Inflation in Turkey is 80%. And they are probably lying. More like 160%
Mustafa Kemal Atatürk, below with his daughter Sabiha Gökçen, a fighter pilot, was
the great modernizer of Turkey who re-shaped the Ottoman Empire after the First World War, outlawing Whirling Dervishes in 1926 as a symbol of the old empire not the modern Turkey. He also discouraged the wearing of the veil and hijab.
Many old customs of the Ottoman Empire are returning under President Erdogan, whose base is in the rural parts of Turkey and not in Cosmopolitan Istanbul. Erdogan also gives orders to the Central Bank. The result:
Ordinary Turks have taken to gambling to protect their assets. The Economist reports that 19% of Turks own cryptocurrency, the fifth largest share in the world. (According to the Bank of Canada, 13% of Canadians own cryptocurrency, a stat that amazes me,)
The Turkish government is raising wages to help people cope with inflation. But inflation is probably 160%, not the Central Bank estimate of almost 80%.
Turkey is a wonderful country run by a not so wonderful man. When I visited there the history was fascinating, the people warm and polite. There seems to be little chance that they will dig themselves out of trouble as long as President know-it-all is in power.
Tech Stocks money makers
The chart below is a couple of months old but the ratios are still the same.
Here are the closing prices on Friday:
The Unintended Consequence of Dumping Nuclear Power
A giant lignite coal mine in Germany. It is most polluting form of coal and Germans are now using a lot more of it. They will be probably using even more as the cold weather comes and there isn’t any Russian Gas. As Germany and the rest of Europe cook, Euro politicians call for climate action, but Germany is pumping out the…
German nuke reliance is now just under 12% of its electric needs. That could change. Nuclear power, once a Green nightmare, is being re-classified as Green Energy.
Nuclear Power is Safer than Wind and Greener than Solar
A Hell of a Week
Asbestos
Once a miracle mineral, now specialists have to do Haz-Mat suits to remove the stuff. Happened to some people in my family this year. Asbestos in the wall paper.
This year the town of Asbestos, Quebec, changed its name, which came from the long defunct asbestos mine there.
Essay of the Week
One of things I do for a living is write books for people. Four years ago I wrote a 25th anniversary book for Wildeboer Dellelce, a Toronto law firm that set out to do corporate work. No divorces, no litigation just corporate work. Each year had a chapter. This one details how the young law firm landed the Initial Public Officering for RIM — Research in Motion, the inventor of the Blackberry.
1996
RIM Goes Public
Jim Balsillie wanted Wildeboer Dellelce, and the three-year-old law firm wanted RIM. In many ways the two were looking in the mirror: RIM was cool, hip, and filled with young talent. Ditto for Wildeboer Dellelce.
In 1996 Research in Motion introduced its most revolutionary product to date: the RIM-900. It was also called the Inter@ctive Pager, which allowed users to send messages over the Internet on a secure wireless data network called Mobitex.
The RIM 900: a techno-marvel in its day.
Remember, this was an era when few people understood the Internet. At the start of 1996, there were just 16-million people who used the Internet in the world. That number would more than double in the next twelve months. Today there are 4-billion, from the richest countries to the poorest.
In 1996 RIM's pager was the ultimate in cool. One of its distinguishing features was the QWERTY keyboard, which allowed users to type in messages quickly. They soon got used to using their thumb. Sending a text message using the keypad on a mobile telephone – available since 1992 -- was awkward and time-consuming.
Wildeboer Dellelce had already done several bought deals acting for Investment dealers. The young firm was about to step up the pace.
"I got a call after doing the bought deal letter for GMP from Rob Fraser. He said, `I've been talking with the guys at RIM, and they don't want you to work on this deal for us, they want to meet you, and you should go up there and meet them'. I said okay. This was on a Tuesday," remembers Rob Wildeboer.
Rob and Eric Apps were the team that first worked on the RIM account.
After a call to Dennis Kavelman, the young Chief Financial Officer of RIM, Wildeboer and Apps drove up to Waterloo to be at a meeting early on Wednesday morning. In the room with them was the Troika mastermind RIM's ascent to glory.
Mike Lazaridis was the brains behind RIM's technological wonders and a man who kept a scientific scale in his office to weigh the innards of his inventions against the competition, such as the Palm Pilot.
Jim Balsillie, the talented dealmaker who was stepping up RIM's game in capital markets; and Dennis Kavelman, the bright young CFO. Both Eric and Rob came away from the meeting even more impressed with the team at RIM
"As we were driving back, I remember saying to Eric, `This, in my mind is a game-changer'. We just sat down in the same room with the smartest people that I've ever seen. Lazaridis was a technical guy, but Dennis and Balsillie were just as bright. Lazaridis could make the stuff technically but Jim was the strategic thinker and Dennis, in my view, was the glue that kept them together as they were thinking of things," says Rob.
Eric Apps remembers that around this time two upstarts, Yorkton Securities and Griffiths McBurney, were competing with a more old-line brokerage house, Midland Walwyn, to be the lead on any RIM financing. Everyone could see this was a company that was going places.
"We were helping Yorkton, Griffiths, Midland and a few others that were all competing for the mandate. These were all guys like Brian Campbell at Midland and Scott Paterson at Yorkton and Rob Fraser at Griffiths. We were helping them all just in terms of putting their structures together," says Eric Apps.
"They were all pitching to the RIM guys who finally decided to go with Griffiths. Then the RIM team asked Griffiths they were going to use as their lawyers and Rob Fraser said they were going to use Wildeboer Apps and Jim Balsillie said `No, we're going to use those guys, you're going to have to find someone else'."
***
Eventually Wildeboer Dellelce was officially hired as RIM's law firm. Rob Wildeboer recalls the meeting, that ended with a financial windfall for every lawyer at the firm.
"I went up to Waterloo, and I was in a meeting room with Jim Balsillie to my left, Rob Fraser (of Griffiths McBurney) to my right, Dennis Kavelman on the other side and Jim said to me, "Can I sign this letter?" I stated that I had written it for Rob, but it's standard so, yeah, sure. He signed it, and he then said, "Okay, you're my lawyer now so is there anything we can do for you"? I replied yes, the firm wanted to buy a unit of stock which was $151,000, and he said: "done"."
The underwriter, Rob Fraser, said Balsillie couldn't do that because the deal was oversubscribed and it's got to go to the clients he promised it to. Fraser said he couldn't even buy it any for his own account.
Jim Balsillie looked at him and said, "He's my lawyer, and it's my call".
It was a gamble. In 2018 dollars $151,000 is the equivalent of about $225,000 according to the Bank of Canada's Inflation Calculator.
"I drove back to the office, and this was the entrepreneurial nature of our firm: I said okay, we have to talk because I've just committed to buying a unit of this stock, of this company that we've been talking about," says Rob Wildeboer.
"The first question from my partners was, `You did what?'. Then ‘do you think it's a good buy?' I replied that if they didn't take it, I'd put a mortgage on my house and take it all." That burst of bravado convinced them. They were in. The seven lawyers at the firm each got one-seventh of that $151,000.
When RIM went public, the shares were worth $3.40, and since that time they have split two for one and three for one, so the equivalent was about fifty-six cents. "Even today it's up twenty-five times," said Rob in 2017. "But if we had held the stock forever it would be up two hundred times. We all did pretty well out of it, and it’s a great story.”
Many of the partners sold their shares when the doubled. Eric Apps hung on longer than most. "I think I sold at around $20 thinking I was a very clever guy," says Eric with a self-deprecating laugh.
Carol Doty made the biggest percentage gain. The long-time personal assistant and employee number one hung on to almost every share she ever acquired during her 20 odd years at Wildeboer Dellelce, maybe out of a sense of loyalty. She didn't want to seem rude by selling. It paid off.
"I had a hundred shares of RIM, and I sold them for $168 a share, and they didn't cost me anything, Rob (Wildeboer) gave them to me as a gift," says Carol. There were other shares she acquired while working at Wildeboer Dellelce that she held on to as well. "I just sold Aecon and Martinrea recently," she said in the summer of 2017.
Wildeboer Dellelce's involvement with RIM added more credibility to a corporate boutique who at this stage was just three years old.