About me
Archive
About me

A €38m lesson with my latte

Yesterday, I stopped for a coffee in the lobby of one of Amsterdam’s more upmarket hotels. I settled into a stylish yet surprisingly comfortable armchair next to a wrought iron room divider, and cracked open Fay Weldon’s The Life and Loves of a She Devil. Before I knew it, though, I had stopped reading, and instead tuned in to the intriguing conversation on the other side of the divider.

At a coffee table was a man with a shaved head, who looked of a similar age to me, wearing a white shirt, and a somewhat over-tight unfastened blue suit jacket, pale blue denim jeans, and black suede shoes. Opposite him, with their backs to me, were a man and a woman, each in smartly conservative suits, with leather folios of notes and papers before them. All three were served cappuccinos.

My ears pricked up when the conversation revealed that the man in jeans was confirming and signing the paperwork for a €38m personal loan: that’s not a conversation one hears every day, and not one that I would have expected to hear in such a public place. It turned out that the loan was to fund the purchase of a luxury boat from the man’s father, at below market value as it was partly being offered as a gift. The man intended to use the boat for general recreation, but also had designs on renting it out commercially for cruises, as acquaintances with similar boats were reputedly wont to do.

I know very little about luxury boats. I’ve seen articles in newspapers and magazines about million-pound super-yachts, but I can’t even conceive of what sort of vessel €38m buys you – let alone the full amount including the ‘gift’. I’d believe you if you told me this was a conversation about a four-bedroom yacht that one might sail into a small harbour, and I’d also believe you if you told me this was a conversation about a mini cruise ship with tens of rooms that would require dedicated port facilities. I’ve really no idea. And I’ve also no idea on what sort of terms a €38m personal loan would typically be offered: it’s never a conversation that’s crossed my mind, let alone one that I’m ever likely to take part in (especially if I spend all my money on expensive coffees in posh hotels). And so I was intrigued. Fay Weldon was not going to receive much attention as I sipped this particular latte.

As the conversation progressed, the man in jeans explained that he was confident in the arrangement because he was near certain that his pay cheques would cover the loan repayments whether or not he got round to renting the boat out (goodness only knows what his job was), and if he should fall on hard times, he could sell the boat and easily pay off the loan given that it was for less than the market value. So to this nosey parker, listening through the divider, the deal seemed as sensible as a loan to spend €38m on a boat ever could.

Yet just as he was on the verge of signing the paperwork, the man asked a question which confounded me: “Given that there are no arrangement fees, why are you charging me such as low interest rate?”

The man went onto explain that he was concerned that he had misread the wisdom of the deal. The loan provider had sent two members of staff to meet him in Amsterdam from their offices elsewhere in Europe, at presumably high cost to their firm. The amount of money being borrowed was substantial. The low interest rate meant that the profit they would make on the deal would be small in comparison with the outlay. Why, the man wanted to know, weren’t they pushing for more? Were they expecting that he would default on the loan, and that they would recoup a greater financial prize from the fallout? Were his assumptions about the safety of the deal wrong? What did they know that he didn’t?

This question confounded me because it’s not common to hear someone clarify the reasons for suspected undercharging. I’m not sure I would have done so—not that I’m ever likely to borrow €38m—because I think I would have been concerned that the lenders would raise their price to meet my expectations.

Yet on my way to Amsterdam, I’d just finished reading Thanks for the Feedback by Douglas Stone and Sheila Heen. This book makes the case that receiving feedback is an interactive process, and we should always seek to understand the point of view of the person giving the feedback. The interest rate on this loan is clearly a type of feedback from the lender.

By discussing the rate with the lenders, the man in jeans could either avoid a huge and costly financial miscalculation on his part, or could set his mind at rest. If the lenders had jacked up the rate in response to his question, he could always have taken his business elsewhere—and, of course, the lenders were unlikely to do so for exactly that reason.

The decision by the man in jeans to have this conversation could have only positive effects: and yet, it is a conversation that I would naturally have shied away from. I suppose, given that he was taking out a €38m loan, the man was probably more used to large scale financial transactions than me. It wouldn’t be an absurd supposition that his day job may be in the financial sector. Perhaps that is why he had he confidence that I would have lacked to initiate this conversation.

But that’s a very easy get-out for myself. What other conversations do I shy away from for illegitimate reasons? Do I avoid asking things that could help prevent me from making unwise decisions because I lack the confidence to ask them? There’s some food for thought and reflection.

And the answer to the man’s question? Simple, really, according to the lenders. Pricing for loans is risk-based. The loan is secured on the boat which is worth more than the total value of the loan regardless. The terms of the loan state that appropriate insurance must be in place. Even if the man fails to make his repayments, the risk of the lenders not receiving their capital back is very low: such low risk investments for such large amount of money are rare. And besides, even at a low interest rate, the lenders stand to make hundreds of thousands of Euros in pure profit, because a small percentage of a very big number is still a big number.

Before long, the paperwork was duly signed and all three were on their way. The meeting lasted twenty, maybe thirty minutes. If I were one of the lenders, travelling internationally for such a short meting would feel like a waste of time, even though I’d just brought in a huge amount of profit for my firm. But as someone travelling solely for pleasure, I think this was possibly one of the most thought-provoking and educational coffees I’ve sipped in a very long time.


Most of the pictures in this post are not my own, though I did post a nice picture I took at the Rijksmuseum in ‘real time’. In this post, the first picture (Amsterdam) is by Boudewijn “Bo” Boer; the second (a ship’s wheel) is by Maximilian Weisbecker; the third (Amsterdam again) is by Javier M; and the fourth is my own picture of a boat’s wake, co-incidentally taken from the back of the DFDS ferry to Amsterdam (though not on this trip). All are used with grateful thanks, and under the terms of their Creative Commons licences.

This 2,468th post was filed under: Miscellaneous, Posts delayed by 12 months, Travel, , , , .

What I’ve been reading this month

I’ve made it through another eleven books this month. I only aim to read about a book a week, but quite a few of these were rather short!


Pale Rider by Laura Spinney

In the couple of years since it was published, Laura Spinney’s history of the 1918 influenza pandemic has been recommended to me by more health protection colleagues than any other book.

Spinney did a great job of weaving together, virology, public health, history and sociology to create a genuinely thrilling volume on a subject that is often treated as a little dry. Spinney brought it to life while also comprehensively covering her brief, and used a light and engaging touch as well as lots anecdotes to illustrate larger points.

It took me a little longer to get through this than my enthusiasm for the book would imply, but only because my days have been filled with coronavirus work lately, and reading about something similar for pleasure seemed a bit masochistic!


A Country Doctor’s Notebook by Mikhail Bulgakov

I picked this up because my Goodreads friend Richard Smith called it “marvellous” and it sounded right up my street. I agree with his assessment.

In this book, Bulgakov describes the experience of being newly qualified and the sole doctor attached to a rural hospital in Russia in 1917. I may have started as a junior doctor (in Newcastle upon Tyne) some 91 years later than Bulgakov (and, for that matter, 32 years after Richard—sorry!) but the stories resonated.

The terror and reading up before shifts; the heart-in-mouth adrenaline rush as the DECT phone rings (or the nurse knocks on the doctor’s bedroom door in Bulgakov’s case!); the conspiratorial performance of maintaining the fiction for patients that the doctor knows exactly what they’re doing, even while being gently steered by the nurses. Even the twin comfort and dread brought by heavy snow felt familiar—comfort as fewer patients will turn up and I might have chance to think, but dread as I have to cope with the weather too.

There was an engaging emotional range to the book, from the amusing and absurd to the tragic. I’m fortunate not to have seen any colleagues become addicted to controlled drugs, and count myself very lucky given the statistics not to have had close experience of doctor colleagues ending their own lives… or murdering healthy patients.

The first mention of Leopold Leopoldovitch in the book reminded me that I watched the TV adaptation of this starring Jon Hamm, Daniel Radcliffe and the scene-stealing Vicki Pepperdine in 2012. I remember enjoying it, but don’t remember enough of the content to have any idea of how closely it followed the book.

The version I read was the 1975 translation by Michael Glenny: other (newer) English translations are available, but it’s hard to imagine how they could be any better!


Midnight in Chernobyl by Adam Higginbotham

My parents bought me this for Christmas… at my request. It wasn’t a unfestive forced selection, but rather a book I’d wanted to read because the reviews were so good.

Higginbotham gave a brilliantly written and researched account of the Chernobyl nuclear power plant disaster. I found it gripping.

Higginbotham managed not only to explain nuclear physics in a way that I could understand, his characterisations of the key figures in the story were excellent. It’s rare to read someone who is this good at writing about complex science and the human aspect of a story.

Thoroughly recommended.


Because Internet by Gretchen McCulloch

I feel sorry for the person who spent ages on the cover design for this book, but this dust-cover-less copy is what the library supplied, and so that’s the picture I’m sticking with. There’s no photoshopping to meet literary beauty standards here!

Because Internet was a study of informal, casual written English, with a particular focus on the internet since, McCulloch argued, the advent of the internet has allowed academics to study informal writing extensively. Prior to the internet, informal writing was generally private (diaries, letters, shopping lists) whereas it is now commonly public (forum posts, tweets, blog posts).

To me, that insight alone was worth the effort of reading this book. I have never pondered the extent to which analyses of written English have been informed only by formal written English, and I’ve never before really thought about how the present generation is the first to publicly express itself in informal English. There’s a lot of food for thought in that.

But McCulloch had much more besides in this volume, which I thoroughly enjoyed. Sometimes, books are so insightful as to explain to the reader why the reader does things which just seem automatic: this is one of those books.

McCulloch managed that very difficult feat of marrying rigorous academic analysis with clear and accessible explanations, a lightness of touch, levity and wit. I thought this book was great.


Mostly Hero by Anna Burns

While this was first published in 2014, the copy I picked up was newer: a part of the 2019 extension to the Faber Stories series I read last year. This volume somewhat stretched the bounds of definition of “short story”: at 127 pages, this was really a novella rather than a short story, and the cover price was consequently higher than the rest of the (much slimmer) volumes in the series.

All of that said, I thought this was a very clever book which I enjoyed reading. Burns presented a sort of literary take on comic book superhero stories, which I’m almost tempted to call “spoof”: it riffed to great effect on common comic book tropes, but Burns also gave the story real depth and meaning. Mostly Hero was inventive and played with language in creative and interesting ways.

At heart, it was a love story featuring a character named “hero” and one named “femme fatale”, but it ranged much wider than that single genre despite its short length. Burns had interesting things to say on societal expectations, gender and the nature of good and evil, all of which were explored under the cover of the absurd cartoonish world she created.


Moral Essays: Volume II by Seneca

When I read the first volume of Seneca’s moral essays translated by John W Basore in 2018, I was completely blown away and read the whole thing pretty quickly.

I’ve read this second volume a section at a time over a much longer period, and don’t think I got quite as much out of it as with the ‘total immersion’ approach of the first volume. The slightly dated language of Basore’s 1932 translation takes some getting used to. The print quality in some parts of my copy wasn’t great, which took me out of the moment a few times.

All of that said, this was still brilliant, and doesn’t feel like it was written millennia ago.


Grandeur and Greed by Giles Smith

Take a journalist best known for writing columns about sport and music, send him to review five of Europe’s great art galleries, and Grandeur and Greed is the result.

In this short volume published in 2019, Smith reviews The Louvre, The Prado, The Rijksmuseum, The Uffizi and The National Gallery. Each enjoys an off beat and lighthearted review from someone with a casual interest in art. Smith even reviews the cafes. I found this short, light, funny and insightful.

I think it’s the other that the physical format of the book was, however, poor: it is very flimsy, and the binding means that a large central portion of the impressive double-page photography is lost in the gutter. Smith’s reviews were originally published online, and I’m not sure that enough thought has been given to the transfer to the physical page.


I Remain in Darkness by Annie Ernaux

This was a moving account of a daughter’s relationship with her mother, as the latter develops and ultimately dies from Alzheimer’s disease. I read the translation by Tanja Leslie.

Reading this book made me reflect that it probably shocks less today than it did when it was published some 23 years ago. Over the last couple of decades, I think societal awareness and understanding of dementia illnesses has increased markedly over what is really quite a short period of time. I think some of the exposition about the illness would be handled differently today.

Nevertheless, this remains a powerful emotional account.


Three Hours by Rosamund Lupton

This newly-released novel was set in a three-hour period during which a school in Somerset was attacked by shooters who also had explosive devices. The book was set in the present day and had a contemporary feel, with Lupton weaving in many of the touchstone issues in the social and political debates of our time (Brexit, Katie Hopkins, Donald Trump, etc). There were also a few decent plot twists along the way.

I enjoyed this, but I felt slightly removed from the action: I felt more of an observer. I think this was partly because some of the plot stretched credibility (would a British rolling news channel really interview someone caught up in this while they were in hiding in the school?) and partly because of the heavy-handed and slightly tiresome way Lupton drew comparisons between her plot and Shakespeare.


Defeated by Brexit by Chris Cook

In this short 2019 book, Chris cook gave a good insight into the Government’s chaotic approach to Brexit. Unfortunately, his analysis ended at a point in time which seems odd in retrospect (a few weeks before Theresa May’s resignation). The text was also a bit too long for an overview, and a little too short to really get stuck into the detail. I think there are probably better books on this topic.

This was published by the same house as the Giles Smith book, and was similarly flimsy.


Dreamerika! by Alan Burns

This 1972 surrealist fantasy was my least favourite book of the month my some considerable distance. I’ve no doubt that Dreamerika! has artistic merit, and it was certainly very clever, but the collage style of cut-out headlines interspersed with paragraphs of discontinuous text was just not my kind of thing.

This was recommended by the London Review Book Shop, and I’m glad I tried it, but it made me realise that I need a good bit of prose to get stuck into a book.

This 2,467th post was filed under: What I've Been Reading, , , , , , , , , , , , .


The content of this site is copyright protected by a Creative Commons License, with some rights reserved. All trademarks, images and logos remain the property of their respective owners. The accuracy of information on this site is in no way guaranteed. Opinions expressed are solely those of the author. No responsibility can be accepted for any loss or damage caused by reliance on the information provided by this site. This site uses cookies - click here for more information.