In a alarmist post Fortis, amid a raise of capital to cover itself, warns of a US meltdown within weeks.
The original article in Dutch was removed from the website but coverage in the blog-o-sphere is everywhere. Here is an english translation.
They predict 6000 banks going under and ... GM, thereby starting the "meltdown" of the US economy. It is coming! next week!
He he, I don't know what to make of the gloom and doom. I stick by my numbers analysis... the subprime meltdown is 50-60% done. Sure we haven't seen the last part of even the worse of it but this too shall pass. Just batten down the hatches.
For me all numbers will derive from the further decline in house prices. A further 10% down would be good news. 15% would be normal, stretching the FED shock absorber. 20% would deplete it. 30% could be serious problem. As in banks are bankrupt without a hope of federal bailout. It may be the trigger for the partial socialization of the banking system. Far from such radical legislation, the clowns on capitol hill are debating another public handout in the form of "a bill to save the housing market". One way to read it is "if your neighbor defaulted on his loan and you didn't, he gets rewarded". Moral hazard has metastasized. Another way to read it is "there will be pain but let's stage it, too much pain at once can kill a patient". The Japanese lost decade comes to mind of many commentators as the right dosage of pain is a tough balance to strike.
Stay tuned, in the meantime, I will keep remixing music as that keeps me steady, it keeps me focused.
May we live in interesting times, i think chuck norris said that once.
Sunday, June 29, 2008
Eurocup 2008: OHE OHE OHE OHE!
OHE OHE OHE OHE, CAMPEOOONES CAMPEOOOONES!
OHE OHE OHE OHE, CAMPEOOONES CAMPEOOOONES!
OHE OHE OHE OHE, CAMPEOOONES CAMPEOOOONES!
OHE OHE OHE OHE, CAMPEOOONES CAMPEOOOONES!
OHE OHE OHE OHE, CAMPEOOONES CAMPEOOOONES!
OHE OHE OHE OHE, CAMPEOOONES CAMPEOOOONES!
QUE LE SON!
TF14: The Devil in the Freak
TF14: The Devil in the Freak by marc fleury
Le Freak, Chic, 1978
The Devil in Us, Black Devil Disco, 2006
The Freak doesn’t need any introduction. Classic, classic disco. And like I am fond of saying if it needs an introduction, get the hell out of here.
Dancing to the Freak has got to be one of my earliest club memories. I was 16, in Spain, in the Baleric islands in 1985 and dancing like a freak monkey full of hormones on the speakers at 5AM. This was pre the 1988 Ibiza summer of love, but to me it was Space. Sorry, as I quickly approach 40 I reminisce and get nostalgic. I remember how annoying it was when 40 year old would talk about “woodstock” and how we hadn’t done shit since then.
Anyway. Freak is a stand out track and it lends itself to easy remixing due to early use of drum boxes and a easy 8A Key. Of course the original clocks slow, what didn’t in these days. But it sustains acceleration pretty well. Interestingly the Devil clocks at 126 and feels slow, but since le Freak is warped up the result feels speedy (clocks at 125 in the remix). You will see, if you have an ear for that.
The Devil in Us is a FANTASTIC dark electro track. I first caught a glimpse of it on the game GTA4 on PS3. Francois K the legendary US DJ (from Paris originally) has a radio station in the game and this track immediately stood out. Francois K must be approaching 55. I saw him in Detroit in 03 and at 4AM he was destroying my ears, way too hardcore. It was disappointing because Francois K is an eclectic listener and loves melody, but I guess this was Detroit (DEMF 03) and he was trying to impress the locals.
Lately Francois K has taken to promoting French talent he likes and “Black Disco Devil” seems to be one of his Parisian proteges. The track is dark and dirty but very melodious.
There is actually version of “The Devil in Us” in french, that I also like very much, called the “Extreme Technique Remix” where the guys speak french and it gives another dimension to the track, “je ne sais pas, je ne sais plus”. I would have loved to mix that. However that track was too busy for the remix, where the Freak is really both dominating and sparse, so you want to invade that space, isolating the voice and high-hats but not overly. When someone welcomes you in their house you don’t want to abuse.
In any case, the final track is very effortless in the sound. More interestingly the structure matches almost out of the box. You will notice the lack of heavy remixing on the structure. Except for intro and outro, for DJ’ing purposes, I really haven’t messed with this much (except for EQ/Flange of course).
Then I was caught by surprise by the last minute, where the Freak chorus matches perfectly with the Devil’s chorus of “yo, hee he ho hee ye ah yo yo!”... anyway you will see what I mean when you hear it, it composes the last minute of the track, as I strech it out. The original chorus is what caught my ear while driving around GTA4.
Enjoy, I consider it one of my better works lately.
Le Freak, Chic, 1978
The Devil in Us, Black Devil Disco, 2006
The Freak doesn’t need any introduction. Classic, classic disco. And like I am fond of saying if it needs an introduction, get the hell out of here.
Dancing to the Freak has got to be one of my earliest club memories. I was 16, in Spain, in the Baleric islands in 1985 and dancing like a freak monkey full of hormones on the speakers at 5AM. This was pre the 1988 Ibiza summer of love, but to me it was Space. Sorry, as I quickly approach 40 I reminisce and get nostalgic. I remember how annoying it was when 40 year old would talk about “woodstock” and how we hadn’t done shit since then.
Anyway. Freak is a stand out track and it lends itself to easy remixing due to early use of drum boxes and a easy 8A Key. Of course the original clocks slow, what didn’t in these days. But it sustains acceleration pretty well. Interestingly the Devil clocks at 126 and feels slow, but since le Freak is warped up the result feels speedy (clocks at 125 in the remix). You will see, if you have an ear for that.
The Devil in Us is a FANTASTIC dark electro track. I first caught a glimpse of it on the game GTA4 on PS3. Francois K the legendary US DJ (from Paris originally) has a radio station in the game and this track immediately stood out. Francois K must be approaching 55. I saw him in Detroit in 03 and at 4AM he was destroying my ears, way too hardcore. It was disappointing because Francois K is an eclectic listener and loves melody, but I guess this was Detroit (DEMF 03) and he was trying to impress the locals.
Lately Francois K has taken to promoting French talent he likes and “Black Disco Devil” seems to be one of his Parisian proteges. The track is dark and dirty but very melodious.
There is actually version of “The Devil in Us” in french, that I also like very much, called the “Extreme Technique Remix” where the guys speak french and it gives another dimension to the track, “je ne sais pas, je ne sais plus”. I would have loved to mix that. However that track was too busy for the remix, where the Freak is really both dominating and sparse, so you want to invade that space, isolating the voice and high-hats but not overly. When someone welcomes you in their house you don’t want to abuse.
In any case, the final track is very effortless in the sound. More interestingly the structure matches almost out of the box. You will notice the lack of heavy remixing on the structure. Except for intro and outro, for DJ’ing purposes, I really haven’t messed with this much (except for EQ/Flange of course).
Then I was caught by surprise by the last minute, where the Freak chorus matches perfectly with the Devil’s chorus of “yo, hee he ho hee ye ah yo yo!”... anyway you will see what I mean when you hear it, it composes the last minute of the track, as I strech it out. The original chorus is what caught my ear while driving around GTA4.
Enjoy, I consider it one of my better works lately.
Saturday, June 28, 2008
TF13: I will be your friend-- Pauvre Con
Podcast here.
On a mid-night IM dare by a French Friend (Nicolas) I got out of Bed and raced to remix Gainsbourg’s classic “Requiem pour un Con”. While the song is great, I truly loathe the words. So very French and obnoxious. It literally translates to “Requiem for an asshole”. It made me cringe the whole time. I do like the drums at the end.
So iTunes at 12:30 gave me the original, keyed on 7B at a mollasses 100Bps. Argh... slow and heavy. I wasn’t hopeful for the harmonic matches.
Fate would have it that the ONE harmonic/structure match would be the seminal house track “I will be your friend” by Robert Owens.
Funny how things go! Hein Nicolas? How appropriate to have a little bit of US peace to counter French piss.
I guess it is a good balance of the force. The words and the way they match are spooky and I played a bit with the words: for example introducing synth where there was none in the original but the singing goes “the synth are for you”
This was put together in 90 minutes, from start to finish, as a dare, excuse the rough edges.
On a mid-night IM dare by a French Friend (Nicolas) I got out of Bed and raced to remix Gainsbourg’s classic “Requiem pour un Con”. While the song is great, I truly loathe the words. So very French and obnoxious. It literally translates to “Requiem for an asshole”. It made me cringe the whole time. I do like the drums at the end.
So iTunes at 12:30 gave me the original, keyed on 7B at a mollasses 100Bps. Argh... slow and heavy. I wasn’t hopeful for the harmonic matches.
Fate would have it that the ONE harmonic/structure match would be the seminal house track “I will be your friend” by Robert Owens.
Funny how things go! Hein Nicolas? How appropriate to have a little bit of US peace to counter French piss.
I guess it is a good balance of the force. The words and the way they match are spooky and I played a bit with the words: for example introducing synth where there was none in the original but the singing goes “the synth are for you”
This was put together in 90 minutes, from start to finish, as a dare, excuse the rough edges.
Friday, June 27, 2008
What just happened in the markets?
I got a wager with my father in law that we will see DOW 11,000 by the end of the summer. I took that bet with him at the beginning of the week when the DOW was at 11,800 as of this afternoon it is 11,300. He doubled down.
Obviously this is a wager I would like to lose.
Leading the charge on the way down are the financials and GM. The financials are understandable. In a nutshell, housing has dropped 20% generating .5T of losses on the banks most of which is being brushed under the FED TAF and repo carpets. The FED shock absorbers have the same length to go in reserve. According to historical level of income to housing price, there could be an additional 10% to go on the way down in the best case scenario, most probably there 15%, maybe 20 if we overshoot. Essentially we may be at 60 of the housing and the FED shock absorbers may absorb most of the subprime shock.
Then there is GM, I haven't looked at the details, but with the prices of oil where they are, you know all the big trucks that they normally sell have got to be hurting.
Inflation is everywhere as a result of oil. However the inflationary spiral of the 70's doesn't seem to exist. Do not mis-understand this, yes the prices are going up but your wages probably aren't. The 70's oil shock started a wage/price spiral. Prices KEPT going up (so did wages), it became a YEARLY thing. This time however unions are weakened, the workforces outsourced everywhere. So the initial shock of inflation may stop there, it will not kick off a wage/price spiral, we will all just be poorer. We will take it in the teeth but prices can't run forever if wages don't follow.
While there is a sell-off, the VIX, the index that monitors the sales of options, the instruments that hedge portfolios and indicate sentiment about the future HAS NOT GONE IN PANIC LAND YET. I don't know what to make of this one, couldn't find anything in the press either. Best case this means people do not panic, maybe we are through panicking. Worst case it means people do not have the money to buy themselves insurance and we are not "swapping losses" (which cost money) we are just "losing" money, period. The one big problem with this is that means even more losses for the banks as derivatives are the most profitable products for the financials.
If that is the case, then this is not the bottom, it is just the VIX is not picking up the right signals anymore and we will be seeing further damage in financials.
The FED has maintained the rates at 2 this week. Indicating they are stuck with this inflation and the need for growth. Stuck on neutral, pure stagnation.
My take on things is that this may be the last shoe to drop. How far will it drop, I don't know. I hope I am wrong on my wager and we are in for a massive bear rally next week. I am waiting for the last action by the FED. It will probably be triggered by another financial near-death experience (Bear style) and will result in a bailout or a final dramatic increase of the TAF facilities for the final 500B on the FED balance sheet.
After that, the FED will be all-in and the markets will be on their own. I do not believe the FED will print money in this inflationary environment. The safety will be off. No more backstopping, that being said it will have been a liquidity injection without money creation, pretty neat.
Interesting times! If a bit scary.
Obviously this is a wager I would like to lose.
Leading the charge on the way down are the financials and GM. The financials are understandable. In a nutshell, housing has dropped 20% generating .5T of losses on the banks most of which is being brushed under the FED TAF and repo carpets. The FED shock absorbers have the same length to go in reserve. According to historical level of income to housing price, there could be an additional 10% to go on the way down in the best case scenario, most probably there 15%, maybe 20 if we overshoot. Essentially we may be at 60 of the housing and the FED shock absorbers may absorb most of the subprime shock.
Then there is GM, I haven't looked at the details, but with the prices of oil where they are, you know all the big trucks that they normally sell have got to be hurting.
Inflation is everywhere as a result of oil. However the inflationary spiral of the 70's doesn't seem to exist. Do not mis-understand this, yes the prices are going up but your wages probably aren't. The 70's oil shock started a wage/price spiral. Prices KEPT going up (so did wages), it became a YEARLY thing. This time however unions are weakened, the workforces outsourced everywhere. So the initial shock of inflation may stop there, it will not kick off a wage/price spiral, we will all just be poorer. We will take it in the teeth but prices can't run forever if wages don't follow.
While there is a sell-off, the VIX, the index that monitors the sales of options, the instruments that hedge portfolios and indicate sentiment about the future HAS NOT GONE IN PANIC LAND YET. I don't know what to make of this one, couldn't find anything in the press either. Best case this means people do not panic, maybe we are through panicking. Worst case it means people do not have the money to buy themselves insurance and we are not "swapping losses" (which cost money) we are just "losing" money, period. The one big problem with this is that means even more losses for the banks as derivatives are the most profitable products for the financials.
If that is the case, then this is not the bottom, it is just the VIX is not picking up the right signals anymore and we will be seeing further damage in financials.
The FED has maintained the rates at 2 this week. Indicating they are stuck with this inflation and the need for growth. Stuck on neutral, pure stagnation.
My take on things is that this may be the last shoe to drop. How far will it drop, I don't know. I hope I am wrong on my wager and we are in for a massive bear rally next week. I am waiting for the last action by the FED. It will probably be triggered by another financial near-death experience (Bear style) and will result in a bailout or a final dramatic increase of the TAF facilities for the final 500B on the FED balance sheet.
After that, the FED will be all-in and the markets will be on their own. I do not believe the FED will print money in this inflationary environment. The safety will be off. No more backstopping, that being said it will have been a liquidity injection without money creation, pretty neat.
Interesting times! If a bit scary.
TF12: Jungle Boogey Nip & Tuck remixes
Following a suggestion by PCLeddy in comments, I have decided to remix Kool and the Gang's classic "Jungle Boogey".
The original is too fuzzy but I found a cover that sounded clean. I decomposed the song in four block (the whole song is an arrangement of those blocks). Scouting for compatibility was a bit of b*tch, even with harmonic matching however I did find 3 that matches greatly and decided to play with this.
The result are 3 mixes a/b/c in TF12
- Jungle Boogey + Zookey == Jungle Zookey
This version is very close to the original. The polydrums supports plays nicely and doesn't impact the melody too much. This is a true "nip and tuck" close to the original. - Jungle Boogey + The Path == A Path through the Jungle Boogey
The Path is great Detroit classic that is notoriously difficult to mix with everything else including itself. However here blocks of Jungle fit nicely. The resulting track has 2 interesting parts. The beginning with "Feel the funk" from Jungle rapidly evolves as the Path's melody kicks in and modulates the melody from Jungle. Surprising result. - Jungle Boogey + L8 == Acid Jungle Boogey
L8 is a very acidish track. Even though it is low-key its acid nature overtakes everything and most of the work was on the reconstruction of the structure of Jungle to match L8. This is a new beast, completely different from the original and qualifies as a acid track remix.
Enjoy, more to come. Feel free to suggest stuff: 70's, 80's, Funk, Soul, Pop.
Tuesday, June 24, 2008
TF9: Super-b*tch
Nip and Tuck remix series.
You can find it here.
TF9 is a disco marvel. I take SuperNature (Cerrone) and mix with is something called "feeling like a b*tch" and a remix from Rob Acid. The disco acid mix is working really well, specifically in the beginning where the sonar sound feels very natural on the old track. The lyrics are fun and the delivery is good. I let SuperNature dominate the first half. The second part is more hardcore acid, it really starts with the beat breakdown, it is still a bit too fuzzy in my opinion, mostly due to the cutesy stuff Cerrone used to do on keyboard in 77. It is funny to think about the fact that the two tracks are separated by 31 years. The melody keeps the tone of the old disco, that cool melody. It makes it a bit more intriguing in a very modern way. Supernature is an interesting track, still very solid all by itself. I wish I had a master. The voice is SUPERB at least the first 3/4, the synth, while dated sounds pretty good, but the rest of the song is falling apart, from beat support to all the silly trick to the reverb, and goodness those beats... everything is ... sagging.
But not to worry, Dr Technofetichiste knows just what to do (EQ the hell out of it, the equivalent of collagen injections :). In the second part (start with how could I explain) the acid nature of feeling comes out and start dominating and really carries the tune. And then frankly, out of luck the last minute of the song, with the Supernature melody works perfectly, ones of those "aaahhh" moments! I like when gems like that appear in mixes and feel like a true studio remix, like I did it on purpose :)
You can find it here.
TF9 is a disco marvel. I take SuperNature (Cerrone) and mix with is something called "feeling like a b*tch" and a remix from Rob Acid. The disco acid mix is working really well, specifically in the beginning where the sonar sound feels very natural on the old track. The lyrics are fun and the delivery is good. I let SuperNature dominate the first half. The second part is more hardcore acid, it really starts with the beat breakdown, it is still a bit too fuzzy in my opinion, mostly due to the cutesy stuff Cerrone used to do on keyboard in 77. It is funny to think about the fact that the two tracks are separated by 31 years. The melody keeps the tone of the old disco, that cool melody. It makes it a bit more intriguing in a very modern way. Supernature is an interesting track, still very solid all by itself. I wish I had a master. The voice is SUPERB at least the first 3/4, the synth, while dated sounds pretty good, but the rest of the song is falling apart, from beat support to all the silly trick to the reverb, and goodness those beats... everything is ... sagging.
But not to worry, Dr Technofetichiste knows just what to do (EQ the hell out of it, the equivalent of collagen injections :). In the second part (start with how could I explain) the acid nature of feeling comes out and start dominating and really carries the tune. And then frankly, out of luck the last minute of the song, with the Supernature melody works perfectly, ones of those "aaahhh" moments! I like when gems like that appear in mixes and feel like a true studio remix, like I did it on purpose :)
TF8: 500 degrees in Funkytown
Nip and Tuck series, Dr Technofetichiste has been quite active doing plastic surgery on old disco tracks.
Yes, you heard it right: Funkytown, that old old old classic from the late 70's. I could see exactly where to operate, the track is 30 but with a bit of touch here and there, it will feel 3 month old :)
The underlying track, 500 degrees, is a modern house track, with good synth and excellent beat support. It is discreet and harmonic. The harmonic mix works easily, not too busy which is good. The song structure of funkytown is a little strange with those breakdowns (not a big fan by the way) and I had to do 3 cuts on the modern track to match the old song structure but nothing too dramatic.
The result, 500 degrees in Funkytown, lifts up the old classic. It is a simple mix, as I mentioned not too busy. Funkytown dominates, 500 degrees' melody modulates the wording which gives it a fresh feel. Some parts work surprising well. Enjoy.
You can find it here.
PS: I got about 20 already in the can, I will be doling them out bit and bit and if you ask nicely.
Yes, you heard it right: Funkytown, that old old old classic from the late 70's. I could see exactly where to operate, the track is 30 but with a bit of touch here and there, it will feel 3 month old :)
The underlying track, 500 degrees, is a modern house track, with good synth and excellent beat support. It is discreet and harmonic. The harmonic mix works easily, not too busy which is good. The song structure of funkytown is a little strange with those breakdowns (not a big fan by the way) and I had to do 3 cuts on the modern track to match the old song structure but nothing too dramatic.
The result, 500 degrees in Funkytown, lifts up the old classic. It is a simple mix, as I mentioned not too busy. Funkytown dominates, 500 degrees' melody modulates the wording which gives it a fresh feel. Some parts work surprising well. Enjoy.
You can find it here.
PS: I got about 20 already in the can, I will be doling them out bit and bit and if you ask nicely.
The Anti-Bubble
Strange financial physics of the inverse bubble.
John Kay from the FT is asking in commentary if there is a term for the inverse of a "Bubble". He muses that it must be somewhere in physics. The particle physicist in me wants to say the obvious "anti-bubble" like there is matter and anti-matter.
From astrophysics, the notion of white dwarf, the remaining heavy core of exploded star, could work with one caveat. Obviously what is nice about the bubble imagery is that it conveys fragility and the certainty that it will explode. The inverse of a bubble is a price that artificially too low and will re-inflate. It needs a phenomena from physics where something is deflated with the knowledge that it will eventually re-inflate. A white dwarf, will not explode.
Oh, I know, a limp noodle?
I think I would stick to anti-bubble. The reason is that the anti-bubble IS A BUBBLE, a ponzi scheme that will run out of steam as it runs out of numbers and will explode. The bubble is such a thing and losing that imagery is losing the main attraction of the word: the sensation of "time running out, artificial, inflated".
The anti-bubble it is!
John Kay from the FT is asking in commentary if there is a term for the inverse of a "Bubble". He muses that it must be somewhere in physics. The particle physicist in me wants to say the obvious "anti-bubble" like there is matter and anti-matter.
From astrophysics, the notion of white dwarf, the remaining heavy core of exploded star, could work with one caveat. Obviously what is nice about the bubble imagery is that it conveys fragility and the certainty that it will explode. The inverse of a bubble is a price that artificially too low and will re-inflate. It needs a phenomena from physics where something is deflated with the knowledge that it will eventually re-inflate. A white dwarf, will not explode.
Oh, I know, a limp noodle?
I think I would stick to anti-bubble. The reason is that the anti-bubble IS A BUBBLE, a ponzi scheme that will run out of steam as it runs out of numbers and will explode. The bubble is such a thing and losing that imagery is losing the main attraction of the word: the sensation of "time running out, artificial, inflated".
The anti-bubble it is!
Monday, June 23, 2008
The FED shock absorbers in a picture
Via Sudden Debt this morning.
See this picture, it is a before and after picture of the FED asset structure. It summarizes the crisis pretty well.
The biggest action has been reliquify assets in the industry. They have pawned L3 assets for Treasuries (for free). A pretty good trade on the surface of things (for the banks) at the expense of the tax-payers.
The assets are illiquid and probably mis-priced and may go further down in value. If they do, this has been a socializing of losses. If on the other hand the asset go back up in value (unlikely keep in mind that banks offloaded their crap, by definition of these facilities) it would have been a good trade.
Point is the risk is transfered to the FED.
There is 57% left of treasuries, so quite a way to go still on "shock absorption" this is what is left.
See this picture, it is a before and after picture of the FED asset structure. It summarizes the crisis pretty well.
The biggest action has been reliquify assets in the industry. They have pawned L3 assets for Treasuries (for free). A pretty good trade on the surface of things (for the banks) at the expense of the tax-payers.
The assets are illiquid and probably mis-priced and may go further down in value. If they do, this has been a socializing of losses. If on the other hand the asset go back up in value (unlikely keep in mind that banks offloaded their crap, by definition of these facilities) it would have been a good trade.
Point is the risk is transfered to the FED.
There is 57% left of treasuries, so quite a way to go still on "shock absorption" this is what is left.
Sunday, June 22, 2008
Eurocup: Spain beats Italy on PK
CAMPEONES! Casillas rules!
(that and there is a bit of revenge for me personally after the WC of 2006)
CAMPEONES!
Ole! Ole! Ole! Ole!
(that and there is a bit of revenge for me personally after the WC of 2006)
CAMPEONES!
Ole! Ole! Ole! Ole!
Thursday, June 19, 2008
Will the fat lady sing already?
It seems that as my economic posts get a bit more technical many of you "disconnect", you all seemed to respond better to generic posts. Truth is, while I apologize for the details, they are important in understanding what the frak is going on in this current financial crisis. However today I will try to fly a bit at "10,000ft".
So, we are facing $350B of losses to the financial sector due to subprime, due to falling prices on defaulted assets with jingle mail phenomenas. House prices are STILL falling down. So the losses are going to increase. Let's say it will be $500B on subprime alone when all is said and nothing sold. The banks have already recapitalized to the tune of $250B. And it is going on with a vengeance. Dividends are being cut, capital is being raised (latest: Fifth Third, with $2B announcement this morning). The financial sector is in dire straits but I am ready to go long on it, well at least by selling puts :) My banker refused to do such a trade on my behalf yesterday. I believe that at the rate they are going we may be see the final shoe drop this summer (hence the puts, but he is right it may be a little aggressive and i am very conservative). We may be at a good 60-70% through this financial crisis. And with the headline SO negative I will be taking a contrarian view in 2 mo.
But the mother of all meltdowns is still moving under the water: the CDS spaghetti plate of Credit Default Swaps. With 60T (yes T!!!) under-written, the whole economy is insured but given the losses in the banking sector, an almost certainty is that the counter-party risk is material just not observed. Also it is REALLY hard to observe it since most of these contracts are Over the Counter (OTC) and thus private. See calls to create markets for OTC (which would cease to be OTC then :). The whiff of radio-activity from this decomposing pile of dunk was enough to trigger the bear-stern rescue on the theory that settling the CDS mess would grind the financial system to a halt and since we are fighting a stupid war at the other end of the world, there would be no one to enforce martial law. Not kidding on this one. However nothing to worry about, move on... the radio-active mountain is still there, and we had better not look to close and hope it holds :)
The credit crisis is alive and kicking, and will continue to do so through the summer. I am long on it with bonds, I like fixed income, I avoid fund of bonds (you get hit on paper value) and try to hold on short and mid-term securities. Inflation be damned, at least I am principal protected, which is more than I can say for equities.
So what with the connection to the "real" economy, and its derivative the stock market, what are the knock on effects of the financial crisis. Well the most obvious variable is the soaring inflation which poses real limits for the central banks. In a nutshell: Stock market dive at the beginning of 08, the FED cut the rates like mad (debated heavily by academic bloggers), save the day for now, debase the dollar currency in so doing, the oil price spikes (crude is priced in dollars, with other demand factors and speculation included) and that has a knock on effect on everything as we use oil well... for everything from medicine production, to farming to transport to ... everything. The problem with inflation is that the central banks feel the need to raise interest rates, see Trichet and his BIG FRENCH MOUTH spouting last week that he would raise the EU interest rates, sending tremors through the markets. The FED are STUCK: they can't lower to stimulate and they can't raise to combat inflation. They will do something but there is NO CLEAR PATH. Recession is "slipping in" according to the official recession indicators, and has been here for the past 3 mo.
Credit contraction could have kept inflation under control, it seems it hasn't, theory is that the inflationary dam isn't breached as there is no wage pressure. So the wage-price inflationary spiral of the 70's, which did nothing but erode cash and increase numbers on paper, will not take hold. We will all get poorer since prices will go up but not income, but there will be no real inflation long term... we will see how well THIS theory holds up.
Speculation on the biggest assets we have (houses) had to have nasty consequences. A part of me sits in contemplation enjoying the spanking the ignorant real estate agents are taking (God! do I despise that kind), another part of me is genuinely worried that credit is evaporating as a consequence with real macro consequences on investment, while the final part says "so what, we will survive this flood, bring it on! Kids let's go to the swimming pool! Time for your lessons!"
So I am teaching my kids survival skills: mathematics and swimming. Matt Asay would insist on Bible teachings, I let Nathalie take care of it.
So, we are facing $350B of losses to the financial sector due to subprime, due to falling prices on defaulted assets with jingle mail phenomenas. House prices are STILL falling down. So the losses are going to increase. Let's say it will be $500B on subprime alone when all is said and nothing sold. The banks have already recapitalized to the tune of $250B. And it is going on with a vengeance. Dividends are being cut, capital is being raised (latest: Fifth Third, with $2B announcement this morning). The financial sector is in dire straits but I am ready to go long on it, well at least by selling puts :) My banker refused to do such a trade on my behalf yesterday. I believe that at the rate they are going we may be see the final shoe drop this summer (hence the puts, but he is right it may be a little aggressive and i am very conservative). We may be at a good 60-70% through this financial crisis. And with the headline SO negative I will be taking a contrarian view in 2 mo.
But the mother of all meltdowns is still moving under the water: the CDS spaghetti plate of Credit Default Swaps. With 60T (yes T!!!) under-written, the whole economy is insured but given the losses in the banking sector, an almost certainty is that the counter-party risk is material just not observed. Also it is REALLY hard to observe it since most of these contracts are Over the Counter (OTC) and thus private. See calls to create markets for OTC (which would cease to be OTC then :). The whiff of radio-activity from this decomposing pile of dunk was enough to trigger the bear-stern rescue on the theory that settling the CDS mess would grind the financial system to a halt and since we are fighting a stupid war at the other end of the world, there would be no one to enforce martial law. Not kidding on this one. However nothing to worry about, move on... the radio-active mountain is still there, and we had better not look to close and hope it holds :)
The credit crisis is alive and kicking, and will continue to do so through the summer. I am long on it with bonds, I like fixed income, I avoid fund of bonds (you get hit on paper value) and try to hold on short and mid-term securities. Inflation be damned, at least I am principal protected, which is more than I can say for equities.
So what with the connection to the "real" economy, and its derivative the stock market, what are the knock on effects of the financial crisis. Well the most obvious variable is the soaring inflation which poses real limits for the central banks. In a nutshell: Stock market dive at the beginning of 08, the FED cut the rates like mad (debated heavily by academic bloggers), save the day for now, debase the dollar currency in so doing, the oil price spikes (crude is priced in dollars, with other demand factors and speculation included) and that has a knock on effect on everything as we use oil well... for everything from medicine production, to farming to transport to ... everything. The problem with inflation is that the central banks feel the need to raise interest rates, see Trichet and his BIG FRENCH MOUTH spouting last week that he would raise the EU interest rates, sending tremors through the markets. The FED are STUCK: they can't lower to stimulate and they can't raise to combat inflation. They will do something but there is NO CLEAR PATH. Recession is "slipping in" according to the official recession indicators, and has been here for the past 3 mo.
Credit contraction could have kept inflation under control, it seems it hasn't, theory is that the inflationary dam isn't breached as there is no wage pressure. So the wage-price inflationary spiral of the 70's, which did nothing but erode cash and increase numbers on paper, will not take hold. We will all get poorer since prices will go up but not income, but there will be no real inflation long term... we will see how well THIS theory holds up.
Speculation on the biggest assets we have (houses) had to have nasty consequences. A part of me sits in contemplation enjoying the spanking the ignorant real estate agents are taking (God! do I despise that kind), another part of me is genuinely worried that credit is evaporating as a consequence with real macro consequences on investment, while the final part says "so what, we will survive this flood, bring it on! Kids let's go to the swimming pool! Time for your lessons!"
So I am teaching my kids survival skills: mathematics and swimming. Matt Asay would insist on Bible teachings, I let Nathalie take care of it.
France shelves a EU tax proposal
Well, on second thought, there are some positive consequences to the Irish NO vote on the Lisbon Treaty. The first one reported in the FT this morning is the shelving of a French proposal on uniformity of taxation across EU.
THE MERE THOUGHT OF THE FRENCH MAKING TAX PROPOSALS TO THE EU IS ENOUGH TO SEND SHIVERS DOWN MY SPINE.
See, one of the reasons I am going to Spain instead of France is that their tax system makes a lot more sense ... for me.
From the article, and in all fairness some of it sounds good :)
During the next six months, France would try to ensure that ratings agencies were subjected to EU scrutiny, that the Basel II capital requirements for banks were supplemented with liquidity requirements and enshrined in EU legislation and that there was better co-ordination between European market supervisors.
On supervision, Ms Lagarde wanted to establish an informal college of supervisors: “We don’t believe it is realistic at all to have a single European supervisor.”
Tuesday, June 17, 2008
Goldman to lay off and invest in SIV
In hot and cold signals, GS is giving the tone of the day:
1/ They are laying off massively. The street is expecting a 30% drop in earning, (60 for lehman) so they are hacking ahead of the bell
2/ They are closing on a $8B stressed SIV investment which is heralded by some (the FT) as a "turning point" in the current crisis. Wait... wasn't it the Bear salvation?
Buckle your belt Dorothy, cash is the place to be!
1/ They are laying off massively. The street is expecting a 30% drop in earning, (60 for lehman) so they are hacking ahead of the bell
2/ They are closing on a $8B stressed SIV investment which is heralded by some (the FT) as a "turning point" in the current crisis. Wait... wasn't it the Bear salvation?
Buckle your belt Dorothy, cash is the place to be!
Bosch and Siemens to recruit at kinder-garten
In germany there is a lack of engineers. So they go to 5 year olds to give them the engineering bug. I had it. One of my twins has it: he is busy drawing the biggest TGV train on paper with just "one" engine instead of the current "two". He calls the 'Tres Grand TGV" also showing an inclination for the insipid yet funnily marketable acronym the French engineers can come up with. He is 5 and I can see he will be an engineer. The other twin says "he wants to be a banker, so I can finance my brother" and I had to explain all about the notion of "interest" to him.
See the funny thing is that in Germany and France (just like in Spain and India) being an "engineer" is a socially acceptable thing, like being a doctor or lawyer in the US. In the US an engineer is almost second class. A friend once pointed out to me that in the French word "ingenieur" there is the word "genie" or genius, and that in "engineer" there is the word "engine". If the problems in EU are acute imagine what they will be in the US? or maybe we just keep importing them?
Because the love of the job, the passion is one thing, the money is another. A lot of my friends from Polytechnique are bankers, quants. At the end of the day if a mediocre hedge fund managers brings home more bacon than an excellent engineer why are we puzzled that people choose the first? After all it is HARD being an engineer, it is long studies and a trade that gets developed over time.
Could the real issue be that engineers are notoriously bad at money? and cannot negociate proper salaries for themselves? At JBoss I made sure the best engineers were properly compensated in stock and cash. But JBoss was clearly a company where engineers had value, we needed them bad.
Market solutions will appear. The job market of tomorrow will demand a level of technical savoir faire, or at least familiarite that you can only acquire through engineering training.
I rest my case.
See the funny thing is that in Germany and France (just like in Spain and India) being an "engineer" is a socially acceptable thing, like being a doctor or lawyer in the US. In the US an engineer is almost second class. A friend once pointed out to me that in the French word "ingenieur" there is the word "genie" or genius, and that in "engineer" there is the word "engine". If the problems in EU are acute imagine what they will be in the US? or maybe we just keep importing them?
Because the love of the job, the passion is one thing, the money is another. A lot of my friends from Polytechnique are bankers, quants. At the end of the day if a mediocre hedge fund managers brings home more bacon than an excellent engineer why are we puzzled that people choose the first? After all it is HARD being an engineer, it is long studies and a trade that gets developed over time.
Could the real issue be that engineers are notoriously bad at money? and cannot negociate proper salaries for themselves? At JBoss I made sure the best engineers were properly compensated in stock and cash. But JBoss was clearly a company where engineers had value, we needed them bad.
Market solutions will appear. The job market of tomorrow will demand a level of technical savoir faire, or at least familiarite that you can only acquire through engineering training.
I rest my case.
Mitsubishi and PSA Peugeot will deliver ev car
2011, that is when they expect to have their first cars on the market.
The announcements today (via FT) is that they will collaborate on the drivetrain and they are looking for batteries, Li-ion to be specific.
My Tesla should be delivered Dec 2008 or maybe Feb 2012, but it will look a lot cooler than a Peugeot, I can tell you that.
The announcements today (via FT) is that they will collaborate on the drivetrain and they are looking for batteries, Li-ion to be specific.
My Tesla should be delivered Dec 2008 or maybe Feb 2012, but it will look a lot cooler than a Peugeot, I can tell you that.
Monday, June 16, 2008
Ireland votes NO to Lisbon Treaty
From the FT
The Irish No strikes a blow at these ambitions because no EU treaty can come into effect unless all 27 member states ratify it. In theory, the 862,415 Irish voters who rejected Lisbon – less than 0.2 per cent of the EU’s 497m population – have stopped Europe dead in its tracks.
0.2 per cent stops the treaty? How is this a "democracy?". I call this an incomprehensible dictatorship of the random!!!! How the hell is this supposed to work?
Saturday, June 14, 2008
Originate to Repo
From the FT. An analysis that the banking system is becoming dependent on the TAF facilities (exchange your dead mice for treasuries) and how this situation has not changed in 10 years in Japan. For all the arrogance of the western banks and regulators, we are repeating exactly the same mistakes. The Japanese banking system is a junkie.
Originate to distribute was the way the bank created so much leverage. They made a loan, sold it and got the capital back so could make a new loan etc. The distribute market is dead (CDO) because the subprime crisis contaminated all the CDOs. So the central banks takes your illiquid loans and gives you the most liquid security in the world: T-bonds. So now the banks package to please the central banks. Originate to repo, the new socialist scam.
But in the meantime I am told that many western banks are becoming increasingly creative about how they repackage their assets to get central bank support. Addiction, in other words, is not disappearing of its own accord. No wonder some bankers now joke that the "originate to distribute" model has quietly morphed into "originate to repo" pattern instead. It is indeed a difficult policy trap. Do not bet on an easy or smooth exit soon.
Originate to distribute was the way the bank created so much leverage. They made a loan, sold it and got the capital back so could make a new loan etc. The distribute market is dead (CDO) because the subprime crisis contaminated all the CDOs. So the central banks takes your illiquid loans and gives you the most liquid security in the world: T-bonds. So now the banks package to please the central banks. Originate to repo, the new socialist scam.
Friday, June 13, 2008
Eurocup2008: NED 4 - FRA 1
Ouch!
Now France has got to defeat those italian clowns to
1/ qualify for the next round
2/ get our revenge for the world cup final.
Lo veo chungo
Now France has got to defeat those italian clowns to
1/ qualify for the next round
2/ get our revenge for the world cup final.
Lo veo chungo
Graphics Designer, AJAX programmer needed
I need a good graphics designer.
I also need a good AJAX shop that can help us with a fairly advanced drag drop assembly application.
This is for our "on the side project" of home automation. They are not full time positions but I will pay consulting rates.
The graphics shouldn't take more than a couple of hours, the application will take a bit more and on that front we want an absolute AJAX guru, familiarity with the Google toolkit is a must, knowledge of SEAM a big plus. You can contact me directly at marcf999 AT gmail.com
thanks
I also need a good AJAX shop that can help us with a fairly advanced drag drop assembly application.
This is for our "on the side project" of home automation. They are not full time positions but I will pay consulting rates.
The graphics shouldn't take more than a couple of hours, the application will take a bit more and on that front we want an absolute AJAX guru, familiarity with the Google toolkit is a must, knowledge of SEAM a big plus. You can contact me directly at marcf999 AT gmail.com
thanks
Thursday, June 12, 2008
We are moving to Madrid!
Well, some of you already know as we have sent out about 100 invites yesterday for a bye bye party! Yep we are moving back to Europe. Truth is, after 15 years in the good old US of A, I kinda miss Europe.
I came to the US in 1993. I was doing my PhD work in a lab at MIT (the Research Lab of Electronics or RLE). I met Nathalie who was attending Wellesley college. I immediately was taken by her, it took a little while for me to convince her that I was the one. After months and months of courtship, the Beauty decided the Beast wasn't that bad after all (she thought I was a bit obnoxious at first, no way :) we dated and we got married after 2 years. We went back to France and lasted only one year. Something about France rubs me the wrong way. I think it is the rudeness. Don't laugh, I know I have been known to be rude even insulting (still am) but something about civilized behavior now pleases me.
This is where Madrid comes in. The conversation with my lady went something like this:
Me: "honey, let's go back to Paris".
Her: "NO".
Me: "come on! I miss Paris, I am Parisian, I miss the urban experience."
Her: "I don't like the people, Parisians are rude, and I don't like the weather"
Me: "yeah I can see that"
Her: "I would prefer Madrid, people are nice in Madrid, they are open, they welcome you, and the weather is great"
You have to know that I am actually half spanish, fluent in the language (so is Nathalie) and I have lived 3 years in Madrid, she lived for one year. I have family there, my parents live in Madrid and the Baleric islands, I have cousins, second degree cousins, many second degree uncles and aunts, and generally a whole bunch of good people that I enjoy being with. All that and the food is SUPERIOR, God, I love that ham! (oh! all that and as icing on the cake their tax situation is better: they have done away with their wealth tax :)
So, Madrid it is.
I have been scouting Madrid for a place to live. I think I may have finally found something in the RETIRO (salamanca: Serrano), which is a very Madrilenha experience, kind of like living next to Central Park in NYC. A very urban experience. Our kids are 9,5,5,2 and the 3 older ones will definitely pick something up in terms of language and culture. The little one will get to play in the Retiro by the Prado and I am sure he will at least get the "music" of the language, the tone.
I must admit I was taken aback by how expensive living is. Renting is out of control and buying is a no-go proposition. So to find something nice in the center of Madrid was no walk in the park. On the very positive side was the reception by my family and friends. Indeed you immediately feel welcome, they introduce you to their "pandillas" and it always feels nice.
For my Spanish friends: estamos encantados de venir a pasar unos anhos en Madrid. Nos hace mucha illusion a Nathalia y a mi. Para los que leen este blog y viven en espanha y tienen negocios que tienen que ver con el open source, estoy dispuesto en ayudaros. Decirme los que esteis alli y ya veremos que. Hasta pronto.
For my ATL/US friends: we are coming back. This is a short term arrangement. We just bought land in ATL and we are building a house. So this is a 2 or 3 year affair, we are ATL bound. See, Nathalie will grow roots here, like a typical ATL tree, and before her roots get too deep, we needed to do this move and go see something else, it will be good for the kids to experience something else, the American lifestyle is too good and too easy :) let's throw them for a spin. For those of you that are soccer fans, you are always welcome (Matt Asay comes to mind :) let's go see some Real Madrid games, should be fun!
And that's it. Hasta pronto!
Tuesday, June 10, 2008
Great! I am someone's hero!
Mark Hinkle published a piece on "Five Reasons why JBoss Founder is my Hero". You can find it here.
Heh! it felt good. I always liked a good rubbing of my back :) the top reasons were
1/ He Built a Community and then Built A Company.
True, although I have seen successful examples of the contrary, I am particularly proud of this fact.
2/ He Didn’t Do It in the Valley.
Well, by necessity, I was broke :) Truth be told I think ATL is a GREAT place to build a software business. When your talent is online you don't need to be in SV. In a way SV is passe in the age of the internet but even that obvious fact hasn't yet fully materialized.
3/ Returned Value to his Stakeholders.
No complains there.
4/ He Fostered a Legacy.
JBoss is an iconic brand and my father would be proud. I am also proud of the activity of the old JBossians
and my personal favorite
heh heh! for the little story, it was my ex-boss, Matthew Szulick that was the inspiration for the costume. He knew I liked to show up in costumes at industry events. One of the first meetings we have I tell him "M, we are public enemy number one now!", he says "Like the rap-band!" and he suggested I dress up as flavor flav for an event. I said "you got it!".
I did enjoy the showbiz angle very much. Too many young entrepreneurs discard the "marketing/entertainment" angle because they want their work to speak for itself or they want to appear "professional" which in many cases means "grey". It is a little bit arrogant, I know plenty of good technology that has never really seen the light of the market. Promotion is important, it is so easy to go un-noticed, it is the norm even, and even with good promotion you need luck to achieve visibility.
Anyway, thanks, it is always good to know you are not entirely forgotten :) and yes I did have a blast at this Javapolis talk.
Heh! it felt good. I always liked a good rubbing of my back :) the top reasons were
1/ He Built a Community and then Built A Company.
True, although I have seen successful examples of the contrary, I am particularly proud of this fact.
2/ He Didn’t Do It in the Valley.
Well, by necessity, I was broke :) Truth be told I think ATL is a GREAT place to build a software business. When your talent is online you don't need to be in SV. In a way SV is passe in the age of the internet but even that obvious fact hasn't yet fully materialized.
3/ Returned Value to his Stakeholders.
No complains there.
4/ He Fostered a Legacy.
JBoss is an iconic brand and my father would be proud. I am also proud of the activity of the old JBossians
and my personal favorite
5/ Marc Fleury is was and will always be a Rockstar
More so than any other open source leader Marc Fleury has been colorful and had fun. He was probably one of the most quotable open source leaders of all time. Here’s the proof. At JavaPolis 2006 he showed up dressed as Public Enemy’s Flava Flav and gave a great professional intelligent speech on professional open source.
heh heh! for the little story, it was my ex-boss, Matthew Szulick that was the inspiration for the costume. He knew I liked to show up in costumes at industry events. One of the first meetings we have I tell him "M, we are public enemy number one now!", he says "Like the rap-band!" and he suggested I dress up as flavor flav for an event. I said "you got it!".
I did enjoy the showbiz angle very much. Too many young entrepreneurs discard the "marketing/entertainment" angle because they want their work to speak for itself or they want to appear "professional" which in many cases means "grey". It is a little bit arrogant, I know plenty of good technology that has never really seen the light of the market. Promotion is important, it is so easy to go un-noticed, it is the norm even, and even with good promotion you need luck to achieve visibility.
Anyway, thanks, it is always good to know you are not entirely forgotten :) and yes I did have a blast at this Javapolis talk.
vinyl coming back?
From CNN:
Sometimes, nostalgia is BS. In the DJ world, LPs are still going strong, if you are a real DJ you use vinyl. I was having this very conversation with a DJ at the REX club on the night of Jeff Mills. Jeff of course uses CD, I don't even bother with physical I am completely digital with Ableton and what not. But it is funny how many people cling to the old ways. The old ways are even making a come-back.
They claim it is not nostalgia, it is because "vinyl sounds better". Whatever.
This spring, an employee intending to order a special CD-DVD edition of R.E.M.'s latest release "Accelerate" inadvertently entered the "LP" code instead. Soon boxes of the big, vinyl discs showed up at several stores.
Some sent them back. But a handful put them on the shelves, and 20 LPs sold the first day.
Sometimes, nostalgia is BS. In the DJ world, LPs are still going strong, if you are a real DJ you use vinyl. I was having this very conversation with a DJ at the REX club on the night of Jeff Mills. Jeff of course uses CD, I don't even bother with physical I am completely digital with Ableton and what not. But it is funny how many people cling to the old ways. The old ways are even making a come-back.
They claim it is not nostalgia, it is because "vinyl sounds better". Whatever.
Negative equity is everywhere.
Say you put 10% down on a purchase of a property. You borrow the next 90%. Say the price of the property goes down 10%, let's say you sell your property, you have lost your 10%. Let's say you walk away: you have lost your 10%. You have an incentive to go "long" on the property, hoping the prices will go back up.
But when your loan is "zero down" you don't care if the prices go down. This phenomena has been described in the US press as "jingle mail" and it is now appearing all over the EU. I just came back from Spain where it is starting to be particularly acute. People buy their second residences there, sometimes as investments. So when the prices go down, your financial incentive is simply to WALK AWAY.
This of course piles on the banks with a positive feedback loop: the prices go down, a lot of people walk away, so the offer increases, so the prices go further down until, accelerating the fall.
I don't see an easy out (even with bubble blowing from the FED).
1/ FED and ECB are making noise of INCREASING rates due to inflation concerns
2/ EURIBOR/LIBOR are at historic highs indicating 2 things a/ banks don't trust each other, someone is going to fall Bear style b/ Since so many loans are based on the EURIBOR it means the payments increase dramatically.
3/ Debt availability is going down. M3 is going down.
4/ I believe the demographics curve does not support growth of demand. The combination of the baby boomers numbers reaching full earning potential and now retirement means we have seen a temporary spurt of demand that is not likely to continue as the demographics curve is turning flat.
The drop in housing price, the source of the subprime crisis, the dollar debasing (via rates), the oil spike, and therefore generalized inflation is a self-reinforcing "positive feedback loop".
There is no stopping this thing. I come back from Spain where rentals yield 2% of capital. Just not really worth it from an owners standpoint and already rental prices are above what most people can afford.
But when your loan is "zero down" you don't care if the prices go down. This phenomena has been described in the US press as "jingle mail" and it is now appearing all over the EU. I just came back from Spain where it is starting to be particularly acute. People buy their second residences there, sometimes as investments. So when the prices go down, your financial incentive is simply to WALK AWAY.
This of course piles on the banks with a positive feedback loop: the prices go down, a lot of people walk away, so the offer increases, so the prices go further down until, accelerating the fall.
I don't see an easy out (even with bubble blowing from the FED).
1/ FED and ECB are making noise of INCREASING rates due to inflation concerns
2/ EURIBOR/LIBOR are at historic highs indicating 2 things a/ banks don't trust each other, someone is going to fall Bear style b/ Since so many loans are based on the EURIBOR it means the payments increase dramatically.
3/ Debt availability is going down. M3 is going down.
4/ I believe the demographics curve does not support growth of demand. The combination of the baby boomers numbers reaching full earning potential and now retirement means we have seen a temporary spurt of demand that is not likely to continue as the demographics curve is turning flat.
The drop in housing price, the source of the subprime crisis, the dollar debasing (via rates), the oil spike, and therefore generalized inflation is a self-reinforcing "positive feedback loop".
There is no stopping this thing. I come back from Spain where rentals yield 2% of capital. Just not really worth it from an owners standpoint and already rental prices are above what most people can afford.
Wednesday, June 4, 2008
20 years of the Parisian Rex club
It has been a while since I have blogged, but I have an excuse, I am in Europe at the moment (we are thinking about moving back to Europe, more on that another day).
A couple of weeks ago, a good friend of mine, Nicolas, wrote saying "if you need an excuse to come to Paris, here it is". The Rex Club, Garnier's residency, is a mainstay of the electronic night in Paris. They have been celebrating the 20 years of the club. The 2 week long line-up is massive, Robotnick, Dubfire, Larry Heard (Chicago) and as a grand finale, and all-nighter with Jeff Mills on Friday and another all-nighter with Garnier on Saturday night.
I am seriously thinking about it. See the advantage of coming from the US for such parties is that when it is 6AM locally and most people start to fade quickly (except a few chemically enhanced souls) it is really 12PM for you, so you look like you are fresh. If someone asks what you are on you can always respond "on jetlag". Very stylish.
So anyway, I decided to fly to Paris and book a 3 nighter and attend both night Mills and Garnier. I make it to Friday night, with a table reserved, excited as a school-girl going to a Hannah Montana concert. With me was of course Nicolas, and a friend of his, but also Mark Spencer and a friend of his, Skylar. Yep, I am talking about that Mark Spencer, who had left his native Alabama, the guns, the farm and the ATV behind, happened to be in Paris on business, and was keyed up for one of the most avant-garde electro-nights in good old Europe. Turns out, Mark is quite the franco-phile and the electro-phile (yes that is him in the picture above, I swear!)...
So we make it to the club, we wait in a long line. In talking to people in the line they have come from all over the continent for the Jeff Mills night. The Rex is a relatively small club (kind of like the Wetbar in ATL for the cognoscienti) but with a killer sound system. They have redone the sound-system with directional speakers and the resulting sound is crystal clear, almost too loud (I use wet paper in my ears to get -20db but keep the range) and is almost as good as the Space in Miami. Crystal clear minimal cuts the air.
Of course, neither Mark nor Skylar know who Jeff Mills is. We all do. Jeff Mills is a legend in EU. One of the techno pionners from Detroit. The man is 46, doesn't look one year above 28, is skinny as hell and behaves like a lanky alien in the DJ booth. (see picture)
Jeff is playing for 8 hours straight. He starts with Disco and Funk, old Techno (Big fun... see Techno-Fetichisme 5 for the reference). Only in Paris do I get to hear UN-ABASHED disco, stuff straight out of the 80's, the US has gotten so washed out in Trance, something like that would never fly. Here it feels almost natural, Nicolas is lapping it up, so am I. Just before the disco gets old, the man goes to house, playing the seminal "gotta have house", the mixing is fresh, the tracks, while old, still sound really good.
The night is real fun. Mark and his friend seem to really enjoy the night. Mark drinks like a fish. He holds his liquor, at some point I was scared of the amount of Vodka he was drinking but he just plows on. Nicolas looks at me and just says "your friend is getting drunk". I explain to Nicolas just what KIND of geek Mark is, and I know for a fact that Mark can hold his alcohol. On the other hand Nicolas seems to be fading fast and he is way past drunk (he got up at 6AM in his defense). That is one reason I stay away from alcohol at night, not good if you want to last. By 3:30AM Mark leaves. Skylar wants to stay but Mark reminds him they have business meetings to attend to on the morning (a Saturday no less). I realize I have lost Nicolas, he has gone home.
At around 4:15AM Jeff Mills goes Techno. In good Detroit tradition, this is Techno with Soul, hard beats with great melody. I truly relish the hour that follows. I find myself thinking while dancing that I haven't enjoyed a session this much in a long time. I love the tracks, stuff I know, stuff I don't know, stuff I wish I knew. I do enter the "zone" where I don't care about anything or anybody, just enjoying the music. A guy in front of me is wearing a t-shirt that makes me smile "good music, I dance, no good music, I no dance".
At around 5:30 Jeff Mills takes a dive and goes all abstract and minimal on me. He bows to the nihilist gods of abstract dark techno. The sound system makes it somewhat enjoyable, but frankly by that time, that's it for me. I just don't enjoy head pounding minimal. Plus I am sweaty, tired, drenched after 3 good hours of dance and I figure, if I want to make it again to Garnier I better call it a night.
I get out at about 5:40, the sun is up, I decide to walk back to my hotel due west and head in the wrong direction given by a guy that was obviously completely drunk (that will teach me). When I find myself deep in the 9th district, with a drug dealers around me, I realize the Sun is dead ahead of me... I think I must be going East. I need to find my way back and a random walk through the dangerous parts of Paris is not going to cut it. I get in a cab. The driver is a Rasta guy. The cab smells strongly of ganja. I notice a few roaches of the moroccan hash variety in a glass cup he has by him. The guy is listening to some french easy listening music. It frankly sucks. I wonder how the hell he is going to drive this thing back to my hotel, high as he is. He is doing something with his hands. I ask "you rolling a joint?", he replies "nope, counting my money", "even better" I reply.
The brother takes me back to the Concorde Lafayette without a hitch, like he is on auto-pilot, except he gets stuck right in front of the hotel by a barrier and it takes him a good 30 seconds to wake up and say "oh merde, I need to go to the right", which he eventually manages. I tip him very generously.
I get back to my room, stare out at the Parisian morning, God, I miss Paris! I finally find some shut-eye around noon. Never made it to the second night.
What a great night!
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