Month: April 2019

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SPECIAL UKRAINE: THE SERVANT OF THE PEOPLE TURNS KING

Volodymyr Zelensky has been elected President of Ukraine in crushing defeat to incumbent Petro Poroshenko

Now it is official. The comedian Volodymyr Zelensky is the next President of Ukraine. While many observers and foreign experts are still astonished about the political experiment and public courage to put an unexperienced TV Star into the highest and most powerful political office in the country, it is first and foremost a demonstration of a powerful, energetic and lively democracy. That is good news. Neither the money, nor the political power or the control of the media, nor the patriotic staging could stop the crushing and deserved defeat of Petro Poroshenko. It is a message of great hope for a country who deserves a better leadership and future. Zelensky was right when he turned to other former Soviet Republics after the victory yesterday by telling them that indeed everything is possible. Accordingly, this election could turn into a harbinger for other countries alike.

As is with all dreams, the morning after a transformation of blurring pictures of hope and glory into purpose and hard work needs to start. And it will crucially depend on the next months, whether the dreams of so many supporters can be turned into a better reality of their lives. By appointing a truly forward-looking Government, by preparing elections to turn Parliament into an arena of trust and commitment and to dis-own it from oligarchs, and by selecting people for key positions in the country gifted and willing to energetically move the country forward.

After the Maidan protests and the ousting of President Yanukovich, Poroschenko had five years to prove that he understood what the people of Ukraine needed and were longing for and to act accordingly. He did not. As a result of his and his Government’s failure, the country today and its inhabitants are poorer, the territory is smaller, the conflict in the East has not ended, the Oligarchy is still in full power, and a selected group of people have amassed more wealth on foreign bank accounts. Another loss of time and betrayal of simple Ukrainians. Zelensky’s rise to power is the shameful sentence of complete failure on Poroschenko’s term.

The US, the European Union, and the international institutions would do well to listen carefully to the messages of the people, too. It is not wise nor efficient to only aim at stabilizing a counterpole and political bulwark against Russia. It is not the artificial language topic that keeps the Ukrainians awake at night, in a country where Russian is a dear mother tongue to many. It is also not the creation of an independent church that advances a country, where many have a decade long relation to their priests and parishes and the proximity to the Russian church is a century-long tradition. It is not even the fighting in the East and the annexation of Crimea by Russia or the demonization of President Putin and the Russian people in a country, where most have family ties to Russia and the Russian culture and traditions are embedded in everyday life. It is also not the accession to the EU or NATO that can rally people behind a common purpose or keep the young and energetic in the country.

No. It is like so often the economy, stupid. The harsh reality of money in the pocket and sheer survival at the end of the month. To get closer to European living standards is what people are dreaming about, and that students and young workers can stay in Ukraine with a perspective of development and modest wealth, and do not have to leave the country in millions to Poland, Canada or other countries to realize a decent life. The things that need to be done, are clear for thirty years, and it will depend on the political will of Zelensky and his key management team of Ukraine, whether they finally take the necessary steps and transform a country of endless potential into a country with a better future for the many and not bigger cash stacks for the few:

Bring in politicians who think first about their country
Simplify rules and regulations in all areas of society
Reduce state administration and bureaucracy on all levels
Build an independent judiciary
Ensure property rights
Stop corruption
Break up Oligarchy
Clawback unjust profits from corruption and bring criminals to justice
Normalize relations with Russia
Build the economic and societal foundation prior to a discussion of EU or NATO membership

The first twelve months for Zelensky will be crucial and he will need to be brutal to bring this change to his country against enormous, powerful, well organized and wealthy resistance. The necessary political will and perseverance for such an undertaking cannot and should not be underestimated, as well as the necessary luck and foresight he will need to choose the right people for his team from the many advisors who will come forward now. As a reward and result, Ukraine has the prospect to become more European, with young Ukrainians wanting to build their personal future in this country, and separatists in the East getting under pressure to reunite with a booming Ukraine. In that case, Ukraine can turn into one of the hottest global investment locations for many years to come, and the coming Easter week a herald for the resurrection of the country.

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WHAT THE TANNINS OF BORDEAUX PRIMEUR TASTING 2019 TELL US ABOUT THE STATE OF THE WORLD

Apr

A Macro and Micro Perspective

Dear Friends and Followers,

Since ancient times wise men have tried to read from stars, bones, runes, bird flight patterns, climate conditions and many other natural and supernatural events. Understanding patterns in a world where everything is linked with everything in a hyper-complex and ever-accelerating way gets more difficult by the day – many have given up.

The loss of general understanding and foresight is obvious: Our children have to skip school to tell us about the importance to invest into the preservation of our planet (which can be done with manageable resources today) while we drown a rotten financial system in money for free and endless taxpayer funds. We destroy our middle classes, write off the development perspectives of a whole generation, and are spectators to the rise of populists, minority bashers, warmongers and other dangerous propaganda from the forgotten ashes of WW2. We pour mountains of antibiotics into our food chain and are astonished about the renaissance of superbugs. And we elect people into office, who are outright fascist, extremist, unfit to govern, or simply idiots.

Time to lean back, have a good glass of red wine and read the meaning and direction of the World in the Tannins (this could be the future of fortune telling as humanity has given up on climate, animals and other traditional means, but alcoholism is on the rise!). Over the last days, 2.000 visitors have been in Bordeaux/France on their annual pilgrimage to understand the future of the best wines. We have participated in this pilgrimage and want to share what we have learned in discussions with winemakers, dealers, journalists, and serious wine addicts – and try to transpose these learnings into business reality. In a holistic world where up is down, and down is up, we can overcome the polarity between left bank and right bank, Merlot and Cabernet and clearly see our economic and political state and future in studying the Tannins.

What do the Tannins reveal:

China in Trouble: The last years, many of us thought to have arrived in Chinatown, not in Bordeaux, as the city was crowded with Chinese wine traders, journalists and investors. The breadth of the Chinese invasion in Bordeaux had easily matched their expansion in the South China Sea in previous years. While Chinese flags are still raised in front of famous Chateaux, we are finally back to normal. Chinese visitors are significantly lower in numbers this year. Obviously, Chinese traders are expecting less demand in their home country …

Russians turn homegrown: Following sanctions, an economic downturn that is mocking the official numbers, and increasing problems to invent new stories about the origin of money vis a vis scared private bankers, the Russian consumer tends to orientate towards culturally closer and most of all cheaper wines, i.e. from Moldova or Georgia. The French extravaganza is restricted to the real top end of the political and business class, and their numbers are shrinking.

Recession in Europe: Everybody keeps talking about prices. While in 2015 and 2016, experts were indulging into the great quality of the wines, accepting the price levels that would be set by the winemaker, this year the constant background noise of checking and complaining about pricing is omnipresent. In anticipation of the economic downturn, everybody is nervous about the looming price releases and their acceptance in the market

Democracies vs. Monarchies: Following Trump’s logic of cheering to life-long appointments of Presidents, there seems to be a benefit of non-democratic leadership. Whether it be the brilliant architectural restructuring of the city by Haussmann in the second half of the 19^th century, the feudal order of organizing the Chateaux, or the multi-generational efforts of wine growing families into producing an ever-improving wine, there is reason to believe that for some developments of humanity, political leadership that stays beyond the narrow definition of an election period has a certain value.

The Brexit Psychosis: Brexit everywhere!!! The Brexit fatigue sensation has arrived in Bordeaux. Even additional glasses of wine and endless discussions do not lead to a better understanding of what is going on and to what it will eventually lead. Yet, new customs and duties on wine and a potentially weak sterling might contribute to a lower red wine demand, and pressure on prices. The World will move on, yellow vests might cry “French wine to the French” and the Eton elite will continue to indulge in Cheval Blanc and Latour wines.

The Deflationary Effect of Globalization is Nonsense: Inflation is there! The price development of the leading French wines demonstrates convincingly, that in a globalized world, prices can go up steeply. As soon as there is a limitation on production or monopolization of origin or supply, the only way is up.

We Only Taste What We Know: In the internet and robot age, where everybody is his own doctor, lawyer, forecaster and shrink, we re-appreciate the old Greek philosophic saying that we have first to know something before we see it or taste it.

Price Follows Brand Follows Quality Follows Continuity Follows Family: Having had dinner with a winemaker who is producing wine in the 27^thgeneration of his family, and being witness to an industry where it takes a generation to start, grow and craft a truly outstanding wine you understand the meaning of continuity, which can only result from the responsibility of a family preparing the field for the next generation to come.

Or in a nutshell: Whatever happens in the World, happens in Bordeaux. The uncertainty and political sarcasm that you hear everywhere at the fireside chats is just another reflection of our current global downturn and political chaos. In that regard, the delivery of an excellent 2018 wine shall be a good harbinger for the excellent year 2021, when we can finally taste the bottled wines of 2018.

All best and Cheers

Marc

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