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.


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