2 FEBRUARY 2010
Of nearing the beginning of the end of the tunnel … just about
Despite economic indicators starting to point upwards, at last , major Euro area economies included, nightmarish balance sheets and herbal tea will nonetheless remain on many firms agenda, at least for a while. Latest trade data published show that OECD exports and imports alike took their first dive in Q2/08 and plunged as far as -30% in Q2/09. From then on, turning positive, in other words, climbing towards the surface, demanded strength, energy and resilience.
And slowly but surely, the momentum is back. Slowly because capacity utilizations in the manufacturing industry in the Euro area and in Europe remain modest, stagnating for the most part around minimal values, and on average at least ten points behind historical high of the ‘90s. Surely however because Europe’s best of class, intermediate and consumer goods, machinery, equipment, and motor vehicles have reported positive export volume expectations in the first quarter of this year along with basic metals and medical equipment.
Therefore among cash-strapped member states, may the last one out keep its fingers from the light. The next six months will be crucial for the beginning of any signs of a stable recovery although a few gaps (output, and turnovers mainly) are expected for January figures. True relief and the possibility to exhale, at last, should thus take place by next summer : just in time for the labor market to experience a long awaited jump-start
2 JANUARY 2010
Of resolutions as the green revolution did not quite make it last year
Since jet fuel never had it so good last December courtesy of world leaders’ incapacity to agree on anything close to coming to the rescue of mother Nature, resolutions to do better and stand tall in the coming next months will solely apply to ordinary people. To each its own.
Thus chin up, amid public transfers and secular tradition, events which we will hear about this new year, and bets are on, include renewed periods of shorter work-week subsidies since job protection rules totally failed, intentionally or not, to secure the labor market in the last 30 years. The sudden labor market’s stabilization solely equaled to a body’s knee-jerking reflex and little else. Thus courtesy of the severe economic downturn, unemployment figures, projected to run higher, will keep deteriorating unless, the adequate replaces once and for the all gawky speeches with concrete action plans.
To throw away old habits come hard since the parochial will endlessly lampoon the reckless and inversely but pain usually helps accomplish great goals.
Amid the lack of snow ploughs and running low on grit, aka déjà vu mishaps, the return of confidence lending and the necessity to cut spending and raise revenues, or an nth national debate on reforming the un-reformable, who will want to yank the lion’s tail ? As usual very likely vox populi. Thus leaders of all parties, mind the gap!
2 DECEMBER 2009
Of a full and busy year ahead with confidence
As the national debt issuance still grades AAA, the debt to-gdp ratio has left many ordinary people totally untouched : projected by the European Commission Autumn forecast to rise to 85.2% in 2010 and to approach 90% in 2011, (close to 96% according to the IMF September forecast) compared to a mere 70% at the end of 2008.
This time of the year, amid speeches on green issues and the obligation, for future generations, to save the planet, the Xmas spirit has invited itself in a gesture of semi-relief from day-to-day horrors.
For what streets and stores of Paris, jammed with shoppers , reflected as early as the last Saturday of the month of November, were not only brilliant decorations and smart lighting but consumers’ decision to shrug « la crise ». A fact which hopefully analysts will take a good note of in order to avoid underestimating « consumer confidence » … in December.
Next year will bring its load of thorny issues, starting with redundancies, record high unemployment, inventory restocking, further labor hoarding, new telecom regulations, working time rules and retirement age, and, among other issues, the end of the business tax. a French specialty, which consists in taxes on companies whether or not they make a profit, but whose termination will leave local councils in want of millions of euros. Who will pick up the final tab ? One way or another, how minimal or partial, very likely households. Thus, the need to let it reap, at least once a year !
2 NOVEMBER 2009
Of stress at work and the consequences of incompetent behavior
Corporations have had plenty of hard thinking to indulge in the last weeks putting aside their financial quarterly results. One disaster, the « economic downturn » and its plethora of unwelcome news, was replaced by another catastrophe which deserves the name of human tragedy.
Stress at work prompted the unthinkable and ultimate way out for some workers, leaving families, colleagues, and friends numb.
For instead of applying the most basic motto on a company’s walls, « you treat people well they perform better » life robbers crept in . It has been said, and often erroneously, that Anglo-Saxon work methods, ruthless and brutal, were literally copied-pasted by the book to the French work scene and triggered disasters. Unfortunately, the overzealous bastards who were so keen on skipping the most important chapters and rules will now, and literally, pay the price.
To your calculators : financial impact on corporate image for having a company’s logo associated with body bags: a few million euros. Financial impact for hiring consultancy firms to pick up the pieces of a damaged firm’s reputation, public relations stints, interviews, public appearances, another few million euros. Financial impact for dedicating more time to cannibalism, isolation, rumoring, destabilization, harassment, rather than polishing skills and encouraging troops, another few million euros.
And financial impact on human impact courtesy of incompetent bullies, billions of euros. And of course, that leaves plenty of time left to catch up on reading , especially chapters missed about profit and well being : even would be master puppets can understand that one ….
2 OCTOBER 2009
Of confidence and bedlam, the mind boggling type
Amid business confidence which has started to pick up again, upstairs and downstairs households have had plenty of propaganda items to chose from in a few weeks thanks to the vast choices offered to them, and from all sides: starting with the Post Office.
How to scare the hell out of all people and spread confusion ? Simple : with a shortcut in which the transposition of a European directive into national law which terminates the post office monopoly is brandished, by unions, as the threat of privatization.
Another example : declare the following in public: « the creation of high schools in 1802, put an end to privileges by birth, which thus meant that what matters in France today to succeed is no longer relevant with good breed but instead is all about showing what one is worth through one’s achieved hard work, and academic records». Simultaneously, shoot yourself in the foot and start the mother of all controversies by finding legitimacy in a 23 years old, preferably an undergraduate , to become the next president of the development corporation of Europe’s largest business district. Then hear vox populi and learn.
Last but not least: humiliate an openly gay high public servant, in other words a minister, and modify at will his written words, drop here and then enough insinuations , no one will bother verify , and make of him one who indulged in unspeakable acts, and who knows, after all, maybe still does.
In conclusion : regional elections in March may well see voters’ wrath
2 SEPTEMBER 2009
Of too many words which failed to materialize into action
As « steel city » Pittsburgh, is about to welcome the nth G20 Summit, words of honor pronounced last year by the very same world leaders were anticipated on to fall flat on their faces. And thus, this very column read last year (Archive Bulletin November 1st 2008) that independence, speculators, golden parachutes, stock options, and overblown bonuses would get what they deserve : a cold shoulder and nothing else. Out of the good, the bad, and the ugly, the new who’s who that was supposed to be re-written is still being drafted between amuse bouche and the likes.
Unlike many nations, France and Germany have already made their voices heard, and loudly, as to the togetherness that is imperative for reforming the excessiveness of the financial world on tax payers’ back.
Thus, as a reminder to world leaders and speech writers, on April 2nd four months ago, it was solemnly declared: « We have today therefore pledged to do whatever is necessary to restore confidence, growth, and jobs" -FAIL-, "repair the financial system to restore lending" -FAIL-, "strengthen financial regulation to rebuild trust" -FAIL-, "fund" -DONE- "and reform our international financial institutions" -HALF DONE- "to overcome this crisis and prevent future ones" -YET TO BE DONE-. Such words of poetry were completed « By acting together" -FAIL- "to fulfill these pledges we will bring the world economy out of recession" -NOT YET- "and prevent a crisis like this from recurring in the future" -TRY HARDER-. Section 14 on « Strengthening financial supervision and regulation » even boasted to « reduce reliance on inappropriately risky sources of financing; and discourage excessive risk-taking. Regulators and supervisors must protect consumers and investors, support market discipline, avoid adverse impacts on other countries…. ». NO COMMENT.
And to the poor MBAs nicknamed all sorts of things among which « Me Before Anyone else », who went as far as signing ethics charts in the spur of such intense moment, remain calm and poised. The end is not near as yet
1 JUNE 2009
Of Europe and national identity
One major lesson that we all learned during the financial crisis was that it took pain and suffering for Europe to make a decision, united, since « me before anyone » had taken over nations and erased all sense of unity at a time of serious concerns.
And thus, sovereignty and national identities started creeping from the caves until common sense and the very reason why Europe was born out of a simple post-war meeting , took over: reconstruction and peace. This time again, we citizens of Europe will be asked to elect our European members of parliament and therefore cast our vote for parties we feel are closer to us, for what we may or may not want to stand for. What matters most to ordinary people is the certainty that jobs will be kept at home, and that economic growth will make a quick come back to stay.
To most citizens, Europe is often as abstract as modern art, and has brought them no benefits but tons of grief . And although massive absenteeism is expected as is the case every five years, the enumeration of progress brought by Europa, (protection from unfair competition, solid currency, scientific innovations, free movement of people and goods, proper and modern infrastructures, food safety, airline security, employment mobility, etc….) will not make any difference. No wonder, since our meps remember to tell us, and only once every five years, that the park down the street was financed , in majority, by Europe’s funds , and that the area’s economic development blossomed along with the park’s first buds.
What they also forget to tell us, is that we stand as the Turtle of Europe ,regularly dragged to court and heavily fined, for failing to implement into national laws European directives. As if redress meant regress ...
2 MAY 2009
Of optimism although the end of the tunnel is yet a long way away
As the state of the nation keeps deteriorating, (unlike last year when gdp had remained constant and heavy players’ order books had taken capacity utilizations in the industrial sector to near saturation levels), closer to home some good news have dared show their faces and have started to trickle down: neighboring member states, unlike us, picked up new industrial orders and consumers have regained some level of confidence , unlike us, due to rescinding prices, noticeable on their food bills and at gas stations. On this last point, so did we.
But to every upside, there must be a downside and the lack of r&d may well be the next trouble we will be running into. To start with, industrial investments are expected to decrease sharply in the coming months and real investments are expected to behave similarly. And for a simple reason: the slow motion industries have been in has left equipment under-used or frozen during long periods of days not worked and has pushed back the necessity to incur new expenses to upgrade, invent, create, new machinery which no one can quite see the use for. And for another simple reason: solid balance sheets.
And thus, risk avert financial institutions may well turn down the next genius into a discouraged, chin down individual , ready to join any public servant job rather than join the dole queue. As a result, the capacity to withstand competition, which includes state of the art equipment, may well pass us by. For the overly optimistic, we may end up at the very bottom of the «nearly best performers» list, meaning no where, and for the realistic, we will be left behind. so when momentum starts anew, will we be asleep and far gone or ready to turn on machinery and equipment ?
Bets are on that we will, but it will take time, as usual. That is our ever lasting challenge …
1 APRIL 2009
Of another world leaders summit, diligence and long term plans
Although science fiction scenarii have long ago been promising the end of materialism, not so much through global destruction but rather through simple human evolution, the necessity to find a parking spot, to own a bank account, to keep ones roof over ones head has remained so tangible that the time for ethereal beings wandering around the galaxy in peaceful colorful lights is just what is should be : bed time stories.
Worldwide leaders will soon meet at the G-20 summit to intend resolving the worst ever crisis and are likely to discuss, as they always do, matters already debated, stale and tiring. last November, exactly four months ago, the G-8 summit heralded a major change , a revolution on regulation, the end of hedge funds , the end of tax havens and the end of other type s of serious anomalies : bed time stories.
Not one single new regulation as regards these topics ever materialized and the good old third degree treatment, in addition to the threat of damaged reputation replaced what should have been firm, unconditional, immediate global law so as to fine massively, at least, offenders and with no mercy . Another bed time story. High up on this summit agenda will probably be written tons of « how to avoid going straight into the wall» guidelines which will end up in draws as each nation fights for survival and tries to deal with their own crisis.
Unless of course, world leaders actually proclaim , in one voice, ready to implement within 72 hours resolutions of nations united . Another bed time story …
2 MARCH 2009
Of the green revolution, and redemption just waiting to happen
Same time last year, London Brent crude oil prices per barrel had jumped +51.5% year-on-year, and the new game in town had consisted in filling up the gas tank and taking off without paying the bill. When caught by exasperated gas station owners, the culprits confessed that they could not longer make ends meet and offered their most sincere regrets.
That very same month, while unemployment ran high, while financial and industrial investments stayed modest, while growth and economic forecasts remained rather grim, France ranked on top of the European list for rewarding execs with the biggest salaries.
And to make matters even less pleasant, vegetables and fruit prices could swing up +44% in just one week. A year later, the party is over. And unilaterally. Globally, efforts to leave behind crude oil dependency has triggered , and rather rapidly, electric cars, energy efficient buildings, war on air pollution, quality of life re-thinking, innovative recycling, research for better oceanic understanding, and the likes.
In other words, all things likely to help us breath better at a time when anxiety ridden news headlines keep announcing, as they must, the reality behind the worst ever financial crisis. The beginning of a new cycle has thus started, in which, we must find solutions to problematic conditions .
Since the shock felt has been sending waves of pain and discomfort far enough, we will succeed. And together. As long as our leaders, in the name of opinion polls and hegemony, do not play with the temptation to go it alone, and to disregard their neighbors, a glimpse of hope remains. Enough to climb the mountain and, chin up, instead of sitting down enraged
4 FEBRUARY 2009
Of a French exception alive and well as ever
This is not about cheese makers and wine growers fighting Eurocrats in order to safe keep exceptional national treasures likely to disappear in the name of uniformity and food safety standards. Instead, this is about an old reflex, known as strike, in order to demonstrate, to voice, and preferably rather loudly, discontent for reasons that can be strictly local as well as international.
Last month, January 29th was declared national strike day: an estimated large bracket, one to 2 million people, thus sent a wake up call to our leaders: nationwide they marched and protested over low pay, deteriorating living and working conditions, and serious worries about rising unemployment. That social big bang preview united white collars, workers, pupils, students, university professors, the self employed and pensioners alike . An exceptional situation since 2005 knowing that the entire world is on fire ? Not so exceptional after all since the « enough is enough » indicator has been blinking red for a while and, knowing that among protestors, French young adults, for the majority in their mid to late 30s, showed up en masse, seriously worried about making ends meet every month. Named «the demoted», a term coined by sociologists, they represent the over-educated, under-employed and under-paid group, on their way down the social ladder.
But bizarrely, amid this jolly good mess, the buzz word in town stands in two words: winter break. Ski resorts have been boasting about 75% to 90% reservation rates, school breaks and holidaying being as protected in France as a sacred cow. Contradictory enough ? Just like bankers’ bonuses, finally forsaken after getting a third degree treatment and fat loans after all. Clear as mud
1 JANUARY 2009
Of wishes, many good wishes , and more good wishes
In three words, one nation has demonstrated to the entire world what strength and determination can do. And thus, as every New Year brings hopes of betterment expressed as good wishes of good health, peace on earth and other loyal intentions, let us thus aspire for the best of both worlds for all: strength and determination.
Strength and determination to pursue our efforts into protecting the earth despite knowing that unacceptable crude oil prices will help achieve this goal after all. strength and determination to bring foes to the peace talk table so as to impose drastic and full cease fire conditions rather than softy concessions.
Strength and determination to eradicate, once and for all, any attempt to corrupt, destroy and rebuild systems that stood on vacillating bases in the name of rapacity disguised into ignorance and incompetence, and, strength and determination to protect and safeguard fundamental human rights. And indeed, to face this New Year, we must brace some more, with strength and determination, to transform good wishes into tangible acts
2 DECEMBER 2008
Of the year that was, as goldilocks economy is no where to be found
With lassitude, ordinary people will look back on 2008 as the bumpiest year they ever experienced and, worldwide. January saw the first economic disasters occur, and Basel brass thought of new liquidity regulations. That same month, crude oil prices reached what was then a record high USD 100 per barrel but France made all the headlines with a mighty Euro 4.9bn loss on a trading floor. In February, companies operating profits behaved rather well but Parisians witnessed the threat of a massive strike remake as salaries keep stagnating.
March brought additional worries to households’ pocketbooks as raw material prices skyrocketed but the « R » word, quietly pushed aside, was replaced by murmur of « biggest crisis« , much less traumatic. April put Europe on the world map as the euro hit a record USD 1.60 and as global fascination with a little Olympic flame brought dreams of championship to every nation’s eyes. The month of May pointed to the very first concrete signs of serious troubles ahead as real estate sales nationwide were announced to have plunged -26% in Q1 and year on year while crude oil prices per barrel hit USD 130.
June confirmed that dire times would hit rather soon as gdp was revised down, food prices kept soaring and crude oil prices topped a new high at USD 140.38 per barrel. July broke all prices records, just when cash inventories in the industrial sector had been deteriorating for six months, and order books had seriously been shrinking. In August, the upcoming crisis and its domino effects became known, -- slow household consumption, soaring unemployment, declining exports and capital investments-- , but the wake up call, named lehman, came in September: the rest is far from being history.
With inflation rescinding , oil prices decreasing , recovery plans rolling, but unemployment soaring, will goldilocks economy dare show its face to the world ? Just to take a look
1 NOVEMBER 2008
Of millions, billions and trillions and still pouring in
In perfect alignment with human nature, it took brutal bludgeoning to trigger the intervention of rescue missions well after massive damages, and certainly not of the so-called collateral type, were already happening. Agreed, the blood spill will continue for a while. There exists no past reference equal to the present time global crisis, and, the ones who will resolve the mess we are all in are likely to be people of determination.
What will thus be the outcome of November 15th when world leaders of the G8 and G5 groups meet to debate about putting the world back on its feet? Leaving aside cultural differences and potential diplomatic incidents of any kind, one key word is likely to remain high on the agenda : profit.
As to how it will be redefined, some leaders are likely to choke on such an oxymoron as ethical profit while others in good faith may grasp the moment to put another word higher up on the agenda: regulation. The kind that already exists having been blatantly ignored by a vast majority, new rules will certainly emerge and become even more confusing by the time they are translated, and itemized on an even longer time table that no one will really want to abide by and that will necessitate more world leaders meetings.
Another plethora of unconventional words, -- independence, control, fundamentals, diligence, monitoring,- and the likes -- will get gold medal status and prodigal sons, aka hedge funds, rating agencies, speculators, will get serious reprimand and, little else.
As for the eccentrics, -- golden parachutes, stock options, overblown bonuses-- they will get what they deserve, a cold shoulder, and be left alone for each nation to choose whether to remove them or not. Out of the good, the bad and the ugly , a new who’s who is about to be re-written. How long will it last prior to being reviewed, disputed, and put aside ? Yet we are running out of time …
1 OCTOBER 08
Of sudden action, and the lack of, as the house is on fire
The hair raising, nail biting, nerve wracking crisis has caught up with Europe and by spreading like wild fire has succeeded in waking up the naïve along with the mercenaries. Our leaders had insisted on telling us how beautiful was the state of the nation despite early warnings of a disaster to come . We had asked our readers to start bracing in March in this very column . Here is a reminder : that same month the OECD revised down its forecast as regards France’s GDP for Q2. in May, real estates sales revealed a market collapse -25.9% on the Q1 year-on-year period and rising stocks.
In June, property developers offered major incentives to attract potential buyers but to no avail as stocks had already beaten the 1992 record high of 105 000 unsold apartments. In July, companies cash inventories had deteriorated while company debts kept rising. yet good news kept pouring in from our leaders : France’s GDP was going to be strong, only slightly revised to 1.7% from 2%.
The wake up call came in August when GDP for the Q2 period was announced to have dipped into the red zone -0.3% but we were told that « 2008 will be a year of positive growth ». Then came September, and the global trading market mess that we are in, and all its dire consequences , still left our leaders totally silent.
It took the last days of September, to hear a different story than the one we had been told. We read the word crisis pronounced in precipitation, with a tone of urgency, on our leaders’ lips. It is now time for action, leadership, and truth. And not necessarily in that order …
1 SEPTEMBER 2008
Of the « R » word, bleak times and pure dire straight
Since falling down, economically that is, is defined as two consecutive negative quarters of industrial output, it appears that we are heading for a rather hard fall and likely to stare at blinking red indicators for some time. In August, a majority of European members states revealed via their respective business surveys that economic sentiment is declining… further. But not in France : no such survey is conducted that month as most industrial heavy weights slow down their production capacities or partially close down their plants in the name of well deserved vacations.
It can be thus ascertained, with no need for a survey, that industrial output figures will be disastrous except for a few lucky devils including consumer goods due to holiday paperbacks and the September school term products. Maybe.
Hardly enough to bring back rejoice to a nation where every day conversations evolve around choking up on heating oil bills, food bills, residential electricity prices which just went up 2% and are due to increase +15% by next year, and of course, low pay. Low pay that have been so low for too long that for the first time, restaurants and hotels recorded a serious drop in revenues this summer. Supermarkets and hypermarkets have noticed a similar trend.
And company bankruptcies have been filling pages and pages in the daily press. As a result, one sentiment has been rising, ready to hit the roof , as lazy summer days are over: the « enough is enough » type of indicator, red hot as a Tabasco sauce. Unions have been warning government, again, about a general feeling of exasperation and are, again, planning to launch the mother of all strikes soon.
What is very different this time is that our neighbors , far away partners, household names or ordinary people around the world have been feeling the pinch just the same. And some states have already taken different kinds of tax relief measures to alleviate the pain. So how about sharing with France the « how to avoid going straight into the wall» guide book ? Thank you
2 MAY 2008
Of another public transport strike, oil gas prices and GDP
As crude oil prices hit a new record high, USD 130/b, another record is about to be beaten in France : public transport is due to go on strike on may 22nd and demonstrators are expected en masse. In the meantime, fishermen have been blockading all costal piers, from Brittany to Normandy and even in the south, as soaring oil gas prices have, they say, rendered their bread and butter stale.
At 0.70 cents a liter of gasoline, fishermen say they can no longer make ends meet while the selling price of fish has gone drastically down: two pounds of fresh scallops is sold at Euros 1.94 , and the same 2 lb ends up at euros 10 at supermarkets . Most consumers don’t even gasp, this is daily déjà vu. And unfortunately applicable to milk, meat, vegetables and fruit.
Farmers, taxi drivers, and other highly oil prices dependent workers will probably follow suit in case fishermen get what they want: gasoline at 0.40 cents a liter. As for ordinary people, they seem to be the only one aware that France does not rule the world and definitely not oil markets.
Yet amid this jolly good mess, which had been brewing for a while, the state of the nation has improved, slightly. Last year, GDP grew +2.2% similarly to 2006. In Q1 of this year, GDP rose +0.6% with exports up +3.1% and imports +1.9%
The really good news is about overtime which has increased 50% last month compared with the previous month according to the office of taxes paid on salaries by companies. Deductible since the beginning of the year, this Incentive has finally picked up. And industrial sectors concerned with overtime include most heavy players. Which simply means that industrial output for the month of April will definitely be vibrant, and will very likely for at least Q2 forget about the roller coaster ride pattern. Watch those figures
2 APRIL 2008
Of a fiasco, freedom of speech, and the pursuit of happiness
Recently, waving a Tibet flag on the streets of Paris has proved to be extremely hazardous for by standers and demonstrators alike. Dismay engulfed television viewers nationwide upon watching riot police throw demonstrators for a « free Tibet » down to the ground as the Olympic games torch was being carried by athletes throughout the city. Disruptions of any kinds were severely and firmly suppressed.
And shock, horror, Chinese organizers did the unthinkable : the flame was repeatedly turned off, like any other light by their delegation nicknamed « the smurf« due to their blue outfits.
And thus the world watched a terrible fiasco. It is not over yet. French bashing, the new game in town in several cities in China, has also turned into a call to boycott French products.
From a strictly external trade stand point, what do we have to be concerned about knowing that when we sell one product to China, we also buy four. Let us thus imagine that France decides to practice what the European union, which it will head for six months, preaches: « united we stand ». in other words, we decide to retaliate.
How about some tough anti-dumping measures to start with ? Data is widely and officially available at our very own Commerce Commission. Who wants to be first ? Shoes, hand bags, t-shirts, unsafe toys, computers, hardware? Let us thus imagine that European consumers, over 400 million, decide to solely purchase manufactured products exclusively made in Europe: think about it ....
2 MARCH 2008
Of a bumpy year … only a few months into the making
It has only been a few months into the New Year and the roller coaster ride that every nation has been experiencing seems to be over lasting. To start with , financial markets keep announcing some raw materials record high figures while indices can swing up and dive in one day. The « r » word heard coming from abroad is on every body’s mind but constantly replaced with « biggest crisis » …much less traumatic.
In addition, musical chairs never have had such a good time regardless of the area concerned .The slight government reshuffle -which took place two days following March Mayoral elections when the socialist party regained long time lost territories- summarized it all.
Things have to change. But on which side ? News of reforms brought confidence and renaissance months ago while reforming brought discontent. As for a roller coaster ride ! You get on all excited, then you scream, you beg for mercy or you cry. Quite a few riders always get off usually grinning or laughing. And for entirely different reasons. So which ones ? Is it resilience ? Is it bravery ? Is it unspoken peer pressure ?
Undoubtedly, life cannot be compared with a roller coaster ride yet human nature knows that bracing allows for some protection when too much turbulence triggers imbalance and adds on to objects propensity to fly.
Worldwide, the slowing down momentum has started , but it is yet uncertain that it will result in soft landing. Until June, keep bracing !
2 FEBRUARY 08
Of a November remake as salaries keep stagnating and prices keep increasing
When strikes paralyzed the country three months ago due to inflationary prices and low salaries, no promises were made to bring relief to workers and employees alike. The most that could be expected turned into a modest +0.8% salary increase for public workers and maybe , for the lucky ones +3% in the private sector.
The not-so-lucky were told « you’ll have to wait, maybe next year« . In the meantime, rent has gone up on average +1.8% in one year, prices of vegetables can swing +44% in one week as for potatoes or carrots +5.8% , similarly to fruit (apples +5%) and thus, the new game in town consists in filling up the gas tank and take off without paying the bill.
According to gas station owners, when people are caught, they humbly declare that they are no longer able to make ends meet and offer their regrets. Our rather high company taxes do not always allow for unilateral pay increases but interestingly enough, France where unemployment runs high, where investments stay modest, where growth and economic forecasts remain rather grim, ranked on top of the list for rewarding bosses with the biggest salaries throughout Europe.
Can rocket scientists explain that one please ? Thank you
2 JANUARY 2008
Of the sub prime crisis and « we told you so but you didn’t listen » syndrome
This time it is not just « the economy… » No name calling here please, it is solely about the Basel II Accord aka counterparty risk : thou shall provision 8% of thou capital so as to avoid falling into bits and pieces due to a defaulting counterparty.
But while Europe, since 2004, was wisely abiding by this new regulatory obligation --KEY WORD-- and building up its little spreadsheets -one has to start somewhere-- the mighty Federal Reserve postponed Basel II implementation to 2009 in a white paper posted on its very web site on March 30, 2006!
Yet defaulting home owners did not suddenly appear: houses were being sold left and right in the USA as early as the summer 06 for the very reasons that brought about the sup prime crisis. At first, since the crisis begin in December, French banks boasted about being covered until they realized that globalization is not only about clicking on a button to enter a deal or make a phone call.
The hair raising, nail biting, nerve wracking crisis has impacted every single financial institution in France and every one is running for cover. The problem is that there is no where to hide, it is yet too early. On television shows, debates about regulating bonuses have been flying left and right, although that topic in itself is entirely irrelevant to the regulatory obligation that was ignored.
Now Basel II is thinking of a liquidity regulation. But where are those spreadsheets ??? As if…
2 DECEMBER 2007
Of the unthinkable which has already happened
One hundred dollars a barrel ! In less than a year, oil prices have recorded increases that had been expected for some time now, but which no one in their right mind would have wanted to see. Except of course for those waiting for that mighty bonus, which they will swear is definitely well deserved.
And amid inflationary raw material prices, which have started to deflate by the way, we the people of France have been informed that ministers will undergo performance reviews, since according to the PM, they are accountable “like every one else”. Wrong ! « Every one else » does not have a chauffeured car waiting for them between meetings and « every one else » does not benefit from vast apartments paid below market prices in the best Paris districts, courtesy of tax payers money.
So as oil prices at gas stations are definitely expected up within the next few days, the PM’s popularity is going down. To top it all, the jobless were told that times will get tough : sanctions will be applied to any unemployed who will refuse two « acceptable » job offers.
As to what « acceptable » stands for in a country known as the sick man of Europe due to its stagnating unemployment figures, that should take another six months. Enough for smokers to digest the smoking ban effective January 1st ….
2 NOVEMBER 2007
Of changing times, and resilience, even when trains stood still on their platforms
Now that the public transportation strike that lasted nine days is over, the big debate in town "so who won ? Sarko or the unions ?" has left employees and workers of all conditions numb. Numb and Tired. And so is the economy according to the ministry of finance whose estimate of the financial loss incurred nationwide roughly equals Euros 300mn to Euros 400mn a day.
But times have changed. Any one old enough to remember the three weeks strike of '95 could nearly feel that change in the air. The people’s opposition to government’s plans then, turned this time into the people’s resilience to make it to work. And unions refusal to back down then, turned into signs of willingness to open negotiations this time.
Although there have been warnings, from some union members that if negotiations fail, a new strike could start in the flick of an eye, union leaders are well aware that public opinion will no longer take it. Especially at a time when purchasing power and unemployment, key words for many, are eclipsed by demands from public workers
2 OCTOBER 2007
Of stagnating salaries and recurrent price increase s
Strikes and demonstrations will make most of November a month to remember as workers, judges, unions, public transportations, utilities, students, the post office, banks, will voice their full discontent with government plans to reform pensions.
Working longer has been understood by most people as a necessity, even though France, where workers can retire at 55 or 58, remains an exception within the European Union. But working longer has become a totally different issue since salaries have stagnated while prices have been skyrocketing.
Between 1998 and 2005, the National Office of Statistics calculated that workers’ salaries increased +0.6% and +0.5% for white collars. On the same period, employees' salaries fell -0.2%
In 2005 median salaries rose +0.9% a year while that same year domestic fuel prices jumped +30% basic necessities have thus become luxuries for many. And the people are losing their patience ...
2 SEPTEMBER 2007
Of equality and unequality
As government vowed to modernize France, so they vowed to modernize pension plans which allow some workers to retire earlier (at age 55) than others (at age 60). Yet the classification of workers which has allowed for the early birds and the late birds, the so-called have and the so-called have nots, date back to the beginning of last century. Hardship stood as the basis for such classification, and controversies have been raging for about the same period as a result.
The typical example of train conductors (who used to have to lift heavy bags of coal to feed their engine) no longer applies, yet they are able to retire at 55. And thus, what about workers who do not benefit from the "hardship at work" classification ? They'll just have to "do their time" to be able to retire and claim their dues. In the meantime, unions have vowed bumpy times to come in case government implements "fairness". And the price of bread is expected to increase ....
2 JULY 2007
Of political debacle which is likely to last
Although France achieved the status of a Republic as far back as 1789, a large majority of politicians have been insisting lately on retrograding to partisan battles seen around the 19th century: to the right, some sad and unhappy chums have been turning incandescent with rage as the new president dares propose cabinet posts and the likes to members of the Socialist Party.
To the left, any member of the Socialist Party who has joined the new government team is openly coined "traitor" , prior to being formally excluded from the party. As for those who would dare consider any upcoming offer from the Prez, they will similarly be shown to the door, dismissed.
It has nothing to do with ideology of course. Such debacle stands much closer to a narcissistic vision of empowerment acquired at an earlier stage. And with friends like these...
2 JUNE 2007
Of competition, energy prices and the no so competitive edge left out for consumers to chew on
From July 1st, consumers will have total freedom over selecting their household gas providers similarly to electricity as EDF (Electricite de France ) and GDF (Gaz de France) lose monopoly over such services. Lovely, will say some, not quite so will warn others.
So far, household electricity prices (less so industrial prices) have been rather cheap compared with our European neighbors, and even more so for gas prices : € 12.72 with 15% tax per GJ for 83.7 GJ/year compared with Denmark’s € 29.82 (55.8% tax) the Netherlands’ € 16.92 (34.5% tax) and Sweden’s € 25.95 (43% tax) according to Eurostat figures.
In France, once consumers will kiss those national companies goodbye and take a new provider (among several choices), there will be no turning back. If that's called open competition how about looking at the good old British way of doing business ? Compare, contrast and switch as many times as you may want.
Bottom line : who is on edge ? Providers, definitely not consumers. For this one, the grass is definitely greener on the other side of the Channel ...and it has nothing to do with the weather !
2 OCTOBER 2006
Of unemployment, more or less unemployment and the search for a solution
With jobless figures increasing for the nth time, whatever hope there was for durable improvement has started to fade away again. Undeniably, unemployment figures rescinded from Q3, just about when exports started picking up, but undeniably as well, short term jobs still outperform long term jobs, and the number of unemployed on training keeps increasing.
The last time that France counted less than 2 million unemployed dates back to June 1983. Compared to the latest officially registered jobless, it almost seems beyond belief. Yet during these very past decades, experts’ reports void of rosy glasses came to identical conclusions on employment policies: inadequate reforms, inappropriate resources, and a serious lack of political will.
The will nevertheless came in precipitation in April last year via decree 2005-326 so as to officially set up, courtesy of the former PM’s office, the “Council for Employment Orientation”. Its mission? To “produce a diagnosis on the causes of unemployment based on available analyses …” (déjà vu) and “evaluate existing measures based particularly on domestic experiences and reforms taken up abroad especially in the various European Union member states.” (déjà vu as well).
We must thank such brilliant Article III 206-3-4-5 of the now nearly defunct European Constitution whereby “each member state shall provide the Council and the Commission with an annual report on the principal measures taken to implement its employment policy….”
And so, had France voted a massive “yes” on May 29th last year, (get the timing ?) France would have had to give some serious explanations on its unemployment paralysis to Strasbourg top brass. Instead, the very first report produced by the Council upon request of the new PM, not only came out six months after the decree had been passed, it solely focused on a) government subsidies to hiring companies, and b) costs reductions (for employers) applicable to low wages.
Another way to “evaluate existing measures”? Read on. As regards point a, the Council concluded that government subsidies to hiring companies are little known, bear no definition from a legal stand point, and have not been the subject of any itemized listing.
In other words, something as abstract as modern art. As regards point b, the Council did not quite bounce with enthusiasm and concluded that although costs reduction for low wages would have a positive impact on the job market, the potential for such reductions to turn into “traps for low wages” does exist.
The Council also recommended a one year audit to determine the not so conclusive efficiency of existing “conditional public subsidies” (aid granted in counter party of job creations) in order to .... solely keep the good apples based on findings. According to the Council report “Politicians are too keen on launching scoops” rather than grant such aids “based on cost/advantage analyses” … as there has never been any impact analyses of such subsidies thus far.
In conclusion, so much for decree 2005-326, for tax payers’ money and for the jobless alike
