West of Lyon, stretching north, as if aiming at Luxemburg, is the great Beaujolais wine region famous for “the only white wine that happens to be red.”
Beaujolais is a light-bodied, fruity wine best enjoyed young, produced in almost 100 villages around the town of Velafranche.
It’s a delight just to drive through the vineyards in the hillsides on a sunny afternoon – the views are breathtaking.
The wine is made of the Gamay grape variety, which is a cross of Pinot Noir and the ancient white variety Gouais, introduced to the region by the Romans. The grapes are grown on granite-based soil where they thrive. The climate here is unique too – the Massif Central is located to the west of it and has a tempering influence, and the proximity of the Mediterranean Sea brings some Mediterranean warmth.
The man in the vineyard high up in the hills, with disheveled hair and thick hands from hard physical labor poured me a glass of his best Chiroubles. It was excellent, with delicate perfume of violets.
“I’m looking for a place to eat,” I said.
“Pa restaurant ici,” he replied. Then he raised his hand a bit making me wait, “je cherche.”
Following his suggestion, I stopped at a Chateau in the valley for a glass of wine and a light meal that made me think that I just died and went to heaven.
France is rapidly becoming one of my favorite places in the world, even though there are some strange aspects to it. The country had a balanced budget last in 1969 – it’s been constant borrowing since then, never paying anything back, just rolling over the old debts. It is also a birthplace of socialism, as introduced by the French Revolution. The resulting way of thinking changed humanity over the last 200 or so years. Interestingly, we can see it unravel in slow motion right in front of us. Nowhere is it more visible than in the pension crisis that is starting to drive monetary policies around the world. The traditional way people took care of their future was to build a family structure - the children took care of the parents. The promises of socialism have relieved the children of such obligations for the government was there. The problem is, that for pension funds to deliver on their promises, they need about 8% of annual return. But there are no fixed income investment grade products that can deliver anything remotely close to it and haven’t been for years. This forces the Federal Reserve to keep rising rates and president Trump with the business community will be dragged along kicking and screaming. And this is also why the European Central Bank’s massive bond buying program will likely end in December. This will introduce new reality to financial markets.
Oddly, as I age, the big picture of the world matters to me less and less. It’s the little things that I enjoy and they bring quality into my life.
The Rhône-Alpes region is absolutely charming, and I could easily imagine myself living in this part of France.
Somewhere between Lyon and Chambéry will be fine for me.
People have this desire to find an order in the world around them, even if it’s hard to prove that one exists. This is second only to the tendency to see life as linear progression – this is just how our minds work most of the time.
A good example is the long fascination with prime numbers (they only divide by one and by itself). They appear totally randomly – there is no rhyme or reason for their frequency. So, it should come as no surprise that this was a call to action for some to find a hidden order. In the 18th century the mathematician superstar Leonhard Euler established an elegant connection between PI and the prime numbers. He basically proved that the quantity of prime numbers is infinite. That was it, really.
Next was Bernhard Riemann introducing the zeta function and trying to further encode the primes. His hypothesis says that the points where the zeta function takes the value zero, all line up in a straight line. It still waits to be proven and there is a Nobel prize in mathematics waiting for whoever succeeds. And if one day some lucky soul will, a new problem will appear – what do we do with this information?
Fast-forward to the modern times and the story gets really interesting.
John Nash was an American mathematician and the only person to be awarded both the Nobel prize in Economic Sciences and the Abel Prize.
Working to prove the Riemann hypothesis, in 1959 Nash began showing clear signs of mental illness and spent several years at psychiatric hospitals being treated. He was not able to return to academic work until the mid-1980s. His struggles with the illness and his recovery became the basis of the film “Beautiful Mind” with Russell Crowe as Nash.
Some people rather sacrifice their lives than admit randomness of the world.
Interestingly, often just an approximation of the order works. The Bernoulli's principle is how the wings of airplanes are designed to create lift. I asked an experienced pilot I know, “how close is the real life flying to the formula?”
“It’s in the ballpark,” he said. “But that’s it.”
Accepting some level of randomness is healthy, but not accepting the cyclical nature of the world can really do widespread damage. For example, this is the case with the climate change crowd, not willing to consider the impact of decline in sun output, right on schedule actually.
The solution to climate change is not carbon taxes or tradable emission quotas. Let’s look at the last mini-ice age and try to learn from it. We could start by correlating historical events with climate changes throughout history, like the global cooling periods with the fall of the Roman empire or with the defeat of Napoleon in Russia. For those inclined to trade, a cool period will bring a boom in commodities.
But really dangerous are attempts by governments to combat the business cycle. It ends with asset bubbles and mountains of debt on one side and pension crisis on the other. And the cleanup is never pleasant. The tools applied include massive interest rates manipulation, open market operations and capital controls. All this has been done before and they never succeeded even once.
Doing the same thing over and over and expecting different outcome is a definition of mental instability and it’s very different from what Nash went through. At least he felt that he was at the frontier of knowledge.
There is something special about British Columbia and I felt it when I landed in Vancouver on Tuesday night. The city has a pioneer spirit to it; it seems a little rougher than most while maintaining a charm at the same time.
Considered to be Canada’s get away to the Pacific Rim; it has the country largest port and is a center for filmmaking, sometimes called “Hollywood North”… It’s a happening place.
Vancouver has also expanded as a center for software development and biotechnology and the constant influx of top quality Chinese brainpower helps a lot in the development of these sectors.
“Where is home for you?” asked the lady at car rental desk hearing my foreign accent and looking at my Canadian ID and Swiss credit card. “It’s becoming harder to say as the time passes by,” I replied. She didn’t react to the joke, just looked at me and said – “then think about it hard, it is important to know.”
When I arrived at the Best Western hotel in a big Jeep Sahara, I saw that someone parked a beautiful Indian Dark Horse motorcycle under my window, and just looking at it made my evening.
“Damn it, this guy is going to be riding this bike down on route 101, El Camino Real as they call it, through Oregon and Washington and I have to go to work tomorrow”.
Some guys have all the luck.
Over breakfast I was watching the news, which was dominated but the fact that both, bonds and stocks are getting weak in the knees. “What happened to the flight to quality, why they’re both going down at the same time?” asked the clean shaved man on national TV looking very concerned.
Well, I’ll tell you why, sir. It used to be that you couldn’t use bonds for collateral to trade stock. After this changed, it’s all interconnected. You buy government bonds and post them to trade stocks. If the bonds go down, the bank will do a margin call asking you to post more money. The only way for you to do that is to sell stock. This is how the machine fuels itself.
British Columbia is an interesting place to be for one other reason: the province's inexpensive hydroelectric power and abundance of water and sunshine—the many hills and forests make it an ideal area to grow cannabis on a massive scale. It is an estimated $6 billion a year industry for the province. Well, now the big moment comes – as of October 17th pot will be legalized in Canada. It was just a matter of time that someone got the idea to tax this business. So a lot will change but regulations are good for business, as are sealed boarders. The legalization of pot means that taxes will be syphoned out until it stops being profitable, never mind exciting. Some people like the kick of being on the edge of the law, you will never get rid of them and they make the world move around.
So I was at this “White Spot” restaurant in Burnaby and a man comes up to me. “Need a joint? It will not be the same a week from now.”
“I drink, one vice at a time.”
“Honest to god,” he said before lighting up, “last chance, like BCer to BCer.”
Didn’t have the heart to tell him that I’m from Poland.
I picked up my high school friends from the Geneva airport late last Friday evening, four of them, and I saw right away that we all look older, but what - life is good, maybe even better than ever. Best to ignore the passage of time, age is just a number they say, no?
I’m almost fifty and don’t like it one bit, can’t process it in my mind. So maybe for me age is more than just a number.
I was talking to a colleague of mine earlier that day, in the office, “five guys, three days in my house, I will be cooking dinners and driving them around, like to Chamonix, Annecy, Geneva and such.”
And she said “Wow, that’s impressive! You’re a good friend.”
In any good circle of friends, there are personalities that differ; it would be deathly boring otherwise. There needs to be a dark soul who walks twenty feet behind and doesn’t pick up the phone when the wife calls, then an outgoing happy-go-lucky guy to balance it, then one with a sarcastic sense of humor, but funny as hell. And one who has all their backs, and it’s very important, he will buy the tickets, check them in for the flight and send a message with a seat number. He will take care of everybody.
You may call it teamwork, actually you should.
There is one thing in the world that makes all the difference – you get the right people together, you get the chemistry. Call it Apple or Microsoft, and all of the sudden, you’re not just working, you’re creating things, you’re coming to work for fun. And you are en la cima del mundo - there is no better feeling that this.
There is, however, a twist to that. The US technology companies made huge innovations and impacted the lives of everyone, but they just design the product and the hardware is build somewhere else. China, by some estimates makes 75 percent of the world’s mobile phones and 90 percent of its PCs. There is an ongoing probe, reaching the highest level of the US government that investigates hardware implants on server motherboards made in China. It all started in 2015, when Amazon sent several of its servers to Ontario, Canada, for a third party security testing. They found chips, not a part of the original design, about the size of a grain of rice, made to look like signal conditioning devices. In simplified terms, the implants manipulated the core operating instructions that tell the server what to do as data move across a motherboard. Amazon reported the discovery to U.S. authorities, sending shocks through the intelligence community, as these servers could be found in Department of Defense data centers, the CIA’s drone operations, and the onboard networks of Navy warships.
As well as in banks and major corporations all over the world.
Outsourcing the production was a great solution in lowering the cost, but as it usually happens, one solution sets the seeds of the next crisis.
But last Sunday afternoon we were sitting at a highway parking with a great view of the Alps, the five of us with not one worry on our minds, just talking about whatever. These are the good moments in life.
Chinese fake chips or not.