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Tuesday, April 18, 2017

Veneto & Friuli: April 2017

From our base in Budapest, we took a one week trip, April 2 - 9, to the Veneto and Friuli region of Italy. The area has always been shrouded by the touristic shadow of Venice, but there is much beauty, history and culture here. The Romans established important outposts to protect the trade routes of the Serenissima between Venice and Genoa; and the Brenner Pass, servicing traffic over the Alps and northern Europe. Roman ruins dot the cityscapes.
This strategic importance continued under the benign rule of the Venetians; wealth from agriculture, commerce and the spoils of war paid for the continual beautification of the region’s cities. The palazzi and villas of Veneto’s greatest architect, Andrea Palladio, are telling symbols  of the leisured existence of the area’s aristocrats.

It is a six hour, 550-kilometer drive from Budapest; we arrived a bit after five o’clock to the Savoia Excelsior Palace on the Riva Caduti Per facing the Bay of Trieste. The line is “that if you have nothing good to say, then just say nothing.” Thus, there will be no description of the hotel, our room or its restaurant. We were here for two nights.
After unpacking, we had a quick outing before dinner seeing the expansive Piazza dell’Unita d’Italia with its imposing city hall, and the somewhat tired Canal Grande. Looking at a map, it is clear that Trieste was an important spot coveted over the millennia by many a despot. The Austrian-Hungarian Empire controlled the area for most of the 19th century, home base for its navy. The spot’s natural inclination was to look east. The history is captivating, but I will leave it be. But the final outcome of Trieste was not really settled until the 1975 Treaty of Osimo and the 1992 affirmation of it by the newly minted nation of Slovenia.

Castello del Miramare
There were many lovely sites, a well preserved Roman theatre, the hilltop fortress and church of San Guisto, the Greek Orthodox St. Nicolo among many others. 

Still, the standout attraction was eight kilometers northwest of the city center, the Castello del Miramare. It was built between 1856 and 1860 by architect Carl Junker, along with exquisite gardens spanning 54 acres, for Hapsberg Archduke Maximilian I. Its white exterior walls stretch right to the beautiful blue water of the Adriatic.

We were up early to a warm day, checked out and were off heading west to Vicenza, about a 2 ½ hour, 230-kilometer drive. Our actual destination was Villa Michelangelo in Arcugnano, just south of Vicenza off the A4. The suite was a disappointment; a vision from a bygone era, but not a good one. After unpacking, we drove the short 30 minutes to Vicenza for the day.
We found good parking at the train station, south of the old city, and had a short walk up Valle Roma to Piazza Del Castello. Here starts the Corso Palladio pedestrian avenue that bisects the town. Lining it are some lavish Palladian villas and public buildings; this was once one of the wealthiest cities in the world. We were unable to visit the interior of the Cathedral, but did get into the Chiesa di Santa Corona, a splendid Dominican Church with Gothic interior, built in 1261. The highlight here for me, though, was Teatro Olimpico, built in 1585 and Andrea Palladio’s last work. It is the oldest roofed theatre in the world, drawing inspiration from classical Greek and Roman playhouses. The famous perspective scenery of the Streets of Thebes was designed by Vicenzo Scamozzi. 
Teatro Olimpico

Before our return to the hotel, we drove to another Palladian masterpiece, the Rotonda, built in 1560. The perfectly symmetrical villa consists of a dome rising above a cube; it blends elegantly with its manicured hillside location.
The Rotonda

Back to the hotel about 5:30, we had a well-deserved Prosecco on the terrace and watched the sun drop behind the hilltop. Dinner was down a strange corridor; a small room made less cozy by a lightning storm that had started.  The food and wine were okay, as was the service, but I kept thinking I was dropped into an Agatha Christie novel. The other guests included a quiet but suspicious German couple, retired; a jolly English pair in their 50s, trying too hard to be stylish; and a lithe, skinny woman multi-lingual but clearly Italian, alone; studying very one else a little too intently. As far as I know, no one was murdered (or a least no one discovered).

We were quickly to bed.

Rain threatened in the morning, but by the end of our 60 kilometer drive west on the A4 a very nice day was presenting itself. We found easy parking near the rail station and proceeded up the rather shabby Corso Porta Nuova to the Piazza Bra and its Roman amphitheater. Built in 30 CE, it is the third largest in the world; its interior is still virtually intact and still hosting many events.
Roman Amphitheater - 30 CE

It was then on to Piazza Erbe, with a compulsory stop at Casa di Giulietta, the fictional residence of Juliet in Shakespeare’s “Romeo & Juliet” – a selfie shrine of the highest order! More seriously, we took in the astounding St. Anastasia, begun in 1290. Notable are two water stoups which are supported by i gobbi, or hunchbacks, the earlier dating to 1495 – exquisite craftsmanship.
1495 - Water Stoup

We continued to the banks of the River Adige, whose switchback in direction forms the natural defensive perimeter to all but the south of the ancient city. Here lies the grandeur of the Scaligeri dynasty and, from 1263, their 127-year rule of Verona. The fortifications, bridges and the impressive fortress Castelvecchio still exude their power. Following on along the Adige we made a final stop at San Zeno Maggiore, a Romanesque church built in 1125 to honor Verona’s patron saint, San Zeno. The bell tower, from 1045, reaches 236 feet; the amazing nave ceiling, a wonderful example of a ship’s keel ceiling; and the 1457 altarpiece of Andrea Mantegna.
San Zeno - 1457 Altarpiece

Verona was a highlight; a definite “must see.” Even our lunch was a pleasure; small sandwiches served by a nice, polite and helpful young man. Look it up if you visit; “Osteria Verona” on the Piazza delle Erbe, 34.

After the short drive back to Villa Michaelangelo we had more Prosecco on the terrace; eventually another dinner  - still no bodies discovered.

Or in English, Padua. The morning was foggy, but eventually cleared to sunshine; Padova was about a 45-minute drive east. Parking was once again at the train station, but this time the public lots seemed full. I found a private lot close by, Garage San Marco, probably run by the Mafia. I joked that our rental would be loaded on a lorry about 15-minutes after we left.
Our first and most important stop was to the Scrovegni Chapel. Cappella degli Scrovegni was built by Enrico Scrovegni, hoping to gain salvation for his father, whose great wealth came from usury. The frescoes were painted by the master Giotto in 1303, works of great narrative force depicting scenes from the life of Christ and the Last Judgement, which occupies the entire west wall. We were extremely fortunate to get tickets, each group of 25 visitors has 15-minutes to take in this masterpiece. It is a miniature Sistine Chapel.

Cappella degli Scrovegni
After the visit, we continued into the heart of the old town, visiting the Palazzo della Ragione, the medieval court of justice, that sits astride the grand Piazzas delle Fruiti and delle Erbe. Exiting onto Via Manin we arrived to the Piazza del Doumo and its 12th century church and the Palazzo del Capitanio with its astronomical clock, from 1344. Lunch was at the iconic neo-classic Caffè Pedrocchi, the interiors much more of a delight than the food.
Palazzo del Capitanio
After lunch, we strolled to Piazza del Santo and the Basilica di Sant Antonio (St. Anthony). The church, started in 1231, is in Romanesque Gothic style, with eight domes and spires of eastern inspiration – squint and it could be a mosque. 
Basilica di S. Antonio

The tomb of St. Anthony is here, so it is a pilgrimage stop for people from around the world. The tomb is an explosion to the senses.
St. Anthony's Tomb

The weather continued to be mild as we headed out to Treviso, 1 ¼ hours and 90-kilometers east of the hotel, north of Venice. Despite comparisons to its more famous Venice, Treviso’s fortified city has its own very distinctive charm. We parked near the Domo di Treviso, visiting this 12th century church that contains some wonderful paintings by Titan and Il Pordenone. Via Calmaggiore forms the backbone of the old town, with perpendicular streets crisscrossing the many canals. The atmosphere is quiet and tranquil.
Canals of Treviso

We visited the iconic fish market, situated on an island of the Sile River before lunching at Toni del Spin, risotto with asparagus – very good. 
Toni del Spin

A bit more walking and it was back to Villa Michelangelo in Arcugnano; an abbreviated day of touring. We had a nice bottle of Sütirol Alto Adige Pinot Noir Riserva in our room looking out to the hillside, a 2011 Girlan “Trattmann Mazon” – fabulous! Dinner was out of the hotel; it was a harrowing 10-kilometer drive to the hilltop we looked at from our hotel room, and the "Trattoria Zamboni" – good basic food and wine.

We returned to the hotel and watched the missile strike on Syria on CNN; an intricate piece in Trump’s well thought through Middle East strategy. Depressed about the world, we were off to sleep. 

We were up early and checked out of Villa Michelangelo after spending four evenings there. We were heading to the small Austrian village of Töschling on the northern banks of the Wörthersee. We did, however, have one more city to visit in Italy, Udine. This first stop was east and north of Vicenza, about two hours and just over 200-kilometers.
This was to be a short stop. Udine’s central square is Piazza della Liberta with some very interesting buildings: the pink hued Piazza del Comune, Venetian Gothic (1450); and the Renaissance Porticato San Giovanni and its Clock Tower (1527), crowned by two bronze Moors who strike out the hour.  
Clock Tower
Piazza del Comune

Further along Via Veneto were the Oratorio della Purità and the Duomo, with its octagonal bell tower. Both house frescos and paintings of Giambattita Tiepolo. Before returning to the car, we had cappuccino at the Art Deco Caffé Cartarena, built in 1915.

Caffé Cartarena - 1915

We were back in the car by early afternoon, another 1 ½ hour drive to our hotel, the Schloss Seefels, part of Relais & Chateaux. This was our third visit here; it is a wonderful, welcoming relaxing property on the shores of the tranquil Wörthersee. We had a relaxing late afternoon; dinner was excellent.
Schloss Seefels - View from our Terrace

The following morning after breakfast, we drove back to Budapest, the last leg of this 2,300-kilometer journey to a part of Italy that will be fondly remembered.

Monday, April 17, 2017

Time to Go

I’ve decided to clear some chips in the equity markets, and bring my stock holding to below fifty percent of my asset allocation. Shiller’s cyclically adjusted price to earnings ratio (CAPE) is flirting with 30; similar to levels before the 1929 crash and the 2000 Internet Bubble. I’m most likely early in reducing my exposure. But we will see a big adjustment at some point; at least 25%, probably 40%, maybe more. Federal debt is by most measures 100% of GDP, corporate earnings have been flat or down if one accounts for the massive buyback programs underway. Demography is another downward drag.

Populism is approaching “full bloom” worldwide; it has its name, in fact, because during certain periods the crazy policies it expounds are “popular.” These governments could last five years, perhaps a decade if one looks at history. But history also tells us that the longer they last, the more pain and tears there will be.
Sadder still is what this is doing to society, by that I mean “all of us.” The populists’ playbook is pretty well set: define a majority group of “us” who are the good stock, blame those not it this group for the current troubles, propose some simple solutions to the problems, denigrate expertise of any stripe, discredit the press and the courts; and finally, declare victory.
We have populists in Asia, Europe and America. Turkey’s Erdogan seems to have won yesterday’s referendum to greatly expand his powers. I have heard Erdogan compare democracy to a tram: You can leave it once you reach your stop.”

There doesn’t seem to be a credible rebuttal to this bout of populism; again, history tells us that these movements run their destructive course until conditions deteriorate enough to uncover the fraud and fallacy of the philosophy and the policies. Hopefully this happens before too many bad things happen; and that our institutions remain solid enough to manage the rebuilding process.

As someone once said: "Cash pays nothing but it's looking pretty good." So, I’ve reached my stop – selling will begin tomorrow. This is painful – 23.8% capital gains taxes are nothing to which to trifle; as much as an 8% drain on total sale proceeds for me.

But these times will pass, I’m hopeful for my kids and grand kids. And at some point, stocks will go on sale again, like in 2008 and 2009.