#titanic

Titanic shipbuilder manages to stay afloat

It seems that Titanic shipbuilder, Harland & Wolff, has been thrown a £6m lifeline after the Belfast based business looked to sink into receivership. The company has 79 staff, well down on the historic peak of 35,000. The trends are only too self-evident.

The OECD notes “As of March 2018, the global order book of registered ships totalling approximately 78 million CGT, thus continuing to remain at historically very low levels. In year-on-year (y-o-y) terms this represents a decline of around 10% and is almost 66% lower than the peak in September 2008.  The order book continuously declined after 2008 before stabilising in 2013 and staying above 120 million CGT throughout 2014. With deliveries stable and new contracting at record lows, the order book again decreased substantially in 2016, declining by around ¼ from January 2016 to January 2018. In the course of 2018, new ordering picked up again from its lows, but declined in the first quarter of 2018.

It wasn’t so many years ago that Korea’s largest container transporter Hanjin Shipping declared bankruptcy.  The above chart shows the daily shipping rates for the industry which remain tepid for the past decade. The problem with the shipping industry is the fleet. Ships are not built overnight. Surging order books and limited capacity meant that as the pre-GFC global trade boom was taking place, many shipping companies were paying over the odds without cost ceilings on major raw material inputs (like steel). This meant that ships were arriving at customer docks well after the cycle had peaked at prices that were 3x market prices because of the inflated materials.

H&W may live to see another day, but the consolidation in the shipping industry will be ongoing. P.22 of this report shows the slowing $ value of trade in recent months.

Cinematic Correctness

Sir Ian Fleming and Cubby Broccoli are probably rolling over in their graves. James Bond 007 has been a formula that has worked. It created a franchise around a suave, sophisticated, educated, debonair and witty womanizing British spy. Whether the dashing Sean Connery, the corny Sir Roger Moore, the rigid Jeremy Dalton, the one-trick pony George Lazenby, the slick Pierce Brosnan or the moody Daniel Craig – the formula has been a massive winner. The Bond franchise has grossed $14.7bn inflation-adjusted.

There are suggestions that James Bond will be replaced by actress Lashana Lynch. The first female Bond. There is probably absolutely nothing wrong with her acting at all. The question is will the producers flunk at the box office by ripping up the script of what has always worked? It is 100% their decision to toy with the tried and tested formula but as ever, “if it ain’t broke, don’t fix it!

To be honest, Idris Elba would make a good Bond. He fits all the stereotypes of the role and fans would watch it on his ability rather than his skin tone. The producers could celebrate being woke and the franchise would retain its (relative) believability quotient.

Political correctness seems to dominate Hollywood of late. Whether complaints that not enough actors of colour were represented in Dunkirk or JK Rowling copping flak from LGBT activists because Albus Dumbledore wasn’t openly gay enough in the Fantastic Beasts film, it seems there is a push to make writers and producers conform. Why can’t films just be those made as their writers intended without enforcing politically correct overtones? Surely if there is a market for “politically correct” movies, the champagne socialists of Hollywood will be the first to jump all over it.

Sadly, many of the Best Picture winners selected at the Oscars (with elements of political correctness) in the past decade have been flops with the paying customers. It is interesting that $100m+ box offices were a cert for an Oscar Best Picture award til 2004. Since 2004 it has been hit and miss. 10 films in the last 14 have failed to breach $75mn. Real-life stories – Argo, A Beautiful Mind, Titanic and The King’s Speech – all cleared $100m at the box office. Maybe audiences can gel to the real-life aspects?

Brokeback Mountain grossed $178m because it didn’t propose to be anything other than a story set around gay cowboys. Milk, grossed $55m because it was a factual story about known gay activist, Harvey Milk. A good film by the way. Bohemian Rhapsody, the story about Freddie Mercury, has raked in over $900m at the box office. It was a factual tale and representative of a period in time.

To keep up with the times, perhaps we should demand that Meryl Streep become the next Shaft and Samuel L. Jackson portray Hillary Clinton in a movie about the 2016 election? How about Jackie Chan portray Michael Jordan in a basketball film about the Chicago Bulls? Why not cast Charlize Theron as Adolf Hitler in the next WWII film and have Arnold Schwarzenegger roleplay her wife. At least he won’t struggle with language? Perhaps do a rerun of Star Trek with Capt. Jane T Kirk? The options to rewrite history or fantasy are endless.

Why did Apollo 13 with Tom Hanks, Gary Sinese and Bill Paxton rake in $350m but First Man starring Ryan Gosling as Neil Armstrong draw in only $45m in North America? Same space theme – two different results. Apollo 13 celebrated the pride in failure as American ingenuity was able to rescue the damaged spacecraft. Maybe home audiences repudiated Gosling’s film for deleting the pivotal moment the US flag was planted on the moon. Small stuff? Don’t play with audiences. They bite.

The lack of political correctness is a drawcard to the Bond franchise. We can laugh at the double entendre and innuendo. We can marvel at the spectacular car chases, death cheating moves, his Casanova-like charm and underdog victories against evil henchmen. Will audiences believe that a woman will be able to knock out a monster of a man 3 times her size with her fists? Will we want to see a poor defenseless woman stripped naked while tied to a chair while her privates are belted with a shipping rope by a Le Chiffre type character? Or will she be promiscuous to extract information from would-be villains? Perhaps she confronts Graham Norton as the villain this time?

Perhaps the new Mr. Moneypenny will have his heart skip a beat every time the new 007 tosses her Philip Treacy on the hatstand outside M’s office. Maybe Q will design a machine gun in a Hermes Kelly handbag? Perhaps a dart firing pump from Manolo Blahnik? Perhaps the Aston Martin will be replaced by a pink Tesla so we can tackle environmental issues as half of London is set ablaze?

People fell in love with Star Wars because it was all about lasers and space ships. Not because it ticked the diversity (although the Star Wars Bar was as diverse as one could imagine) and inclusion boxes. How dare the poor harmless Jawas or Ewoks be murdered by white supremacists aboard Imperial Battlecruisers. Were the Sand People just misunderstood? What about the animal cruelty that was inflicted on the poor tauntauns on Hoth?

Maybe the franchise is testing the waters by proposing Lynch. We’ve already had Halle Berry play Jinx, the NSA agent in Die Another Day. There have been countless female villains throughout the franchise too – Rosa Kleb, Xenia Onnatop, Miranda Frost, Elektra King, Fiona Volpe, Helga Brandt, Mayday, Bambi & Thumper. All added their own spice. Yet it was always James Bond that was the drawcard.

Ultimately the box office will tell the story. Die-hard Bond fans will likely be cringing at the thought. Maybe CM is just too much of a purist and detests change for the sake of it, especially if it is just about appeasing activism.

Denial

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These are the Oscar stats. A 40% decline over 5 years. Is this a sign of a format that is no longer sustainable? Is the disintermediation/disruption caused by video on demand such that making a ‘date’ to go to the cinema is no longer a priority? Cinema attendance in the domestic US market is back at 1993 levels. In the 1990s Hollywood made 400-500 films annually. It now pumps out more than 700. The average revenue per film continues to head south. The strategy seems to throw more at audiences and hope it sticks. Are the movies the industry rates itself on actually reflected in the box office? Out of touch with the audience? It would seem so. See for yourself.

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It should appear to Hollywood that movies about real life stories are the ones that seem to resonate most with audiences – Titanic, The King’s Speech, Argo and A Beautiful Mind. These 4 films grossed $1.04 billion at the box office. It has been 10 years since Hollywood has had a fictional film it chose for itself beat the worst of the 4 movies based off real stories in ticket sales. It has been 15 years since having a proper blockbuster like Lord of the Rings which is arguably pure fantasy and extends to child audiences.

Films are of course subjective. One film one person may enjoy, others may not share the same view. It is interesting though that $100m box offices were a cert for an Oscar Best Picture award til 2004 after which it has been hit and miss since. 9 films in the last 13 have failed to breach $75mn. So instead of Hollywood being so preoccupied with espousing politics, perhaps it should look to the audience it ‘preaches’ to and starts ‘reaching’ them instead.

Macron has boarded a modern day Titanic but Le Pen has stolen over a third of the life boats

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The Titanic was most infamous for being an unsinkable ship. We all know the tragedy of its maiden voyage. Folklore tells us that to calm the passengers, the band played as the ship went down. The cautionary tale is one that fits the EU almost too perfectly. Macron’s win is akin to the EU playing the band (well Macron did play the EU anthem for his victory speech rather than La Marseillaise) all the while the Hard Brexit iceberg has ripped a huge hole below the waterline of SS Titanic II. The problem is the EU continues to behave as if the SS Titanic II is indeed unsinkable. Le Pen’s loss is much like believing the water tight compartments will keep the ship afloat. They couldn’t be more wrong as chief designer Thomas Andrews told White Star Line boss J. Bruce Ismay – who protested she was unsinkable- “She’s made of iron, sir! I assure you, she can… and she will. It is a mathematical certainty.”

The SS Titanic II’s crew treats its customers with varying levels of service. It entertains Lady Merkel and Lord Macron in proper first class fashion but for steerage passengers like the Greeks, Spanish and Portuguese they are kept locked below deck. The Greeks were willingly given passage on the SS Titanic II in full knowledge they possessed forged promissory notes as they boarded. The belief was that when they landed on the other side of the Atlantic they’d be able to work it off. Sadly the crew has finally realized it is futile and are now demanding they hand over whatever they have left before handing out life jackets. Moreover they must promise if they’re let out of steerage they must stay chained to the Master at Arms.

In all seriousness the treatment of the Greeks is despicable beyond words. 36% of Greeks live below the poverty line. 58% youth unemployment. That means many can’t access affordable healthcare because it is generally provided by corporates and when you lose a job you lose the healthcare. This means many are forced to use A&E of major hospitals which are now overcrowded and understaffed as more doctors are leaving to seek better fortune for their services elsewhere.

If that wasn’t enough, mothers who had given birth were being restricted from taking their new-borns home if they couldn’t pay the fees. While the government has banned this practice they have introduced new laws to allow the seizure of assets (e.g. homes) if debts are not settled.

Naturally the EU wishes to keep control over the way Greece handles its economic affairs but using the nation’s defiance of autocratic rule from Brussels as a weapon against it shows how little the federal state truly cares for its members. Deeds, not words. It promised to punish steerage countries, Spain and Portugal, for breaching debt covenants. This is the real EU. It is a supranational. A federation through the back door.

The Brexit vote is without a doubt the most damaging iceberg for the EU. The gaping hole it exposes is far more serious than any perceived phyrric victory through Macron’s win.

The issue here is that if Hard Brexit (May is likely to get the majority she needs on June 8th to push for it) is shown to work for the UK (likely) and the idea of extortionate exit penalties are legally unenforceable (confirmed last week) then the risks of jumping ship are sharply lowered. The problem for the EU is that there won’t be enough life boats to save all the crewreaucrats when more member states realize self preservation is the only viable option.

Le Pen’s 1/3rd of the vote, Hofer’s 46% in Austria, Wilders’ 25% increase in seats in The Netherlands, the Sweden Democrats jump to the top of the polls, Italy’s ousting of Renzi, Brexit, the Swiss handing back a 30yr standing free ticket to join…these don’t look like promising trends for an EU which is already badly listing. Despite ample warnings the EU refused (and still refuses) to change its course or exercise due care.

Will Captain Juncker go down with his unsinkable ship or follow Seamen Martin Schulz off before it is too late?