Canadian fans who drove up in a bus from Naples. Note inflatable doll in foreground.


Big names


Cheer Babes


Cheer Baby


Red and White


"Thanks for bailing us out, Marty!"

Mr. M asks for news.

Briefly:

Got to Milan yesterday evening and met ZMama, Ace and Semirabai. We went to the Duomo in the evening and eventually found a nice, hip establishment where he dined around 9 pm. The food was unbelievable - glass of champagne at the bar while we waited; salmon, swordfish and beef carpaccio antipasto; secondo piatto was baked lamb chops or veal medallions with artichokes, while ZMama had a primo homemade fetuccini with shrimp and porcini mushrooms. Washed down with a light chianti followed by a heavier cab, finished off with a heavenly green apple sorbet and petits fours.

I shall be blogging sporadically at best for the next week as I am off to Italy for the Olympics. I know, I know - my life is tough.

"You're starting a new venture," asks my old real estate attorney from L.A, "how do you have time to go to the Olympics?"

Well, I sometimes ask myself such questions. Like: "What are you doing moving to a country where you don't understand the business culture, speak the language, or have any contacts?" Or: "Why are you leaving all you know behind for an untested, purely speculative business plan?"

My answer to these, and myriad other questions, rests on the immortal words of this great 20th century philosopher:













What, me worry? Pfffft. . .

Joining me in Torino will be Ace* (the Original Swine), ZMama and Semirabai - some of my favourite people in the world. I have already informed them that I shall be spending a solid hour at mealtime engaged in what Bertie Wooster would call some "serious knife and fork work".

Here is a rather lengthy summary of what happened the last time Ace and I saw an Olympic game. One of the more memorable days of my life.


*Pretty much everyone who reads this blog knows my partner in crime "Ace", but you probably don't know why I use that pseudonym. Back in 2001, we took a now-legendary trip to Vegas, during the course of which he refused to remove his sunglasses for the entire weekend. These sunglasses evoked Bobby Deniro's character Sam "Ace" Rothstein in Casino. That trip, I had every dealer, player and cocktail waitress calling him Ace.

Yesterday was one of those nights that reminds me how much fun this is going to be, and how much I have yet to experience. I was at a dinner party thrown by my yoga teacher, at her cozy little apartment. The crowd was the artsy/literary set: a couple of magazine editors; a documentary producer; a film actor; a foreign correspondent for NPR who just returned from Kabul and Beirut. And me - the token grubby capitalist.

But the following is illustrative of how I manage to bumble through life: it so happens that my yoga teacher's roommate is a writer with a fine arts degree from London. Clearly, we should have been talking about her interesting life rather than my mundane business. But somehow I got trapped into discussing Turkish real estate, a topic that I'd rather avoid at parties. Then, she casually mentioned a family friend who has started a Turkish property fund. It turns out that I have read their prospectus - they are newcomers who have recognized the same opportunity I have - and I have been wondering for the last few months how to inviegle an introduction. As my sister notes, I somehow manage to blunder through life falling ass-backwards into good situations.

In fact, "falling ass-backwards into deals" is one of the bullet points in my business plan.

Later that evening I met up with my old college roommate Gina, who was in town from Ankara, where she works for UNICEF. She brought a friend who coincidentally grew up in Ottawa and now works at UNDP Ankara. I mentioned that I would keep my United Nations jokes to a minimum, but she replied that she had been out with a bunch of Iraqis the night before. Understandably, their withering contempt and acerbic jokes towards her employers far surpassed anything I could come up with.

We had vodka martinis in a quiet bar overlooking the Bosphorus and the Golden Horn, and I could see the Aya Sophia and Blue Mosque in the far distance.

I felt I was in a very odd, wonderful dream.

Please note that when I'm photoblogging, you can click on the images to see a full size picture.


This was the scene from my apartment window a couple of days ago; thick, white flakes floating down upon the city.



But yesterday, the weather cleared, as can be seen here on Istiklal (Independence Avenue, which used to be the old Grande Rue de Pera in Ottoman Constantinople). . .



. . .And the sky turned blue.

It's official. German television producers are the stupidest people on the planet. Those who can't do, teach. Those who can't teach go on to careers in German television programming and production.

Just so you know, when they say "we're gonna show Men's Ice Hockey", they really mean "we're gonna show the nightly news, then a talking head, followed by about ten minutes of hockey, then an Austrian medal ceremony, a long interview with some athletes, a silly reality tv contest, and some figure skating."

None of this would be so bad if the effing IOC would let me listen to my team on the internet. I will pay good money for this privilege, you bastards. This, to quote my cousin, is market failure.

I'm so pissed off right now.


. . . In other news, Katarina Witt is still hot.

I took a stroll down Istiklal avenue to the Canadian Consulate today. Of course, I wanted to register with them as an expat, but my main reason for visiting this organ of my home government was to find out if they had made any arrangements for tonight's hockey game. No surprises - they hadn't. Those hosers have no clue.

But, miracle of miracles, I found a German television station that purports to broadcast the game. Fantastisch!

I have more pictures to post but my internet connection is a bit dodgy today; will get to it later.

Well, they're about to drop the puck in Torino and I'm going to have to watch this damn game on Rai Due because 1) Eurosport is a bunch of pansies and 2) apparently the CBC doesn't broadcast in Turkey. Right now, I have Canada's second national anthem looping in my head like an ohrwurm. I have my jersey, a couple of beers and a bag of doritos. Game on.


Bonus Rant*:
Let me take this time to tell you what I think of the IOC - a body filled with more corrupt morons than even the United Nations. Unbelievably, in this day and age - 2006, mind you - these idiots have structured their contracts so that you can't get streaming audio on the internet, so that there is no possible way for me to follow tomorrow's game against Germany. It's like they sit around a table saying "How can we make our product less accessible to the fans?" I mean, I know the body is run by a Belgian, but come on! What a bunch of assholes. I hate them so much.

Luddites.

*I swear I am sober as I write this. I haven't even cracked one open yet. Trust me, there would have been at least one or two f-bombs if I had gotten into the beer.

I've been asked to post more pictures.

Here is a nice one that forms the basis of the title banner; I took it from the rooftop bar of my hotel in the Sultanahmet district where I originally hatched this cockamamy scheme in June 2005. On the left is the famous Blue Mosque, built in the seventeenth century by Sultan Ahmet I. On the right is the Obelisk of Tuthmosis III, stolen in the fourth century from the Temple of Karnak in Luxor. Even back then, when the Emperor Theodosius purloined it from the Pharoahs, it was over a thousand years old. Clearly, it was built by aliens.

Here is a link to the original email I sent on that day.



A friend of mine is using this as cover art for her new book. I will therefore, technically, be a published photographer. So I got that goin' for me. Which is nice.

It's been snowing sporadically here in Istanbul over the past week. Not so much snow that it is accumulating, but enough to make me think that I should be on a slope somewhere hitting moguls.

Now my sister J informs me of reports of Cross-Country Skiing in lower Manhattan. When I was but a lad, occasionally the Great White North would be heavily blanketed by a foot or two of the fluffy stuff, and before Mr. Plow came around, Dr. Diamond and I would strap on some Nordics, step out the door, and ski through the neighbourhood.

I'm still glad I'm out of that frozen land, though.

Yesterday, I was strolling through Akmerkez, Istanbul's premier shopping mall*. Minding my own business, listening to my iPod, I unexpectedly ran into my friend Bahar. Sort of made me feel like I am settling in a little bit. Now, this is not the first time this type of thing has happened. In November, I was walking down Istiklal Avenue, central Istanbul's main thoroughfare, when I was recognized by a friend of a friend.

What's weird is that greater Istanbul has about 14 million residents - by far the largest city in Europe. I think that perhaps various parts of Istanbul are frequented by different circles of people, so that a series of "villages" has formed within the metropolis, as in New York City.

In any case, it feels good to be able to run into people on the street.


*Real estate geeks will note that Akmerkez won the 1995 ICSC International Design and Development Award. They actually did a pretty good job on the structure and layout.

Skype is way cool, yo. I know, I sound like an ad. Please be assured that the editorial board of "Taken At The Flood" has in no way accepted any remuneration from the brilliant Estonians who engineered Skype. But, seriously, stop what you're doing and download it immediately. Stop reading this blog, stop working, stop playing Texas Hold 'Em, just trust me. You'll thank me later.

A couple of months ago, I was dining out in the West Village with some friends, including My Attorney. I use the term "My Attorney" the way Hunter S. Thompson referred to the crazed Samoan with whom he travelled to Vegas. My Attorney was an accomplice in probably 7 out of the craziest 10 nights of my college days.

Anyway, we were, for reasons unclear to me now, discussing the march of human endeavours. One suspects the cocktails and wine may have influenced the subject matter.

"We discovered the scientific method four hundred years ago," he began. "We're making iPods now! Do you realize how amazing that is?" Bangs the table for emphasis. His eyes widen, as they tend to do when he is trying to convey something he feels is of import. "I mean. . . Louis XV shat in a pot!"

I completely agree with this sentiment. The average westerner lives a life that would be envied by the most powerful man in 18th century Europe. And current technology allows me to efficiently carry my music collection to a faraway land, to bridge huge distances between family and friends, and to follow my favourite hockey team. Basically, without the internet and today's electronics, I would feel much farther away from the world I left behind.

I spent yesterday with my friend Bahar looking at some very expensive apartments. We lunched by the Bosphorus in Bebek, with a magnificient view of the Anatolian side of Istanbul, its elegant villas dotting the hillscape. In the evening, I came home to see the Galata Tower illuminated against a clear night sky.

Just outside my apartment, one can see a portion of the Galata Tower in the foreground, and the square where children (and adults) have been snowball fighting for the last couple of days.

Just as I was beginning to feel all hip and techno-savvy about this little blog, I found my precocious young friend Lena is way ahead of me.

The best way to contact me remains email. However, I would love to hear a friendly voice, so call my Turkish cell (I can email you the number if you don't yet have it). Alternatively, I am on Skype, an internet telephony service. It's free, and will work with any internet connection. My Skype username is [my first initial][my surname]. I am working on getting a US number which will also connect to Skype.

One last, critical point: Turkey is on GMT+2, which is 7 hours ahead of east coast, 10 hours ahead of west coast time.

As we all remember from high school, in 1941, Hitler turned from the western front and, treacherously violating the Molotov-Ribbentrop pact, attacked Soviet Russia. As the Axis forces marched on Moscow, their superior numbers, training and organization - combined with the element of surprise - appeared to justify Hitler’s bold aggression. However, despite initial catastrophic Soviet defeats, Moscow was never captured. Like Napoleon before him, Hitler was undone in part by the Russian winter and its logistical challenges. After the dry summer, a cold, wet winter caused difficulties in supply lines of fuel, adequate clothing and, not least, boots.

I bring this up because upon landing yesterday in Istanbul I found the city under a brilliant white blanket of snow. All day, a windy, wintry storm pelted down while temperatures held well below freezing. Leaving my two-bedroom flat located a few steps from the Galata Tower, I ventured out and did not get more than thirty metres before I sought refuge. Problem: inadequate footwear. As my buddy Matt the Cat says, “amateurs study tactics, professionals study logistics”. Today, the first order of business was to obtain proper boots. Once that was accomplished, life became much easier, and I had a new appreciation for the plights of the Napoleonic and German infantry.

3.0 litre 220 horsepower, 221 ft-lbs torque, dual-overhead-camshaft V6 all-wheel drive, with loads of punchy goodness in the 6-speed manual overdrive tranny. Quite chagrined to see her go. I only wish Ace's Dad Mr. M could have driven it; he would have appreciated the precise Teutonic engineering.

Anyway, I'm officially a bum. No job, no car, no furniture. O tempora, o mores.

I think J may have taken this picture a few years ago.

Last weekend EnduranceJay, GBates and I decided to absorb a little culture and attend a reception at SFMOMA (which included a fascinating Chuck Close exhibit). On the ensuing cab ride, our driver started talking about corporate governance/chicanery and, specifically, Enron. "Who could have seen that one coming," he asked?

Sammy W, that's who. Back in 2001 Sammy Dub implored me to buy puts on Enron ("It's a big hedge fund that doesn't make any money and is valued at a huge multiple of book") and I didn't listen because I couldn't make head or tail of the balance sheet.

I bring this up today because Ken Lay and Jeffrey Skilling are finally going on trial and will in all probability get their comeuppance.

Ironically, this is happening while Worldcom scumbag Bernie Ebbers is moving forward with appealing his 25 year sentence. Last year, I covered the issue of business ethics at length under the pseudonym "Jack Vincennes" for a sadly defunct website called "whatbubble.com", the brainchild of my buddy Jiggy Donuts. Whatbubble was an iconoclastic investment site which combined a mixture of analysis and bravado. I have included the full text of that article below, which manages to quote "Scarface".

TAKEN AT THE FLOOD

By Jack Vincennes

There is a tide in the affairs of men,
Which, taken at the flood, leads on to fortune

- Shakespeare

All I have in this world is my balls and my word and I don't break them for no one.

- Tony Montana

Before I get to this week’s column, let me first state how excited I am to be affiliated with this most excellent site. We have gathered here a first-class roster of talent commanding deep, battle-tested experience in virtually all facets of markets, asset classes and financial instruments. I am honored to join this stable of investment experts in what will, in time, be regarded as the very best independent financial website on the ‘net.

But as The Wolf from Pulp Fiction wisely intones, “Let’s not start sucking each other’s [members] just yet.” Enough self-congratulation, onto this week’s column:

This is a great country. Seriously, this country is set up so that with minimal effort you can do very, very well. What’s more, if you are privileged enough to earn your keep in the finance industry, all you need to do is work maybe 9-10 hours a day, exhibit some bare minimum competency, and keep your head out of your ass. That’s all it takes. After doing this for a few years, if you follow the above formula, you will soon find yourself eating the finest meats and cheeses, living in a nice crib, driving a sweet ride and dating hot chicks.

But guess what, slick?

This can all be taken away from you.

They can take away your bank account. Your AmEx platinum. Your Audi, your Park Avenue apartment. And if they take those away, the hot chicks will be gone faster than crack at Courtney Love’s place. If you don’t believe me, ask MC Hammer.

But here’s the thing: they cannot take away your honor. They cannot take away your balls, or your word, as Tony Montana so eloquently noted. That’s all you have in this world, ultimately. You have your reputation and your honor that you trade upon every single day in order to do deals, in order to command your partners’ trust, in order to make the mad Benjamins so coveted by the strippers at the Olympic Garden in Las Vegas.

As such, my word and my reputation mean more to me than my entire net worth – not because of some high-minded principle but because of the simple calculus that my word and my reputation represent the sum total of my future earning capacity as a finance professional.

And you should take the same attitude. Jealously guard your scruples and your reputation and do not ever compromise your ethics or your word. Strict adherence to this policy will pay dividends greater than any investment you will ever make in your lifetime. The ethics of the people who do business are truly the underpinnings which support the generous harvest of capitalism. Without ethical norms, the system would fall apart and we’d all be living like citizens of a third-rate socialist country.

Which brings me to Bernie Ebbers. Bernie, you miscreant, you worm, you little pubic louse. Bernie, you toadie, you coward.

Bernie Ebbers, for those of you returning from the deepest Congo, is the former CEO of Worldcom, a glorified pyramid scheme. As the Wall St. Journal noted in a prescient article in the late nineties, Bernie was practicing what Brealey and Myers describe as “the Bootstrap Game”.

(Richard A. Brealey and Stewart C. Myers’ “Principles of Corporate Finance” is the pre-eminent corporate finance textbook used at the finest business schools in the world. If you haven’t already: purchase it, embrace it, digest it. Know it cold, because the guy sitting across from you almost certainly does.)

Where was I? Ah, the Bootstrap Game. This neat little scheme involves a highly valued company which acquires smaller, slower growing companies which are not as highly valued. In terms of p/e ratios, a predator which trades at a high p/e (presumably due to high growth prospects) can issue stock to acquire a target with a low p/e and immediately accrete its (the acquirer’s) earnings per share, without having added any value at all from the acquisition. This can be repeated ad nauseum, resulting in accelerated earnings growth which (using circular logic) is used to justify the high p/e of the acquirer.

“But Hollywood Jack,” the alert reader will ask, “isn’t the target company a low p/e company due to its own low growth prospects, and won’t the integration with the acquiring company inevitably lower the long-term organic growth prospects of the overall business?”

Bingo. The Bootstrap Game only works for a time. Furthermore, it only works if you can keep up the pace of acquisitions. Ultimately, however, no matter how many times you slap lipstick on a low-growth dog, eventually the market will see the underlying growth for what it is.

Worldcom played this beautifully, although it was obvious to even the slow-witted mouth breathers at the Wall St. Journal that Bernie was playing the Bootstrap Game, and that this could not go on forever.

Fast forward to Q3 2000. The market for all stocks is tanking as the Fed’s Y2K-liquidity pop has diminished and the capital expenditure bust is beginning to work its way through the telecom industry. Bernie is facing margin calls on the debt he has unwisely placed against his stockholdings in Worldcom. Bernie needs that stock price to stay up, so he can keep banging hot chicks and eating caviar. So Bernie instructs Worldcom CFO Scott Sullivan to engage in accounting shenanigans (the substance of which is immaterial for this discussion – the very act of compromising the shareholders’, creditors', customers’ and employees’ trust is the issue) in order to prop the stock up for another quarter or two.

Well, you know what happened: the whole house of cards fell apart, with Worldcom declaring bankruptcy, stiffing bondholders and stockholders alike. (The fact that those same bondholders and stockholders should have seen it coming had they been diligent and alert is an issue for another day.)

Shady CFO Sullivan turned State’s evidence à la Sammy “the Bull” Gravano and Bernie Ebbers was convicted of 9 counts of conspiracy and securities fraud in the largest accounting scandal in U.S. history. During the trial, Bernie had the sheer gall to take the stand and claim that he didn’t understand the particulars of finance and accounting. The CEO of a company that, at its peak, was valued at over $180 billion and had made hundreds of acquisitions claimed that he didn’t understand basic finance or accounting that the average college sophomore business student has mastered!

“By my beard, Your Honor,” I would have loudly declaimed, “this halfwit isn’t competent enough to manage the bar at a tri-Delt mixer, let alone a NYSE-listed company! The prosecution moves to have the defendant doused in cat urine.” (Had I been a trial attorney I would likely have been disbarred, I imagine.)

Bernie abused the trust of his shareholders. He screwed ‘em. He screwed many people on the way up, selling them on the lies of the Bootstrap Game, and he screwed ‘em as it was falling apart, dumping stock to save his own ass. And if our justice system truly reflected what Plato referred to as the Form, or ideal, of “Justice”, Bernie would be hoisted up by the little pits he amusingly calls testicles and left to wilt in the hot desert sun.

But he will likely just go to country club prison, where he can serve out his term at his leisure. However, we now know, definitively, what his reputation, his word, his honor mean:

Nothing.

Bernie, you’re nothing.


“Hollywood” Jack Vincennes is a man of his word. His column, “Taken At The Flood”, will appear on a regular basis at whatbubble.com.