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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, , , , .

The Tyne Pedestrian and Cycle Tunnels: eight years on

In May 2012, I blogged about visiting ‘the Ped’, more formally know as the Tyne Pedestrian and Cycle tunnels, which first opened in 1951. A year later, the tunnels closed to undergo a two-year, £7m refurbishment.

The refurbishment didn’t go according to plan: it ended up taking over six years and costing £16m. After adjustment for inflation, that’s about 60% of the cost of building the tunnels in the first place.

Today, I thought I’d revisit and see what had changed.

Both the north and south entrances to the tunnel retain their rotunda-like buildings, that have something of the feel of stations. Entrance remains free of charge. In 2012, the south end was looking perhaps a little tired.

Tyne Pedestrian and Cycle Tunnels south entrance

Today, the paving on the approach has been considerably improved, with much clearer cycle paths. The overall appearance has been smartened up, though the heritage plaque seems to have been lost and a TV screen of questionable function has been installed. The shutters are also of note, not only for being new, but also because the tunnels are no longer open 24 hours as was previously the case. They now only open 6am to 8pm, at least “until further notice”.

Note that the entrance is labelled ‘Jarrow’: this on the Jarrow side of the river. One might have thought it more logical to make it plain that the tunnel is for Howdon, but that would I suppose conflict with the station heuristic for which the designers seem to be reaching.

On entering the rotunda, one was formerly presented with two historic wooden escalators, each labelled with its intended direction of motion, and each labelled with one of the historic county crests of the two historic counties the tunnel connects. At the time of installation, they were the world’s longest escalators, and were only overtaken in the UK by those installed at London’s Angel tube station some forty years later. In 2012, they were the longest remaining wooden escalators in the world.

Tyne Pedestrian and Cycle Tunnels south escalators

Today, only one of these remarkable escalators remains in place at each end of the tunnel, the other torn out to make way for an (as yet uninstalled) inclined glass elevator. At the southern end, the ‘County Durham’ escalator is the lucky one… I forgot to check the northern end.

The remaining escalators, which didn’t work in 2012, have now been fixed in position: note the open ‘gate’ with its post driven in a step at the top the escalator below. They are now, I suppose, unique heritage staircases rather than escalators.

Note too that the safety information posted next to the unopened glass lift is unusual: the imperative is not to avoid lift use in the event of a fire, but to listen for instructions as the lifts may be used for evacuation. The ‘mood lighting’ is eye-catching, but not especially to my taste.

As I walked down the escalator in 2012, the strong scent of damp rose to greet me. Not so in 2020. The atmosphere barely seemed to shift. The considerably brighter (and working) lighting made the experience feel considerably less unnerving.

At the bottom, one reaches a sort of ‘lobby’ at the entrance to the slightly wider cyclist tunnel and the slightly narrower pedestrian tunnel. In 2012, this was a grimy space.

Tyne Pedestrian and Cycle Tunnels

Today, these spaces are considerably cleaner, brighter and more welcoming, but still retain the essential character of the space. Today’s photo is of the ‘lobby’ at the opposite end of the tunnels: they haven’t switched positions!

In 2012, the tunnels didn’t just smell damp: the ground was physically wet. The lighting was in a poor state of repair, too. The atmosphere was dingy and unwelcoming.

Tyne Pedestrian and Cycle Tunnels

Today, the experience could not have been more different. The tunnels were clean, dry and well lit… and perhaps mildly ‘other worldly’.

In 2012, there were a number of upsetting and unnerving damaged bits of wall along the way, which felt to me as though they were raising uncomfortable questions about the structural integrity of the passage.

Tyne Pedestrian and Cycle Tunnels

By contrast, today there are a number of new emergency help points with flip-down seating, sensitively designed to blend in with the curvature of the tunnel wall.

The midpoint of the tunnel is clearly marked, as one passes from the historic County of Durham to the County of Northumberland. In 2012, this was marked by some weird rusty metal plates.

Today, what I assume may always have been ventilation shafts are capped with a more aesthetically pleasing metal grid.

In 2012, for those with bikes (or those who couldn’t face the hike up the broken escalators) a vertical lift was provided on a branch off the main tunnels at each end.

Tyne Pedestrian and Cycle Tunnels

These remain in situ, though I think they may have been replaced with newer models.

The works have also retained the ugly, but probably historically relevant, fish sculpture outside the northern rotunda.

All things considered, I think this is a good job. It’s disappointing that two historic escalators have been ripped out and two turned into staircases, but it is probably unreasonable to expect 70-year-old machinery of this type to keep on working forever.

The difference in the feeling of the tunnels is night and day. They now feel bright and welcoming, and the modernisation hasn’t sacrificed the essence of the tunnels. From the care taken over the retention and repair of the tilework to the way that the historic painted signage has been kept and restored, this has clearly been a project on which respect and love for the craftsmanship of the original workers has not been in short supply.

Of course, it’s a shame that circumstances dictated that the restoration took so much longer than planned at such an increased cost. I hope that they get back to being continuously open soon enough, and that the restricted hours “until further notice” doesn’t turn into permanently restricted hours. I hope, too, that the inclined lifts enter service in the not too distant future.

But, overall, I’m left with the impression that this was an elegant and sensitive restoration of a mighty piece of civil engineering beneath a historic and beautiful river.

This 2,462nd post was filed under: Miscellaneous, Travel, , , .

The Nativity × Gaudí

I don’t think I truly understood the meaning of kitsch until visiting the Sagrada Familia today. It’s an architectural wonder. I found it breathtaking, spectacular, beautiful and hideous all at once. I’m very glad I visited.

This 2,383rd post was filed under: Miscellaneous.

Winter sunshine in Paris

I’m increasingly of the belief that Paris is best visited on crisp, sun-drenched winter days, with fewer crowds, a cosier feeling to the café on every corner, and the optimism that comes of spring being just around the corner.

This 2,359th post was filed under: Miscellaneous.


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