Sunday, 11 March 2012

Welcome to the weekend . . . nipple failure!

So, how many spokes can a bike wheel have fail before the whole thing collapses? One failure (see picture below) kept my 94kg frame safe for about 20km's today. Looks to me that the spoke thread failed and caused a separation from the nipple. The wind was awful - I'm told it's typical, but in the 2 years I've been here I haven't felt anything like it. Anyway, I was half way up a hill near Golf Club de Bonmont heading towards the abbey on the hill. Ping, ping, ping .... an awful sound, like a wire coat hanger being dragged across a steel grating. 

Dodgy nipple?

As this had never happened to me before and my experience with wheel failure basically stops at changing a flat I took it very easy on the ride back to meet my wife and some friends. 

The whole spoke failure episode had me thinking about the Greeks. So this week they managed to bully the holders of government bonds into a so called "voluntary default". What a load of rubbish. You see the Greek debt wheel has many spokes and just because the Greeks changed their own laws doesn't mean that they can change everyone else's. And here's the rub (or should that be hub?); the Greeks have issued billions in debt under a number of jurisdictions and guaranteed the debt issued by their banks. A lot of journalists and average men in the street types don't know about this. You see in order to get debt "away" bond holders prefer the English courts as a kind of independent arbitrator. My old friends at Zero Hedge provided me with the following table:

GREEK SOVEREIGN GUARANTEED DEBT                                AMOUNT
The New Economy Development Fund                              $139,000,000.00
The Hellenic Railway                                                          $2,240,000,000.00   
Structured Notes (Not counting Floating Rate Notes)         $20,683,000,000.00   
Athens Urban    Transportation                                         $837,000,000.00
Greek Bank Guaranteed Debt                                            $83,314,000,000.00
TOTAL GREEK GUARANTEED. DEBT                                $107,213,000,000.00
The whole thing is reminding me more and more of the Koreans or the Malaysians in 1998. In those days fortunes were made by playing chicken with governments over this "euro-debt". I predict that someone somewhere is going to make out like a bandit when the Greeks or their European masters realise they can't manipulate the English judiciary. Stay tuned for the fun and games.


Finally a mail reached me today saying that my writing style showed strong influence from my 20 years experience working for investment banks. This doesn't shock me as everyone knows the secret language used in these banks usually is aimed at giving all sorts of subtle avenues for exit when the shit inevitably hits the fan. There's a strong element of bullshit bingo in just about every invesment banks internal meetings.

I'm definitely in need of a strong injection of the real world. If you're looking for examples of this "writing for mitigation"check out some of the stories in Michael Lewis' The Big Short or better still some of US Treasury Secretary Geithner's testimonies to the Congress.

Bon weekend and happy investing.

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