While packing for my redeye flight to Istanbul tonight, I remembered the last time I had travelled to Turkey around 6 years ago. After getting sort of stranded in Kazakhstan for a day, I ended up wandering back alleys of Istanbul talking to questionable people in the non-bank financial service sector.
A planning error left me with no choice but to run an experiment on the fringes of the global forex market.
At the time, I was working at an investment bank in China, but I got a week off for a some sort of Communist Party workers holiday in October. My then girlfriend now wife was a grad student in the US. We decided to meet in Turkey for a little getaway.
As I prepared for the trip I was flush with RMB(Chinese yuan), but short on dollars and Euros(1). None of the banks in Beijing I went to would directly change RMB to Turkish Lira. Plus all them had silly wide bid-ask spreads on RMB/USD or RMB/EUR transactions. No point in changing here I thought, I’ll just change once when I get to Turkey. Turns out that was a rookie mistake.
I was on the Air Astana flight from Beijing to Istanbul with a layover in Almaty, Kazakhstan. Checking in was a bit of a debacle. I had to wait in a long line behind migrant laborers who had absurdly large quantities of luggage to check, much of it in non-traditional suitcases (ie barely sealed cardboard boxes).
The guy in front of me in the line to check in was about 6 foot 4, bald, big boned, with the look of a football referee who let himself go. After some sort of commotion at the front of the line , he turned around, smiled and said in a baritone, probably Russian Accent: “Almaty airlines ,this always happens. “
The flight was delayed a few hours but it ultimately did take off. However we were late enough that I missed my connecting flight. I had a day to wait for the next flight to Istanbul.
Almaty airport wasn’t fancy, but it was no worse than many of the small airports I’ve been to around the globe. I went to a cafe to get some food.
Turns out they wouldn’t accept RMB. No problem I thought, and I walked over to the one moneychanger accessible from the terminal I was at.
Turns out they wouldn’t change RMB at all.
I went to the ATM, and it wouldn’t accept my card for some reason.
For amusement I tested if any of the shops there would take RMB. None would.
At least I got a lot of reading done passing the time with no money to entertain myself in the airport for a day. I don’t remember what the meal was on the next leg of the flight, but I remember it was quite delicious.
When I got to Istanbul, and ran into identical forex issues with shops, moneychangers, and ATMs.(2)
So I wandered the streets going into moneychangers asking to change money. Even banks with China origins wouldn’t do it. Finally one money changer looked surprised, and asked “how much,” as he motioned me over towards the other end of the counter.
I answered him, then he took out a pen and a piece of scrap paper, and started to draw a map.
It was a long journey. As I recall, I had to go to the far end of one of the subway lines, then walk for about 15 minutes. Finally I found a shop that would change RMB. But their rate was horrible so I said I’d be right back.
I finally found another one a block over with a much better rate. I was relieved to at last clutch a fistful of Lira.
The rest of the trip went smoothly. Of course those days were before Erdogan, um “changed” (3).
This time I’m going back to Istanbul, with a mix of USD and Euro I’m excited to enjoy deeply discounted falafel, and drink coffee while working from a deck on the Asia side of the bosphorus, with a perfect view of the river, and Europe on the other side. I won’t have time to explore the far ends of the subway lines since I’ll only be in Istanbul for a day. After that I’ll be going to Sofia Bulgaria and working there for a week.
(1)When if ever will the RMB be a global currency? I don’t know. My general view on currencies is I never make pure directional bets. I just try to avoid getting killed by sudden changes. This basically means cautious sizing of any position that is exposed to fringe markets. Smart operational decisions have real alpha implications in these areas as well I guess you can say I learned this on the streets, the hard way.
Anyways, while there is now a surplus of superficial media coverage of China’s One Belt One Road policy,few people are talking about the capital markets implications. China is basically throwing money at every country to its west all the way to Europe, with a potentially huge impact of the smaller countries. What I find interesting is that most of it is going to be financed with yuan denominated debt, not dollar denominated debt. Combined with a yuan denominated oil futures contract hitting the market, One Belt One Road will result in a lot more financial market activity in yuan rather than dollars. I would still consider yuan internationalization(and a decline in the dollars status) a bit of a long shot near term, but these recent changes make it a lot more plausible over the next decade. At the very least there will soon be a lot more funky securities denominated in yuan(many probably, ahem, distressed and deeply discounted), so it makes sense to get comfortable with custody and banking issues involving the currency.
(2) My ATM card ended up getting flagged with a security alert for suspected fraud, which I was later able to resolve.
(3) Much as been said about his more populist tendencies. I also find it amusing how non-populist policies have had unintended consequences contributing to the current crisis. For example, the government incentivized small and medium sized companies to borrow in non-Lira currencies, by loosening restrictions on loans over a threshold(IIRC, $5 million). This part of the economy is seriously hurting now. Alas there will be some fun picking in the distressed debt space before too long.
Louis L’amour was an autodidact’s autodidact. John Wayne called him the most interesting man in the world. L’amour spent the first couple decades of his adulthood wandering across the country, and around the world, doing odd jobs, and obsessively reading whatever he could find. Only much later did he become a famous novelist. Education of a Wandering Man is a quasi-autobiography, in which he describes the trajectory of his life, and the evolution of his thinking in terms of the places he traveled and the books he read.
L’amour spent years as a hobo, hopping trains from town to town, working various jobs. In each town he would visit the local library.
Its important to note, that unlike a bum, a hobo is ready and willing to work.
To properly understand the situation in America before the Depression, one must realize there was great demand for seasonal labor, and much of this was supplied by men called hoboes.
Over the years the terms applied to wanderers have been confused until all meaning has been lost. To begin with, a bum was a local man who did not want to work. A tramp was a wanderer of the same kind, but a hobo was a wandering worker and essential to the nation’s economy.
…Many hoboes would start working the harvest in Texas, and follow the ripening grain north through Oklahoma, Kansas, and Nebraska into the Dakotas. During harvest season ,when the demand for farm labor was great, the freight trains permitted the hoboes to ride, as the railroads were to ship the harvested grain, and it was in their interest to see that labor was provided.”
He also worked on merchant ships, and traveled throughout Asia and most of the world. He would find books for free or cheap wherever he went, reading 100+ books per year. For example:
Byron’s Don Juan I read on an Arab dhow sailing north from Aden up the Red Sea to Port Tewfik on the Suez Canal. Boswell’s The Life of Samuel Johnson (Penguin Classics) I read while broke and on the beach in San Pedro. In Singapore, I came upon a copy of Annals and Antiquities of Rajasthan, Vol. 1 of 3: Or the Central and Western Rajput States of India (Classic Reprint) by James Tod.
Although he didn’t have real formal degrees, L’amour understood the value of books and knowledge:
Books are precious things, but more than that, they are the strong backbone of civilization. They are the thread upon which it all hangs, and they can save us when all else is lost.
…Knowledge is like money: To be of value it must circulate, and in circulating it can increase in quantity and hopefully, in value. “
He wrote 89 novels, and clearly a lot of ideas came from paying close attention when he travelled:
People are forever asking me where I get my ideas, but one has only to listen, to look, and to live with awareness. As I have said in several of my stories, all men look, but so few can see. It is all there, waiting for any passerby.”
… for a writer, everything is grist for the mill, and a writer cannot know too much. Sooner or later everything he does know will find its uses.
As with reading, L’amour never let the challenges of a transient lifestyle interfere with writing:
“I began my writing in ship’s fo’c’sles, bunkhouses, hotel rooms- wherever I could sit down with a pen and something to write on.”
L’amour also spent time boxing in various small towns, and coaching other fighters. I’ve seen reference online to a 51-8 professional record, although I wasn’t able to verify it.
In the later years of his life L’amour spent more time in his personal library. His deep knowledge of the world gave him perspective:
Surely, the citizens and the rulers of Babylon and Rome did not see themselves as a passing phase. Each in its time believed it was the end-all of the world’s progression. I have no such feeling. Each age is a day that is dying, each one a dream that is fading.