Belgium’s central bank governor should be a good penalty taker
Dubai: Mark Carney calmly walks up to the spot. He glances ahead, eyeing the goalkeeper like an eagle. Inhaling deeply, he takes a couple of steps back, before rushing up to the ball and smashing it in to the back of the net.
Of course, given Carney is the governor of the Bank of England, he would most likely miss, like virtually every other penalty taker in England’s history.
However, according to a new, admittingly light-hearted, report from Goldman Sachs, there is indeed a strong correlation between the ‘success rate’ of penalty shooters and central bankers across countries. Conducting monetary policy and kicking a penalty are clearly different endeavours, yet both require cold blood and hard training.
Belgium emerge as the victors in this respect, logging the strongest penalty shoot-out success rate in World Cup history at 100 per cent, and the smallest absolute deviation from inflation target, at close to zero per cent.
Achieving an inflation target and scoring a World Cup penalty both seem to be largely a matter of accuracy, with Germany, Paraguay, and South Korea all scoring high in both.
“Express yourself, it’s one on one,” sang New Order on their 1990 hit, World In Motion, in reference to the thrill and the agony of penalties.
If the classic World Cup anthem is to be believed, love makes the world go round.
But is it really love? Or is it money that’s got the world in motion? When Russia played Saudi Arabia in the first match of the 2018 Fifa World Cup on June 14, it certainly seemed to be the latter.
As President Vladimir Putin and Crown Prince Mohammad Bin Salman watched on smiling politely, it was their Opec and non-Opec pact to cut the supply of oil that has seen both countries’ economic forecasts soar in recent months.
But do the higher oil prices that boosted their economies indicate a higher likelihood of a successful tournament?
According to Goldman Sachs, almost certainly not.
Not to let that get in the way of some rigorous econometric study of the causal link between the two, Goldman’s analysis suggests that there is still “a remarkably strong (and statistically significant) negative relationship between oil prices and the fortunes of Saudi Arabia’ football team.”
Therefore, the more oil prices fall, the better the football team does.
“Whether the causation flows from oil prices to football or from football to oil prices is beyond the scope of our analysis,” the report states.
Either way, the good news for the Saudi football team is that, given the current level of oil prices, Goldman’s results suggest that the team should be performing better than their current ranking of 67 implies.
As for the Pharaohs, what tenuous factor has Goldman decided is a good indicator of the Egyptian national team’s potential performance?
This time, it’s tourism.
Both Egyptian football and its economy are recovering after the period between 2011 and 2016: The political uncertainty that followed the 2011 revolution took a heavy toll on Egypt’s economy and its football, the Goldman Sachs’ report says.
The recovery that Egypt has witnessed in recent years has coincided with a return of tourism to the country. Goldman’s analysis shows that the peak in tourist arrivals coincided with Egypt’s best recent football ranking in 2010, and the recent recovery may therefore be a good omen.
But the country will need Mohammad Salah back and fit if they are to climb the pyramid in to the round of 16.
Most importantly, will the recent uptick in global rates mean more goals in the World Cup final?
Teams have become more risk-averse in the World Cup final over time. The number of goals scored in the match used to be between four and five during the 1970s and the 1980s, but has declined to between one or two over the past decade, according to Goldman Sachs.
This ‘safety-first’ attitude has been mirrored by the preference for safe assets such as US government bonds and the long decline in UST yields over the same period.