Rites of Spring: Gergovie & Tutto Wine Tasting

View of Tutto/Gergovie Spring Tasting 2016 in the Round Chapel, Hackney
View of Tutto/Gergovie Spring Tasting 2016 in the Round Chapel, Hackney

Those lucky enough to be in London for the Bank Holiday had a chance to go to an superb event at the Round Chapel in Hackney, organised by Tutto Wines and Gergovie Wines.  Both importers, along with a handful of others, have done much to create a space for natural wines in the London market – 15 years ago wine-drinking here was neatly segmented into high-end Bordeaux and Burgundy, set against high-alcohol, often New World, rotgut sold to the masses at off-licenses.  Natural wines, with their exacting standards of facture, respect for the land, artisanal approach, and sheer contagious enthusiasm, have brought in younger, cosmopolitan drinkers and really breathed life into the wine scene here.  While events like RAW have popularised natural wine, bringing in producers from Germany, Austria and further afield, Tutto and Gergovie have maintained a distinct Italian and French focus.  On the retail side, Noble Fine Liquor, closely associated with Tutto, has made Broadway Market in Hackney pretty much the hottest place to buy top-end, often idiosyncratic producers, particularly from Italy.  A short distance away, the eno-bistrot Brawn, by another natural wine pioneer Ed Wilson, keeps Columbia Road amply fed & watered. Lastly, south of the Thames, Gergovie’s food venture 40 Maltby Street, with its phenomenal but simple food and tiny menu, the place to go, even as Borough Market has descended into a tourist-driven fracas of selfie-sticks and ‘street-food’.

Wine swatches, akin to artist's colour samples, hundreds of them lined the entrance to the hall. The Gergovie team have been collecting these for years, and they were lovely in their minimal evocation of some phenomenal wines from far-off lands.
Wine swatches, akin to artist’s colour samples, hundreds of them lined the entrance to the hall. The Gergovie team have been collecting these for years, and they were lovely in their minimal evocation of some phenomenal wines from far-off lands.

Rant over…so this event was organised primarily for trade and growers, almost entirely from Italy, France, and Slovenia.  It was in an awesome de-consecrated Victorian chapel off Lower Clapton Road, across from Noble’s second venue P. Franco.  I can’t find much on the history of the chapel, but it had distinct echoes of the fine early Christian basilicas found in Constantinople and in Northeast Italy, the old Exarchate of Ravenna.  The room was hung with the lovely posters that have long been a feature of the London and Paris natural wine shops/enotecas, and are so sorely missed in the hyper-commercial (and somewhat more restaurant-based) New York wine scene.  There was a distinctly aesthetic vibe to the whole thing, from the posters, to the small-scale but utterly conscientious attitude of the growers, and even to some of the London-based staff, artists working part-time in the food and wine businesses around Maltby St.

40 Maltby St's spectacular grub: to start, a gutsy terrine, refined liver mousse; duck egg with asparagus; salt cod fritters. Mains: wood-grilled rabbit, aioli, and simple rough greens; a seafood rice. To end: selection of 3 cheeses; a stunning lemon-rind tarte with pure butter base, creme fraiche. This wasn't the day for vegans or diets.
40 Maltby St’s spectacular grub: to start, a gutsy terrine, refined liver mousse; duck egg with asparagus; salt cod fritters. Mains: wood-grilled rabbit (shown), aioli, and simple rough greens; a seafood rice. To end: selection of 3 cheeses; a stunning lemon-rind tarte with pure butter base, creme fraiche. This wasn’t the day for vegans or diets. Wine: Cristiano Guttorolo’s amphora-aged primitivo.

We ended up mostly sticking with the Italian stalls, with no disrespect intended to the others !  Food was essentially a holocaust of rabbits, grilled outside by 40 Maltby Street’s awesome team.  The evening ended at Brilliant Corners in Dalston, where wine crosses audiophile vinyl.

The distinctive wine posters
The distinctive wine posters
...and the sun from basilica windows
…and the sun from basilica windows

In keeping with the superb spring day, it all got a bit out of hand, with a bit of a Dionysian rendition on the preacher’s pulpit.  A tender respect for religious sentiment restrains me from a pic…

Doyen of the corps de vigneron, Gabrio Bini of Serraghia has long been a fixture on the London wine scene. His wines, from Pantelleria, closer to Africa than Sicily, come from old vines, are hand-tended, and partake of the saline air. Our favourite is his amphora-aged white of Zibbibo (local name for the Moscato di Alessandria, the name of which brings out Cavafy's poems of a vanished city).
Doyen of the corps de vignerons, Gabrio Bini of Serraghia has long been a fixture on the London wine scene. His wines, from Pantelleria, closer to Africa than Sicily, come from old vines, are hand-tended, and partake of the saline air. Our favourite is his amphora-aged white made from Zibbibo (local name for the Moscato di Alessandria grape…evoking perhaps Cavafy’s poems of a vanished city).
Gabrio's distinctive bottles.
Gabrio’s distinctive bottles.
The wines of Cantina Giardino come from the highlands of Irpinia, in Campania, known for the great Taurasi appellation. The noble grape Aglianico (Nebbiolo being the Alianico of the North) dominates reds, here and in Basilicata. The white wine Sophia, is based on Fiano, foot-trodden (by children apparently) and aged in unlined clay amphorae. Other wines are aged in chestnut/acacia barrels from the area.
The wines of Cantina Giardino come from the highlands of Irpinia, in Campania, known for the Taurasi appellation. The noble grape Aglianico (Nebbiolo being the Aglianico of the North) dominates reds, here and in Basilicata. The white wine Sophia, is based on Fiano, foot-crushed (by children apparently) and aged in unlined clay amphorae. Other wines are aged in chestnut/acacia barrels from the area.
Cantina Giardino's amphorae
Cantina Giardino’s amphorae
The wonderful proprietors Antonio & Daniela De Gruttola of Cantina Giardino.
The wonderful proprietors Antonio & Daniela De Gruttola of Cantina Giardino.
Farnea's wines, from the Eugenean Hills just outside Padova in Veneto. The soil is volcanic, grapes are fermented in concrete with natural yeasts and skin contact - Emma, based on Moscato Rosa and Moscato Giallo was a fave.
Farnea’s wines, from the Eugenean Hills just outside Padova in Veneto. The soil is volcanic, grapes are fermented in concrete with natural yeasts and skin contact – Emma, based on Moscato Rosa and Moscato Giallo was a fave.
...meanwhile back in the Colli Eugenei (Source: Tutto Wines)
…meanwhile back in the Colli Eugenei (Source: Tutto Wines)
Again from Veneto, Daniele Piccinin lands are in the Alpone valley near Verona. His focus is on the local, and almost extinct, Durella grape (aka Rabbiosa - the angry i.e. acidic and hard to vinify).
Again from Veneto, Daniele Piccinin’s wines come from the Alpone valley near Verona. His focus is on the local, and almost extinct, Durella grape (aka Rabbiosa – the angry i.e. acidic and hard to vinify).
Cristiano Guttarolo from Apulian karst-covered hills at Gioia del Colle emphasises the local stalwarts Primitivo and Negroamaro, but works hard to tame them and harness refinement and balance instead of the alcoholised fruit that often marks lesser wines of the mezzogiorno.
Cristiano Guttarolo from Apulian karst-covered hills at Gioia del Colle emphasises the local stalwarts Primitivo and Negroamaro, but works hard to tame them and harness refinement and balance instead of the alcoholised fruit that often marks lesser wines of Italy’s mezzogiorno.
Guttarolo's phenomenal Negroamaro - skin contact in steel and clocks in at 12% ABV.
Guttarolo’s phenomenal Negroamaro – skin contact in steel and clocks in at 12% ABV.
...all the better to follow his Trebbiano/Verdecca blend, again skin contact but in terracotta amphorae, giving a salty savouriness. Here supported by a brodetto w/ saffron, staple seaside soup of the Abruzzese, Molisano, and Pugliese coasts.
…all the better to follow his Trebbiano/Verdecca blend, again skin contact but in terracotta amphorae, leaving a salty savouriness. Here supported by a brodetto w/ saffron, staple seaside fare of the Abruzzese, Molisano, and Pugliese coasts.
From the Slovenian border with Friuli-Venezia-Giulia, near Gorizia, we had some excellent wines from Klinec, based on Malvasia, Ribolla Gialla, Jakot (i.e. Tokai Friulano), growing in marl/sandstone soil similar to that of the neighbouring zone in FVG. The wines are aged in cherry, acacia, mulberry, and oak.
From the Slovenian border with Friuli-Venezia-Giulia, near Gorizia, we had some excellent wines from Klinec, based on Malvasia, Ribolla Gialla, Jakot (i.e. Tokai Friulano), et al, growing in marl/sandstone soil similar to that of the neighbouring zone in FVG. The wines are aged in cherry, acacia, mulberry, and oak.
One of our favourites was the aged blend Medana Ortodox, aged since 2006.
Aleks Klinec with one of our favourites – the aged blend Medana Ortodox 2006.  He was here with his wonderful family, with whom he runs an agriturismo we’re going to try to stay at on our winter pilgrimage to NE Italy.

There were a number of other Italians that I didn’t manage to get pictures of – like Skerlj from the Carso in Friuli-Venezia-Giulia, and of course all the wonderful French winemakers.  We also missed, but are looking forward to see at RAW, some others: Cornelissen, Radikon, Lamoresca, Quarticello and so many more from other regions in Italy.

From Bearer Bonds to the Blockchain: Artistic Perspectives on Digital Money

Bitcoin and the blockchain have generated an enormous amount of press, as well as investment by governments, banks and technology companies. Ruth Catlow of Furtherfield  and Ben Vickers of Serpentine Galleries, with the generous support of the Austrian Cultural Forum London organised a fantastic workshop attended by artists, representatives of public and commercial arts organisations, and technologists. The agenda was to consider what the blockchain, a poorly-understood yet politically-charged technology that means many things to many people, might mean for art and artists, and society-at-large.

Motivation

Although our audience had a specifically artistic interest, the discussion around blockchain intertwines economics, technology, and public policy, so I thought it might help to take a step back and start by thinking about money pre-bitcoin. Specifically, I wanted to un-entangle some of the philosophical and historical questions around money; not least because the nature of money itself, and long-standing assumptions in Western economies, are today being subverted by the ongoing after-shocks of the 2008 financial crisis, to wit: negative interest rates, the potential phasing out of cash, and financial repression.

Money as Social Construct

I see money as a social construct, or alternatively, a de-centralised social contract with few explicitly articulated constraints on the individual, but plenty of implicit conventions-in-use. The essence of this contract is that money gives its holder a claim on assets or labour. It generally implies at least two parties in any given transaction; as well as a belief system that most parties in the given society mostly agree upon. These ways we use money are diverse, but are closely related to metrics for the utility of the money in question: authentication, anonymity, portability, convenience, legal certainty and fungibility.

Some examples may help.

Cash

Cash appears to be the simplest form of money. U.S. Dollars represent a claim on the American Treasury via the Federal Reserve Banking system. Since dollars are no longer backed by gold reserves – in other words, if one goes to the Fed or Treasury with a briefcase of dollars, one is not generally entitled to an equivalent amount of gold coins in return – this claim on the U.S. is termed fiat money. That is, most people, domestically and globally, agree that the Fed, and therefore the Treasury, is good for its dollars, and that everyone else in the system will provide goods and services against dollars. Furthermore, most people agree that the Fed will run the U.S. economy in a reasonably responsible way – though this consensus is far from unanimous. When, and if, this confidence erodes substantially, one may see devaluation, or inflation, depending on how the relative price of dollars to foreign currency, or to domestic goods/services, respectively, have changed. A recent example on how belief systems regarding money can change: during the summer 2015 EU crisis when Greece looked likely to be ejected from the Eurozone, there was much serious talk on how a parallel currency could co-exist with the Euro (the so-called ‘New Drachma’).

Cash is more or less anonymous in use, often is free of record/receipt, and may be irreversible (i.e. no refunds). The central bank doesn’t generally keep a ledger of individuals or businesses that hold modest amounts of cash; they do keep a ledger for commercial banks, which have a special relationship with the central bank. The central bank also closely watches how much cash is in circulation on an aggregate basis (so-called M0 or base money) and monetary policy is the science, and art, of managing M0 (and its friends M1-M4), in order to meet various legislative or statutory goals: often, price stability and low unemployment. The anonymity of cash is one reason it is interesting for tax evaders and tax authorities alike. As an aside, for all the noise about offshore accounts in the Panama Papers, HMRC estimates £16.5BN of lost UK tax revenue actually comes from VAT evasion – i.e. paying one’s plumber in cash, an entirely British affair that has nothing to do with offshore centres.

The authenticity of cash is verifiable in a relatively de-centralised way, in a reasonably short period of time: an experienced eye can spot most counterfeit bills, and marker pens or UV lights can easily be used anywhere.  Cash is portable, yet is purely symbolic – for the most part, the social contract that underpins cash, isn’t spelled out in other than the most terse terms on a bill. Most of the enabling legislation, case law, and so forth, exists outside the cash note. These points will become important later in the blockchain section.

It’s worth noting that many of the features above, which fall under the rubric convenience, mean cash can also be stolen easily and thus is expensive to store, transport, and insure.

Precious Metal

I will intentionally not say much about gold and silver, as the history and cultural aspects, while fascinating, would hopelessly complicate the discussion. Indeed, most respectable commentators hold that gold is a ‘barbarous relic’ (as John Maynard Keynes’ put it in 1923) and should be consigned to the bejewelled dustbin of history. Suffice it to say: gold is anonymous, reasonably portable (relative to value), easily authenticated, requires no ledger, but like cash, is expensive to protect. As above, gold relies on an obscure social contract and judging by the price action, I’m not sure the consensus on gold’s value hasn’t changed. Gold also may suffer from the nasty habit of being declared illegal just about when it might prove useful, due to inflation or war – for instance see Executive Order 6102, signed in 1933, that criminalised private ownership of monetary gold during the Great Depression.

Bank Deposits

In contrast to the above, money sitting in a bank has no material form, until it is pulled out of an ATM. It sits in the bank’s ledger, and definitely belongs to someone – namely, the depositor. Thus it is not anonymous, and is, in the absence of fraud or error, authenticated. Nor is it portable, though one can transfer deposits to another bank.

Bank (time) deposits do, however, earn interest , while cash obviously doesn’t. More accurately, they used to earn interest – in what some will call financial repression, and others, unconventional monetary policy, retail deposits in most Western nations, and Japan, earn near-zero interest. In an increasing number of situations, certain deposits now earn negative interest rates – one pays the bank to place a deposit.

Bank deposits also exhibit double counting. In its first guise, double counting is more commonly known as fractional reserve banking. Basically, very little cash money actually exists in the banking system. A great deal of the ‘money’ in circulation is in the form of on-demand deposits at various commercial banks (so-called M1). But those deposits rarely become cash. Bluntly, when a mortgage bank disburses a loan to a home-buyer, it almost never pays out hundreds of thousands of pounds in cash; rather, there are a chain of debits and credits, respectively, of the buyer and seller deposit accounts, that result in the seller’s account going up by the price of the house. The bottom line, for the financial system as a whole, is that a tiny sliver of M0 cash supports a large volume of M1 deposits. A bank run is when all depositors want their cash out of the bank at the same time, and there isn’t enough to go around.

A more relevant example of double-counting is when a transaction actually happens, there is often a period of 1-3 days, when balances are in transition between the seller’s deposit account and that of the buyer. Again, there are a chain of transactions, often involving two or more banks (i.e. the seller’s and buyer’s), as well as the central bank, during which time deposits may well be double-counted in the accounts of multiple financial institutions. This is mostly fine, because the central bank, in theory, supervises the system, provides plenty of extra cash liquidity and, in any case, the double-counting doesn’t last for very long; however, when there is a financial crisis, this could become a problem. This double-counting problem applies to blockchain precisely because the latter is basically a simultaneous system – transactions are confirmed and settled almost instantaneously.  I would point the reader to Izabella Kaminska’s writings over at the Financial Times for more on this topic, and in general for excellent critical commentary on how various quasi-utopian aspirations of digital money square up to the sometimes brutal realities of the financial world.

Bonds and Shares

The last animals in this taxonomy are bonds and shares, of which I’ll only treat the former. Bonds combine many of the features above, namely they are a promise (i.e. debt) by a party (the issuer) to pay another party (the bondholder) in a certain currency (dollars, pounds, etc.) at a certain rate of interest (known as the coupon) on a certain date (the maturity date of the bond).

The first difference we note is that bonds have a maturity date – unlike on-demand deposits, the bondholder generally can’t get his/her money back whenever he/she wants. So they look more like time-deposits in a bank (which incidentally go into M2).

Bonds, interestingly, used to come in two flavours: bearer and registered. Registered bonds usually have no physical form: rather they are an entry on the ledger of a central record-keeping agency, a so-called custodian. There is usually a specific method of transferring them, through a so-called clearing system – basically this is the bond-world equivalent of the bank that kept track of who had what deposit, and provided a way of transferring money between deposit accounts. Bearer bonds are more interesting – they belong to whoever physically holds the bond document and therefore are anonymous. That owner can transfer the bond to another by simply giving the transferee the document. Bearer bonds used to have little pieces of paper attached to them, called coupons, that one tore off and took to the bank, where one could get cash in return for the coupon. So bearer bonds actually look a lot like cash. They are mostly extinct now, since they were often used for tax avoidance or evasion. Also, if one misplaced a bearer bond, the wealth that it represented (for them) was often lost, disappeared, gonzo…

Bonds as a class have a particular relevance for blockchain – the ‘system of beliefs’ that govern how they work are mostly contained within the bond document itself, in hundreds of pages of legal language specifying how the bonds are to be transferred, what happens if the bondholder defaults on their payments, which courts are allowed to resolve disputes between bondholders and issuers, and so forth. However, in order to enforce contractual terms or resolve a dispute, a bondholder needs to approach the issuer or chase down the custodian/trustee, and if that doesn’t work, sue everyone – all of which is a time-consuming and expensive process.

Bitcoin, the Blockchain, and Digital Money

After that lengthy preamble, we can perhaps see, in the proper perspective, what bitcoin and the blockchain might offer to various societal stakeholders. Firstly, terminology: bitcoin and the blockchain are easily conflated, but for the purposes of this essay, bitcoin is a ‘digital currency’, while blockchain refers to a complex of underlying technologies that support and enable bitcoin and other digital currencies. Blockchain-based platforms may be available to everyone (public) or only accessible by a specific group of users (private). Bitcoin has attracted a great deal of attention and notoriety, but I, mirroring the FF/ACFL conference, will concentrate on the blockchain, which also happens to be the focus of intense investment by technology firms, venture capitalists, banks, and regulators. Furthermore, I will wave my hands and abstract away exactly what the blockchain is. Suffice it to say that it replaces the central ledger or repository variously referred to above, with a distributed ledger which is held at various nodes in a network, in multiple, synchronised copies. Every time a transaction happens, this information about asset ownership is updated across the network (essentially) simultaneously. Most of the complexity arises in authenticating transactions and in working out the time order in which transactions have happened, to avoid double counting/spending, ensure anonymity, reward the various agents in the network for participating, etc.  An engaging lay explanation of bitcoin (blockchain is easier to grasp if one starts with bitcoin) is here.  A sophisticated, but not especially mathematical, explanation of the blockchain, which starts with bitcoin’s implementation of the blockchain, is here.  For those interested in the undressed guts, see the Nakamoto PDF below which references Hashcash and other bits of prior work in this area.  Lastly, I’d be remiss in not pointing to the blog of he whom some, depending on their cultural background, might deem the Pretender, the false Dimitry, or a mere Anti-Pope: self-outed as Satoshi Nakamoto.

Smart Contracts

One of the most exciting, from a commercial perspective anyway, things about the blockchain is the idea of a ‘smart contract’. As I touched on above, bonds have fixed contractual provisions but in order to enforce any of them, one needs go to court or to a custodian. What if there was a bond which would automatically do certain things, like pay its coupon, or shorten its maturity date, in such a way that the (small) bondholder didn’t need to go fight the (big) issuer in court? A real-world example arises with Everledger diamonds that have blockchain-derived serial numbers etched onto them, accompanied by smart contracts that describe their provenance. One of the important points to note about blockchain, posited early on by bitcoin’s (ex-)pseudonymous inventor Satoshi Nakamoto, is the idea of immutability – once a transaction is inserted into the distributed ledger, it is impossible, or unfeasibly hard, to reverse. This means, in a contractual, financial, and legal sense, the history and provenance of diamonds (say Angolan or stolen) cannot be re-written or laundered. Another of Nakamoto’s principal aspirations was that, in a manner analogous to authenticating cash, authentication and verification of blockchain-based transactions should be something that could be done easily by an agent, even if they weren’t technologists or didn’t have the resources of a network node (i.e. a farm of computers mining bitcoins).

Devolving Funding, Ownership, and Contract

Smart contracts may also allow groups of (not necessarily rich or especially knowledgeable) collectors to jointly buy stakes in an artwork that none of them could have afforded singly. A digital contract would accompany the artwork, and the collectors would be immutably bound to that artwork. Conversely, the artist too could be immutably bound to the work, so that, in 30 years, when it sold at auction for millions, the artist could get paid. This is in contrast to the current situation, where artists or early-stage collectors don’t always benefit from the eye-popping gains in the value of artwork they created or nurtured.

It is however, important to point out that the issue I highlight above is not essentially technological – it is a contractual problem. Nothing actually prevents groups of collectors buying shares in paintings, just as nothing prevents artists from selling artwork with a restrictive covenant that constrains further sales or attaches to such  sales (and plenty of artists have explored these ideas of contract-in-art). The practice isn’t widespread presumably because few collectors would buy an emerging artist’s work with such a proviso. Having blockchain technology doesn’t really change the picture, in my view. What blockchain does do is automates execution of the relevant provision, and in the event there is a breach or dispute, might lower the cost of enforcement. Because smart contracts don’t require lawyers or court enforcement, and are almost instantaneous to execute, they become useful for relatively small sums of money. The diamond example above can easily be ported to art: Ascribe and MONEGRAPH provide content management suites that use blockchain to manage rights to digital art assets.  The notion of lowering barriers-to-entry is one of the most prosaic, and therefore most adoptable, applications of blockchain.

A high-profile applications in the area of funding and rights management was by the musician Imogen Heap, who has established Mycelia, a music storage and rights-management system built upon the Ethereum platform. Mycelia hosts an artist’s tracks, automatically updating as and if new and improved recordings are added; the information is stored in the cloud, and as a track is played, a smart contract is triggered to automatically pay the artist. Mycelia would also store other digital assets, such as liner notes, videos, etc., and contain provisions to allow derivative use: content to be embedded into other media (such as videos, advertisements, etc.) would trigger automatic payment to the artist. In theory, this all happens in the music industry already, but I suppose the point is that middlemen or artists’ agents handle the process, often badly (from artists’ perspective) and take a significant slice of the economics. In Heap’s words, Mycelia’s promise is that it might make the contracts between music artists and whoever ultimately is paying for content, whether record labels, advertisers or the public, much more transparent, easier to understand, self-executing, and thus, cut out layers of middlemen, while ensuring artists received as much revenue as possible, as quickly as possible.

Collaboration

It appears that Heap’s ideological perspective is that audience, listeners, can and almost should be brought in as partners with the artists, and thus Mycelia allows for more direct links between the two. An analogue of this forms the curatorial practice of Helen Kaplinsky, who talked about how to share assets in the current British cultural climate, where the concept of ‘civic publicness’ is crumbling, throwing into crisis the Enlightenment-era model of the museum as a public good. She has been converting a cultural space from a single-landlord entity into one that is owned by a community land trust. In a related project, she wanted to think about how artworks, accessioned into institutions but not currently on display, may still remain in circulation (and visible) rather than just sitting in a warehouse. In her vision, viewers, artists, and institutions would share an artwork in a fundamentally different way than the previous institutional model, which was binary – either a work was on-display or in-storage. More generally, the project tries to address questions that are coming up now in the contemporary economy & in art, revolving around what to do with artwork that might not have a ‘permanent’ or ‘stable’ state, something that has become key in museum conservation departments globally. Blockchain-based platforms like Ascribe provide a way of keeping track of interactions (ownership, borrows, licensing, insurance, liability, etc.), and because of the relatively low legal/financial cost, perhaps enable large-scale sharing of an artwork or a collection. Again, incorporating blockchain seems to me an incremental, and possibly worthwhile, technological improvement to an existing real-world solution: at MIT, students are already able to borrow artwork for their residence rooms.

Geo-wallets: Monetising the Self

Another intriguing applications of the blockchain lies in the integration of money, via the digital wallet, with GPS technology. Max Dovey presented a project undertaken with University of Edinburgh’s researcher Chris Speed where geo-location technology was connected with a digital wallet, such that the account balances within the wallet would change depending on how the user/viewer moved through Edinburgh. Another project called Handfastr also meshed geo-location with digital money, allowing couples to form temporary fake ‘marriages’ and temporary pooled accounts based on proximity: as long as the couple were near each other, they would have a joint digital wallet, and when they moved apart (spatially) they would revert to individual wallets.

These projects exemplify how small collaborative groups, physically co-located, can self-organise, and pool their financial resources easily and with a minimum of legal and contractual overhead.

In my view the more interesting perspective is an ambiguity of the whole thing: by linking money so closely to other digital technologies (GPS today, and in the future, say, bio-medical data from an Apple Watch), the move towards monetising individual identities and bodies continues apace. At a basic level, one can imagine large corporations, and the state, having even more information and potentially, control, over people. Given the enthusiasm with which people have adopted cashless, non-anonymous, immutable-record and friction-free payment methods (tapping debit cards, Apple Pay, or Uber), I can imagine many people will happily opt-in to linking more and more elements of their identity into a variety of surveillable and monetisable, albeit ‘free’ and convenient, networks.

From Self-Executing to Self-Replicating

Most of the approaches above have looked at funding, ownership, and sharing implications of the blockchain. Another potential artistic trajectory could be investigating the underlying technology itself. For instance, Plantoid is a system implemented on the Ethereum blockchain, that takes the initial form of a sculpture; however, once a certain trigger, described in an Ethereum smart contract, is reached, the blockchain instructs human collaborators to make a new version of the sculpture (and an algorithm embedded in the smart contract provides the specific dimensions of the sculpture to the human producers). The auto-generative potential, even if it is, at the moment, human-assisted, is combined with an economic metric, as encoded in the smart contract. If one takes a dystopian view, the project, loosely paralleling certain concerns about hypothetical self-replicating AIs, perhaps shows a future where mechanical things make themselves over and over, with human beings as mere workers or artisans operating under the (benevolent?) guidance of the an automated, financialised network.

Questioning Some Shibboleths: Доверяй, но проверяй

In the FF/ACF discussion, the word ‘trust’ kept coming up.  All the while, I was reminded of U.S. President Reagan’s little joke phrase he’d trot out regularly at his meetings with General Secretary Gorbachev: “Trust, but verify”.

In Nakamoto’s original technical paper, in which he drew up the bitcoin idea, he quite explicitly describes it as a system not predicated on trust. Specifically, it doesn’t require participants to trust the keeper, whether governmental or corporate, of the central ledger, as was the case with bank deposits or bonds. In fact, the technology makes distinctly non-idealistic assumptions: rational actors, often intensely individualistic even quasi-autistic, who don’t know each other, thus have no reason to trust each other or any third party.  Hence the importance of ensuring that each transaction can be authenticated and verified independently and quickly.

Other words came up in our discussion: ’emancipatory’, ‘radical’, which appear to be sentiments that come in from the hype around bitcoin. A cursory Google search tells us bitcoin and other crypto-currencies would eliminate the need for governments, central banks, courts, international law. Many of these aspirations seemed to gloss over the point that bitcoin doesn’t operate in a vacuum, it needs telecom networks and lots of computers, and in most cases, it interacts with real world laws and regulations. These quasi-public goods represent a societal subsidy (or shackle), often by profit-maximising evil capitalists and neoliberal-infected governments. Moreover, even self-executing ‘smart contracts’, pace theory, are unlikely to do away with disputes or fraud. What about when the system makes a mistake or simply breaks? Just as in the real world, we keep a wary eye on cash wallets, in the digital world, there will presumably be a need for users to constantly monitor digital balances, as well as familiarise themselves with applicable Terms & Conditions (which most of us currently Ignore & Accept). When something bad happens, counter-parties may, in extremis, need to resort to boring physical-world things like courts, lawyers, and contracts. As an aside though, Vitalik Buterin, the main force behind Ethereum, has proposed a ‘decentralised court’ that would arbitrate disputes.

My view, and I think that of some in the FF/ACFL room, was that the blockchain technology isn’t inherently emancipatory, just as it isn’t inherently repressive. As Vinay Gupta pointed out, blockchain can be used to support pretty much any political outlook. In fact, the reason banks are interested in it is pretty tedious stuff: it might dramatically shorten the amount of time it takes to finalise transactions in bonds, stocks, and other financial instruments. It might also minimise the risk of double-counting money or assets during the payment settlement period, as mentioned above. Similarly, governments are interested in blockchain because it might reduce tax fraud, make for a safer financial system, better track eligibility for welfare support, and increase employment.

Steve Fletcher at Carroll/Fletcher Gallery noted the ecological cost associated with implementing blockchain – again, hardly something that fits comfortably in the radical story-line. The ecological cost arises from the electricity utilisation of thousands of computers that, collectively, form the network which underpins the distributed ledger. These computers are constantly running to process transactions, a process sometimes called ‘mining’ (analogy with mining gold), and this eats up lots of power.

At a poetic level, insofar as economics can be looked at poetically, this process, called ‘proof-of-work’ in the blockchain jargon, is a loose analogy to what I originally defined money as: a socialised claim on labour (or assets). Hence, it would almost be philosophically perverse to expect a form of money, digital or physical, that did not perform this almost-sacramental act of abstracting labour into monetary value.

From another perspective, and this lies beyond the scope of this post, I’m also not sure how scalable the various blockchain technologies are – if everyone in the world used blockchain for all transactions, does that imply a huge increase in mining processes (with consequent ecological cost), or can a very limited stream of proofs-of-work be used to support all transactions? While blockchain might reduce the need for trust (in government or big corporations), it does so tortuously and expensively; I can’t help sensing a vague analogy with American survivalists who flee the Federal government for a rural homestead, armed-to-the-teeth and stocked with tinned provisions, bleakly awaiting the End of Days.

In summary

The FF/ACFL programme was a great opportunity to bounce ideas around, without a tightly-framed artistic, commercial, or ideological agenda. What I’ve tried to do here is sketch out how one might think about money generally, using the metrics of authentication, anonymity, convenience, fungibility, and contract, and apply these metrics to the bitcoin/blockchain complex. What seems to emerge is a potential for blockchain to devolve mechanisms and processes for funding for artists, as well as allowing various players in the arts ecosystem – artists, collectors, viewers, curators, and others – to define how they want to interact, with the possibility that sharing and artwork almost merge, or at least become as two sides of the same coin. Both of these potentialities seem more evolutionary than revolutionary. Other approaches offer fertile ground for exploring bio-politics and auto-generative physical artworks. A constant I observed through the entire conference was the inherent ambiguity of the technology: in contrast to the original libertarian or revolutionary claims made for bitcoin, the evolution of the technology today seems to offer as many risks of a dystopian future as emancipatory opportunities.

U. Kanad Chakrabarti  is an artist and former banker based in New York and London.

 

Neoliberal Lulz at Carroll / Fletcher

Carroll/Fletcher Gallery’s soon-to-shut exhibition Neoliberal Lulz takes a look at manifestations of capitalism, and specifically at the joint-stock company, a form of social organisation that is both broadly criticised and utterly indispensable.

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Femke Herregraven ‘Rogue Waves’ 2015, engraved aluminium sticks. Source: Carroll / Fletcher

The press release invokes the fall of the gold standard in 1971, but the more resonant historical starting point is the 2008 Global Financial Crisis (GFC), the aftermath of which we are, arguably, only halfway through.  The artists in the show intertwine a perspective on the GFC with parallel, and more than incidentally related, developments in Western consumerist society, technology and politics.  In comparison other work on similar themes out there, this is a sophisticated take, aestheticised with high production values.  It is also muted: no screeching about Late Capitalism – yet it remains an eminently political and punchy show.

Constant Dullaart, Femke Herregraven, Emilie Brout & Maxime Marion, and Jennifer Lyn Morone combined investigations into the mechanics of financial capitalism, particularly the corporation, with elements of contemporary social discourse, such as privacy in a networked world, corporate tax evasion, or the visuals of ubiquitous advertising.  From a material perspective, the exhibition was very long video and web, and short to the tune of 20,000 shares sold online to the public.  The physical stuff on display was slick – perspex, photographs, CGI video, machined aluminium, etched glass, careful ink-on-paper drawing, neon.  One could easily see in this show the genealogy of Haacke, Sekula, Klein, and the aesthetics-of-administration, albeit less explicitly applied here to the Artworld.

Herregraven’s work, I thought, took the subtlest approach – he seemed to focus on the terminology of high-frequency trading, and its emphasis on ultra-short timescales, the so-called ‘latency’ of a stock order-routing network. Machined aluminium bars both recalled a graph of pulses in a fibre-optic cable, as well as a more archaic currency: the Spartan legislator Lycurgus, perhaps to prevent the corrosive influence of ‘easy’ money in society, mandated that gold and silver coins be replaced by heavy and unwieldy iron bars.  In doing so, any usefulness of money that stemmed from its portability would be eliminated, leaving only its function as a numeraire.

In another work, Herregraven worked with Dutch technologists to make an online game of tax avoidance – players could organise the corporate structure of their (fictional) companies to minimise tax bills.  This reflects the contemporary anger about multinationals using the tax code to drastically cut their taxes.  There’s an ambiguity here that oft goes unmentioned: the companies are generally using perfectly legal means, and mostly complying with laws that democratically-elected legislators have enacted.  Thus to get angry (only) at the companies is to overlook the fact that politicians, the system, and indeed, in many cases, voters themselves, are at fault.  I recall a U.S. appellate-court judge, the brilliantly-named Learned Hand, commenting on taxation: ‘Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.’ (in Helvering vs Gregory [1934] Source: Chirelstein, Marvin A. Learned Hand’s Contribution to the Law of Tax Avoidance in Yale Law Journal Vol 77, 1968.  http://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=5558&context=fss_papers).

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Emilie Brout & Maxime Marion ‘Untitled Sas’ 2015. Source: Carroll / Fletcher

Emilie Brout and Maxime Marion established a French company, the sole purpose of which was to be a work of art, and are selling shares in the company online (http://www.untitledsas.com/).  As a corporate shell with no debt, its value is lower-bounded by the cash it holds from share subscriptions, while the sky is the limit on the upside, and indeed the company is now worth €300,000.  In doing so, they reference and update Yves Klein’s conceptual share-certificate work Zone of Immaterial Pictorial Sensibility (1959).  They were advised by a French legal firm, presumably to ensure regulatory compliance for share offerings – something that is not merely a technical footnote.  Although the facts are quite different, one may for illustration and amusement read about the 2015 Sand Hill Exchange case: what might happen when the ‘fun’ aspect of an online game, interacts with pedantic, boring, and ever so aggressively-enforced SEC rules (https://www.sec.gov/news/pressrelease/2015-123.html).

In another, slightly more predictable work, they ordered free samples of gold-coloured objects, which were then framed along with texts that document where and how they were produced.  The works seemed to comment on labour, production chains, and whether things described as ‘free’ or ‘costless’ really are so (thus tying in nicely with Morone below).  They also echo Christopher Williams’ practice that exposes, via attached text or books, the documentation, material, bureaucracy and geography of the banal objects he photographs, albeit without the beauty or intense staging that Williams brings to bear on the images themselves.

Jennifer Lyn Morone continued with the idea of the corporate entity, in this case, incorporating herself and selling shares.  Her specific angle relates to the contention that internet-users collectively give away an enormous amount of personal data to the companies that provide internet services.  Even if the data is aggregated and anonymised, it is still valuable as it correlates geography, consumption (eating, buying, browsing) patterns, social networks, medical anxieties (as evidenced by web searches), political allegiances, and so forth.  We give this up in exchange for free, or the perception of free, access to the internet and perhaps even consumer goods (Shoshana Zuboff wrote a great piece on this in the Frankfurter Allegemeine Zeitung http://www.faz.net/aktuell/feuilleton/debatten/the-digital-debate/shoshana-zuboff-secrets-of-surveillance-capitalism-14103616.html).  Morone’s concept and videos, and its connections to bio-politics, are considerably more thought-provoking than her somewhat forced manufactured objects that cross consumer design and advertising: perfume-on-a-plinth or diamonds-made-from-hair.

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Jennifer Lyn Morone ‘JLM Inc Promotional Video’ 2014. Source: Carroll / Fletcher

Lastly, Constant Dullaart had a number of video and image-based works that reflected on corporate design and branding, as well as the fact that companies develop technology that is used for purposes that not everyone agrees with, so-called ‘dual-use’: in this case, spyware that might have been utilised to monitor various political activities during the 2014 Arab Spring.  These works were all well-made, but other than the large photographs in the front room, they didn’t seem particularly strong aesthetically or conceptually: I didn’t discern a lot of new ideas or imaginative re-workings of old ideas.

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Constant Dullaart ‘Most likely involved in sales of intrusive privacy breaching software and hardware solutions to oppressive governments during so called Arab Spring’ 2014. Source: Carroll / Fletcher

The exhibition as a whole, however, provides a different take to other relevant recent shows.  For instance, Show Me the Money: The Image of Finance, 1700 to the Present (2014-2016), is a particularly comprehensive and historical look at finance and financial crises.  The academic curators have, admirably, taken on difficult topics and tried to make them somewhat accessible to a general audience.  Furtherfield’s Art Data Money (2015) programme had some overlap with the Carroll/Fletcher exhibition (Morone and Brout/Marion were shown), but with a more explicit political agenda and with much greater emphasis on social engagement/participation.  Carroll/Fletcher’s conceptual cross between corporate structure and technology, delivered as a tasteful and elegant exhibition in a major for-profit gallery points out what is really at stake here: the inherent ambiguity we face in criticising capitalism while sitting comfortably within its consumerist cocoon.

A Few Questions on Stranded Assets

Now for a post that’s a bit different from the usual rants about food or art:

‘Stranded Assets’ are a somewhat emotive topic that have moved from the relative backwater of Guardian-readership into mainstream investing thought.  The issue has been simmering away since about 2011, entwined with various fossil-fuel divestment campaigns, and headline-grabbing art performances.  Meanwhile, relatively quietly and in the more prosaic world of investment management, coalitions of investors, purely out of gimlet-eyed self-interest, have been pressuring the corporate world to take the threat of climate change more seriously.  With the 2015 COP21 climate-change conference in Paris, and Mark Carney’s widely-publicised intervention, the issue moved onto the front-pages.  We wanted to ask a few questions to assess how this issue might evolve, and how much, if any, is already priced into oil & gas stocks.

Is this a fringe issue or a real risk to investors?

Some investors, oil companies, and media have tried to paint the issue as something dreamt up by coddled, rich-world tree-huggers that has no relevance to actual portfolio allocation decisions.  While at one point this might have been true, it is no longer a gap-year fringe issue.  Look at BOE Governor Carney’s letter to insurers delivered at Lloyd’s in September 2015,  an HSBC research report from April 2015 on stranded assets, or Michael Bloomberg’s chairmanship of the Financial Stability Board (FSB) disclosure panel on climate-related financial risks.

What exactly is the financial risk?

There are at least 3 components to the financial risk to an investment portfolio.  Firstly, to the extent climate change causes substantial, secular changes to the global economy, most obviously a higher frequency of natural disasters (hurricanes, flooding, etc.), this could have implications for insurers’ liabilities as well as for broader portfolios with significant EM concentrations.  Much of these risks are concentrated in the significant equity/debt markets of Latin America and South/Southeast Asia.  So we are talking increasingly-frequent and large natural-disaster-related losses distributed across broad-market portfolios.

Secondly, if one believes that the 2° C global-warming target is something that, from a regulatory perspective, is likely to be enforced – meaning that most global regulators are likely to comply with their COP21 commitments to bring down emissions to a level consistent with this target – then it would appear that much of the world’s coal, oil, and gas reserves would be un-burnable.  Therefore, the reasoning goes, because the traded energy groups are partially valued using their hydrocarbon reserves, this would have significant negative implications for their market valuations.  In theory, if this regulatory response happened overnight, there would be a massive drop in energy group stocks, associated drops in utility shares, as well as companies that support the energy complex (pipes, pumps, etc.).  Given these sectors’ contribution (Vanguard’s all-world VT ETF is 13.7% invested in energy, basic materials, and utilities), there would be implications for broad indices, and therefore pensions, endowments.  Insurance companies, already exposed above on their liability side, may also run risks on assets.

Obviously this isn’t going to happen overnight. There are other caveats: technology to lower carbon emissions might improve – though, carbon capture & storage (‘CCS’) doesn’t appear to be going anywhere fast.  Also, much of the world’s oil & gas is owned by national oil companies (‘NOCs’) who aren’t investible anyway and operate in countries, such as Iran, Iraq and Saudi Arabia, where the regulatory response to COP21 may be quite different from that in the US/EU.

Lastly, carbon risk is tied up with oil-price risk.  At current prices, much of the reserves of certain oil & gas companies is uneconomical to exploit – Russian Arctic oil, Canadian tar sands, shale all need prices between $80-120 range to be profitable.  These assets can be said to be, to a greater or lesser extent, economically stranded due to low oil prices.

How might this play out?

From a pragmatic perspective, the risk to portfolios lies over a 1-3 year horizon, as the regulatory response evolves.  The risk also lies in large institutional investors themselves placing pressure on companies, or indeed divesting, from fossil-fuel groups.  To the extent that investor coalitions, such as the IIGCC, which represents €13TN of assets, can gradually push energy companies to publish sensitivity analyses, at least the scale of the problem at an individual company level would become clearer.

At present, companies and equity analysts are able to assess the impact of prices on reserve valuation.  But it is much harder to disentangle the parallel effects of oil prices and climate-change regulation on the value of reserves.  Absent any other information, the base-case assumption might be that companies under pressure on carbon-emission regulation, would exploit their lowest-cost reserves first and mothball high-breakeven reserves.

In 2015/2016 there have been a number of high-profile divestments, particularly from coal groups, for instance by the Danish fund AP2, the Rockefeller Family Office, and the Norwegian Government Pension Fund.  There will undoubtedly be more – though it’s not clear that divestments, at least at the current rate, pose a significant portfolio threat to investors, since someone else buys those shares at the market price.

A game-changer could be if more SWFs joined Norway in either divesting or aggressively pushing for changes in company policies, not least because they are amongst the largest investors, with the most patient capital, and with potential access to infrastructure projects and assets that are not publicly traded.  Moreover, the biggest SWFs often belong to hydrocarbon exporters, who, one might imagine, would like to diversify their exposure away from energy.

China is another force to watch – in the 13th 5-year Plan, to be announced in March 2016 – there are expectations of significant initiatives to reduce carbon emissions and promote green technology.  The date often mentioned is 2030, when China’s carbon emissions are expected to peak, but until the Plan is actually announced it’s not clear what, if any, immediate steps are expected.

On the other hand, a more granular picture on regulatory response scenarios is provided in a paper from the Grantham Research Institute.  The interesting bit of it is as suspected – in what sense is it fair to ask EM countries, significantly poorer per-capita than the DMs, to bear the inevitable costs, howsoever pro-rated, of transitioning to a low-carbon environment?  Moreover, how reasonable is it to expect that countries who have short or non-existent histories of civil society/institutions, a record of policy reversals, endemic corruption, and weak states, will embark on, and deliver on, COP21 commitments that are intensely challenging, from institutional, legal, political, financial, and technological perspectives.  The report, euphemistically, highlights Argentina, China, India, Indonesia, Saudi Arabia as having ‘potential for increasing support [for implementing COP21 commitments]’.  Lest our SUV-driving North American friends pat themselves on the back, neither the U.S. nor Canada do much better in the report.  So it’s quite possible that, from a regulatory perspective, very little happens in the next few years; though that would seem to imply that the necessary adjustment to policies, and therefore investment portfolios, when it inevitably comes, will be that much more severe.

How have the oil & gas companies responded?

As stated above, the quality of disclosure and sensitivity analyses is presently most inadequate.  Even so, European majors score better – for instance, Shell, Total, Repsol, GALP all score highly on the Carbon Disclosure Project’s rankings. Chevron and Exxon Mobil are on record as being resistant to shareholder resolutions proposed in 2015.  However, Exxon Mobil did produce a climate-change disclosure report in 2014, albeit without any meaningful sensitivity analysis.  More specific information on company responses, including mining groups, can be found at the Association of Chartered Certified Accountants.

Exxon Mobil’s 2016 energy outlook, which covers the period out to 2040, provided their take on how carbon reduction commitments might be met for the system as a whole, namely through dramatic reductions in carbon-dioxide and energy intensities (50% and 40% respectively).  According to the FT, this stretches credibility given apparent lack of political will, certainly in the US and even in the EU, as well as an inadequately high carbon price.  Looking at the price of American gasoline and the alacrity with which people drive in most of the U.S., outside Manhattan anyway, I can see the pink paper’s point.

Lastly, some companies, such as Total SA have invested in renewable energy as a hedge, howsoever small, to their extractive activities.

Is the risk already priced in?

At current oil prices (Brent future for December 2018 delivery is $46), the market recognises that certain high-breakeven reserves, such as in the Arctic or in Canadian tar sands, are unlikely to be monetisable.  Thus, economic stranding is reflected in share prices of groups and funds that are highly exposed to these reservoirs.  It is much less likely that the risk is priced in for the integrated majors, given their diverse properties and mid- and down-stream operations.  It is even less likely to be priced in for utilities and infrastructure companies.  Again, there doesn’t seem to be much analysis or disclosure around the (presumably) differing sensitivities to economic and carbon-related stranding, in part because the regulatory regime that would drive this is yet to be announced.

How to play this?

At the moment, this is basically a structural risk that’s relatively hard to avoid – since in theory everyone from energy companies to utilities to car-makers are somewhat exposed.  Moreover, energy groups are steady dividend payers, for now anyway, so dropping them has a significant financial cost.  Thirdly, coal is mined by integrated miners who also pull other stuff out of the ground, so divesting coal might mean losing much of the metals & minerals complex.

The simplest approach, for a small or passive investor if not the system as a whole, is to remain invested in a broad index, and hope for the best.  There are two reasons for this: one is that, depending on how the situation plays out, portfolio impacts could vary tremendously.  Mercer Consulting highlight drastically different return and composition-of-return scenarios depending on whether regulatory and investor actions prompt rapid, proactive and coordinated, as opposed to, delayed and fragmented, responses.  Thus, this risk could be viewed as an exogenous factor, a bit like catastrophe, war, or un-planned death, that cannot be diversified away simply or costlessly.

The ‘dumb’ strategy above can be improved by removing coal, which no one has anything good to say about (not even Goldman Sachs), and (possibly) by removing high-breakeven companies, such as those involved in Canadian sands or US shale.  Whether one then tilts the portfolio from oil to the relatively cleaner gas becomes a judgement call.  Further tilts are possible away from E&P towards pipelines, infrastructure, refining, or distribution, again probably with diminishing returns (in terms of yield/concentration trade-off).

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Vanguard VT (all-world ETF) against two ‘low-carbon’ ETFs Source: E*Trade

Some new ETFs, including CRBN from iShares and LOWC from State Street/SPDR follow indices with lower carbon footprints, such as the MSCI ACWI Low Carbon Target Index, jiggling other index constituents to achieve similar dividend yields and correlation with the much broader all-world MSCI ACWI Index.  This chart above shows performance relative to Vanguard’s all-world ETF VT, albeit over the slightly meaningless timeframe of a year.  These ETFs use company disclosures on emissions to re-weight their allocations, but it’s not entirely transparent how meaningfully exposure to carbon regulation has actually been reduced: for instance, Exxon Mobil and Chevron are still in the portfolios, albeit at tiny allocations, while Enbridge Inc, a gas-pipeline operator and Ultrapar, a Brazilian conglomerate with downstream operations represent meaningful holdings in LOWC, while not showing up at all in VT.

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Clean energy ETFs compared to VT (Vanguard all-world) and VDE (Vanguard energy) ETFs on 5-yr horizon

A complement to the approaches above could be investing in clean, renewable, alternative energy and related companies.  There are a number of ETFs in the space (ICLN, PZD, QCLN, FAN, NLR, KWT, YLCO, GEX).  Most of them look like dogs: over 5 years they’ve substantially under-performed the broad market (VT) as well as energy (say VDE) ETFs.  Fukushima Dai-ichi wiped out the uranium ETF.  Over 3 years the others seem to have gone through a bubble as oil prices went up, making their relatively-expensive technologies look viable.  Then, in the last year as oil prices have crashed, substitution effect has made green technologies again look uneconomic.  So unless one believes substantial subsidies for green tech are forthcoming, that oil prices will shoot back up, or that regulatory and public attitudes towards nuclear will change, these feel a lot like a levered play on oil prices, where investment timing becomes critical.  However, within this universe, specific plays might be interesting (such as measurement companies or water-treatment companies), due to the diversity of their businesses and/or relative independence from subsidies and oil prices.

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The clean-energy bubble (2013-2016)
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Clean energy follows oil down in 2015-2016

Thai Food in Queens

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Decorative vases – these are used to cook rice and certain other dishes. A wicker basket is placed above to steam glutinous (sticky) rice, a staple of Southern Thailand.

One of the jewels in NYC’s food scene is the cluster of Thai restaurants in central Queens, around Jackson Heights and East Elmhurst, at the confluence of the 7 and E/F subway lines. As in other regional centres around the city, whether Flushing (Chinese), or Coney Island (former USSR), there is a culinary infrastructure of markets, dry-goods shops, restaurants, and critically, old ladies keeping the eateries honest.

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Grilled Thai sausage at Zabb

Thai is of particular interest precisely because I’ve found it to be rare in Western cities – Thailand, unlike Vietnam and Cambodia, had a relatively peaceful twentieth-century.  Nor was it substantially colonised. Hence there was less of a diaspora; the exodus that led to the awesome Vietnamese food of Paris, or the widespread, if often dubious, ‘Indian’ food in the UK.  London has only a few decent Thai restaurants.  Som Saa is run by non-Thais, but they, as so often, do a better job of it than natives.  It had a fantastic energy when it was in the chaos of Climpson’s Arch, and I’m looking forward to their permanent digs.  Nahm I never quite felt comfortable in, sweating bullets and hyperventilating always felt wrong in the expensively-bought serenity of Belgravia.

NYC’s Thai food scene hit the big-time with Andy Ricker’s Pok Pok Ny, which has great food.  Personally, the pleasure sort of drops out of it when one sees the crowd – the Brooklyn/Manhattan food-tourism bunch, clutching their iPhones, seeking out the hottest new restaurant on Timeout.

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Zabb: sour bamboo shoot curry with prawns, and a catfish larp

For my money (and it would be a lot cheaper than any of the above), I would head out to Queens.  On a weekday one might see no crackers unimaginatively munching on pad-thai, there are actual Thai families feasting, there are almost entirely Thai staff in the kitchen, often supervised by a portly mama, and when one’s done, there’s the supermarket nearby to pick up kaffir-lime leaves and frozen krachai.

This list is non-exhaustive, both in terms of restaurants and menus.  Pick up David Thompson’s (aforementioned Nahm) Aharn Thai / Thai Food, it will tell more than you ever wanted to know about culture, history, traditions, ingredients, and recipes.  The recipes are quite elaborate and few will follow them precisely, but they are useful as a canonical reference to be modified as ingredients, time, skill, and patience dictate.  Unless otherwise mentioned, Thompson is a principal source of background material below.  The book I actually use to cook is by Vatcharin Bhumichitr – a pragmatic volume that allows for shortcuts (for instance, taking a base red-curry paste, modifying it slightly to emulate other, similar, curry pastes).

Playground (Woodside Ave)

This is pretty awesome – a karaoke bar crossed with Thai restaurant, ironically next to the old Zabb space (below). Food is reliably spicy and a well-heeled Thai clientele, not dis-similar to Khao Kang, albeit a more comfortable space. As of Oct 2017, this feels like one of the top spots in Woodside/Jackson Heights.

Playground in Woodside: a boiled curry of fish, prawns (no coconut milk); and super spicy kua kling (dry minced pork curry) from the south

Zabb Elee  (Woodside Ave, don’t know anything about the Manhattan branch)

[Note Oct 2017: this review hasn’t been updated – but briefly, Zabb received a Michelin star in 2015 but has lost it in 2016, and seems to have changed ownership and name – the food is now merely okay, and mostly Isarn-style (Northeast)]. Isarn food has been trendy for a few years (Pok Pok Ny, Som Saa to some extent).  The region is a plateau of 200m, and critically, near the great Mekong river, snaking along the border with Laos and Cambodia.  Until recently, the land was densely wooded, inaccessible, and rural.  The people of the region are a mix of Khmer and Lao, with the Thai being relative newcomers from the 10th-century.  The land and people were poor, and the food pungent and spicy, so as to better relieve the monotony of white rice.  Unlike the south, glutinous rice and coconuts are not features of the cuisine.  Fermented fish (pla raa), raw minced meat salad (larp), a cornucopia of herbs, and grilling, as opposed to the elaborately cooked curries of Bangkok, are the norm here.

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One of the noodle soups at Zabb with basil, pickled mustard greens, a fish ball I think. On the side is the Lao salad with fermented fish and crabs, and pork rinds.

My favourites on Zabb’s menu: the grilled Thai sausage is superb, redolent of lime leaves and ginger.  The yellow curry with bamboo shoot was awesome – a curry with a base of fermented fish (not that one necessarily can tell, the fishiness has been tempered and balanced as so often in the Thai repertoire), and the delicious aroma of sheets of fresh bamboo shoots.  Bamboo shoots are fiddly to prepare, so this is a great dish to eat out (as is the sausage).  Naamya Pa and Pak Tai were both good.  The Lao Soup was excellent – a darkish broth – very different from the other soups, perhaps meat-based – and, in a pleasant surprise, the chicken version was quite different from the catfish.  A word on Southeast-Asian catfish – I believe these might be from the Mekong river – they are pretty bony, but eventually one works out the structure.  Still, I don’t love them, but they contribute a lot of flavour.

 

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Inside Sake Bar Zabb

On the salad front, there was a sausage of raw and sliced pork sausage with papaya – it was interesting, funnily, though the sliced sausage reminded me of the gross hybrid of pate and baloney meat found in ‘authentic’ Vietnamese sandwiches. In a salad, however, somehow it worked.  The Lao papaya salad with fermented fish and tiny purple preserved crabs was pretty good, but like many papaya salads, too sweet for me personally.  The larp ironically, weren’t my favourite – I prefer to use lime leaves, lemongrass and loads of roasted rice – whereas Zabb’s were closer to Thompson’s canonical, simpler, version.  Having said that, I had the catfish, and chicken, varieties, and both were great.  They also have duck, beef, pork, pork liver, pork ear, crispy pork, and crispy fish – knock yourself out.

Sake Bar Zabb

While at Zabb, or probably on another day, check out the izakaya downstairs.  Unrelated to the Thai restaurant, other than by name, the basement joint was started by a young Thai guy passionate about Japanese food.  He has made a drinking den that could easily fit under the Yurakucho Arches at Tokyo Central.  The Sapporo pitchers are super, as are the crazy, mayonnaise-and-eel sauce drenched rolls.

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Sushi at Sake Bar Zabb

Kitchen 79 (Jackson Heights)

This place, with the most insane nightclub interior, was admirably summed up by Robert Sietsema which I’ll struggle to outdo.  But a bit more on the south of the country: there is a low-lying region near Bangkok and then the thin, hilly, monsoon-ridden Isthmus of Kra.  Tourists may know this area as it is near Phuket and Samui, and it is much less isolated than Isarn.  The people are split between Muslims and Buddhists, and the food has something in common with Malaysia and points to the south, influenced as they are by traders plying the sea-route from India.  Apparently there are also some marginal ethnic communities, such as sea gypsies and pygmies in the dark forests.

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The southern style minced chicken at Kitchen 79. The other dish is Pad Ped Pha Duk, sauteed catfish with Thai aubergine and basil

The food of the south is characterised by use of turmeric, coconut, and sour things like tamarind.  Unlike in the north, fish is much eaten, fresh as well as dried.  Not surprisingly, cardamom, cumin, and ginger figure in the cuisine.

Kitchen 79’s sweet staff freely admit that they mostly cater to non-Thai, given their location in the melting-pot that is Jackson Heights. Yet on weekdays at lunchtime, I see plenty of Thai eating there in little groups.  The menu is forced to span all tastes, but I stuck with the stunning Gaeng Tai Pla curry, a brown curry from the south with vegetables and a base of (possibly fermented) mackerel and prawns.  Another standout dish was the Kao Kling Moo, a southern dry curry paste with ground meat (I had chicken).  This was one of the best Thai dishes I’ve had, ever.  Both dishes are intense and spicy, and are much better shared with others.

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Kitchen 79’s version of a Southern curry with prawns & mackerel. Beside is the superb minced chicken in dry curry paste.
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A curry with catfish, though this one is from Zabb (so Northeastern) rather than Southern Thai (Kitchen 79).

Khao Kang (Woodside)

I’m a bit reluctant to post this one – it is tiny, a caff really.  But it’s possibly the best of the lot, because of the variety on offer.  One can see what’s freshly made that day, and try a few things.  The clientele is almost 100% Thai, and young hip ones at that, but enough oldies come in to assure one that standards are being upheld.  No one speaks English particularly well, which is reassuring.  It was interesting to have reference dishes, such as the bamboo curry at Zabb Elee, here made with fish rather than prawns – I preferred this version frankly.  There is also an astoundingly fishy curry here, seemingly made with fish head, smokily complex, intensely spicy, with either palm hearts or bamboo shoots in it – again, a must try.  I find the eggs with pork belly in sweet brown sauce a perfect foil to the other spicy food, and any time they have vegetables, often simply sauteed with ginger and oyster sauce, I take those as well.

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The serving area at Khao Kang
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Eggs cooked in sweetish brown gravy with pork belly and tofu, redolent of star anise, one of the most subtle dishes at Khao Kang
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Greens with prawns, again a very mild sauce, not much more perhaps than stock and ginger, oyster sauce. The other dish is ground pork with basil.
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Anytime bamboo shoots are available, grab with both hands. These are slivered shoots with prawns. Both Khao Kang and Zabb also make a curry with sheets of shoots, as it were.

Paet Rio (Broadway)

The food is very good here, with lovely service and the place is stylishly decorated.  I don’t have a specific recommendation, but do recall an intensely spicy catfish curry with Thai globe aubergines and green peppercorns.  My fondness for this place comes down to the owner, who ran a tiny takeaway in Hell’s Kitchen called Wondee Siam – this was where I first ate real Thai food in 1997 – before taking rooms in Bangkok’s Oriental Hotel, the doyenne of Asia’s grand hotels.  I understand Wondee has perhaps changed, subject to the forces that are altering much of the formerly-deserted bits of Manhattan, but Paet Rio keeps the fire going, and boy, do you feel the burn….

Eim Khao Mun Khai (Broadway)

In that blessed kilometre of Broadway, with its string of 7 Thai places (at last count), I rate this one for uniqueness.  China’s southernmost province, Hainan, sent traders out all over Southeast Asia.  They brought with them a dish of chicken poached in a stock; rice cooked in the fatty broth of the chicken; the broth served again as a ginger-laden soup.  Often the stock itself incorporates a ‘master stock’, one that has been boiled, clarified, chilled, and re-boiled hundreds of times, until it gets an unparalleled depth of flavour.  Eim Khao Mun Khai serves only one dish, poached chicken on rice with broth on the side.  It was very tasty, even though schmaltz, isn’t really my thing, whether in Yiddish or Hainanese.  I thought their version possibly was a bit lighter than the Singaporean take on the dish…

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Hainan chicken rice

Sugar (Broadway)

This is notable as a grocery for ingredients, as well as a place to buy some prepared food, and particularly, tubs of various curries and dishes, that I happened to have seen at Khao Kang. Possibly they have the same owner.  There are also sweets, if one likes Thai sweets (I’m not a particular fan).  It is also a sort of clearing-house for advertisments, and a youth-club.  One can also get a mortar and pestle, important for making Thai food; note however, this type (terracotta) is only suitable for making soft things like papaya salad.  A curry paste is better made in a granite mortar, best ordered online. The Thai grocery on Woodside Ave near Ayada sells one, but it’s too large, pricey, and feels aimed at the Westerner slumming it in Queens.

Sripraphai and Ayada (Woodside)

I have eaten at both, but to be honest, stuck with the more ‘particular’ places above.  Both are very good, and were pioneers a few years back when there wasn’t that much Thai food in Queens, never mind NYC as a whole.  Now they have become the best known Thai places and are mobbed by brunch-eaters from Manhattan and giggling Midwestern tourists.  Probably weekday lunches are still good.

Arunee Thai (Jackson Heights)

This is supposed to be good, but I had a lunch-special dish there and didn’t particularly rate it.  Perhaps it should be given another chance off the regular menu.

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A must-have to make Thai curry pastes
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My own take on a krachai-infused jungle curry, with pangasius (a type of intensively-farmed catfish available in boneless frozen fillets, inoffensive and utterly tasteless, complementary to most curry-type preparations. From Vietnam. The sauce just behind is lime juice, chili, garlic, and fresh chili – useful to pep up any dish).

Thai Grocery

There are two I know of – one across from Sripraphai and another across from Ayada.  Pok Pok Ny’s Andy Ricker seems to like both.  I prefer the former – a very sweet owner, who took the time to tell me about restaurants in the area, the differences between various ingredients, and seemed to have fair prices.  I picked up pickled mustard greens, lemongrass, and a few odds and ends.  I would stay away from the Chinese supermarkets, if possible, for specific Thai ingredients: the green birds-eye chilis (so called ‘scuds’ by Thompson) were past their best and not remotely spicy, and the frozen galangal was water-logged.  The supermarkets are fine for greens, but I’ve tended to go to Patel Brothers and Subzi Mandi in Jackson Heights – prices are good and stuff is fresh.  Fish, prawns, etc. needless to say should only be bought in Manhattan (Chelsea Market’s The Lobster Place has great things mostly at fair prices, and I’m told the fishmonger Rainbo’s at Essex Street Market is good, at least better than the Chinese one in ESM).

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Thai medicaments, salves, balsams, and tonics at the grocery across from SriPraPhai
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The Thai grocery across from SripPraPhai. The best place for dry, preserved and frozen ingredients. Don’t have greens or fresh fish/meat.