Paris opera joins the French free-for-all

As I pedalled a Vélib' to the office this morning, the Renault behind was angry because I was going too slowly in a quiet narrow street. So the driver blew his horn and swore at me. Such behaviour is normal in Paris.

I rounded the corner into the Place de L'Opéra and saw a crude banner draped across the splendid facade of Charles Garnier's palace. "Opera on Strike", it said. They have cancelled tonight's performance of la Traviata because the stage staff walked out. President Sarkozy wants to trim their generous retirement conditions as state workers and they don't like it. 

I shrugged mentally because in France, c'est normal to punish the public in order to press your case. Today is the start of the schools' All Saints holiday week and many families are leaving town. So cabin staff at Air France have chosen the weekend to strike in order to cause maximum disruption. The airports are chaos with cancelled flights, but such bloody-minded behaviour is traditional, so few question it.

In the same way, Paris region commuters had their lives disrupted for several days this week by a rolling railway strike. Yet there was barely a squeak of criticism from politicians or media, and least of all from the centre-right government. Sarko is so eager to get the public sector to accept his mild pension reforms that he is showering them with praise.

He even dropped in on a Paris railway depot for a session with the striking lads yesterday and put a brave face on a pretty unfriendly reception. In three weeks, the civil service is due to stop for the day and the railway workers are likely to strike again.

And so the old story goes on. Some see the strikes as a last hurrah by the unions before they give way to the Sarko revolution and his creed of "work more to earn more." Things are certainly changing, as the election of the reformist president last May showed, but France's underlying anti-social spirit has not changed much.

Why should the opera staff or railway workers renounce privileges when they see from the daily news how little civisme (public spirit) there is and how much everyone is out for themselves?

One of the running scandals this month would not be deemed credible in more northern nations. This involves the uncovering of a slush fund worth hundreds of millions of euros operated by the UIMM. The metallurgy industry body is one of France's oldest employers' associations. Previous heads of the UIMM have said this week that it was a tradition for big money to be spread around to make industrial relations "run more smoothly".

In other words, the employers appear to have been paying off unions, political groups and who knows whom else. One of the oddities of France is the secrecy since the 19th century that legally protects the accounts of the unions and employers' organisations. Denis Gautier-Sauvagnac, the current UIMM boss, is being investigated for withdrawing 17 million euros (23 million dollars) in cash over the past seven years. He says that he kept none of the money for himself.

That might sound like a tall story, but do not forget that the state itself was dishing out about a hundred millions a year in cash until 2001 when a Socialist government stopped it. These were the so called special-funds, suitcases of untraceable cash, which were distributed to the prime minister and ministers to pay expenses and top up the salaries of their staff. There were no controls and no taxes of course. A prime beneficiary was Jacques Chirac, the last president.

The Government put an end to the special funds only after they had become news in a case involving Chirac. Questions were being asked about hundreds of thousands of euros worth of family vacations and other expenses that he had paid in cash. The president explained that the loot came from "special funds" that he had stashed away from his previous time in government.

All right, Chirac is history, but he is still enjoying a pension of over 30,000 euros a month, the total of half a dozen pensions that he stacked up from his decades as Mayor of Paris, Prime Minister, member of parliament and local councillor. While on that subject, France has learnt month that parliamentarians enjoy their own "special regime" pension system, like the ones that Sarko is telling the railway and opera workers to give up. The parliamentarians do not intend to give up theirs.

I'll just mention one more current case that hardly encourages the workers to engage in sacrifice for the common good. This is the massive insider trade dealing that the stock market authority suspects was carried out by the big share-holders and senior executives at EADS, the parent company of Airbus.

Arnaud Lagardère, the tycoon friend of Sarkozy who owned 15 percent, was questioned by a parliamentary committee on Thursday about why he sold heavily early last year just before bad news from Airbus slammed the share price down. The shareholders made tens of millions before the crunch which led to a large-scale plan for workers to be laid off at Airbus. 

Lagardère knew nothing about Airbus's problems at the time, he told the inquiry. Besides, he had kept Dominique de Villepin, the Prime Minister, fully informed of his moves, he said.

De Villepin, you may recall, has recently been charged with complicity in the circulation of fraudulent bank accounts in an alleged plot to incriminate Sarkozy and others. Executives from EADS are also facing charges in this case. And so on....

I am straying from the man in the Renault, but it's all part of why the French are so suspicious of one-another.  "Hell is other people," as Jean-Paul Sartre wrote in 1944 after a four year occupation when neighbours denounced neighbours to the Nazi authorities.

A short book was published yesterday which offers a brilliant analysis of the phenomenon. I mentioned it in advance in a Sarko post last month, but it's worth having a look at La Société de Défiance: Comment le modèle social français s'autodetruit [The Society of Distrust: How the French Social Model is Destroying Itself] [Here's just about the whole book in pdf format]

Yann Algan and Pierre Cahuc, two academic economists, diagnose what they the call the "vicious circle" of distrust and incivisme (lack of public spirit) that drags on life in France.

"The French, more often than the inhabitants of other countries, are suspicious of their fellow-citizens, of the authorities and of the free market. This distrust goes hand in hand with an incivisme that is most common in areas essential to the functioning of the economy and the state."

If the French were as trustful of one-another as Scandinavians, their economy would be five percent larger and unemployment would be three points lower than its current eight percent, say the authors.

They argue that the French hostility to others is largely a phenomenon of the  state-directed social and economic system created in the 1940s after the wartime disaster. "It was the mix of corporatism and statism for the French social model which promoted distrust and incvisme," they write. "This distrust in turn creates fear of competition which provokes the creation of regulatory barriers. These create protected privileged groups which in turn promotes corruption and mutual distrust."

I apologise for letting this run long. La défiance is part of life everywhere but it is so strong in France that it's worth examining. Now I'm off for an All Saints week in the Cévennes. Please keep the conversation going and I'll post if the wild boar haven't torn up my telephone line again.

  [Sarkozy drops in on railway workers Friday[

Comments

[rocket]

Charles

DO NOT GET ME STARTED ON THIS ONE!

[Edward Johns]

I have only lived in France for three years, my experiences are that there is a much higher level of "sharp practice" at corporate levels than in dealing with "everyday folk".
If the overriding ethos in French commerce is to "get away with whatever you can" then no wonder nobody has trust in their business contacts. Even though I have no time for religion, I wonder whether the emphatic rebuttal of the church in France's history might have had an impact on the levels of integrity to be found here ?

[azloon]

CB, bonnes vacances, and don't forget to get some halloween candy for the "trick or treaters."

(i first was bit by the blog bug after reading CB's story on halloween in france a year ago this week. i am glad my family is raised and gone and i have no paid employment, or i would have been useless to both this past year).

[:terry]

Charles:

You picked the right topic if you're going to be absent. Don't worry. I'll keep this one going. What would you like this time? 400 comments? 500 comments? An even mille?

Anyway, your article touches in good part on something I was talking about on other blog. For those of you who worship big government, this is the natural consequences. When you constantly want government intervention, you sent up economic groups who benefit and those who suffer. The result is industrialists AND unions paying off, legally or illegally, government officials to write legislation that gives them an advantage over the competition or overgenerous compensation (unions). All in return for votes. In some ways, I am sympathetic for workers actually. There is nothing wrong with paying a CEO 300 million dollars if some company thinks he is worth. (I cant see that, but I dont work in industry). But, if the company is incurring losses, it seems to me that would be the best place to start cutting. In America, the company would file for bankruptcy and then get the bankruptcy judge to FORCE the workers to rewrite their contracts under bankruptcy laws. Here' where again, business gets government to write laws to give it special advantages. I dont know if France has a similar animal.
The consequences of all this nonsense is that the waste and fraud is passed onto the public.

[Dot KING]

deux petits commentaires:
Strikes are meant to disrupt and bring to notice grievances which sometimes might even be justified. If strikes didn't disrupt, there'd be no point in having them.
Strange, n'est-ce pas, that Sarkozy accuses Dominique de Villepin over the Clearstream Affair and Arnaud Lagardère, Sarkozy's pal, is now making it clear that Dominique de Villepin was fully aware of the insider-trading deal he obviously would never have dreamed of doing over the sale of Airbus EADS shares? tu parles!
I smell a rat!

[Sandrine]

Bonnes vacances Charles !

And happy anniversary to you Azloon !

Charles, I wanted to thank you for speaking of the "régimes spéciaux" of the Parliament and others that people rarely speak of on this blog. It's common in France to ask others to make efforts (generally the poorest) while forgetting to ask those who have the more power and the more money.

Maybe we would more likely make efforts if EVERYBODY was in the same boat ! But that might not happen under Sarko's presidency.

[Julie D]

CB you put your finger exactly on the point that hurts, as we say in French. We spend our lives being miserable to eachother, at least outside he circle of friends and family. Yet everyone talks about solidarité and there is even a solidarity tax (CSG). Egalité, Fraternité etc. Only France could invent such hypocrisy.

[rocket]

"I shrugged mentally because in France, c'est normal to punish the public in order to press your case."

Charles, It's called civic irresponsibility and the French have elevated it to an art form. A lot of these people are mentally incapable of realizing that they are violating the most basic right of others with their actions and personally they don't care. There has never been any sanctions. Such is "le grandeur de leur egosime dans une régime" where everyone is a victim." That's why when they speak about civic education here, I always get a chuckle. It's like the blind leading the blind.

[rocket]

Julie

"Yet everyone talks about solidarité and there is even a solidarity tax (CSG). Egalité, Fraternité etc. Only France could invent such hypocrisy."

So true and if I might add put this hypocrisy up as an example to the world.

[Daniel Strohl]

Sandrine,

"But that might not happen under Sarko's presidency.

May be yes, may be no. Perhaps we should leave him some additional time (i.e 2 or 3 years) and judge on results et non sur des intentions affichées ou sur des intentions qu'on lui prête.

Let me remind you that Mitterrand was in power during 14 years. That is time enough to make things - do you think it was a really positive period for our country ? After that, we had Chirac during 12 years. One may ask the same question - the answer will probably be more or less similar. In my opinion at least, we have continued to decline slowly, but surely.

Now, we have much younger people in charge, and coming from much more diversified origins. There are more women in charge (women are often more courageous than men, IMHO). If things should nevertheless not change, this would be a disaster. I do not believe in disasters. And you, Sandrine, as a young, intelligent and sensible person should as well not believe in disasters.

[Daniel Strohl]

Charles,

"Sarko is so eager to get the public sector to accept his mild pension reforms that he is showering them with praise."

Charles, you wrote also "He even dropped in on a Paris railway depot for a matey session with the striking lads yesterday."

One may say that Sarko did not "shower them with praise" in this occurence - it was exactly the contrary. One of the CGT unionists refused to shake hands with him - this is at least an unbelievable offence - another union "brains" (to whom Sarko explained that it was normal that railway workers should work 40 years as any other worker or civil servant does right now) said they would go on the street to enforce their "rights" as they have have always done up to now, forcing every "Premier Ministre" to back down. Sarko made it very clear that he would not back down and that it was not up to the street to go against the law . It was a really incredible situation.

All this was reported by TF1. I don't know if A2 and FR3 have showed the same things. May be not – in my opinion, the whole thing will « retomber sur la gueule » de la CGT et de SUD, the most virulent unions. If I were B. Thibault, I would not be happy with this « Propagandablitzkrieg ». I don't believe that he has staged it.

I hope that big numbers of my compatriots have seen the event on TV, so as to be able to make their own judgment on the proceedings.

May be some bloggers have still in memory what I wrote a few days ago about the communists in 1939/40. Apparently, a similar species is still there, with the same high level of « sens civique ». Fortunately, these gentlemen are only a minority now. At least, I hope so.

PS : the above does not imply at all that I approve the stock options "manoeuvers", the shameless golden parachutes and the like.
[Thank you Daniel. Yes, I watched the Sarko meeting. He didn't praise them much there, but in general he and his team are being very publicly warm towards the unions in order to mollify them. I'll reword what I wrote to clarify. CB]

[Dot KING]

Daniel, In defense of the other, public TV stations - they showed the exchange between Sarkozy and the cheminot, I saw it on Fr3 and later on Fr2. I don't watch TF1 very often.

[Daniel Strohl]

Dot King,

I am pleased with what you say. This means that both public TV stations have made the job for which all of us pay them (la redevance - for non French bloggers, this is an annual fee of 116 € x 1.4 = 162 US dollars which everybody watching TV either with an antenna or per cable has to pay to the state).

However, as a general rule, one may say that FR2 and FR3 have some sympathy for the left, TF1 for the right. As long as this remains within reasonable limits, this is not a problem for me. Regarding the news, we watch often TF1, but swap ("zap" in "French") very often channels - my wife is not very patient with propaganda, left or right, and she has also "ses têtes".
I do not interfere - she is the switch master !

Right now, she is watching an American film about the last pope. Since the pope in the film looks like a Pole in the same manner as I look like a bushman, I am back on Charles' blog. And I have the possibility to look at many many TV channels on my PC with an excellent (transmission) quality - this works only because I am close (less than 2.5 kms) to the exchange.

[Daniel Strohl]

Charles,

I appreciate very much that you managed to find the time to make a comment to my post. I know that it is not easy for you to make everything everytime perfectly balanced, due to hard time pressure.

I, and presumably 99,999 % of the bloggers wish you an excellent vacation. And congratulations for your excellent work.

[christopher muir]

There's no doubt that France can be an infuriating place to visit. Having been a victim of many Paris transport strikes in the past, it seems to me that if the tough(?) Sarkozy can't fix the French "lay down your tools" mentality soon, the country will continue to sink. A free media should be insisting on politicians setting an example to the population by willingly giving up some of their outdated privileges. Then the scenery changes might be restored forever at the Paris Opera.

[Judith]

These strikes must be inconveniencing people enormously. It seems a bit odd to me that there can be so much public support for striking workers when the membership of unions are so low.

The comments on the proceeds of 'slush funds' perhaps buying off unions, among others, indicates why unions don't need to worry about membership fees.

However, even with the strikes disrupting life now, it seems to me that the level of strike action is fairly mild compared with what was being predicted for September after the présidentielle in May.

Perhaps there is more to come but I would imagine that strike action and certainly big street rallies become very much more unattractive when the weather if very cold. Not to mention the fact that everyone will be thinking about Christmas before we know it.

[Valentin]

There's a certain bored weariness in the air about these strikes. Everybody expected them, everybody knows there's hardly anything to do.

To Judith who wondered about the public support:
for one, there is indeed the deep distrust towards the state, even greater one towards the big companies, seen as predators.
Also, the unions always managed to self-victimize, speaking of workers' rights, the sacred right to strike and so on, in a 19th century rhetoric.

As to the society of distrust, I can't help repeating that it goes in France exactly like it does in Italy:

"Faced with greedy and hostile authority over many chaotic centuries, it is argued, Italians fell back into the idea that only the family can be trusted. Everything outside the family and clan can be ignored, or tricked into submission.

“We are a people of saints, heroes, improvisers and artful fixers; above all, we are cunning,” a 1986 study on Italian values concluded, finding the nation’s mind-set little changed over time. “Our cunningness consists of believing that others will take advantage of us if we do not first take advantage of them.”"

http://www.nytimes.com/2007/02/14/world/europe/14italy.html

[john o'doe]

Thanks for bringing up this subject. As a Brit and long-term resident in France I have always maintained that the French have a problem of distrust of each other. Pointing this out in discussions with my French in-laws has never gone down well. They refuse to believe there is just no equivalent elsewhere to the widespread use of the term 'con' to insult others. I'm so glad so discover this study written by French researchers (and not envious 'anglo-saxon' rivals) which shows how much this attitude is costing them.

[Jo Persan]

You are absolutely right, Charles. France's problems come down to the fact that the first French instinct is to believe the other guy is trying to cheat you in some way. But as your researchers say, it's a vicious circle. I don't think Sarkozy knows how to break it. C'est toujours la faute de l'autre con...

[Dominique]

Amazing.

When i read CB's post and people's reaction, i feel they are talking of another country. I am still trying to understand the initial cultural bias that brings this.

How come can discussion and political disagreement (in other word "democracy") can be considered as distrust and greed? This may come from the fact that some english people do believe that we live in Disney land where everyone should be happy and disagreement does no exist. Well, then, let me inform you of that : Conflict and disagreement do exist and are part of life. Sorry.

By the way, Charles :

"So the driver blew his horn and swore at me. Such behaviour is normal in Paris."

How come no one ever horned at me when i drive a velib? Sartre was so right : "l'enfer , c'est les autres", n'est-ce pas Charles?

[Daniel Strohl]

Charles and everybody else,

"put a brave face on a pretty unfriendly reception".

I hope strongly he is preparing a pretty hard reception to the union extremists if they strike mid november, especially the railway.

Judith,

"strike action is fairly mild compared with what was being predicted for September after the présidentielle in May."

One of the reasons is that the strikers know that they will not be paid - this in former times was not really the case, since there were most of the time "des arrangements divers et variés" which softened or even cancelled in some cases the financial loss for the strikers. The unions are as broke as the government - may be even more - so they are absolutely unable to finance strikes. And the solidarity of the private sector will be purely verbal, if any. Ordinary people are really fed up with the whole mess.

"Not to mention the fact that everyone will be thinking about Christmas before we know it."

Two days ago, on local TV (FR3 Alsace), there was a short "reportage" showing a big fir being cut in the Vosges mountains in order to be installed as a huge Christmas tree on the Place Kleber in Strasbourg. This has probably been already done.

May be Sarkozy is relying upon the "Général Hiver" (General Winter) as an ally, as did the tsar against Napoléon in 1812 and the Soviets against Hitler in 1941. Due to the climatic change, we could now rename it "général Noël" (General Christmas)

Sarkozy needs all possible help, and some luck too; but he has the brains and the will. The latter quality was lacking to most of his predecessors. Now we pay a heavy price for this.

[Little Big Horn]

Ah ah ah!

Have the Anglo-Saxons become distrustful of something, to always say to the French what is good for them?

No no Charles, the French aren't a "suspicious people". It's what you'd call a perceptive illusion. Try to see things from a French point of view (but after your holidays of course, enjoy, enjoy!).

They sure may be suspicious, when it comes to free market and the capitalistic ideology, or when they are in presence of... hum.. (I’m sorry)... Anglo-Saxons. Yes, they become suspicious. It’s natural. It’s history.

But it doesn’t mean that generally speaking, they ARE a suspicious people. That's pretty different. French are rather conscious people, which explains a "defiance" with your model.

Those "academic economists" (or Sarko himself, or his neo-Conservants in general) who know what is good for the People/country, may prefer their theories and ideology to the People/country, and even accuse the People/country, for not embracing totally and eagerly their superior democratic principles. But, maybe that what they consider as more important than the "suspicious People/country", should also be considered as suspicious?

Let see things from another point of view. People/country’s one.

Maybe that capitalism is distrustful towards French People? His nature, history, culture, wisdom and believes. And towards true democracy. Maybe it's capitalism, or neo-conservatism that creates between the French a situation similar to the Occupation, since you were talking about 1944? As this BNP’s banker, at Montreuil a couple of days ago, who called the police to arrest one “sans-papier” who was withdrawing HIS money from HIS account. Who would have thought that money had a smell! (He's in jail now) Maybe that capitalism ideology is distrustful towards reality, and numerical abstraction distrustful towards humanity? Maybe that virtuality and artificial worlds are suspicious with the French art de vivre?

Maybe that some non-Anglo-Saxons’ people in the world do NOT consider that they came on Earth to give their unrepeatable life to a sanctified market, and want to die for something else that money’s, things’, informations’ and people’s circulation, or accumulation. Maybe that the French belong to a class of people for whom humanity still doesn’t belong neither to a financial system, nor to machines. And are depraved enough to believe that it is the contrary. Maybe that miscreant French just don’t believe neither in money (as value, saviour, master and authority), nor in corruption. Maybe they have something that capitalism cannot digitalize, or trade? Maybe their unconscious know something that the Anglo-Saxons have forgotten ("You'll praise only ONE God"... You can't serve God AND money" St Mt)?
It's suppositions.

Maybe they still make a difference between "une oeuvre" (life), and a product (death). The single expression "cultural product" sparks off my French suspicion, distrust. There is NO cultural products. But cheap junk propaganda "entertainment" (dumberness), for slaves. Only culture, as Melville's "Moby Dick", Poe's poetry, Bernstein's music or Ford movies, entertains.

So... they become a “suspicious” people, while the Anglo-Saxons, confident, are going.. where? You know where it comes from, Charles: this is the old Cartesian doubt:
“Does capitalism TRULY exist?”
Well, seulement dans l’oeil de ses admirateurs.... Objectively, NO. Just a mirage in a desert of death.

Then, to the Cornelian choice the Anglo-Saxons put in their distrustful mind ("la bourse ou la vie?"), some French still answer... la vie... an Anglo-Saxons' itchiness?

Besides, strikes are still legal here. They are not, simply because they disturb the traffic or Anglo-Saxons' mind, some “incivisme". Otherwise, the Airbus Power 8 Plan which put between 50 000 and 80 000 people “à la rue”, should also be considered as "incivilités". And "the state-directed social and economic system created in the 1940" has a name here: solidarity. Sometimes it's what makes a country a country, and not a gang of United Lonesome Cowboys, or a Société Anonyme. It isn't more archaïc than capitalism itself I guess. Social security isn't less useful than your Queen Mother? With due respect! so? What's the trouble? Fear of the Frog?

Have you seen this piece of Sarko's whim?

http://www.cbsnews.com/sections/i_video/main500251.shtml?id=3416100n&channel=/sections/60minutes/videoplayer3415.shtml

A bit worrying for a Head of State, isn’t he!

[To finish with distrust and capitalism. Big difference between Anglo-Saxons and French. Without any authority, leader, manager, boss, chief they venerate, the Anglo-Saxons are just like beheaded poultry, they're lost, they run everywhere like at Patay while clucking, so they cherish their Big Brothers. On the contrary, the French are always naturally DISTRUST about the authority above them, and wish secretly to cut its head, even a presidential one, and be free. You'll understand how being headed by capitalism, a thing with absolutely NO HEAD you can cut, despite etymology, may be sometimes, from this point of view very, very alarming! Different composition]

[rocket]

An Interesting take on French Democracy or lack there of in the Libé of this morning

http://www.liberation.fr/actualite/politiques/287964.FR.php

Quelles sont ces «avancées démocratiques» ?

Pour la première fois dans l’histoire de la République, un équilibre entre les pouvoirs exécutif, législatif et judiciaire sera établi. Au pays de Montesquieu, droite et gauche réunies, nous sommes responsables collectivement de ne jamais avoir instauré cette règle d’or de toute démocratie. Les pouvoirs ont toujours été concentrés soit dans les mains d’un exécutif fort — un roi, un empereur, un dictateur (sous Vichy) ou un superprésident —, soit plus rarement au bénéfice d’une assemblée. Si nos propositions sont acceptées, voire enrichies, ce sera une petite révolution.

[Dominique]

Rocket,

If you know a country where "un équilibre entre les pouvoirs exécutif, législatif et judiciaire" exists, please let us know!

As long as laws are made by parlements, judges will not be independant : they have to stick to the law! Witch is rather a good thing....

The problem will always be : devant qui ces pouvoirs sont-ils responsables and who pays for it? I am glad to see you now are on the side of all the judiciary administration who complains every morning that Rachida Dati is to much into their business, trying to explain to them how they should work.

One more effort, and you'll be a true socialist...

[Dominique]

Little Big Horn,

I'm with you! Well said!

Regarding Charles answer :

"You'll understand how being headed by capitalism, a thing with absolutely NO HEAD you can cut, despite etymology, may be sometimes, from this point of view very, very alarming!"

You're right Charles! These is exactly why we invented someting called "the state". It's very purpose is to organize things in order to have someone responsible for the organization of the society. After all, we are not animals and don't want to be governed by Darwinism. That's also called civilisation.

This is the very purpose of a state in a democracy : trying to organize things and being blamed in case of failure. Elections then bring new polititians who try again.

As Albert Camus used to say, "Il faut imaginer Sisyphe heureux" ("one must imagine Sisyphus happy" )

[Valentin]

What use is there in digressing over distrust, humanism and capitalism.
Every day at work I see people around trying to read between the lines all the time, seeking hidden, potentially harmful meanings and implications, self-conscious to the extreme and quick to interpret anything as a sign of judgement being passed on them.

Having lived in Anglosaxony, France looks like the country of suspicion and continuous stress.

[christopher muir]

I read this in today's Le Figaro: Une note interne de l’Elysée recommande d’augmenter le salaire du président de 101.488 à 240.000 euros par an...

It seems to me that this action can only cause more troubles. But politicians are the same everywhere - as a class they always take care of themselves.

[Daniel Strohl]

Dominique,

"How come no one ever horned at me when i drive a velib?"

May be simply that you are faster than Charles when cycling in narrow lanes ... (LOL)

But I am like Charles, I feel stupidly agressed when I hear an (unjustified) horn. And sometimes, one is really tempted to react brutally.

[Little Big Horn]

Hi Dominique,

Thanks!

Charles didn't answer by the way. The end of the comment was be myself.

;-)

[azloon]

Dominique and LBH --

i guess we 'pick our poison,' tho france appears, at least many french, to want to move toward a new poison. true?

both of your spirited defenses of gridlock and malaise (from my very american view) point to great difficulty for any real reform, at least anytime soon.

i wish NS luck. he'll need it to judge from the views of the two of you.

[Terry]

LBH:

That is the fact the beauty of the capitalist system. It has no head. Economics is determined by millions of choices and decisions made by all of us. It is in that effect, perfectly democratic. The inevitable problems that result is when a group of people, often socialists or ironically, industrialists try to get government to control it their individualized benefit. That is when the fun always starts.

[John Gregory Flinn]

"I shrugged mentally because in France, c'est normal to punish the public in order to press your case."

I hesitated to make this post because I did'nt want to imply that France's employer/employee relations are like Britain's used to be!
They are not, and 'bloody-minded' attitudes are not unique to France. I did get a feeling of 'deja vu' and remembered the (British) Unions' attitude in the 60s, 70s and early 80s. In particular the strike in 1979 which left the dead unburied and the rubbish uncollected undoubtedly contributed to Mrs T's election success that year.

She changed attitudes by a massive programme of privatisation and changing some laws which had served to protect Unions.

The French have always seemed slow, or unwilling to embrace privatisation, and I can understand that State ownership has been part and parcel of the success of SNCF's TGV and EDF's nuclear electricity programmes. But if these strikes lead to more disruption than Sarkozy and the French public can stomach then maybe that solution will be sought.

I also saw the tension between Sarko and 'le cheminot' on channel 2, and am intrigued by the remark "it was not up to the street to go against the law" on DANIEL STROHL's post.
I understand there is a 'minimun service' law in the new year, but are other measures planned?

[Dominique]

D Strohl,

That is probably because you are an alsacian, a saxon and therefore half an anglosaxon.

As a latin, i'd rather thing : "ooops, i am in the middle of the road...! so what? let him horn!" and go yelling at him "shut up! babies are taking a nap!"

nothing to do with distrust nor greed... just a way of expressing myself!

Of course, this is complete non sens as i am contradictoring my self!

[Daniel Strohl]

Re : sub primes

There was an interesting discussion above and in other posts about capitalism and socialism.

It is a long time since I have not used one of my "lapalissades" (which Pierre calls statements). I can't resist any more : IMHO, if mankind were perfect (honest, altruistic, not greedy), any economic system would work perfectly - socialism as well as capitalism. But obviously, mankind is not perfect.

Therefore, capitalism is better if one wants to judge in economic terms, because greed is a much more powerful and efficient motor than altruism.

A good example of that was demonstrated yesterday evening on the TV channel M6 – there was an excellent reporting on the sub prime business as it had been run in Stockton,CA and how it continues in order to clear the sequels. The sales methods described (and acknowledged by some participants) could have been imaginated by a brain trust composed of sharks and of crooks.

The result : around 2 millions American households are ruined and had or have to let the banks sell their houses. If one assumes that each household has two children, this means that 8 millions people are « à la rue » (on the street ?). This represents a percentage of 8:300 (millions) = ca. 2.7 % of the Americans. In statistical terms, this is not negligible. In terms of human sufferings, anybody is free to have his or her own opinion.

Due to strict banking legislation, something similar is unlikely to happen in France or in most European countries – as an example, French banks consider as a rule of thumb that the down payments for a house should not be over 30 percent of the net monthly income – they check also if there are not any other big credits running. Most of the time, an initial down payment is required – thus avoiding the monthly down payments to be too high. Of course, this reduces the number of potential buyers, but also the risks for unwise or uneducated people to get ruined.

Of course, I do not pretend that our bankers, contaminated by our more or less socialist culture, have turned into saints. Therefore, some of them have been baited or lured by the fast money they expected in the American market. Other European banks also have been lured and have lost in the business even greater amounts.

Conclusion : I do not try to pretend that Europeans are more virtuous than Americans. However, our crooks and sharks – we have plenty of them too, including in high level positions - don't have it so easy as in the US (at least in banking matters), and this due to regulations imposed by the governments, including the French, which has been much castigated by some bloggers always sure they are the best and that they have the best system. Modesty is always good, including for the French, of course.

[rocket]

Azloon

"i wish NS luck. he'll need it to judge from the views of the two of you."

And that's only the tip of the iceberg.

[Terry]

Daniel:

Two things:

"Therefore, capitalism is better if one wants to judge in economic terms, because greed is a much more powerful and efficient motor than altruism."

Must you say greed. How about good old fashioned self-interest? Greed is more when you will use nefarious ends to achieve your self-interest rather than trading.

The sub prime market.

You're a bit wrong on this one. Banks were giving loans to people without one dime of down payment. Many of these people made few a payments and lived rent free for the next year or two it took to evict them. It was the banks who got killed. They lose a lot of money everytime they foreclose. They have to fix up the house and sell it at a loss. So, the banks are the real ones who are taking the loss. As it should be, they took those stupid risks. The people who lost "their" homes didnt lose any equity and probably paid what they would have if they paid rent. However, the foreclosures were a small percentage of the market.

But there were many people who didnt make down payments and were able to refinance. Many also found better jobs and had higher incomes after three years before their rates went up. These people got to keep homes that they normally would not been able to afford had regulations been in place. So, just realize Daniel, that you cut off a segment of the population who sub prime mortgages would have worked for when you impose regulations. This is always better left to the market. If the banks want to hand out loans to unqualified people, then the banks suffer the consequences. If people buy over their heads with no down payment, then they suffer the consequences. Your way would prevent people who subprimes might work out for, from ever getting that chance.

BTW: Notice how the subprime market has not had a significant long term effect on the economy. That's because the true losses were confined to lenders not homeowners.

[rocket]

A little bit of cultural awareness

Cette enquête révèle qu'en tout premier lieu, c'est Chabal qui arrive en tête. L'idole des Français est le rugbyman avec qui 20% des Français aimeraient partir en vacances. Ses plus grands fans sont les hommes qui le plébiscitent à hauteur de 26% contre 17% pour mesdames.

In other words 26% of Frenchmen and 17% of French women would like to go on vacation with Sebastien Chabal. Ugh! Get me some perfume please and a bag to put over his head.

Guess it says a lot about Frenchmen though.

Interested Dominique?

Link is here

http://www.tourmagazine.fr/Lastminute-com-Chabal,-le-camarade-de-vacances-ideal_a5179.html

TOO FUNNY!

[Dominique]

Rocket,

Chabal will be forgotten in ... 2 weeks time (eventhough i have nothing against him as he sounds rather smarter than the average football player or cyclist).

But what does it say about frenchmen?

[Daniel Strohl]

Terry,

I have read your balanced comment with great interest. As one says in French, one should always listen to two (different) bells ringing (entendre deux sons de cloche).

The word "greed" is may be too strong, but definitely not always, if I believe what we have seen and heard in the reporting. Good old self-interest was may be at the start, but some of the traders and their bosses (and the banks in the background) could not resist and used actually nefarious means to push the sales in order to earn more and more money.

"As it should be, they took those stupid risks" - that is exactly the point, and they did it to make "easy" and fast money. This is not possible, at least on a comparable scale, in most of European countries. However, due to hard competition, French banks and credit companies too have been much too imprudent with "crédits à la consommation" granted (in fact, sold) to many people unable to reimburse them - so there have been many personal bankruptcies, in Germany too - may be in other European countries as well. But I have no precise info about the latter.

But I have learned through your post several things which were not apparent (at least to me) in the reporting.

Therefore, in order to thank you, I report hereafter a good joke we heard recently on TV :

A very musculous bar owner had a speciality of cocktails including lemon and/or oranges. He always pressed the fruits by hand, thereby challenging any present customer to press the fruit again in order to get out of it at least one droplet. In case of success, the bar owner would grant the successful customer free drinks at will during one month. Many tried, nobody succeeded.
Then came a new customer, a small man, with narrow shoulders and may be 50 kgs weight at the best. He asked shyly if he could try also – there was a general outburst of laughter in the bar ! The barman : « Yes, of course, you are welcome! » The small man took calmly the fruit just pressed by the bar owner, pressed it himself – several droplets of juice came out of the fruit !

There was a deafening silence in the bar ! Then the barman asked shyly : « Sir, are you working as a circus athlete ? » . « No, I am simply your new percepteur (tax man) ! ».

[Daniel Strohl]

John Gregory Flinn,

"I understand there is a 'minimun service' law in the new year, but are other measures planned?

John, my formulation was unfortunately not accurate; Sarko did not hint that other measures were in preparation. But he said very clearly that he would not allow the street to impose its diktat in any case. This was a "loud and clear" response to a young union member out of his mind who wanted to brag in front of his comrades. And one should never forget that there is a fierce competition between the various unions. So the various local sub-bosses try to profile themselves - this one didn't do it very intelligently, to stay polite ! But the problem is that he looked quite convinced and that he was defying openly the President.

John, the comparison with Britain is legitimate. I have made it several times for myself. The main difference is that our deads have always been buried in due time up to now - of course, I exaggerate a little bit, but nevertheless ...

[rocket]

Terry

"You're a bit wrong on this one. Banks were giving loans to people without one dime of down payment"

"As it should be, they took those stupid risks. The people who lost "their" homes didnt lose any equity and probably paid what they would have if they paid rent. However, the foreclosures were a small percentage of the market."

Terry you are dealing with people on this blog who have no idea how the housing market works in the US where you can buy a $300K house with $3K down and they can't even comprehend the correlation between renting and buying and then giving your house back because of a default loan. Here if you default on a home loan they drag you into debtors reeducation. In France you need at least 20% - 30% down before a bank will even let you walk in the front door. Spain is totally different because of overbuilding and there are even transmissable (sp?) loans between generation to buy in Spain. I think it is 99 years now.

Minimum salary in Spain 480€/month. Average housing cost in Madrid 200€K and towns like Valencia have been skyrocketing because of Americas Cup. Marbella has been hit by some real scandals (I think half the town council is in jail)and some housing may even be torn down because of illegal construction.

Most people in France who pretend to be experts on the subject simple listen to the 8pm news here which is completely biased against anything American and totally ignorant of economic reality and then they become automatic experts.

PS - I read an interesting article on Britain and individual debt has reached 150% against 70% in France. In the US it must be hovering around 120% in some cases. Economic growth through consumer spending is what is making the economy strong in US and Britain, but no bubbles please. I have seen what it did in Japan and it was ugly

[Daniel Strohl]

Rocket,

"Here if you default on a home loan they drag you into debtors reeducation."

Did that happen to you ? If yes, the reeducation was really badly conducted, if one judges by the result ... Another proove that the French administration is really bad.
(LOL)

Rocket, I am not an expert on everything as you are - therefore, I was happy to have got Terry's explanations, which were balanced and clear. When I wrote my post, which was may be a little provocative, but with no intention whatsoever to offend anybody, I was almost sure that Terry would answer. May be some other Europeans were happy as well to have clear explanations of the American way to look at the matter.

Nevertheless, the whole story was a big shock to the banking system. Central banks, including the Fed, had to pump huge sums into the market. One may perhaps compare this phenomenon to a huge fire as it happened in California (or in France or elsewhere). One knows when it starts, but it is often very difficult to fight successfully against it, even with very huge means. And the fight has always a cost.

Terry wrote : "Notice how the subprime market has not had a significant long term effect on the economy". Yes, I think (and hope) that Terry is right. However, the whole story should be interpreted as a warning shot - no economy is able to live sanely too long a time spending much more money than it earns - this is of course the case in France too right now.

[Dominique]

Rocket,

"Most people in France who pretend to be experts on the subject simple listen to the 8pm news here which is completely biased against anything American and totally ignorant of economic reality and then they become automatic experts"

So typical! What does expertise has to do with America? So, "economic reality" comes from america? So, other countries such as China, Zimbabwe or France have no "economic reality"? Japan is an economic failure? so is Brunei, Korea or India , Irland or Luxembourg?

More, can you please let us know who is the universal expert that fits to every "economic reality" of yours?

Sounds like according to you, expertise is american! If people think of doing their own way, they are just wrong because the don't do it "the american way"? I am sure you don't even notice that what you write is complete non sens.

That is called arrogance (french people are often blamed for the very same habit)

[Terry]

Rocket:

"Economic growth through consumer spending is what is making the economy strong in US and Britain, but no bubbles please. I have seen what it did in Japan and it was ugly"

This very true. Something interesting happened though on savings accounts. Savings accounts ONE year ago, were offering 1% interest. ONE PERCENT. So, people started putting their money into investments rather than a savings account. Something lazy journalists (usually leftists, hehe) missed. People started saving through stock and real estate purchases etc which is in a way better for the economy. However, you are right. This has been going on since Clinton. The economic growth that
we have experienced is entirely consumer spending. If there is so much as a sneeze, there is going to be a bad cold.

Interesting about Spain, etc.

[Terry]

Rocket:

"Terry you are dealing with people on this blog who have no idea how the housing market works in the US"

True. And I am also dealing with people who hold very stong opinions on massive government spending yet havent the simplest understanding of basic economics. Yet, I still try. Daniel got it.

[Terry]

Daniel:

"Central banks, including the Fed, had to pump huge sums into the market."

This is true. This was to prevent runs on the bank. In 1929, the government did the exact opposite turning a recession into a depression. But it is not like the FED SPENT the money. It allowed the banks to borrow more. The banks are taking a bath. But that they took the risk.

Half of my practice is real estate. I predicted this 3 years ago when I watched all these people take adjustable rate mortgages with nothing down. This means they risked nothing and they lost nothing. It amazes me the disinformation put out by the european socialist media.

With regard to government regulations, America is considerably different to Europe in one aspect. We dont prohibit lawful conduct for everyone just because a few people abuse the freedom. Guns, for example, millions of people use guns for lawful purposes. We dont ban guns for those millions because a small minority misuse guns. The same with economic laws, we dont force banks to have 20% down because some people act greedy. Why punish those who benefit from guns or subprimes because a few bad apples? Sadly, we are moving away from this philosophy quite quickly.

[Terry]

Daniel:

I broke my comments up so that they were a bit more digestable.

I do find it amazing that we spend so much attention on what the private sector is doing, which we do not have much control over. Instead, we should be much more focused on what government is spending, or rather wasting, OUR money on. If we turned that same skeptical look we have at subprimes at what our governments are doing, we'd be much better off. Instead, at least on this blog, everyone seems to think that massive government spending and regulation is the cure for everything from unemployment to acne.

In the US, the public sector is devouring the wealth of the private sector. And not just rich people. At some point, it's going to give.

BTW: Very funny joke.

[peter kinsley www.peterkinsley.com]

My recommendation to CB: do as a colleague of mine used to do in the narrow streets of Nice: when they klaxon, stop. Get out slowly and walk to the back of your car; examine both rear tyres by kicking them; bend and look at the exhaust; open the trunk and check for smoke or fire; close trunk and turn with puzzled look and say: "Kess Ker Say Mon Sewer?" By now he is apoplectic. Give him the prongs and drive on....slowly.
PS But with a bike, ask the driver behind if he has a puncture repair outfit. He may have a heart attack, so get ready to dash off.

[rocket]

Dominique

"So typical! What does expertise has to do with America? So, "economic reality" comes from america? "

I said

"and totally ignorant of economic reality"

Did I say AMERICAN ECONOMIC REALITY ?

You need to do an English comprehension course but then again you are the living proof of what I have said about making opinions without thorough understanding.

So better not do the comprehension course.

Daniel

"When I wrote my post, which was may be a little provocative, but with no intention whatsoever to offend anybody,"

YO TAMBIEN!

[rocket]

Dominique

Take2

"Sounds like according to you, expertise is american! If people think of doing their own way, they are just wrong because the don't do it "the american way"? I am sure you don't even notice that what you write is complete non sens."

Did I say AMERICAN ECONOMIC REALITY?

Either you have got a serious reading impediment or else you are not playing with a full deck.

[Daniel Strohl]

Rocket,

For a change, why don't you write a few posts in French ? This would help you to see that it is not so easy to explain things in a foreign language. Dominique is not an English teacher, of course and one may see it, but he is not dumber than you and me either.

[Dominique]

Rocket,

Please read your sentence again :

"Most people in France who pretend to be experts on the subject simple listen to the 8pm news here which is completely biased against anything American and totally ignorant of economic reality and then they become automatic experts"

You are linking "bias against anything american" and "economic expertise". Otherwise, what would so called "antiamerican bias" do in your sentence about economics, as that was not your initial subject?

or maybe your sentences have no logic at all...that's a possiblity ;=))

PS : you also write "I read an interesting article on Britain and individual debt has reached 150% against 70% in France. In the US it must be hovering around 120% in some cases. "

Well, I don't know if americans and engish people are more experts in economics than the french ones, but these numbers tend to show that the french are more reasonable and avoid bubbles! quite the opposite of what you wanted to say then.....

[rocket]

Terry

Good luck with your "reeducation of our European friends" as far as economy is concerned. First your story about guns and the bad apples. Well unfortunately, the French perspective is everyone is born bad so we need big governement to inhibit committing bad actions. (unless it has to do with sex). Same mentality with making money which is considered bad so it has to be governmentally restricted and certainly propagate the big lie of solidarity while the government pads useless jobs. Believe me, I know how business runs in this country. I've had two businesses here and was in the past an employer. Secondly in the past if an investment doesn't pay off here in France in particular, those who lost money will claim victimization. At the time of privatisation the French thought that investing in equities was like opening a savings account. ( The investors now are fortunately are smarter) I never hesitated in the past (80's) to buy a French privatisation flotation (in the 80's) as the government had to make sure that it was a success. Such was the level of free market knowledge here. Another thing I would do would be to go to stock market investment forums around France where the president of such and such a stock market in France, for example the Second market (now Euronext) would give investment advice. You knew that these guys were insider trading between themselves as a good ol boy network exists here (see EADS today) so you took their advice and got out after 6 months with 50%+ on investment. "So who do you like? Well, I like so and so" and then the next day you go out and buy. I've had French clients tell me about their future share previsions and I've run out of the room. They thought I was crazy.

Please refer to Eurotunnel fiasco yet there is still short term money to be made on this equity if you watch the stock evolution. Sometimes the stock triples over a period of 6 months then goes to hell and comes back.

Other that, the rank and file French simply shrug when it comes to talking stock portfolios. Personal income increases come from class struggle in the streets, not investing for the majority of the French. retirement is governement by what the French call "répartition" (a big pie) granted and getting smaller every year.

[rocket]

Peter

so true

"By now he is apoplectic. Give him the prongs and drive on....slowly."

Sometimes I act like I'm deaf and they get this stupid Gomer Pyle look on their faces and move on.

I've even started slobbering like I was mentally retarded just to watch their mouths go into cul de poule.

http://www.fiftiesweb.com/tv/jim-nabors-c.jpg

[Valentin]

Terry is usually good when it's about economics, but he should definitely keep away from topics such as social security or gun control.

Or else, this can happen to him (re gun control):

"For the period 1999 to 2001, the average rate (the number of homicides per 100,000 population) was 1.6 in the EU ... and 5.6 in the USA.
...
In the EU capital cities, the average number of homicides was 2.3 per 100,000 population. There were higher rates in some American cities: New York NY (8.7), Washington DC (42.9)"

Dixit the British Home Office.

There were 17000 homicides in the US in 2004, of which more than 70% by firearms. (FBI)

[Daniel Strohl]

Terry,

"It amazes me the disinformation put out by the european socialist media".

I have now got how the American housing market works. But, Terry, please do not rely upon entirely on my post to speak about disinformation by the European socialist media. First, the man in charge who directed the reporters to Stockton is young, and really bright (I am however not able to recall his name); in my opinion, he is as good a socialist as you and me, even if he takes great care to stay neutral - he shows things, asks questions, but does not try to influence the spectators.

Second, I am not sure that the mechanism of the subprime as you have explained it has not also been explained, may be in a few words which I didn't get (I have hearing problems) - I asked my wife; she has excellent ears, she didn't hear it either, but didn't follow the whole reporting !

However, she wondered, and I wondered, where the homeless people were going after their expulsion. There was no clear answer. But one thing is clear now for me : one of the traders offered 1000 dollars to one of the expulsed if he accepted to leave within 2 weeks instead of the "normal" 2 months allowance. He accepted after some hesitation. Ok, he had to move faster, but with unexpected 1000 bucks and no debt to the bank, which we didn't know at that time as already explained. However, he said that he had borrowed money to make house maintenance work.

The trader who offered the 1000 dollars said he expected to make 274 000 dollars this year (I am about sure of the figure).

My post is already too long, otherwise I would have explained in detail the sales methods I discovered through the reporting - amazing !

[Lily]

“You picked the right topic if you're going to be absent. Don't worry. I'll keep this one going. What would you like this time? 400 comments? 500 comments? An even mille?” (Terry)

“I broke my comments up so that they were a bit more digestable.” (Terry)

Ha! Another clever trick…

[Pierre Bernardi]

Terry, French news is always biaised to the left. Hence people who claim to be on the right (eg self-proclaimed commie-hating Daniel Strohl, above) come out with left-wing viewpoints. Subprime, if you like.

[christopher muir]

I'd like to know, say, from Terry - what happens to the US dollar if the US Fed lowers interest rates again? Surely there are terrible strains at present within the US financial system which Europe seems to have avoided. Well, up to a point, because a highly valued euro is going to cause serious export problems for France in its trade with the US. And a huge number of US "home owners" being tossed out on to the pavement doesn't make the US sound like any sort of Eldorado to a foreigner like me.

[Ros]

Rocket
I've lived in France for nearly 40 years but have never heard the expression "cul de poule" - (something my late husband didn't teach me)! What does it mean? Merci.

[Ros]

Pierre Bernardi
"Hence people who claim to be on the right come out with left-wing viewpoints." Well, that's what Sarko is doing, isn't it?

[Terry]

Valentin:

Perhaps, you misunderstood me. I did not say that Europe has more gun violence. I merely said that in the U.S. we dont ban lawful use of guns because of a few bad apples. 99% of gun use is lawful. It's a little silly to ban guns because of the other 1%. That really is what freedom is about. Should we ban all speech because some is libelous? Ban driving because some drive drunk?

Oh, but I relished the compliment on the economics. Thank you.

[azloon]

Christopher --

u.s. not eldorado. it's got economic problems now as it has had regularly over the past 200 years, at least four times since 1987. such problems are inevitable result of our approach to risk taking (much encouraged, admired). but it has its downside since it's difficult to monitor, regulate. it fact, we don't want to regulate it much since this acts as a hinderance.

we accept our present circumstance, as france accepts many disadvantages of its approach to management of the economy.

as i've said in previous post, you pick your poison.

[Terry]

Chris:

"I'd like to know, say, from Terry - what happens to the US dollar if the US Fed lowers interest rates again?"

I do take requests. As far as currency and its valuation goes, there I am a little weak. What I believe the US has been doing is intentionally devaluing the dollar because we at war and are accumulating lots of debt. A weaker dollar is better when you are a debtor. A stronger dollar is better when you are a creditor. By the way, I also believe that counterfeiting, perhaps state sponsored, has had a sizeable impact on the dollar. The US government has changed its bills 3-4 times in the last 5 years. I assume it is doing that for a reason.

I do not know what will happen to the dollar if interest rates go down. But, presumably, if interest rates are lowered some with subprimes who have better credit ratings now will be able to refinance for a fixed payment loan. It also cause another mini-real estate market increase. Although, I dont think so.

A couple points on "throwing people out on the pavement" to answer both you and Daniel's question. First, if a mortgage holder files bankruptcy, it can take 2 1/2 years to complete the foreclosure. That's 2 1/2 years of rent free living. Many do it. Most foreclosures take about a year. Also, foreclosure filings are up, but that doesnt mean the foreclosures are going to happen. Many pay off what they owe. Or, what is now happening, is the banks are renegotiating the terms of the mortgage to get the homeowner to stay. Banks are instituting better mortgage deferral programs. They take everything you owe and add it onto your mortgage while keeping the payment the same. This allows a fresh start for the homeowner. The bank takes a bath big time when a house is foreclosed on. So, it's in both of their interests to try to stop the foreclosure. In the end, though, there will be more foreclosures than 5 years ago.

Second, those foreclosed on have a long time to find somewhere else to live. There is no shortage of rental units in the United States. You can even rent houses. These people will not be thrown out on the streets. They will go back to what they were doing before-renting.

I disagree that Europe has avoided financial strains. I have been to Italy twice in two years. Each time, the Italians have been complaining about how the euro has destroyed their purchasing power. More Italians are unable to move out of their parents home (yes, I know about the bambinos). My friend in the Rotary, who was born in Portugal, just came back from Portugal last month. She said all her friends and relatives were complaining about the euro. My friend who went to visit her relatives in Greece made the same complaint. The euro might be nice for France (i dont know) but it has destroyed the purchasing power of citizens in these countries. A "strong euro" sounds nice and for some unexplained reason instills pride in europeans. It certainly helps you when you come to visit the US. But does it benefit you individually on your own day to day purchases, Chris? My cousin from Scotland flies into the US with two empty suitcases to load up on clothes. That is LOST business to someone merchant in Scotland.

[Terry]

Chris:

Rocket may understand the valuation of currency more than I do. Perhaps, he can give a better answer.

[rocket]

Dominique

I'm begining to wonder if you are not dyslexic;

totally ignorant of economic reality
totally ignorant of economic reality
totally ignorant of economic reality
totally ignorant of economic reality

You purposely distort what I said to fullfil your own corrupted agenda based on firstly, what seems to be a debilited style of debate and secondly problably an impatience to take time to read these posts.

Then again I think you just don't read English so well.

"or maybe your sentences have no logic at all...that's a possiblity ;=))"

Je suis rassuré a savoir que ma logique ne corresponde point à la tienne ;=))

[Daniel Strohl]

Christopher,

"because a highly valued euro is going to cause serious export problems for France"

Yes, and for some other European countries as well, notably Germany. Up to a few weeks ago, everybody there was for a strictly "orthodox" management of the European currency by the ECB - in other words, let the market determine the exchange ratios and continue to fight (potential) inflation with all means.

Now that the Euro has almost hit the 1.44 exchange rate mark, some of them are less sure that is good to leave the Euro climbing and the dollar falling, for the sake of "orthodoxy". One is orthodox as long as it touches other's wallets only ...

PS : Christopher, thanks for the expression "being tossed out on to the pavement" - I was looking in a former post for a correct translation of the French expression
"mettre à la rue, se retrouver à la rue". Of course, I didn't find the right one.

[Dominique]

Pierre Bernardi,

"French news is always biaised to the left."

Why not "Anglo american news is always biaised to the right"?

It says more about your own view than about french news...

I tend to believe that French news is sometimes biaised to the right, sometimes biaised to the left.

Exemple :

TF1 is always biaised to the right (if not far right). Often in the news (especially with Claire Chazal and of course the shamefull JP Pernaud), but even more often in the rest of the programs (from Julien Courbet Trash to Rugby journalist flatering Sarkozy)

Canal+ and ARTE are always biaised to the left(if not far left).

[Daniel Strohl]

Pierre,

You exaggerate a little bit - I am not commie-hating, but I can still not stand the propaganda the French communists have made since the end of WWII to try to camouflage what they have done (or not done) for their country prior to May 1940.

The left wing viewpoints you credit me with are as it seems right now also inspiring our finance minister, Mrs. Lagarde, who conducts conversations with our bankers in order to limit the expansion of floating rate housing loans. I have heard (and read, which is better for me) that there are currently between 20000 and 50000 of these loans in France. Some are problematic. Intuitively, I would say that it is not the right moment to create additional problems.

PS : in one of my posts, I have used the derogatory word "greenhorn" as opposed to "old timer". I was absolutely not thinking of you (I would exchange my academic background against yours "sans problème"), but of many young people coming out of school with various diplomas and with the conviction (encouraged by many of their teachers) that these diplomas were equivalent to a "sésame" for a given salary.

As an example, as we were still in business, we hired a young secrétaire-comptable which hold a BTS (for non French bloggers : "Brevet de Technicien Supérieur"). She was a nice girl, but it took me much effort to have her be able to write simple letters in French (in English or German, which she was supposed to speak, it would have been "mission impossible").

Therefore, when she said to my wife : "Mais, Madame, avec le niveau que j'ai!" (But, Mrs. Strohl, with the level I have got!), the latter immediately put things back in perspective ...

[azloon]

[Christopher, thanks for the expression "being tossed out on to the pavement" - I was looking in a former post for a correct translation of the French expression] Daniel

sometimes americans say "kicked to the curb."

short, more precise, more direct and anglo-saxon.

en francais:

persons not in financial compliance are, of necessity, and because of certain laws relating to financial obligations, requested and finally forced from their living circumstances, which means that they are, against their will, prohibited from occupying their present dwellings.

:)

[Valentin]

Terry:
"I merely said that in the U.S. we dont ban lawful use of guns because of a few bad apples"

My point was precisely that it's not merely about "few bad apples" but about the safety of the citizen. Safety rate in the US seems to be 4 times lower than that in the EU, if you prefer.
This dramatic difference in public safety is mainly due to gun overuse in the US vs gun restrictions in the EU.
If suddenly 85% of homicides were performed by knife, I would definitely support serious restrictions on knife possession and use.

I repeat my previous point:
guns are like toothbrushes in the US. This is not normal, and public safety situation proves it beyond all doubt.

[Daniel Strohl]

Rocket,

"je suis rassuré a savoir que ma logique ne corresponde point à la tienne ;=))

Dominique is a nice and very polite chap; otherwise he would have been entitled, as a teacher (even a dyslexic one), to correct your sentence as follows :

"Je suis rassuré de savoir que ma logique ne correspond point à la tienne" - two grammar errors in a rather short sentence !

Regarding Dominique's French, it is really perfect. May be two months ago, he sent a rather long post to Sandrine. I have scrutinized it very closely, and to my "displeasure", I was not able to spot even the slightest spelling or grammar error. My sadistic side (LOL) was disappointed !

[rocket]

Ros

"I've lived in France for nearly 40 years but have never heard the expression "cul de poule" - (something my late husband didn't teach me)! What does it mean? Merci."

it means chicken's ass mouth

maybe I can help you here

http://tinyurl.com/374goj

or here's a picture of yours truly avec la bouche en cul de poule.

http://tinyurl.com/2xf4h3

[rocket]

Terry I'll be brief as it's dinnertime here

"I'd like to know, say, from Terry - what happens to the US dollar if the US Fed lowers interest rates again?"

Answer, I buy cheap Levis in the States next month and stay in better hotels than originally planned. In other words US exports more as domestic consumption stumbles.

Daniel

Now that the Euro has almost hit the 1.44 exchange rate mark,

It's over that as of this writing and I haven't checked out Fed funds today. That's up for 20:15 our time. 25 basis point drop expected. My personal prediction 1.48 after Jan 1

1.00 EUR = 1.44487 USD as of 19:20 today

Daniel.

"because a highly valued euro is going to cause serious export problems for France"

It already has!

Yes, and for some other European countries as well, notably Germany

Are you sure for Germany at 1.44. France has structural problems, the Germans have remained "exportingly" competitive and are even soaring to new heights.

See Sarkozy's "brimade" against the high dollar a few months ago and Germany's lukewarm response to this.

[rocket]

Daniel

For a change, why don't you write a few posts in French ?

Believe me I don't need to prove that I speak French and why would I penalize our American friends et al.

[rocket]

Terry

European real estate market

http://tinyurl.com/3d5khz

I'm looking for a NYtimes article from this summer on the spanish real estate bubble. Will try to find the link.

[Valentin]

On the euro:
many feel indeed they lost purchasing power; they're convinced shops pumped up prices clandestinely at the passing to the euro, and that statistics offices all over the continent try to hide that truth.

There actually is some truth to that, I think, I was having a non-fast-food lunch on 40-50 francs (6-7 euro) in 2001, now I regularly spend over 9 euro - 30% more, compared to 15% official inflation.
On the other hand commercial offer is much richer today than 10 years ago. When you long to buy all those iphones and flat screens, you feel you don't have enough money.

But the Euro also did a GREAT job protecting the feeble european currencies against speculation and political influence. The only strong currency was the German mark. France, Italy or England have been near default many times before. Any billionnaire tycoon could bring any European country (except Germany) to its knees (see George Soros).
Now we have the first currency in the world, financial flows are fludified and pass seamlessly through Europe. Before it was a bit like in the Middle Ages, when the smallest landlord could put a tax on passing his bridge.
I won't even speak about the budgetary discipline and the complete success in mastering inflation.

[Terry]

Valentin:

"I won't even speak about the budgetary discipline and the complete success in mastering inflation."

Thanks about your thoughts on this. ONe thing though, how did it master inflation if everyone thinks prices went up 30%.

[Valentin]

Daniel:
"May be two months ago, he sent a rather long post to Sandrine. I have scrutinized it very closely, and to my "displeasure", I was not able to spot even the slightest spelling or grammar error"

Indeed, I took much pleasure reading it - as well as Sandrine's posts.
And I simply don't see any way of putting it into intelligible English. No way at all.
I don't mean to be rude to our saxon friends, but making fun of French sounds a bit like my Ohio girl wiping her nose in front of Mona Lisa while rambling about the 7-dollar Coke.

[Valentin]

Just had lots of fun looking at rocket's "French attitudes" !
Guess I'll have to take back everything I wrote about the japanese & co ! :)

[Lily]

"persons not in financial compliance are, of necessity, and because of certain laws relating to financial obligations, requested and finally forced from their living circumstances, which means that they are, against their will, prohibited from occupying their present dwellings." (Azloon)

I think you got it! (LOL)

[Daniel Strohl]

Rocket,

Rocket,

Your commentary about German exporting industry compared to the French : herafter a quote from today's (31.10.2007) « spiegel on line » - (Der Spiegel is a well known German news magazine comparable to Times or Newsweek) :

« Bei einem Euro-Kurs von 1,50 Dollar, sagen Analysten, müssen deutsche Exporteure um ihre Absatzchancen fürchten. Und spätestens dann ist die Konjunktur des Export-Weltmeisters Deutschland in Gefahr »

« Analysts say that at an exchange rate of 1 Euro = 1.50 Dollar, German exporters will have to worry about their (export) sales chances. And from that time at the latest, the economic situation (Konjunktur) of the world export leader Germany is in jeopardy ».

If one believes your own forecast, this exchange rate will more or less be hit within two months. This will have consequences in Europe and elsewhere – Europeans will, along with others, continue to pay for the huge American deficits induced by the financing of the war in Irak. And the world oil supply, where the Irakian oil is still missing, is not sufficient to keep oil prices at a reasonable level, since furthermore speculation induced by various means is rocketing (sorry, I couldn't resist it !) its price to unrealistic and dangerous levels.

But, as goes the French saying, "le pire n'est jamais certain" - the worst is never sure.

[Daniel Strohl]

Valentin,

"guns are like toothbrushes in the US".

Yeah! Is one supposed to use guns at least three times a day as we are supposed to use toothbrushes ? May be we should get some training in the US (for the guns, of course).

[Daniel Strohl]

Azloon,

"sometimes americans say "kicked to the curb."

Thanks for the American expression - it is self explaining, but of course, I didn't know it up to now.

A similar French expression : "se faire virer à coup de pompe(s) au cul" - to be thrown out with kicks in the ass - however, it is not very academic French ...to avoid in high level conversations.

[christopher muir]

Terry -

Your fulsome summary of the state of the American financial situation was appreciated. Your optimism is welcomed, but the AP wire I've just read doesn't make me dance for joy. "The 13 nation euro soared to $US1.4493, its fourth new high in as many trading days, while the British pound traded around $US2.0800, after having hit a high of $US2.0821 today."

Even the Australian dollar is at record highs while oil heads towards a massive $100. Anybody got any news about Cecelia? Now that would certainly be a diversionary relief.

[Dominique]

D.Strohl,

"se faire virer à coup de pompe(s) au cul"" : not quite

"se faire virer à coup de pompe(s) DANS l'cul" : more so

i am surprised by this inaccurate translation...

[:terry]

Chris:

The Fed lowered interest rates yesterday by .25.

As to the exchange rate, what does that mean to individuals, Chris? Other than the national pride you feel from hearing the "euro is strong", how does the strong euro benefit you personally? Are your croissants cheaper because of it?

If I am a tourist going to Europe, Im going to get slaughtered. If you're coming here, you will do well. French exports, like wine, will decline in the US because the relativity of the two currencies. This will hurt French producers and possibly French employees eventually.

The weak dollar means US exports will go up. Meaning more profits, more jobs.

[Valentin]

"master inflation if everyone thinks prices went up 30%"

This is quite puzzling. It is explained by local sharp increases that make a strong impression on the buyers.

And you certainly understood that it was meant over 6 years.

Eurozone inflation is about 2% per year ever since the euro came.

[Valentin]

"how does the strong euro benefit you personally? Are your croissants cheaper because of it?"

Cheap imports, especially commodities and primary products, which are often labeled in dollars.
How would you like to have the gas for your car at 3$ a gallon instead of 5 ? mm ? :)

[John Gregory Flinn]

"The weak dollar means US exports will go up. Meaning more profits, more jobs."

Yes TERRY, that's true up to a point. But a precipitate fall is dangerous. As well as your imports getting dearer, the Chinese, Japanese and others sell more dollars, raw materials like oil and metals rise (in dollars) to compensate and ALL economic activity slows down.

It may recover - lets hope it does -but the subprime crisis and the credit splurge on the back of (previously) rising house prices in the US and other western countries could lead us to hell in a handcart depending upon how deep the crisis becomes.

Watch the Stock markets over the next month or so - they will tell us if a recession is coming.

[Daniel Strohl]

Dominique,

"se faire virer à coup de pompe(s) DANS l'cul" : more so"

Yes, you are right ! Your translation is much more precise and direct - mine is somewhat edulcorated; I didn't want to hurt delicate ears - you are aware as I am of the high level of this blog ...

[rocket]

Daniel

That's pretty funny. You dress me down for some French mistakes and I'm not even French and then you fuck up yourself... like on your next post in French.

All the best

[Daniel Strohl]

Rocket,

Everybody speaking French reasonably well will have understood that I was joking with Dominique ...

Please come back as soon as you will have got a minimum of humour ! LOL

[rocket]

Hi Daniel

"Everybody speaking French reasonably well will have understood that I was joking with Dominique ..."

I guess Dominique doesn't speak French reasonable well in your opinion.

Dominique said

D.Strohl,

"se faire virer à coup de pompe(s) au cul"" : not quite

"se faire virer à coup de pompe(s) DANS l'cul" : more so

"i am surprised by this inaccurate translation..."

Here's a new expression for you in English

DAMAGE CONTROL!

In all seriousness Daniel, we are nitpicking.

[christopher muir]

Terry -

I don't want to see the US dollar crash - it won't help anybody. However, I do wonder if some commentators who say that the US Fed is just feverishly printing money to postpone an inevitable recession might be correct. As John Gregory suggests, Wall St probably will be the guide, but it certainly finds it hard to settle down at the moment. So, that makes me cautious...

[Mary Catherine]

"Guns are like toothbrushes in the US".

This is incorrect. I believe it is estimated that 1/5 of the population are gun owners.

[:terry]

Chris:

Wall Street is not the guide. In 1992, I worked in a bagel shop. Lox was $24 a pound. People would come in and buy a pound of it. As the economy worsened, people started buying less of it. Why? Because it was a "luxury" item. We were soon slicing half as much. The point is that when the economy starts heading south, CONSUMERS start spending less on things they dont need as much of expensive fish, wines, jewelry etc. If you want to know when a recession is coming watch consumer spending. That is what the economy is. Not traders gambling in the stock market.

This is part of the problem with economics. People always look at it from Top down. This is what the Fed is doing. This is what Wall Street is doing. It's rather an elitist attitude (im not saying you Chris). It's the same nonsense that let's bureaucrats think they can control an economy when the only real power they have is to bury it. Real economic forces are driven by people buying coffee and donuts in the morning.

[Valentin]

"I believe it is estimated that 1/5 of the population are gun owners."

My point was that you can go in a store and buy a gun with the same ease as if it was a toothbrush or pair of jeans - in a store, or at street corner, or flea market...
And at least if we spoke about handguns, but the same is true about automatic guns, which are genuine mass-murder weapons.

And then go patronize Iran... Talk about nerve!

[christopher muir]

Terry -
Thanks. Just one last comment from me on this subject. I think that it's difficult to judge the economic future mainly by consumer trends because a great deal of purchasing power is nowadays driven by borrowed money. Let's keep our fingers crossed. I think it was Candide who kept saying " it's all for the best..."

[Ros]

Rocket
I only just saw your reply - many thanks for the information (& useful site) - have put your photo in "mes images" - hope you are flattered!

[azloon]

Rocket -- our board's own salvador dali. thx for exposing yourself (oh, you know what i mean).

[John Gregory Flinn]

"Not traders gambling in the stock market..."

TERRY - really!
I would never have credited you with that sort of leftie comment!

[Valentin]

"I would never have credited you with that sort of leftie comment!"

LOL indeed, another hero's magic torn into pieces! But hey. There are dark sides in any of us !

[azloon]

Terry --

you have finally revealed yourself to a man of varying opinion, and not the strident idealogue many supposed, judging from your hardline, ayn rand view of life.

'traders gambling in the stock market" perform a valuable function in fast moving markets. they provide liquidity which is vital to the smooth operation of all markets. it means buyers can buy and sellers can sell easily, at prices close to the current price, without distorting market movements. incidentally, these people are acting out of self-interest. :)

as others have pointed out, your 'take' on these traders is definitely left of center. ayn rand certainly would take you to task.

it's nice to know that even you have some divergent opinions -- different from the party line.

[:terry]

John:

That's all the stock market is. A casino. Stock trading is little more than legalized gambling.

John

"TERRY - really!
I would never have credited you with that sort of leftie comment!"

Azloon

"as others have pointed out, your 'take' on these traders is definitely left of center. ayn rand certainly would take you to task."

I'm not sure guys, how referring to investing in the market as "gambling" puts someone into the leftist category. LOL Isn't that what it is... A GAMBLE! Buying a house could come into the same category as one wishes and hopes and sometimes begs to turn a profit on it after a certain period of time.

Or for that matter check out your IRAs.

If gambl