The biggest bubble in the world 12 comments

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No it's not the US housing bubble or even the UK housing bubble. Though definitely quantitatively more substantial, the amount of euphoria and the way that prices were being chased up are nothing compared to the greatest one of all -- the English Premier League.

When player wages are inflating at an increasing rate even as global fundamentals are declining you either call that a growth industry or a bubble. Some statistics: in the first Premier League season the average player wage was £75,000 per year, but subsequently rose by an average 20% per year for a decade (source: Wikipedia) and in 2006 a survey by The Independent and the Professional Footballers' Association found that salaries of EPL players had jumped by a massive 65% within one year to an average basic pay of £676,000. Based on anecdotal evidence from 2006 onwards, I would think that rate of growth has continued to sustain itself, with the influx of wild money from abroad.

When you combine this with the fact that only eight of the 20 EPL clubs recorded an operating profit in 2006/7 - half the number which did so a year earlier (source: BBC news), you have to conclude that this is a bubble rather than a growth industry.

Two decades ago, cash-flush Japanese benefiting from a massive real estate and export boom at home combined with a greatly-appreciated yen post-Plaza Accord (see " Japanese bubble economy of the 1980s") went on an overseas asset buying spree, with the most infamous being their purchases of Impressionist paintings at absurdly high prices of tens of millions. When the economy bust, so did the market and prices for paintings. So today we see the phenomenon being repeated with petrodollar-rich Arabs and Russians, whose names have been so oft-reported in recent times that I need not repeat them here. Crazy liquidity chasing illusory status symbols.

While we're at this game, I might as well list down the various clubs and their possibility of extravagant takeovers/makeovers, and who SHOULD be buying them, in terms of personality fit etc. In the order that they currently occupy in the table:

Chelshit - Only Putin can take this one away from Roman. I hope he does and this biggest bubble of all gets relegated.

Liverfools - Admittedly, they're already a brand name with great tradition. That's why the filthy-rich won't buy them, because the idea is to flaunt your wealth and show how your money can transform a piece of rubbish into gold. Maybe a Spanish buyer might be interested, so that the Spanish transformation of this club will be complete. They can rename it La Fools.

Man Shitty - Already done. Might be attempting a trillion-dollar takeover of Man-U next, through buying their entire team over starting with the crying one. No-brand/house-brand manager Mark Hughes won't survive past half the season.

Arsenal - What's the point of takeover? Give him billions of dollars and the Frenchman prefers to spend millions (or thousands if possible) at most. If Anwar takes over the Malaysian government, he might like them. But Malaysia can't afford to buy this arse.

West Ham Utd - London address. Managerless. Excellent for a takeover with minimal opposition and freedom to install one's choice of management. With their tradition of violence, maybe Iran might be interested.

Middlesbrough - Currently going nowhere which makes it a good choice for remaking. Maybe some Japanese fund will buy it since they share similarly-coloured flags/jerseys and share similar recent histories of underperforming.

Aston Villa - Big club, middling performance. Prime target. Some kind of value buyer, say a bank or private equity, that can hype this into a speculative and exciting club and then hawk it to the Arabs amid the euphoria.

Bolton - You really don't want to buy a club that is in danger of relegation. Any makeover has to be extreme.

Man Utd - They are so profitable that they are going to be difficult to take over. As said above, Man Shitty's strategy is to empty them of their players. If anyone is going to buy them, it will be China --- a symbolic gesture (Chinese are big on these) of China's imminent world domination.

Blackburn - With a name like that, I think black-hearted hedge funds who will burn in hell might be interested.

Newcastle - Anil Ambani of Reliance rumoured to be bidding. For a club not known to be reliable on consistency, this is indeed ironic.

Hull City - CMI. Straight back down.

Wigan Athletic - Any club with Emile Heskey and Titus Bramble needs an extreme makeover. But I cannot fathom who will give it to them. This one will never become a Monet or a Renoir.

Fulham - The Harrods boss probably has loads of Middle-East connections so he might sell, but only at a huge premium. Saudi Arabia or Kuwait, maybe.

Stoke City - CMI. Straight back down.

Portsmouth - Dirty Harry allegedly loves to buy and sell players because he takes cuts out of each transaction. I cannot think of more appropriate buyers than another of those Russian oligarchs.

Everton - I hope Temasek or GIC buys them, so that I can claim to be patriotic when supporting Everton.

Sunderland - Should get a jersey makeover before anyone will consider bidding for them. Maybe one of those shady Al-Qaeda funds might like to buy them because they have a gigantic stadium and nobody visits the stadium, so they can use it for all kinds of training purposes.

Tottenham - Premium London address. Premium tradition of excitement, but mainly when going one-on-one rather than in group matches. Perhaps the US might be interested in going for them.

WBA - Can anyone tell me what these initials stand for??