Wednesday, 30 May 2012

A great day to ride / Pavlov's dog bites back . . .

I had a fantastic day. There's no other way of putting it. So instead of my usual practice of leading with my thoughts on the current global situation let me try and put a smile on your face.

As I write this I'm sitting at Tre Stelle, a restaurant/hotel in Barbaresco Italy. I love the wines of this little town and the vineyards themselves look green and lush after the May rains. At the ends of many of the vine rows are beautiful red roses in full bloom. The roses act as an early warning signal to the onset of various diseases that might afflict the vines. No sign of that at the moment.

I hit the road early this morning and headed south from Geneva towards Turin and a small town about an hour further south named Piasco. I had paid the deposit for my new Cannondale Evo Super Six and had to go down and see my friend Giovanni about a final fitting. Giovanni is more like a tailor working on a fine wool suit, than a bike salesman. He tilts his head in a considered fashion before making a suggestion. "I think for you . . . " this crank set or these pedals. "I think for a bike like this you need the best." Yes Giovanni I do. Then more measurements. I was a text book size 56, though he might want to change the stem to alter the reach once he puts the bike together . . . "When you come back i put you on the trainer and we decide what adjustments we make ... " A bit like shortening the sleeves on a suit to allow for certain style etc. I loved it.

After an hour, when I thought I was finished he surprised me by asking me to join his club's lunchtime ride. "Just one hour and maybe thirty minutes . . . " I was hooked. I was going on real ride in Italy with a local club. There were nine of us on the ride including the current ladies leader from the Coppa Piedmonte. I wonder how many hours she beat me by when I raced at Novi Ligure? Lots of smiles, fit people and beautiful bikes. There were five Cannondales, two Pinarellos, a BMC and a Scott. This was serious.

We rode a 40k route circular route, which I will publish after I download it onto the web when I get back to Geneva. The highlight was a 7k climb. Giovanni and the team didn't tell me that parts of the climb would be at 15 degrees! I'm embarrassed to report I hit the wall at the 6.5k mark and had to stop. The temperature was close to 30 degrees and even with the kind sheparding of one of the guys I couldn't make it. I was crest fallen and gasping for air. The worst moment of my cycling career .... But you know what? Giovanni and Jean came back down the hill to help and with good humor and a little encouragement and after 100m of walking I was back in the saddle. No one was unhappy, no frowns, only smiles including mine. Fantastico, what great people.

On the way down the hill we stopped at a special spring to take the lite mineral water. I called it magic water as I felt refreshed on the final 15k's into Piasco. I managed a sprint at 45kph on the flat. What a ride. Great hospitality. I am so lucky to have had this opportunity. As the experience was priceless I now consider the bike a bargain. Thank you to all the riders of Piasco.

It's amazing when you feel on top of things you start living the dolce vita. You see things differently and clearly. I knew the Chinese stimulus being touted by the street was an illusion. Why, oh why don't people learn. The Chinese want to keep their powder dry in case a billion or so of people not leveraged to the various condo markets of the new cities decide they've had enough. The 1%'ers of China are not the People who will keep the Communist Party in power. Enough!

Meanwhile Australian retail sales look to be falling off a cliff. The government has nothing to give, no 2008 style stimulus for my brothers. The government promised a surplus and therefore it's up to the RBA to cut rates hard. And this is rub. The AUD is a carry positive currency ... cut rates and people will sell it. Stay short, next stop 90.

The big banking freeze is gathering pace in ways that the man on the street can't comprehend. Today comes news that the trade finance insurers have stopped covering the Greeks as its no longer possible to have certainty of the liabilities in the case of a Grexit. This of course is a harbinger of things to come. Wait until Spain freezes up, as I expect it will. Normally this is where governments or the local banking system steps in, but they are all capital poor and unable to take such bets as they have no ability to make payouts in the case of a disaster. Remember when the oil rig Piper Alpha exploded in the 80's and Lloyd's insurance market essentially imploded leaving many including an ex-Australian Prime Minister flirting with open ended liabilities. Well Greece may not be Piper Alpha, but Spain most definitely is. Kaboom!

Just before dinner I had an hour long conversation with a very perceptive friend of mine. I love bouncing ideas back and forward with smart people . . . Especially people you trust to filter out all the rumors and wild theories. It's sobering to hear someone on the ground who is in the day to day grind of Invesment banking. Have you seen the Morgan Stanley share price? How can they run a huge prime brokerage business that relies on credit when their own investors don't trust them enough to buy their stock. JPM, ditto? GS, when will the market understand that they too have an earnings problem? Readers I humbly suggest staying away from banking shares. If I learn't one thing today it's that the "Occupy" movement may end up getting their way . . . bankers out of work.

There's only one thing for it .... Buy the best bike you can by visiting Giovanni. At least you'll be smiling at the end.


Note: due to working on an iPad far from home I will have to skip the usual references and links tonight. Any readers who need the footnotes can send me mail at