afford a hotel; and WeWork tenants rather the funding needed to have their own office. Nobody has chosen to be reduced to this kind of life, although they are putting a brave face on it. It gave rise, in part, to Trump; it gave rise to Brexit; and it is a major driving force for the economy and innovation in the West today:

Social mobility

Source: The Fading American Dream: Trends in Absolute Income Mobility Since 1940 (Opportunity Insights, December 2016)

Which brings us to Brexit. Having long been a Remainer, I see Brexit being a self-inflected economy wound which is less than ideal. However, I have also always maintained that Brexit is a political debate, not an economic one; and it would and should be won and lost on the political questions and not on economic. On political grounds too, I am a Remainer. Nonetheless, it would be remiss not to see the opportunities that Brexit actually does present, not in terms of the fantasistic national resurgence posited by some on the fringes of the Conservative Party – let us call them the Liam Fox wing – but rather in acting as a test bed for innovation in consumption downgrade.

Because ultimately Brexit is a localized process which is only bringing forward long-term secular trends of declining middle-class income which are happening anyway, and which will be increasingly and universally visible across the OECD in the coming years. Britain will merely be ahead of its time. Therefore, any innovations that the British economy produces through this would be well-positioned for the broader decline across adjacent markets, ready to be rolled-out into the rest of Europe and America just as others too begin to experience their own downturns.

McKinsey consumption downgrade

Source: Poorer than their parents? A new perspective on income inequality (McKinsey, July 2016)

What will these innovations be? If I could tell you, I would have a substantially larger bank account; but my own sense is that it lies somewhere in areas such as consumer financing and potentially further changes in shared services. The irony is that the consumption curve for Gen Z will resemble something akin to a Giffen curve. For all the debate between ‘boomers on the one hand, claiming that the kids are “wasting their money on iPhones”, and young people on the other, lamenting that they will never be able to afford a home, the truth lies somewhere in between. The more that large capital investments such as housing feel unreachable, the more people will spend their remaining income on frivolous goods. The current younger generation can indeed be both poorer and more prone to disposable consumption at the same time – something I will for now label the Paradox of Chic Poverty (again, helpfully sketched out below):

Poor get poorer

In short, consumption downgrade is not what it seems (China), and at the same time has been with us for some time (Uber / WeWork / Airbnb) whilst potentially presenting a great opportunity (Brexit). Three cheers, then, for the rich getting richer!