Tuesday 31 July 2012

It's getting hot in here . . .

So one thing athletes and central bankers have in common at the moment is super high expectations. Some will rise to the occasion and some will not. Although this blog is about investment banking and cycling I believe that during the Olympics no metaphor combining the competitive world and the financial world should be left un-abused. In this spirit I ask you to compare the expectations of (say) Mr Ben Bernanke and the Australian Mens 100m freestyle relay team.

My Aussie brothers were under extreme pressure many weeks ago and their team leader, James Magnussen had even acquired the nickname of "The Missile". Now the irony here is that Mark Cavendish, who suffered under the weight of expectations also goes by the same nickname. So what happened? The team came in fourth, with France taking the gold. It would seem that the entire nation here had taken this gold for granted and the recriminations started soon after, much in the way they had for Cav and the GB cycling team:

Missile bombs as men's relay team misses medal


I'm not sure a missile can bomb, but whatever the right pun is the Sydney Morning Herald spared no one. Which brings me to Mr. Bernanke.

The Wall St Journal screamed:

Heat Rises on Central Banks 

Fed, ECB Officials Convene This Week as Markets Look for New Growth Measures


The markets have only just begun to pause ahead of this weeks Fed and ECB meetings. The two-day Federal Open Market Committee meeting convenes Tuesday. The ECB meet Thursday, no doubt with a number of the members ready to ask Mario Draghi what exactly he meant when he said he would do "whatever it takes" to preserve the euro. 


The US markets are back up towards their 1 year highs even as we start to see revenue start to decrease at even the most savy companies (e.g. Apple). With a US economy growing at 1.5% and a stand still rate of 2% needed to just maintain zero velocity we can only conclude that quite a bit of future increases in money supply are priced in. I therefore await any failure to deliver by Mr. Bernanke as another opportunity for markets to final clean themselves out. Of course if he manages to convince his fellow board members to skip down the Keynesian road with him I expect a bigger disaster at a future date . . . the spring gets ever more taught on the crazy Keynesian economy machine:


First unveiled at the London School of Economics in 1949, the Phillips machine used hydraulics to model the workings of the British economy.

Before moving on to something special I wanted to point out the following chart from a Nomura research piece. This one shows Chinese Rebar v. Iron Ore:

While it is no doubt true that Rebar is more volatile than Iron Ore it is also true that one does not decouple from the other for too long. The question now is which moves towards the other? Nomura says it should be Iron Ore. Make up your own mind.

Now for something special. I loved the Colnago C59 the first time I saw it's chunky lug enforced frame in a shop window. Therefore if you combine this with one of my favorite riders and give it a special coat of paint I think you get something a little bit special?:


According to Bike Rumor Colnago has just announced a 135-piece limited edition run to celebrate Thomas Voeckler’s 135 points in the race for the Climber’s Jersey at this year’s Tour de France. It's a beauty and yours for for around five grand depending on the fit out. I reckon with Campy EPS (electronic shifting) and the those Bora Two's you'll be lucky to find one under 15k. At least they'll see you coming.

Ciao!



Monday 30 July 2012

Olympic Cycling . . . not so Olympian governments . . .

The Olympic men's cycling road race was fantastic and it led me to start thinking about the old adage of 'under promise and over deliver." The master of this was Steve Jobs at Apple, though there's been lots of examples over the years of the same thing. The reason why I thought about it was that the GB cycling team did the opposite and got punished for it by the press and finished up without so much as a ribbon to pin to their chests. Wiggo, Cav and the crew did what we all ask of our sportsmen and told the truth, right down to confirming that their was no Plan B, in fact as the GB coach said "Cav is Plan A and the rest of the alphabet." It was therefore only the most one eyed optimist who thought that the rest of the peloton were going to sit back against the best sprinter in the world and allow him to waltz his way around nine circuits of Box Hill before being paraded back to The Mall for a final couple of hundred meters of triumphant peddling. I tried not to take Cav's post race whingeing too seriously, he was under a lot of pressure and with no race radios and four riders less in this team than on the pro circuit the race was too long by at least 60km's. I thought he'd win, but then I also thought that Mario Draghi would stop shooting off his mouth by now.


Darghi behaved somewhat like the GB cycling team last week and decided that he'd just tell the truth (as defined by the PIIGS and France) and say that he would deliver Euro from what was ailing it. That was all very good until Jens Weidmann, Bundesbank president, voiced concern about a lowering of credit standards. The ECB's council was not unanimous last Thursday when they expanded the assortment of collateral paper that they would be willing to take in exchange for real Euros. I didn't realize that treatment of the pool of 14trn Euros of eligible paper would not be even across the whole Eurozone, which for me rang alarm bells. I mean doesn't this just encourage the PIIGS to take more dubious paper and rely on the ECB/IMF etc to bail everyone out when one of these banks collapses? Maybe I need to chill out and trade the increased liquidity and not the increased systemic risk?

I was listening to one of my favorite podcasts "This Week in Tech" this afternoon when it occurred to me just what pressure there was on Apple via iPhone 5 and Microsoft via Windows 8. The Asian OEM chain is very vulnerable at the moment and some of the recent surprises from Microsoft are adding to the insecurity of suppliers. Apple's quarterly earnings miss is even more important because this has been the one company that you can bank on to over-deliver. Analysts in the US have been keen to pardon Apples failure on the grounds of pent up demand for iPhone 5, but what if we get the unthinkable, an Apple product not quiet worth the WOW that we're used to? I don't know what will happen in Apples Hong Kong mega store, but I suspect that the crowds will still come, maybe not at the same rate as over the last 12 months, but they will come. That's the point though, if they don't come fast enough what PER are you willing to pay to play on as a shareholder and hope that iPad 3 or iPhone 6 brings back the astounding growth rate we've seen from Apple since Jobs reappeared with his translucent colored machines a dozen or so years ago.



I should mention that I had my first traffic incident on the bike since being back in Sydney. I was on my final run when I was coming down Elizabeth St Paddington and into the roundabout where it crosses Hargrave St when a lady in an Audi Q5 (coming from the direction of the Five Ways towards Woollahra) decided that giving way to traffic already in the roundabout was optional. Luckily I swerved and gave her an extra couple of meters to stop the beast. She did apologise, but jeez I honestly don't know what she was doing. I think I saw child seats etc. so am going to guess there were lots of distractions in that 4WD. Anyhow if I had been hit there was a half a dozen people drinking on the balcony at Darcy's restaurant who saw the whole thing. They were very nice and asked me if I'd like to come up for a drink to settle the nerves. I decided to ride on.


Ciao!







Friday 27 July 2012

The great pretender . . .



Mario, Mario when are you going to learn? Perhaps never. What is he talking about? Bumblebees? This guy is a joke, but clearly the market is not in the mood to fight back while the main policy makers in Germany are on vacation.

On to things more important than one man's delusions.

Does Mario Draghi have a Facebook account? I really can't be bothered checking. Maybe if he did it might generate some revenue for the hoodie crew at Facebook. The stock trades around 24 bucks now v. a 38 dollar float price. In year on year comparisons they made 11 cps a year ago and now they lose 8 cps. That is not impressive for a stock built on the promise of growth not shrinkage. Revenues were up 32% from a year ago and this compares with the previous years growth of 45%. So has Facebook already matured, are they going to become a company of no margins? It looks more and more like we will be waiting for a monetizing miracle that will never happen. In my mind this stock is heading to 10 bucks and a restructuring . . . .stick with Google.

You have to love Ex-Citigroup boss Sandy Weill's pronouncement that banks need to be broken up into retail and investment banking arms. The high priest of the bankinssurance model had a St Paul moment and converted on his way to Damascus. Take DB, they already have CEO's running the two divisions. The First question that DB need to ask is can they survive in their current form with a non-competitive tier 1 capital of 7.2%. At the very minimum they will have to cut a swathe through their headcount and tell shareholders that dividends will not be coming back any time soon. After all that what would you pay for DB's individual units . . . more or less than the current 0.5x Tangible Book Value?

I'm going to cut this Friday edition of the blog a little shrt to prepare myself for the Olympic cycling. It's going to be a challenge down here as most of these events will be taking place around 1am Sydney time. I'm considering some spread betting to keep myself awake . . . the over under on UK golds in the cycling is 5.2. I reckon thats probably a buy. Chris Hoy 1, Wiggins 1, Cavendish 1, the girls 2 and another couple on the track. The downside is 4 in my view, the upside 7? Also I think UK gold at 23 is a buy, but less certain than the cycling bet. And for the Aussies a sobering thought is I reckon up to 10 of those golds are in events that put the poms and the Aussies in a head to head. Should be fun in certain pubs around London?

Bon Weekend!

Thursday 26 July 2012

Same old . . . and yet a little more

It's funny being in the Australian timezone as you wake up thinking about the significance of what you saw in your own markets yesterday, but those observations are immediately crushed by the European close and the intra-day news from the US.
My favorite company (not the same as favorite stock) reported overnight. Caterpillar (CAT) beat expectations and along with Boeing managed to steady a market worried about what they saw from Apple. I won't go into CAT today except to say how many stocks do you know of this market cap are trading at or above their 2007 levels who are not in the tech space?






CAT proves the old adage that the guys that get rich in a boom are those that supply the picks and shovels. Compare CAT's performance to some of the resource mega caps in the same period and you'll know what I mean.


Looking back at yesterday I noted that Japan's exports fell in June year on year, the first decline in four months, that means a 2.3% annual decline, but that was better than the f/c 3.0% decline. Its still bad though. With the JPY sitting around 78 I just can't see those numbers adding up to anything other than trouble for GDP. The Reuters survey says that economists expect Japan to grow at 2.2% for their financial year (end March 2013), but surely that is doubtful at this stage. No amount of post Tsunami spending is going to bail the Japanese out.


Meanwhile Australia's core headline inflation figure came in at 0.5% (0.6% rate expected). Talk here locally is that this gives the RBA room to cut. Adding to speculation (not necessarily guiding in a particular direction though) was RBA boss Glen Stevens who spoke yesterday at business lunch commented:

"It has to be said that the housing market bubble, if that's what it is, seems to be taking quite a long time to pop - if that's what it is going to do," he said. "The ingredients we would look for as signalling an imminent crash seem, if anything, less in evidence now than five years ago."

Maybe it's just me, but that doesn't sound like a man likely to urge his board to cut rates. The Aussies are currently addicted to cuts as they are all too aware that the recent failure of the big 4 banks to pass on the full amount of moves by the RBA signals all is not right in homeowner world.


I stupidly forgot to mention the UPS results from Tuesday and more importantly their cut to f/c numbers. UPS is very geared to GDP and one needs to remember the old adage that the Dow Transports are the first movers in a market turn:

“Economies around the world are showing signs of weakening and our customers are increasingly nervous . . . We think current second-half economic forecasts for the US are too high and that GDP growth will likely be closer to 1 per cent,” (Scott Davis, CEO of UPS)

As we're still in a news vacuum in the cycling world pre-Olympics I've started to look at companies benefiting from the recreational cycling boom. Yesterday I wrote about Dorel Industries (owners of Cannondale). Today I decided to follow my nose and look at an other bike connected name. In this case Garmin. As a company Garmin is firmly in the specialist consumer electronics, namely SatNav and exercise measurement. 


The Sector breakdown for company sales is:

Auto/Mobile - 50%
Outdoor - 14%
Fitness - 13%
Aviation - 13%
Marine - 10%

The PND (personal navigation device) business is under pressure from the likes of Apple and Google (Android) - as well as some aggressive pricing from competitors, such as TomTom.
Garmin remains the number one supplier in the U.S. and one of the largest suppliers in EMEA, but the company itself says this is unlikely to last. There's no way someone is going to carry a Garmin 800 in their pocket whn they can use their smart phone. So Garmin will focus on automotive OEMs (for navigation and infotainment applications) and emerging markets. This basically means you have to look directly at auto sales numbers to see significant earning growth as it is 50% of revenue by sector . . . it doesn't matter that Outdoor is up 16% for the year and Marine was up over 9%. Of course in the long run it will help, but not yet.

I did like that when they reported earnings that Gross margins for the quarter were 51.0%, up 329 basis points (bps) sequentially and 404 bps year over year. Average Selling Price (ASP) increases offset the volume decline in the sequential comparison. So, by segment - auto/mobile 39.3% (up 156 bps sequentially, up 812 bps year over year); aviation 68.2% (up 369 bps sequentially and down 50 bps year over year); outdoor 61.3% (down 663 bps sequentially and 98 bps year over year); fitness 61.1% (down 329 bps sequentially, up 112 bps year over year) and marine 59.7% (down 6 bps sequentially, down 496 bps year over year). You have to read the yearly numbers as sequentially you're looking at the usual seasonal drop off that occurs for this quarter.

Finally, the company is guiding EPS of $2.45-2.60. The Zacks Consensus for the year was $2.85 from surveyed analysts. They made 44cents in this quarter, which seasonally lines up. The stock trades at 37.50, so we're looking at a PE of over 14 times using the top end of the Garmin guidance. I think this one is a hold at best because 2H12 auto cannot hold up in my view and their growth areas in Outdoor/PND can't grow as fast in the face of smart phone adoption. This is probably a sell the rallies than a buy the dips story for now, if you get what I mean. Sorry.


I'm off to do part two of my personal fitness test. This is the cardio section and as long as the trainer doesn't add an agility element I should do better than I did on strenth.

Ciao!



Wednesday 25 July 2012

Revenues and bicycles . . . can I have both please?

There was a nice interview with Dr Neil Soss of CS on Bloomberg late yesterday New York time. He rightly talked about a European Resolution Trust, similar to what happened in the US after the S&L crisis of the late 80's.


Dr Soss describes something I wrote about this week and that is this lack of trust between credit "buyers" and "sellers". It clearly is about a blocked credit pipeline and as I said you can make rates as negative as you like, it won't change the fact that no one is lending because they just don't know what collateral is worth. It's worth listening to.

Apple finally looks to have entered a dangerous phase it its precipitous rise of recent years. I wrote about my skepticism some time back, but I was reluctant to fight the tide. Now comes today's result which shows a weakness at the revenue line. The headlines read:

APPLE 3Q REV. $35.02B, EST. $37.25B
APPLE 3Q EPS $9.32, EXP. $10.37
APPLE 3Q NET PROFIT $8.8B
APPLE SEES 4Q REV. ABOUT $34B, EST. $38.01B
AAPLE 3Q GROSS MARGIN 42.8%, EST. 43.8%
APPLE SOLD 17.0 MILLION IPADS DURING QTR, UNIT EST. 15.4M
APPLE 3Q IPOD UNITS SOLD 6.8MLN , DOWN 10%
APPLE SOLD 4.0 MILLION MACS DURING QTR, UNIT EST. 4.3M
APPLE SOLD 6.8 MILLION IPODS IN QTR, UNIT EST. 6.6M

Here's two charts that Zero Hedge put on Twitter this morning:


Each show the declining revenues over the last couple of quarters. The upper chart shows the raw numbers by geography, while the lower shows the sequential change. Now the bulls will say that there should be allowance for the seasonality / new product effect, such as a new iPhone. Let's just say that 1Q12 was not the time when the stars aligned and everyone went out and bought an Apple product, let's instead say that this was a one-off iPhone 4GS / iPad etc. product cycle "thing" . . . is it reasonable to suggest that eventually we'll reach saturation? Is it also reasonable to say that at some stage a credit crisis will slowdown the consumers ability to by products from Apple and pay a 42.8% margin v. whatever single digit number Samsung is happy with? You have been warned . . . one failed product and we'll be in Microsoft territory where it becomes all about Apples cash pile (110bn) and no longer about the earnings growth. Prepare to short.

I got mail overnight about the delay with my Cannondale Evo SuperSix order which got me thinking. In the mail the agent said that the normal lead time within Europe for new or replacement Cannondale bikes was about 15 days for top end products. To me that's about right for a carbon framed bike that embodies a certain amount of hand finishing. Now the problem is that the old 15 day rule seems to have become a little elastic at the moment so I thought I'd look into this.

Dorel Industries is a Canadian company that owns Cannondale. They call themselves a "World Class Juvenile Products And Bicycle Company, meaning they make baby carriages and own Cannondale . . . well that's a little harsh, but essentially that's it. First of all here's the geographical exposure of the company:


When we dig down they are moving into South America via an acquisition in Chile and Emerging Europe via Poland.  The problem comes when you realise the problems in the company are  in the Juvenile (baby carriages) segment and the growth is all in the Recreational (cycling) segment.



Juvenile segment revenue in the first quarter of 2012 was $269.5 million, flat with 2011. Operating profit for the period was $20.7 million, a decrease of 12.7% from $23.7 million in 2011. Organic revenue decreased by approximately 4% after removing the Dorel Chile and Dorel Polska acquisitions and the impact of varying exchange rates year-over-year.


First quarter 2012 Recreational / Leisure revenue increased by $20.5 million, or 10.2%, to $220.9 million compared to last year’s $200.4 million. . . Organic revenue growth, excluding the impact of varying foreign exchange rates was approximately 11%. Operating profit increased by $3.6 million, or 20.3% to $21.4 million, compared to $17.8 million in 2011. Operating profit for the quarter was the highest ever in the segment’s history, dating back to 2004. 


The company has been restructioning the Juvenile divisions and we'll need to see how 2Q12 looks before deciding on that. I'd be happy to see their margins on an up trend in Juvenile to prove the point, because I know that revenue is unlikely to have increased. If the demand in the Recreational division holds up we may be able to revisit the stock as at the moment the stock is trading on somewhere between 8-10 x earnings . . . not stretched if they get it right.



I'll report back when I get those quarterly results and 'll; try and compare them to other companies in the sector.

Ciao!

Tuesday 24 July 2012

Even the best looking girl at the dance sometimes sits alone . . .

Moody's putting some of the northern European darlings on negative credit watch shouldn't have surprised us . . . but I guess it did.



The odds get tighter each day that Hollande and the other whingers will eventually verbally batter Merkel into submission. Eventually Germany will be forced to quit the Euro or pay up for the PIIGS and France. The only country worth trust are the Finns, who have made it clear from the start that they need collateral before continuing this insanity.

My favorite headline from the press today comes from CBNC's website . . . .
China Manufacturing Bounce Doesn’t Rule Out Stimulus.The money honeys continue to look for the silver bullet that will end the agony of the last 4 years, but they just don't get it. Stimulus alone will not help. The whole point of my piece yesterday was that this isn't some sickness easily solved by a Keynesian pill.

Let's look at this Chinese PMI. So, 49.5 is up from last month's 48.2, but you need a reading above 50 to show expansion. Let's face it, for the entire globe to be moving you'll need an reading way above 50. I have great sympathy for the Chinese as they know quite well that they don't want to slow the deflating of the housing bubble, but with limited external investment opportunities they may be left with know choice. I think the leadership will continue to open up new outlets for investment that will relieve at least some of the pressure.

A good example at the corporate level of outward investment was CNOOC's bid for Canada's Nexen. A 61% premium with  15bn on the table used to be very significant. The same company previously failed in a larger bid for Unocal in 2005. I remain somewhat skeptical as this will get through Ottawa's approval process, you will remember the hell BHP went through when trying to aquire a Canadian potash producer, so I can't really see how this will be any easier. It will suit the Canadians to string this on for months.

Europe accounts for 40% of McDonalds sales these days, the US accounts for just over 30%. I guess therefore it was natural that even lower end dining would eventually hit a wall.



They missed the fairly bullish expectations of Wall St, but I'd be inclined to be patient. One obvious problem for them is that the weakness of the Euro hurts them in terms of earnings translation . . . Maybe if you want to punt Euro bounce the golden arches are a more risk savy bet than most. There has been much to admire about the last decade of McDonalds business plan execution. The localisation of menus finally started to pay off and branching out to make non-peak hours more effective (McCafe etc.) has been a winner.

I put cycling on hold today in favor of my first fitness test in quite a while. I'm embarrassed by my push up total in 2 minutes (only 37) and 1.43 on the plank.



I need to lose about 4 kilos and I think that my almost exclusive use of cycling for my fitness has really hit my upper body strength. I guess it was fairly obvious. I doubt I could do even 3 proper chin-ups at the moment. Unless you want to be a climber in the Alps then I suggest getting off the bike and into the gym a couple of days a week.






Monday 23 July 2012

Turning Japanese . . . Allez Wiggo!

I don't believe that the gloomy comments by John Williams, president of the Federal Reserve Bank of San Francisco caused the sell off on Wall Street on Friday. I think three solid up days closing in on a weekend meant that shorts have likely finished their covering moves ahead of the poor but better than f/c quarterly results in the US. The bond market continues to show the real stresses in the economy and therefore I remain skeptical as to the likelihood of a bonds sell off in the US and Germany which in my mind would go hand in hand with any push towards equity analysts f/c of the S&P500 above 1400 (e.g. BoA 1422 target). PIIGS bonds remain under pressure, as does the Euro itself. In fact it is interesting to note that the correlation between equity risk and the Euro has looked to have broken for the moment and thus much of the algorithmic trading world is now in a kind of no mans land or perhaps even purgatory.

One reason for Mr Williams concerns can be seen in the following chart in the FT sourced from the Fed itself:


This neatly sums up the reasons why what we're experiencing is a credit crises and not a conventional recession. I would hazard a guess that this is similar to Japan post the bursting of the bubble back in the early 90's. What we learned from 20 years of Japanese misery is that loose monetary conditions alone do not in fact lead to a recovery in credit markets. In fact this type of policy leads to continual distrust within a credit system as in order to efficiently disperse available capital to enterprises likely to use it wisely requires a certain faith in the system. By pushing down rates to (in the case of Japan) zero or lower actually sends the wrong signal especially if depositors (the public or cash rich corporates) see no quick change in the uptake of this cheap capital. In fact the message becomes one of - "wow, if rates are negative how come the smart people in the economy don't use it? In that case I'm/we're worried and therefore don't trust the system ourselves." The Fed now is effectively pushing on a string, just as the Bank of Japan has for many years. Credit is not getting through to SME's and therefore those free enterprise economies are unable to stimulate enough growth to increase employment. I hate to say it, but perhaps the governments should tighten monetary policy while simultaneously loosening credit conditions by either nationalisation of the banking system or the creation of new credit dispersing bodies (e.g. Fannie Mae and Freddy Mac) with clean balance sheets able to lend at reasonable terms without the anchor of bad loans and mental destruction from the 2007/8 crisis.

The earnings season as I said earlier has been a positive for the stock market, but Apple reports today and given it's status as bellwether and safe haven it will be crucial in deciding the next technical move in markets. Apple’s earnings for the quarter are seen at $10.38 a share, based on Thomson Reuters I/B/E/S. That compares with a profit of $7.79 a share for the year-ago quarter. Apple’s shares are up 49.2% for the year so far. I doubt they'll announce any further enhancements to their balance sheet via dividends or buybacks, but be aware there is potential for both.

Over the weekend the FT did a short piece on the economic cost of Cycling UK's quest for Tdf yellow and Olympic gold. I thought the piece had a strange tone, but maybe that is befitting of such a newspaper. I don't know what the eventual costs of the Olympics or all the money poured into British sport in the lead up will be, but I do know that it probably has saved the country from a deeper and more morose recession than might have been. No one one can detract from a sensational effort by Wiggins and Sky. Cavendish's win in the final sprint was wonderful and in my mind a foregone conclusion at the start of the day. Whether Wiggins can repeat remains in the lap of the gods who settle the final course for 2013 and of course the mental attitude of his team mates. Froome, his guardian angel in the mountains only once looked likely to crack as Greg LeMond did in the face of Bernard Hinaults broken promises during the 1986 TdF. You have to assume that Froome is unlikely to get any promises from Wiggins given the current champion's relatively young age (31). Instead I'd look to Sky to slowly break apart with Froome looking to back himself at another team.

Ciao!

Sunday 22 July 2012

Bianchi Oltre and Bondi Beach . . . I like them both . . .





A rainy morning for my first serious ride in Sydney since getting home. I took it easy as the roads were slippery and the new tires that Mike Shaw from Atelier De Velo had put on my loaner Bianchi Oltre were in need of a certain bedding down. So this weekend edition of the blog will be part observation and part review of this first ride.

Riding in Sydney

You only really know the quality of the tarmac when you get on a bike. In Sydney's case I never thought the roads were really that bad, but they are and for the bike rider there are plenty of cracks, potholes, dips and debris to watch out for.

The second observation is that Sydney is a morning city. This isn't Geneva where the only people you see before 10am on a Sunday are the police or other bike riders. In Sydney there are walkers, joggers, dogs, cars, garbage trucks and the occasional cyclist all launching themselves into the day. Everyone moves with purpose, even if that purpose is only to obtain their favorite cappuccino, latte or most likely the ubiquitous Aussie "flat white".  For the cyclist this means that you have to keep your head up at all times, thus making it a little stressful especially when you venture on to the more popular thoroughfares.

As you can see from my Strava output my route today involved the foreshore in the most densely populated piece of Australia; Sydney's Eastern Suburbs. I chose this course as I was born and bred in the east and am familiar with the most scenic locations. The main challenges of the day were the hills towards the suburb of Vaucluse and the exit from Watson's Bay to The Gap and on to Bondi. Most of the hills are short but steep and The Gap run has a nasty 11 degree section that wakes you up.

Generally car drivers are a bit dismissive of cyclists. I'll reserve final judgment as it was 50/50 this morning and to be cyclist friendly you need a more 75/25 attitude. A couple drivers got a little impatient around the many traffic calming devices that litter the streets of most modern cities. The real test and in many ways the best test is the round-a-bout where drivers often look on cyclists as not their equals and fail to give way (in the case of Australia) to the right. Taxi drivers are particularly dismissive and I guess this morning that my most uncomfortable moments came from taxi drivers getting a bit close.

Bianchi Oltre



Thanks to Mike the Bianchi Oltre was setup as well as can be expected. He did a great job getting me in a comfortable position. The man took a lot of time to fit me and gave me a great excuse to recomend him to all readers of this blog. I'm not sure of the size of this white, grey, black and celeste example but frame is as advertised, very handsome and beautifully finished. I like the predominance of white as most of my own bikes up until now are more black orientated. The bike was finished in Campagnolo with Chorus groupset and new Bullet wheels.


The  frame had an assured stiffness and maintained its stability under heavy use, especially up hills. There were none of the creaks and moans that my BMC has under power moves. I felt the top tube was perhaps a little short for me and it might just be a fitting thing that you would correct on purchasing a custom fitted model. The Oltre has a very comfortable ride, which was greatly appreciated on these roads. This is no Felt FR1 and should suit even a heavier rider looking to put in a big weekend on the road.

The Campy Chorus groupset was my first experience of the lower spec version of my usual Super Record 11. I have to say it's far superior to the Shimano 105 (though I think it's better compared to the Shimano Ultegra) on my BMC and has a more precise feel for shifting. You can hear the difference between the Super Record and Chorus as the latter's alloy based components make a different sound than the carbon dominated former. It really doesn't matter a lot and I found myself quite satisfied with everything to the degree that I forgot about the groupset altogether. Surely that's a good sign?



I had only read about Campagnolo's new Bullet wheels in the cycling press and aside from being non-plused by the aesthetics really didn't have any preconceptions when I first sprinted up Darling Point Road. The rear wheel has the familiar G3 spoke pattern. I'm not sure which spec these Bullet 50's are, but they're likely to have the standard steel ball bearings from what I'm feeling and probably weigh-in at around 1700g's. They are carbon bodied clinchers with Aluminum braking surfaces which was needed greatly this morning. First impressions were that they were comfortable, but lacked the "zip" of say Campy Bora's. Having said that they feel alot more solid than my Easton EA90 SLX's. I guess they're cheaper than the Bora's, but possibly more expensive than the Eastons. I need to check this. One warning though for riders new to Sydney . . . the wind can really blow here and I'd suggest a good set of standard depth rims for days like today.

Conclusion

For a rider of my capabilities I was never going to find much wrong with this beautiful bike. It should easily bring a smile to most intermediate to advanced riders faces before, during and after a good hit out. Comparing it to my Pinarello Dogma 60.1 I'd have to say its a close call and dare I say it may even come down to aesthetics and fit out. This one can be yours for around AUD 9000 before negotiations, which puts it very much in the top end group. I'm going to be riding the bike for the next 2 weeks and promise to report back on my progress.  I fitted the Oltre with my trusty Garmin 800 and when I get the cadence sensor registering properly will no doubt be more able to maintain a pace better suited to the capabilities of this fine machine.

Many thanks to Bianchi and Mike Shaw from Atelier De Velo for the opportunity to ride the Oltre.


Friday 20 July 2012

Are you stupid to volunteer for an independent assessment?

Am I stupid to volunteer for a fitness test. As usual I ran my mouth off this morning on my return to Tattersalls Club in Sydney and got myself in the gun sights of the chief trainer. Thus I'm now booked in for an assessment next Tuesday morning . . . panic commence!



My recent focus on bike riding has left me with severely under-sized guns. My chin up count will be lucky to register two. I fear the worst and most of all I fear the post session lecture about cutting out carbs, alcohol and probably sex. Trainers are always the same and I admit I'm not the best person I could be, but please don't shoot me just yet.

Mike Shaw from Atrelier De Velo has officially offered me a chance to ride one of his demonstrator bikes. I've already dusted off the cleats and gear ready for a quick fitting on Saturday. I have no idea where I'll ride, but I'm likely to head out to Watson's Bay and then up to the Gap, Bondi, Bronte, Waverley and Centennial Park. The round trip is probably 30 - 40km's the way I've mapped it. Hopefully I don't bonk on my way up the hill to the Gap. Either way I'll faithfully record the embarrassment on Strava for all to see.

I think Morgan Stanley and I are very similar at the moment. Yesterday MS reported a 23% drop in earning from the first quarter. I think my fitness output fell an equivalent amount. We both now have a small window in which to transform ourselves back to lean mean fighting machines. I bet I'll do a better job than MS.



My compatriot James Gorman has been trying to transform MS into a wealth management business. He comes from the retail broker side, therefore his focus is naturally in that space, but is it right? For a start it's a US centric based strategy and assumes that correlation to GDP + leverage would see them give an above average return on equity. The problem is that the MS balance sheet is inferior (and thus the recent credit downgrades) to their wealth management peers. Now people who have been reading this blog know that I am the last person enamored of the Swiss banks, but they have a central bank actively willing to support them via a "pushing" strategy that requires them to hold so much tier 1 capital that all they have to do s stand up straight and hold out their hands and eventually money will pour into them. Look at CS . . . a new round of capital raising announced yesterday is solely because the SNB will not stand for a re-leveraging of their balance sheet. Who in their right mind is going to deposit money into MS?

Meanwhile Spanish 10year yields have pushed back up over 10%. The equities markets and the bond markets seem to be at odds over what will come next. Equities continue to be driven by earnings and the news vacuum I discussed yesterday, while bonds reflect the reality of the casino that is the Eurozone.

Bon Weekend!

Thursday 19 July 2012

We're not in Kansas any longer Toto . . . and we're also not in Geneva

I took time out from dealing with telecommunications people today to hunt around for a bike to hire for a couple of days while Cannondale get things moving on my Evo Super Six. I stumbled across a beautiful shop on Clarence Street by the name of Atelier De Velo.



Its a combo upscale bike shop and cafe. I met Mike Shaw the owner who was working on a Wilier when I first came in. In fact I was surprised to see they had Wiliers as you just don't see them that much in Switzerland and France, let alone Australia. They also stock Bianchi and Focus. Prices looked in line with what you'd expect in Italy after allowing for the extra freight.  Mike seemed like a nice guy and he told me that they were trying to arrange a regular shop ride which obviously I'd like to join. No promises but he thinks he can help me out. So if you're in Sydney and want to grab a coffee in a very chic bike shop then stop in and and say hello to Mike. He might even let you buy a Wilier from him!

Who had worse news last night . . . Cadel Evans or Ben Bernanke. Both were under extreme pressure.



I wonder what would happen if they swapped roles? Would Evans be a Keynesian and print money until the global economy started to grow again or would he prefer to conserve his energy knowing that the right moment was still to come? Conversely would Bernanke have attacked in the Alps or held back for the Pyrenees? I think Evans would be more a monetarist of the Chicago school and chose his moments knowing that his resources were finite. He can't win the tour now, much like Ben in my view can't win now either, but both can try and preserve their reputations by a judicial use their respective energies in these final stages. And for the record . . . I'd say Ben would try and ride in every brake away hoping that he wouldn't get worn down by the peleton in a futile attempt to be the last man standing.

The reporting season in the US seems to be a bigger driver of equity markets in my view than the macro for the moment. It's almost as though we're in a news vacuum in Europe as the Libor scandal seems to offer an appropriate diversion for politicians unable to come to grips with the bigger picture. I pity the poor trader at Barclays Philippe Moryoussef whose name has now been leaked by people connected with the probe as he's about to have a summer of utter misery at the hands of the press. IN meantime the big names of the Dow and S&P500 keep beating analysts forecasts thanks to their constant talking down of expectations.  Amongst the financials even Bank of America managed to eek out a "beat" of 19c v 15c expected. Of course not everything is as black and white as advertised and much of the profits finding their way into these numbers are from write backs of provisions. There is no growth . . . that is clear.

Goldmans who also beat analysts estimates the previous day was in the same boat relying on further headcount cuts etc. to torpedo the boffins. They'll have to cut more, or more likely restructure if they're going to provide investors with an acceptable return in the medium term. Sost income ratio was back over 44% in the last quarter which in my mind suggests that the new business model is yet to be found. Heaven help the Citigroups, UBS and DB's of this world.

I hate to bring up HSBC and their performance in Washington, but all this talk of Mexican banking being data poor is a bit much. Let's face it someone dropped the ball and as usual shareholders will be taking the hit to the tune of about 1bn. KYC is not difficult, it just takes a line in the sand of which everyone is aware. The key is the line and in the case of HSBC everyone had there own version of it.

I haven't seen anything that is really sexy yet in any of the results coming across the tape. Like I said yesterday, when Telstra is at a 3 year high, then equities are in a bad way.

Ciao!



Wednesday 18 July 2012

Starting again is hard to do ....

Apologies to all for being out of action for the last 10 days or so, but unfortunately putting together a blog while using an iPhone tethered to my laptop was just not feasible. It shouldn't have been like this, but such is the life of a returning expat.

Telstra is Australia's biggest telecommunications company and like many of the largest phone companies around the globe they are the legacy of a public utility. In other words service is an after thought. As a returning customer I guess I shouldn't have been shocked when they completely botched the installation of what here is called a bundle (landline, cable TV and internet). After finally getting the internet connected they failed to coordinate correctly with cable TV partner Foxtel and I decided to exercise the cooling off rights in the contract and move to number 2 provider Optus before things got worse. The irony of the situation was that if Telstra had just got a Foxtel guy over to drop off a box they could have kept the business and I would have installed it myself in 10 minutes as I did in Switzerland, Singapore and the UK. Instead they said it would be another 3 - 5 business days without any guarantees . . . so just to rub salt into the wounds the Optus transition team connected me directly to Foxtel who booked me in for an appointment tomorrow morning before 10am. Why Telstra couldn't do this is beyond comprehension. Too bad for them.

Leaving customer service issues aside the shares of the Telstra are trading at close to a three year high. The stock reminds me of Tokyo Electric Power in the late 90's when Japanese rates where being cut to zero. Clearly this stock is now a bond and is illustrative of many legacy utility providers who have the benefit of high barriers to entry and strong lobbying power in their respective capitals. The long only fund managers are effectively hiding from the lottery which is the broader market.


I guess Telstra is a little more interesting than most as it's growth driver have been via its holding in Foxtel, the primary cable TV provider in Australia. Their main partner in Foxtel is Newscorp and that leads me to the question of what might happen if Newscorp moved for full control . . . would Telstra sell? Should they sell? I haven't done the numbers but if Murdoch were to cede control of his newspapers, as is possible under the proposed structure for Newscorp one would suspect he would make a move to do a deal with Telstra. Of course the wild card is local media company Seven who have a strategic stake in CMH the third partner (25%) in the Foxtel ownership structure. I wonder also that in the case of a sale would the government look to brake up the effective monopoly of cable by encouraging a foreign investor via the much vaunted National Broadband Network?

China is truly a magic place. Just when you though lower factory orders and a GDP on the skids was going to bring the whole edifice crashing down out pops, a mere two months after loosening monetary policy a rise in property prices. Essentially everyone rushed down to their local condo developer etc and bought what they could:

"Of the 70 leading cities tracked by the Chinese statistics bureau, 25 registered month-on-month price increases and 24 saw prices remain the same, while prices fell in 21. That was an abrupt reversal from May when prices fell in 43, stayed level in 21 and rose in only 6." (FT)

It's important here in Australia as housing is by far the primary consumer of steel/iron ore. If Chinese housing fails then so to will the AUD. The FT has the following graphic explaining the relationship:


The question for the government is whether they can stimulate without adding inflationary fuel to a housing bubble already mature and looking to burst. Personally I doubt it, but we have to await the tricke down effect to other sectors of the economy before conducting the last rites for Beijing "Condo-man" and his relatives.


The TdF in my view has lacked something. I think Sky has just been too good. About the most exciting thing this week was the tacks thrown on the road during stage 14. I have no idea why someone would do this, but I thought Wiggins showed class in slowing the peleton for those who had suffered.


I haven't had to worry too much about tacks, nails or spectators as none of my bikes have made it to Sydney thus far. I was hoping that my Cannondale would have at least left Europe by now, but alas Cannondale have failed to come to the party. I'm hoping it's just because they needed every Evo Super Six frame for the Liquigas team. Nibali sits in contact with the Sky team as Sagan's flexes his muscles in his quest for the sprinters green jersey. It's been pretty awesome watching Wiggins and Froome dispense with all challengers in the GC up until now and I doubt that they can been beaten by Evans or Nibali.


Sagan is a beast and so exciting to watch as Liquigas doesn't have any kind of lead-out train and the "Tourminator" is left like a limpid mine to attach himself to the Lotto team and sneak in when Griepel is not watching. Fantastic stuff.

Thanks for reading today and I promise to warm things up now that I'm back on line.

Ciao!

Tuesday 10 July 2012

Falling . . . .

Iluka Resources is a miner of mineral sands in Australia. The stock fell 24% yesterday when they failed to meet their forecasts. I mention this because Iluka's output goes directly into housing and of that much of it goes into China for the manufacture of various building tiles. Since the beginning of the year I've been pointing out the likely severity of a Chinese slowdown. Clearly now such a slowdown is upon us and the inability for the Keynesian shift to stop such an event will once account cast a pall over GDP numbers globally.



Coincidentally in the UK JJB Sports also fell 24% indicating that consumer discretionary retailers are suffering the impact of the European malaise. The surprise continues to be the luxury end of the market where the continual demand for label goods by the growing upper classes in the developing world is pushing ever more store openings in Chinese cities that hardly existed 20years ago. Surely this bubble too will be popped by a communist party that rules with the consent of the many who aspire to climb the greasy pole to condominium nirvana in either Beijing or Shanghai.

What's the conclusion? Well obviously stay short the most liquid correlated asset to the China bubble the AUD, but that's a little too easy. The real question now is how long the US treasury bond market can hang on. I don't think it's time to short just yet . . . Though it's tempting to buy some longer dated put spreads or even put back spreads just in case it all happens in a rush. Stocks to buy? Well you'll want to stay out of the fast money casino that is the financials and look towards the petroleum space soon. Oil will drop with economic activity, but at around $60bbl and a whiff of money printing/inflation the likes of Exxon and Shell will buy you a nice glass of your favorite red sometime in the next 12 months.

On a cycling note I'm still anxiously waiting for the first of my bikes to arrive. Most riders here seem to be up and finished their workouts by 0730hrs. Wednesday is popular as a number of clubs host midweek rides and their's plenty of nice frames out on the roads. I think most of the commuter activity in Sydney is concentrated in the inner western suburbs, so as I'm on the east side I haven't seen much. What I have heard is complaints about bikes blocking lanes and jumping red lights. Honestly I could understand the red light complaint if drivers were afraid of hitting a cyclist and going to gaol, but listening to talk-back the line of thinking seems to be more along the lines of "why can't I run red lights like that". Mmmm .... Well I don't know, maybe because if you do, then 2 tons of car going 40kmh is more likely to do damage than an 80kg rider on a 10kg bike doing 20kmh?... Just a thought?

In terms of the TdF it looks like it's Wiggins to lose after the stage 9 time trial. A great ride by he and Froome. I really enjoyed Froomes ride at Vuelta last year and anyone who saw him then can appreciate his position on the GC leader board now. One question though? Is it me or has Froomes body shape undergone a radical change in the last 9 months. 

His arms are almost non-existent now and he looks like a refugee. OK I know that's the body type and all, but he looks so different to 12 months ago. Wiggins looked similar last year and has at least done some work at the gym to make his chest less concave. If Froome falls he'll brake a bone in his upper body. It's not good. Wiggins himself said the doctors who examined him after his own exit from last years race warned him about upper body strength and the link to survivability.

Unlike other bloggers I don't believe Sky is doping, but looking at the two GC riders and Cavendish at 5kg's below his body weight from last year there's definitely some dangerous dieting going on.

Ciao!

Monday 9 July 2012

Matey . . . no worries

I feel like I've seen this movie before. I'm not talking about European financial summits, but rather the expat relocation game.



Sydney seems pretty much unchanged since my last visit here almost two years ago. I don't remember the service attitude being so positive though, maybe its just because two years of Genevios "no-can-do" in comparison makes Sydney seem almost American in a service industry sense. It hasn't been all smooth going thanks to Telstra and Australian Post employees being less than enthusiastic about welcoming me home, so my enthusiasm has some comparative points for reference. There are always ways around road blocks and in the case of Telstra there's a dinky instant messaging chat line you can use to setup all your communication needs. I wish Australia Post had the same facility, but alas maybe that will come in the future.

So cost wise the Aussie telecommunications industry is clinging to the pay for data model. AUD145 gets me cable internet with very good speed but a 500GB data cap per month. You can get an old school ADSL2 type line with unlimited data from a smaller ISP for around half that, but you kind of get into this zone of multiple service providers and therefore more bills to pay. The one thing I don't get is that as Telstra owns a chunk of number 1 cable TV provider Foxtel why don't they just take the cap off the data and get everyone renting movies and TV shows via downloads? I want to look into this model because Telstra is still a cornersone shareholding in many equity portfolios here given its dividend yield and sensitivity to the growing population and economy.

The coffee here is better than in Switzerland, but still doesn't have that nuttiness that you get in Italy. Mind you, the cafes are open early, staff smile and the food is fresh and everyone is go-go-go on the streets. Mrs I B Cyclist will tell you I'm a pretty purposeful pedestrian and found Geneva to be very frustrating as people meander along the streets seemingly with very little direction or purpose. In Sydney there's a lot more striding about, not quite the pace of New York, but certainly "London-ish". There are less cyclists on the streets here, but a lot more than I remember from the past. I've been to two bike shops since I arrived. Bikelab in Bondi Junction is very upmarket. They even stock Cipolini! I spoke to the boss there and have arranged to have my bikes reassembled by them when they arrive. The shop does computer fitting and hopefully they can help finalise the setup on the Cannondale when it arrives in the next week or so. They had maybe 5 guys working in the shop on a weekday so things must be OK . . . perhaps not everyone works in the mining industry?

At least Australia has low unemployment for the moment. The US job numbers (non-farm payroll) tell me that if the participation rate was the same now as at the start of the Obama presidency then unemployment would be 10.7% rather than 8.2%. I was surprised the markets didn't rise on the news as many of the usual bulls and money honeys started talking about QE3 seconds after the release. We'll soon know what's been happening to company's as today marks the opening of the US reporting season for Q2. Given the weak ISM etc. I suspect the man on the street is about to get a shock and with summer vacations upon us the sell in May and go away mantra could once again have provided the canny investor with a key strategy for avoiding the coming news Tsunami.

I'll be watching Alcoa, Caterpillar, rail and shipping stocks. Obviously the banks will be interesting, but I'm not expecting much clarity. I'll remind all readers that we'll be getting US student loan araers numbers in early September and I'd expect that one trillion dollar bubble to show further signs of stress.

Once I get back into my house I'll be cranking up the blog intensity again. Apologies for the gaps in analysis.

Ciao!







Tuesday 3 July 2012

On the road to Sydney via Singapore . . . goodbye Europe

Five hours in London Heathrow Terminal 3. Thank goodness I have a live feed of stage 3 in the Tour de France. Anyhow I'm waiting to get on the a Singapore airlines flight to Sydney via Singapore.



Terminal 3 is looking much better these days. It used to be home to all the third world airlines. I once flew in here and saw a Nigeria Airlines flight being met by an absolute phalanx of police and security. I found out later that a huge drug bust had gone down. The Brits seem a little more subtle now days and the shopping concorse is full of the usual international brands . . . there's even a few smart mid market restaurants.

Heathrow of course is a testament to the amount of infrastructure cash that has gone into London since winning the Olympics for 2012. I believe Heathrow has been classed as the biggest civil engineering project in Europe for quite some time and it's starting to show. I avoided passport control today as we managed to have our bags checked through from Geneva directly from Swiss on to Singapore Airlines. I paid CHF 225 for extra baggae, but I consider that a bargain compared to what TNT quoted to courier our small 10kg sports bag to Sydney, which was CHF 375 plus extras.

Stage 3 of the TdF 2012 ends and again it's Peter Sagan of Liquigas. This guy is so strong it's amazing. He absolutely strolled over the line after taking on the peleton in the final step climb into the finish. This guy is going to win a lot more races in the next 10 years if he stays fit. It also reminds me that I'll have my new Cannondale Evo Supersix in Liquigas colors in the next two weeks.



I'm having mine built with a Campagnolo group set instead of the SRAM you see on Basso's bike.  My bike is is coming from Cicli Mattio in Piasco Italy, as did the pair of Sidi Ergo 3 Liquigas special edition shoes that I bought recently. I couldn't resist as the guys had them on sale at the time. 



I'm not sure they'll help me ride like Sagan, Nibali or Basso in Sydney, but you sure won't miss me coming down the road! Contact Giovanni if you are looking for Cannondale or Pinarello related stuff.

I don't know what to say about Europe as I get ready to depart. I saw that the Netherlands senate approved the changes to the ESM, I don't expect the same ease of change from either the German courts or lawmakers. Essentially we really don't know what Merkel promised at the recent summit (mark 17 I think?). The constitutional court there is not likely to be swayed as easily as the Dutch and we now wait with some trepidation for rulings as to what might be able to get through. Good luck with that!

I want to say something about lie-borgate. I learned at Geneva airport that Bob Diamond the Barclays CEO finally resigned. I had intended to write about why he needed to do this, but he must have sensed my disgust at his behavior in throwing the bank's chairman under the bus over the weekend. Clearly if the chairman had any balls he would have moved to sack Diamond himself first. In my mind the Chairman's job was and always will be the supervision of the management of the ban, rather than the running of the bank itself.  Diamond now has the opportunity to explain himself free of the encumbrances of his former position and fr the sake of the industry needs to make clear what happened and what central banks did and said in supervising the industry during the dark days following the collapse of Lehmans.  This can only get more interesting.

So, 30minutes until my ate opens and I'll be out of contact with lots of time to think for the next 11 hours or so. I'll try and write up my thoughts when I hit Singapore.

Ciao!

Monday 2 July 2012

Farewell Geneva, it was interesting watching Europe burn as you fiddled . . .

So, my final full day in Geneva. Nothing sadder than leaving an empty apartment. A lot of good and bad memories to sign away.

My office - a floor and some bags.
Anyhow here's how you spend a final day in Geneva:

1. Swisscom

Drop off the cable TV boxes and cancel the phone services. We'll switch the numbers to Pay as you go so people can contact us. If we have to take out new numbers and you need to contact me please use email.

2. Bikes, booze and coins

I'm passing down my old Trek 830 mountain bike to a friend here. If you're ever in Geneva and see a purple and green bike check the seat tube for a "Clarence Street Cyclery" plate know that it used to be mine. I'll also be distributing the left over booze and randomly giving two jars of coins away to various charity collectors.

3. Power Co. (SIG)

Head over to the Geneva power Co. "SIG" with my letter that says I'm leaving Switzerland for good and get them to cut everything off. I could have done this on line except for the fact that we packed away all our SIG account docs and don't have our account number. Doh!

3. Regie

This will be stressful for Mrs I B Cyclist as she doesn't like criticism of her cleaning and maintenance efforts by strangers. I guess none of us do, but I know she'll take it personally rather than as part of a business transaction, which is how the Genevois see it.

From everything I'm told and for that matter experienced of managing agents here in Geneva this will be an hour of being told you destroyed the apartment. They will try and claim compensation for the most insignificant scratch on floors, walls or ceilings. In Geneva people usually strip everything they can from the homes leaving them white boxes. One fun fact is that light fittings are not included in apartments so usually you'll get nothing more than a bare socket hanging from a ceiling or wall waiting for you to provide a fitting or just a bulb if you like the prison cell look. We're leaving the light fittings and I half expect the Regie to try and charge us for their removal. We're resigned to the fact that we'll be paying for the usual Genevois repaint of the walls (approx CHF 4000), but anything else will be taken very badly by us as we really looked after the place and the cleaning crew did a great job.

After all this we'll be getting in the car and heading for a hotel on the Nyon side of the airport, chosen for its cheapness and of course its swimming pool as we've been having something of a heatwave here in Geneva. Hotel prices in Geneva have hit new highs as the Arabs have arrived ahead of an early Ramadan. I got a nice corporate rate of CHF 575 at 5 star hotel La Richmond, which was nearly half the list price, but I prefer to save 400 and spend it on a final meal and bottle of champagne by the lake. My exit seems more investment banker'ish that way. So I'll toast the 1% elite in Brussels as they print money to bail out themselves before heading for a month off in their holiday homes safe from the populations left to pay off their policy commitments.

Hopefully I'll be sitting by the pool in the late afternoon watching the Tour de France on my laptop.


Ciao!