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.