Draw Breath

I’ve spent the last few months combining my time between reading critical theorists on finance and reading financial theorists on finance, both of which I find strangely entertaining and interesting. I have an empty empty life.

Anyway, reading Andrew Leyshon and Nigel Thrift’s ‘The Capitalisation of Almost Everything’ (published in Theory Culture & Society in 2007, but a pdf draft is here) I came across this very interesting point. Leyshon and Thrift are interested in countering arguments that financialised capitalism is pure speculation. Rather, it is connected to predictions about more or less definite income streams (from mortgages, rents, PFI contracts etc), all of which can be bundled up and sold on as what used to be thought of as low-risk bonds.

Part of the article is devoted to Northern Rock and its switch from building society to aggressive mortgage retailer. As with everyone else in the mortgage game in recent years, Northern Rocks’ business model was based on the debt-as-revenue model involving borrowing in the wholesale banking market in order to sell mortgages that could be repackaged and sold on as bonds. Anyway, this is where sponsorship of Newcastle United came in:

The change in the business model of the bank, from marketing for depositors to fund its mortgages, to marketing for investors to buy its securities, was symbolized by Northern Rock’s sponsorship of the English Premier League football club, Newcastle United, which advertises the bank’s logo on the chest of the team’s strip. This sponsorship was designed not to link the organization to the area in which both it and the football team are based, but rather to raise the profile of the bank’s brand in Asia – where Premier League football is keenly followed – because the financial markets of that region are where it sold a large proportion of its securitized mortgage bonds, which are based on the monthly repayments of UK home-owners.