Early last Saturday I was looking at the weather forecast for Switzerland and saw that the rain was coming, and intensifying as the day progressed.
I was sitting in my house just east of Geneve, packing my motorcycle gear. I had a trip to Schaffhausen in the East planned, hotel booked and all that, and I was considering if I should drive or ride. “Let’s see:” I thought to myself, “four hours in the rain, 15o C at 120 km/h? Of course it’s a motorcycle.” Never underestimate the boy in a man. And I was lucky that afternoon riding east through the Swiss plains, between the Alps and Jura. I was sometimes ahead of the rain and sometimes beside it. I got wet from the drizzle all right, but it was still bearable. As I arrived in the hotel, holding my bag and helmet in my hands, having a messed up hair that showed to everyone that I’m a rider, the good God said “NOW”, to whomever he says it. And as the lady in long black skirt and white top was checking me in, a heavy rain started flooding the streets without mercy. Looking outside I thought – “I must be living right or something.” Or maybe the good God likes motorcycles too. Later that night I was lying in my bed barely registering the bell ringing every half an hour from the church in the center of the town. Which is kind of ironic in a country famous for watches – the church wants to tell you what time it is like they ignore the Hublots and the Panerais that people have on their wrists. And it was an old hotel, the plaque in the lobby said that Goethe used to hang out here a lot. So him and me on a rainy Saturday night, huh? Nice to meet you Johann Wolfgang, you were a poet and I’m a writer, maybe we can talk someday. Back in Nyon, the school year started, and the kids here all change their schedule books titles from horaires to horrors, of course. Don’t ask me how I know. I happen to live close to a high school, and sometimes when I work from home, I see the boys and girls with their relaxed attitude, the blink in eye and the curiosity about the future. And it gives me a great pleasure, and I hope the life will treat them kind, and they get to do what they’re passionate about. This is really the ultimate goal. You know, the true definition of hell is when you’re on your dead bed and you get to meet the person you could have been. Try to avoid it kids. So now I have something cool to look for. Four of my high school friends are flying down to spend the weekend with me in Suisse at the end of September. And they’re good guys, I know them for more then 30 years. It makes you feel that you belong. It’s a good feeling. If this is not nice, I don’t know what is.
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The title comes from a song by Calvin Harris and Dua Lipa, of course, but there is a flip side to it.
In his dark comedy, A Woman of No Importance, Oscar Wilde wrote, “A kiss may ruin a human life.” Looks to me that the woman wasn’t of no importance at all to Wilde. Women have this influence over men when we’re in the dangerous age, between 18 and 80 more or less. It’s like the great song by Robbie Robertson: “Like a moth to flame She leads me down” And this line of thinking translates into recent events. The world of politics is coming unglued this week with Trump’s campaign chairman Manafort convicted on 8 felony counts. None of this really implicates Trump, but the real problem is with Stormy Daniels, the adult movie star, whose legal name is Stephanie Clifford, and who was paid $130,000 by Michael Cohen, Trump’s former lawyer. So the prosecutors will multiply it to the monkey square to make it bigger than the Clinton affair with Monica just to try to get Trump impeached. And this could well happen even though I hope it won’t. In Agatha Christie’s brilliant novel “Murder on the Orient Express”, detective Hercule Poirot says: “there is always price to pay for romance.” Men don’t seem to really understand that simple fact until it hits them hard. It looks to me that the Donald is now learning it the hard way. Moving on to Europe, the event that shook everyone just to the South of me, was the Morandi bridge collapse in Genoa. Witnesses said the bridge was struck by lightning during a thunderstorm before it crumbled, so maybe sometimes one lighting is all it takes. The bridge formed an arterial connection between France and Italy, so its collapse is not an insignificant event, plus, of course, 43 people died. As the name suggests, stays are a crucial part of a cable-stayed bridge. They pass directly from the towers to the deck, helping distribute the weight of the bridge evenly across the towers. Trust me on this - I’m a civil engineer by training. The main difference between the cable-stayed bridge and its close cousin, the suspension bridge, is that cable-stayed bridges lack the primary cables that connect towers to one another. They rely only on the cables that pass from tower to road. As result, they need a precise balancing of weight – if they start falling apart, they really fall apart. And this is what happened in Genoa on August 14th. Now the Italian government is in full force blaming European Union austerity policy for the lack of funding for the infrastructure maintenance. And while there are several other factors at play here (bad design, build quality that goes along with corruption), they are totally right saying that. Austerity is a bad idea, pushed on the south of Europe by Germany, who never really understood what caused the catastrophic hyperinflation that brought Hitler to power in 1933. The Germans are mentally stuck with the idea that the quantity of money in circulation causes inflation. While this could contribute, it’s not a driving factor at all. The confidence in the government is. Once the people lose it, it all falls apart like the Morandi Bridge. And fast. It’s interesting how the Germans got out of the hyperinflation episode. They had to back the Deutsch marks with something that people will trust. But there wasn’t enough gold in the country, so they backed the currency by real estate. People have confidence in their homes and buildings in general - you can see them, they’re real. And you need one to live in to survive. And this is how the trust was restored. And it happened fast – life has to go on, like, right now. A moment of straight thinking is all it took. Usually one knows when it happens – the moment something big is starting to unfold, and this goes for all the walks of life - arts, politics and economy.
Like, for example, the 1971 movie “Duel”, directed by then 25-year-old Steven Spielberg that put him straight into movie-makers stardom. It’s about terrified motorist who is stalked upon remote Mojave Desert canyon roads by the mostly unseen driver of an unkempt 1960 Peterbilt 281 tanker truck. The film opened a new era in Hollywood blockbuster movies. The “Jaws” followed four years later. The political and economic catalysts mostly intertwine, but the pivotal moments are not that difficult to see. For example, it becomes clearer with each passing day, that what is now happening in Turkey will not stay in Turkey – the events are starting a major upheaval all over the world. There is no doubt that President Erdogan has more than something of the Chavez about him. And, as we have learned through bitter experience, bad things happen when a Chavez stalks the land. Recep Erdogan has the ambition to re-create the great Ottoman Empire, capitalizing on the chaos in the Middle East. He doesn’t seem to realize, that he has lost the confidence of the people, internally and externally, to remain a head of state. As result, the markets turned against him in a big way. Turkey’s economy, just like all other major economies around the world, is utterly dependent on the flow of credit, and now lending is becoming greatly restricted. Turkey has been a huge borrower in global capital markets over the past number of years when the world’s central banks were encouraging investors to stretch for yield by investing in emerging markets. Investors choose to ignore the retreat of the rule of law and the rise of the rule of man across the emerging markets - Turkey, Romania, Hungary, Poland, China, the Philippines, Mexico - to name just a few. In case of Turkey, over a half of the borrowing is denominated in foreign currencies, so as the lira sinks, debt-servicing costs and default risks rise inexorably. The lira has fallen 82 percent against the U.S. dollar in 2018, and this is putting an enormous stress on the Turkish financial system. The expense of servicing those loans has jumped, and they will be much more difficult for banks to roll over. The second risk is the sharp rise in nonperforming loans, including those made in foreign currencies, mostly to businesses. Well, the thing is that Turkey is not alone. Similar scenarios are playing out in emerging markets all over the planet, and another dramatic example is Argentina. The Argentine peso has lost 8 percent against the U.S. dollar over the last three trading days, and overall it is down about 33 percent over the past four months. In a desperate attempt to restore confidence in the currency, the central bank raised the core interest rate 5 entire percentage points on Monday to a bone crushing 45 percent. Argentina, a serial defaulter on its financial obligations, managed just last year to find buyers for dollar denominated 100-year bonds with 7% interest coupon. Well, for holders of this paper it is one year down, another 99 to go. In addition to Turkey and Argentina, currencies are also crashing in South Africa, Colombia, India, Mexico, Brazil, Chile and a very long list of other prominent nations. If emerging market currencies keep crashing, events are going to begin to escalate rapidly – the strong US dollar may well break the back of global economy. For me a Firestarter moment came on one spring morning in a boutique hotel in Vieux-Montréal. I wrote a slow but strong scene looking at the narrow street and waiting for the sun to come into the window. I read it again in the evening and I liked it. As result, I spent the next seven years composing my book, “The Traveler”. It turned out that the first scene didn’t make the final cut and it's not in the book. But I still like it, which means that it will show up somewhere, sometime. I gave it the title “Blinded by the sun”. Bon week-end. “Don’t be afraid”, said the snake charmer who stood in the middle of the Jemaa el-Fnaa square as he put a black cobra around my neck. He was a dark, frenzied man with long disheveled hair falling over his shoulders.
I said - “no, I like it. I like it, it’s good”. He said - “you like it now, but you’ll learn to love it later”. It was a hot evening - Moroccan spices were in the air and music was coming from more than one direction in an intoxicating experience. I could get used to the life in the dessert, if that is what he meant. I had just spent a good part of my day in a rustic tent, with the view of the Atlas Mountains, which are covered with snow in the winter. I drank the sweet Moroccan tee and rode a camel through the hills. The wind was blowing from the Sahara, which the locals call Ghibli, it’s hot and dry, brings the dust up. It can last for days. A big yellow dog in the rocky desert looked tired as there was hardly any shadow to hide from the sun. He lay down under an olive tree and his face was that of an old guy. And then he started crying like a broken-hearted man at the howling wind. It’s different in Africa. They say that geography is the backdrop to human history, it is the most fundamental factor in the foreign policy of states because it is the most permanent. In this context the natural world has given Africa much to labor against in its path to modernity. Though it is the second largest continent, with an area five times that of Europe, its coastline south of the Sahara is little more than a quarter as long and lacks good natural harbors, the East African ports being the exception. Few of Africa’s rivers are navigable from the sea, dropping from interior tableland to coastal plains by a series of falls and rapids, so that inland Africa is particularly isolated from the coast. Moreover, the Sahara Desert hindered human contact from the north and for this reason Africa was little exposed to the great Mediterranean civilizations. Then there are the great, thick forests on either side of the equator, under the influence of heavy rains and intense heat. These forests are no friends to civilization, nor are they conducive to natural borders, and so the borders erected by European colonialists were artificial ones. Note how temperate zone, east–west oriented Eurasia is better off than north–south oriented sub-Saharan Africa because technological diffusion works much better across a common latitude, where climatic conditions are similar, thus allowing for innovations in the tending of plants and the domestication of animals to spread rapidly. In a stark contrast, geography has helped the Unites States maintain its prosperity and power. It’s like the three rules of real estate – location, location, location. The USA is protected by two oceans, a vast frozen swath of land to the north and the Amazonian forest in the south. Issues here are of different nature, and I am referring to this week’s ridiculous tweet by Elon Musk about taking Tesla private by rising 81 billion dollars. The company bonds barely moved in response to the news – they still trade below face value, even though they’re protected by puts. It seems that the markets are rather pricing in a bankruptcy filing at some point. Perhaps it is true that they ring the bell at the top. TSLA, the overpriced, mismanaged, cash burning company may be the ultimate destroyer of capital that will puncture the bubble of current business cycle. Hopefully I am wrong. Recently, on a beautiful summer morning, we found ourselves sitting next to Bryan Colangelo and his Italian wife Barbara on Spiaggia del Pervero in Porto Cervo, Sardinia.
Colangelo is top NBA executive, or at least was until June of this year, when he resigned from running the Philadelphia 76-ers after being alleged to create fake Twitter accounts to talk ill about his predecessor and some of the players. Colangelo denies all allegations of course, and hints that perhaps his wife had something to do with it, should hard evidence of the silliness have surfaced on some bad day. But he was enjoying the sunny day on the beach the same way we were, making trips to the bar above with some frequency for a glass of Sardinian Zedda Piras in the shadow on the patio. Mirto Zedda Piras, traditional Sardinian spirit, originates from the small red berries (Red Myrtle) and the leaves (White Myrtle) of the Myrtle plant. It’s extremely popular in Sardinia, and I can see why. There are things in the history of this Mediterranean island that are unique. One is that the coastal towns were heavily fortified against attacks by Saracen pirates from North Africa. They were a major nuisance especially during the 17th and 18th centuries – the Saracens captured more than a thousand merchant ships in the Mediterranean’s and took over a million Europeans into slavery in Africa and middle East (by some estimates, we will never know for sure). It had gotten so bad, that people stopped settling in the coastal areas. At the beginning of the 19th century the British had developed enough naval power to bomb the Saracen barbarians into bloody submission until they came asking for a piece treaty and the situation had somewhat normalized. However, corsair activity based in Algiers did not entirely cease until France conquered the state in 1830. The dramatic history is visible today in the presence of fortified watchtowers along the coast to warn the cities of attacks and provide the first line of defense. I swam to one of those, located on a rocky reef – it controlled access to the bay, all right, but if you were stationed there, you only survived if the city behind you beat the barbarians. There is no access to the tower at ground level, it looks like the soldiers had to climb a ladder which they pulled up after. I am sure it was a lonely place, totally relying on others. One must wonder if history repeats itself. Perhaps it just rhymes and let’s hope that’s all there is to it. In a recent news around 400 African refugees stormed the beautiful Spanish exclave Ceuta on the border with Morocco just on the African side of the Pillars of Hercules. They have climbed over the double barbed wire fence which are over 18 feet tall (6 meters). They attacked guards throwing corrosive Quicklime at them, which of course burns. Ceuta and Melilla, also a Spanish exclave, are effectively the only EU external borders on the African continent. But for now, Sardinia is a paradise. The local cuisine is exquisite, the sea is light blue in the bright sun and a glass of Zedda Piras makes the evening flow like a dream. Let the good times roll. |
AuthorTom Kubiak is the author of The Traveler Archives
February 2021
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