Two excellent points here ... FT article from Gavyn Davies ...

Essence is that it hard to convince people that have no experience of inflation to behave as if it exists ... and that higher low skilled wages are a nil sum game in a services economy where tech can be deployed quickly and easily to offset low skilled jobs ...


Powerful slide ... it shows you just how out of sync the big UK REITs are when it comes to retail ...

Alot of the noise you hear about UK retail is about these names ... their OCR's are twice the level of their counterparts in Europe for a given level of sales ... in Europe short leases and shared sales and turnover data make it impossible for landlords to 'hold-out' like this ... in practice the same is true for most UK centres because short leases make it so ... but in a few big centres ... like the centres owned by the UK majors - the longer FRI U/O leases create alot of MTM rent interia. That doesn't change the fact that the UK names are over-charging their tenants (in some cases by a factor of 2 based on these densities) ... I was with a UK retail agent yesterday who tells us that in many cases centre rents are double the nearest strong performing high street. Sorry guys but its time to take the rental medicine otherwise the CVA's will just keep coming ... oh and can we please all just agree that life is better for us all with shorter leases + shared trading data ...



In the UK businesses have the same challenge ...

Firms are forced to run any pension shortfalls through their P&L and top-up - this has been a major drag on earnings and profits and continues to reduce the amount of capital firms have available for investment, growth and wages ... understanding low productivity and generational inequality is all about understanding unfunded liabilities ...