Friday, March 21, 2008

Subprime bubbly anyone?

A long long time ago when I was studying macro economics in America, I learned great deal of interesting things about supply and demand, and too much money chasing too few goods, and how much someone coming out of three months in the jungle would pay for one hamburger, but the most useful piece of information was this: follow the dollar.

Now you can be a dollar fan or a euro fan these days but the point, that if you start with the money angle you will understand a lot more, a lot faster, is the same. Because, basically, if you haven't got the money to do what you want, whether it is AIDS or wine, the myriad of related information and possibilities about how you do it becomes respectively, a) less relevant and b) less possible.

So, having written all that I could this week, about the expansion of the champagne growing area, I sat down finally read the Financial Times, only to find I had missed a key point.

The head line of the editorial was 'Subprime bubbly' – yes, yes, I borrowed it - and in it, they referred to the possibility of now calling the AOC champagne growing area - and I still kick myself that I didn't think of it - was 'appellation d'origine décontrôlée?'.

The thrust of the article was the possible counterintuitive logic of the Champenois - 'as petulant as they are pétillant', the FT said - expanding production area of what is essentially a luxury good, just as we are in the middle of a 'profound and puzzling financial crisis'.

Well of course they may or may not have realised, and I reckon they did, that it will not be until 2020 or so that any new champagne volumes actually come onto the market, and who knows what might happen by then.

But their main point was be careful when you debase a currency, or a product, as mortgages were in the US. You end up getting downgraded.

Now could it be possible? That champagne could lose its cachet? After all I like the taste, not the fact that it costs a lot or is hard to find. That yeasty, dry, minerally, tang. That is what I love. And more of it would welcome. At least so I thought. Until I remembered a strange few months in my life, even longer ago than when I was studying macroeconomics.

I was living with my then boyfriend in a house in the sticks (American/Irish word for countryside), which had two things: a) no parents as they were divorcing so the dad was living with his mistress and the mother had retreated to London, and b) a large cellar full of Louis Latour, Chablis and Sancerre, and the good Widow, Veuve Cliquot.

Anyway, I am ashamed to say, we forced the lock and made hay while the sun shone. I remember telling someone I had drunk so much champagne 'my pee was fizzy'. And yes, in the end I got literally and fashionably, sick of the stuff.

Hence the move to the Louis Latour. I didn't have time to get sick of that because both parents loomed and the house was sold and we were out on our ears.

So yes, you can get sick of champagne. Just like anything else. In all reality I doubt the expansion area will increase volumes enough to sicken anyone, but it is something worth bearing in mind.

And just now, creeping into the press, at least in the US, I see signs already, little snipes, that this move could reduce champagne quality.

Luckily, I have no fears. The Champenois are as avid readers of the financial press as I am, and I am confident they know enough not to make the same mistake as they are alleged to have done in the lead up to New Year's Eve 1999, when there were all sorts of rumours flying around, about over production and falling quality.

They know that traders drink to celebrate and to commiserate (Bear Stearns). They know people never drink bottles champagne alone (except me). They know that a French woman of 110 has just claimed that her remarkable age and health are down to drinking champagne and putting honey in her tea. And they are canny enough that when headlines appear about wine shrinking the brain, they speak only of 'champagne', and when headlines appear about how good wine is for your health, they speak only of their wine. They are, in short, dollar followers.

Now, must rush, as to celebrate the end of Lent, I am off to buy the best possible bottle of champagne and, like man who comes out of the forest in search of a hamburger, I am ready to pay over the odds.

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