The following is an excerpt of Grant Williams' free weekly newsletter "Things That Make You Go Hmmm..." Click here to subscribe.
The 174-room Algonquin Hotel is situated at 59 West 44th Street in Manhattan. It was opened in 1902 and is designated as a New York City Historic Landmark. Originally conceived as an apartment hotel in the grand New York style of the era, the owner, Frank Case, failed to sell enough long leases and decided to turn it into a regular hotel which he intended to name ‘The Puritan’.
Thankfully, after discovering the first inhabitants of West 44th Street were in actual fact the Algonquin tribe (admittedly this was before street signs), Case decided to rename the hotel the Algonquin. History would cast this decision in a very favourable light.
There are many idiosyncrasies that separate the Algonquin from the rest of the hotel world, amongst which is the tradition that has been in place since the 1930s whereby a ‘hotel cat’ has been given free reign throughout the property; a practice that originated the day Case took in a stray:
(Wikipedia): Hotel lore says actor John Barrymore suggested the cat needed a theatrical name, so he was called Hamlet. Decades later, whenever the hotel has a male he carries on the name; females are named Matilda. The current Algonquin cat, a Matilda, is a Ragdoll that was named 2006 cat of the year at the Westchester (New York) Cat Show. Visitors can spot Matilda on her personal chaise longue in the lobby; she can also be found in her favorite places: behind the computer on the front desk, or lounging on a baggage cart. The doormen feed her and the general manager’s executive assistant answers Matilda’s e-mail. During 2011, Matilda was temporarily confined to upper floor or to the limits of a leash tethered to the check-in desk, due to a directive from the city Department of Health. As of late 2011, Matilda has been confined to the non-food areas of the lobby by an electronic pet fence.
But more than a decade before the original Hamlet took residence at the Algonquin, another tradition was begun when Dorothy Parker, Robert Benchley and Robert E. Sherwood—Vanity Fair writers all—began meeting for lunch daily in the Rose Room. This gathering quickly expanded to include many literary figures, actors and journalists of the day (this was a time when a daily luncheon was an integral part of the routine— somewhat akin to the City of London until the late 1990s). Amongst the glitterati that attended these gatherings regularly were George S. Kaufman, F. Scott Fitzgerald and Ernest Hemingway. It was this august body that founded The New Yorker Magazine (a publication which is, incidentally, given free of charge to all hotel guests to this day).
Legend tells of one such lunch at which Hemingway was present along with several writers of the day during which a discussion on the skill of concise story-writing evolved to the point that a wager was made.
Hemingway bet of his own against each stake of his companions that he could write a six-word-long short story. Six words that would contain a beginning, a middle and an end. The wager was duly accepted by all and one of the more junior members dispatched to fetch drinks for the bon vivants gathered at the Round Table.
Hemingway took a napkin and scribbled six words upon it which he then presented to the group. It read simply:
“For sale: Baby shoes. Never worn.”
Wager won. Brilliantly.
I was reminded of this tale a few days ago as I listened to the words of Mario Draghi and the immense amount of speculation surrounding his incendiary words last week at a nondescript event in London. Draghi was making unprepared remarks—which is always dangerous in a position such as his—and yet markets, bereft of optimism, ripped the words from his lips and clutched them feverishly to their collective bosom in the hope that this, finally, was the watershed Europe had been waiting for.
This week saw statements released by both the Federal Reserve Open Market Committee and the ECB and, as is the norm when these pronouncements are made, every word is scrutinized for the tiniest clue as to future action.
One can’t help but wish for Hemingway-like brevity from these clowns, but such a flight of fancy is akin to Great Britain’s chances of topping the medals table at the London 2012 Olympics; a beautiful dream, but one that will never, ever, EVER come true.
Before we get to the nitty gritty (such as it was) of this week’s events, however, a little expansion on my thoughts in the last Things That Make You Go Hmmm..... about Draghi’s comments in London late last week.
The innocuously-titled Global Investment Conference in London on June 26th hardly seemed likely to generate headlines around the globe until ECB Governor, Mario Draghi stepped to the podium to give a speech for which there was no pre-prepared transcript— indicating decisively that these remarks were very much ‘off-thecuff’ and definitely NOT approved ECB policy.
Draghi began by comparing the Euro, rather curiously, to a bumble bee:
(ECB): The euro is like a bumblebee. This is a mystery of nature because it shouldn’t fly but instead it does. So the euro was a bumblebee that flew very well for several years. And now – and I think people ask “how come?” – probably there was something in the atmosphere, in the air, that made the bumblebee fly. Now something must have changed in the air, and we know what after the financial crisis. The bumblebee would have to graduate to a real bee. And that’s what it’s doing.
Fair enough, Mario. Personally, I would have opted perhaps for a duck-billed platypus or even Frankenstein’s monster, but, at the risk of mixing my metaphors, we’ll run with the bee.
The next part of Draghi’s speech was where the fun began:
(ECB): The first message I would like to send, is that the euro is much, much stronger, the euro area is much, much stronger than people acknowledge today. Not only if you look over the last 10 years but also if you look at it now, you see that as far as inflation, employment, productivity, the euro area has done either like or better than US or Japan.
Classic Central Bank jawboning there; Ben would be proud. Mario was telling the world something it can plainly see is absolutely not true in such certain terms as to make those paying attention think for a brief second that maybe, just maybe, they are mistaken.
Mario, the euro is NOT strong. Really. It isn’t.
