May 6, 2012

France and Greece [bh]

The socialist Hollande knocked off Sarkozy in France and the Greek citizenry once again showed their incapacity to act as adults.

What does this mean?  Does it mark the true beginning of the end for the EU and the euro?  Does it mark the latest development in the long, slow crunch?  Sorry but it probably comes down to one of those two options.

Discuss.  Or talk about something else entirely.

Update: Here’s a thought from Russ Roberts to keep in mind when reading the news coverage.

Posted by bh @ 6:21pm

Comments (60)

  1. what this means Mr. bh is that the good people of Germany have been baited and switched out of an enormous amount of monies by a rampant horde of julia-type hyper-dependent socialist french fuckfaces, having made their stupid decisions to stopgap the failed european science fair project thinking they had a french partner what to some degrees shared their own thinkings

  2. Nikkei gapped down a bit (-2.4% now) but this is also their first chance to react to some of our crappy data from Friday.

  3. also they have no nuclear power anymore and no way to get any

    stupid reactionary cowards no wonder they lost WW2 turns out they’re a goddamn pansy race

  4. I guess that’s how they cornered our market on electronics and decent motor cars.

    Never under-estimate the Japanese. They’re crazy.

  5. Zerohedge on Greece elections and link to realtime results.

  6. Apple’s a lot uncornered that market Sony is now more synonymous with over-priced than with quality

  7. poor bear he was just hungry

  8. Apple has poor chinese women make its products and Apple doesn’t pay its taxes. A lot of studio recording equipment and soundboards are Japanese.

    Bears are evil and stupid and will kill you dead. They’re like wild pigs on steroids.

  9. yes lots of the high-end stuff in sound and film is japanese

    here is a handy and comprehensive clip n save list of bears in order of their dangerousness

    1. Polar bear
    2. Brown bear (the grizzly and Kodiak are both subspecies of this species)
    3. American black bear
    4. Sloth bear
    5. Asiatic black bear
    6. Spectacled bear
    7. Sun bear
    8. Giant panda

  10. One of my sons opined when he was a wee lad about the Giant Panda: “If they’re too stupid to figure out how to have babies, they deserve to be extincted.” Out of the mouths of babes and all.

    I only like bears of the teddy variety.

  11. I’m pretty sure the Colorado falling bear was retarded.

  12. Bush’s failed policies with respect to the mentally ill are responsible for the bear’s death.

    Obama would have saved the bear, if only taxes were higher.

  13. Maybe he was the Hamm’s bear on his way to town for a brewski.

  14. The Colorado bear menace might explain Jeff’s strength training regimen. Yes, I’m talking about bear wrestling. It’s making a comeback.

  15. the death of the bear is an omen for the bulls?

  16. Bear wrestling? I can taotally see Jeff doing that—until his family gets wind of it.

  17. Does it mark the true beginning of the end for the EU and the euro?

    Of course not. That happened when the damned thing was dreamed up. It may mark the beginning of the end of the beginning of the end.

  18. A nice black bear I found last October. Lucky I wasn’t considered a walnut!

  19. That’s a good point, McG. Pablo was expressing something similar in the earlier thread.

    I guess I’m wondering how long until the end. Very short term? Shortish term? Medium term? Does it just stagger on for a decade?

  20. Nice, jdw. How big do you think he was? How far away were you?

  21. Question marks don’t work like they used to. I blame Bush.

  22. Wildlife officials believe the unusually warm and dry climate in Colorado has left limited sources of natural food for bears, prompting them to wander into town.

    It is just fucking relentless, isn’t it?

    I guess I’m wondering how long until the end. Very short term? Shortish term? Medium term? Does it just stagger on for a decade?

    We are all going to die from global warming, it doesn’t really matter.

  23. it’s either that or get eated by bears

  24. The dinosaurs died because they were so big and were too flatulant causing Global Warming. I read it on the interwebs.

  25. We are all going to die from global warming, it doesn’t really matter.

    hedge your bets “climate change”

  26. there are alot of stupid peeps wielding power these days. important: the radish crop is good this year!!11!!

  27. oh heck !!12!!

  28. it’s a competitive world!

    dinosaur farts in large amounts

  29. I was only worried about the EU at the beginning of this thread.

  30. The EU is going the way of the dinosaurs, and the election of Hollande is merely a fart.

  31. dinosaur farts in large amounts


  32. From AP.

    Asia stocks plunge after Europe elections, US data

  33. Zombie on Europe and the US.

    But something interesting happened on Sunday in Europe: Voters in both France and Greece, two countries ruinously addicted to government entitlements, rejected the “austerity” model of debt-reduction and instead doubled down on unsustainable spending sprees. France elected Socialist Francois Hollande as president, and in his acceptance speech he promised to increase government benefits and amp up “stimulus” spending programs — the exact things that got France into a metaphorical debtors’ prison in the first place. But exactly as Cloward and Piven has surmised, once you get 50+% of the population hooked on “free” government money, there’s no turning back — they will vote for socialists every time. The election of Hollande is the culmination of Cloward-Piven; the strategy worked, but in the wrong country.

    (In a similar blunder, it should be noted, Karl Marx predicted that the first socialist revolution would happen in an industrialized country like Germany or Great Britain; instead the exact opposite happened, as two backward pre-industrial nations, Russia and China, were the first to embrace communism.)

    Also on Sunday, Greece held local elections and voters rewarded various “anti-austerity” parties and candidates: “Greek voters punish ruling coalition, reward far left,” reads the headline. “Voters angry over austerity delivered a blow to Greece’s ruling parties on Sunday, with neither the conservative New Democracy nor the Pasok socialists winning enough votes to form a government while far-left Syriza took second place.” Even a “neo-Nazi” anti-immigrant party won seats for the first time because they too rejected the “austerity” measures and want to maintain the entitlement state (albeit solely for Greek citizens, in their case).

  34. Now the people who can will pack up and leave Greece and France and the poor suckers who stay will get to watch it all im-fucking-plode. Sad.

  35. ” It may mark the beginning of the end of the beginning of the end.”

    Xeno’s paradox as seen from the inside!

  36. ” also they have no nuclear power anymore and no way to get any
    stupid reactionary cowards no wonder they lost WW2 turns out they’re a goddamn pansy race”

    I dunno. They are trying to give hard cold reality a wedgie with their sloganeering that takes some crazy-ballz.

    It’s a bit like Gaius Mucius Scaevola keeping his hand in the torturers fire while the soldiers that captured him pissed their pants trying to pull it back out. Except ol’ Reality’s armies aren’t going to get intimidated by the courage and pack up and go home. A for effort though.

  37. The really bad thing about it, if you aren’t looking forward to the economic and political prospects of a WWIII, is that Socialists can’t blame the real problem- themselves- they have to point the finger elsewhere.

    Finger pointing usually followed by bullets.

  38. The only thing standing between the West and its death is its system of divided powers. For as long as that lasts. The greatest threat facing the West is client-statism and its lubricant, the centralized fiat/reserve banking system.

    Given that these are wholly ingrained systemic problems largely unrecognized by the compliant dependent class, of which we are all members to some degree, the demise of divided powers will be an interesting dynamic to witness.

    That is all.

  39. I like your first post, feets. Spot on. Remarkably, Germany is an export economy. How they do that baffles me. Or why.

    Fiat money is interest-bearing debt, people. If all debt were liquidated, this money would cease to exist. We are living on 99.44% pure debt. In this reality the system is inherently faulty and must collapse. The dollar is worth three cents. Inflation is not the natural order of an honest currency. Wealth transfers to the top in such a structure.

    And we tolerate this, and as “conservatives” even defend it.

  40. It may be time for Germany to once again kick the asses of the rest of Europe. This time, I might even cheer them on, provided they refrain from the awful bit with mass-murder of “undesirables”.

    I don’t really mean that, but it seems as if France and Greece aren’t using reality right now, so someone else may as well get a crack at it.

  41. Francois Hollande has ten weeks to avert a French bond crisis

    France will have to take its medicine in less propitious times, somehow clawing back 20pc in unit labour competitiveness against an austere Germany.

    It is not easy to see how France can pull this off. Little has been done so far beyond repeal of the infamous 35-hour week. Labour rigidities – employment protection, high tax wedge and minimum wage (SMIC), etc – are among the most entrenched in the OECD club. The unreformed French state takes 55pc of GDP.

    The current account has swung from a surplus of 3pc of GDP to a deficit of nearly 2pc in twelve years. France’s share of EMU exports has dropped from 17pc to 13pc. French trade data has become an “event risk”, keenly watched by traders.

    Mr Hollande must know the dangers of “socialism in one country” under a currency peg. He was a Mitterrand aide when such an experiment blew up in 1983, leading to the `tournant de la rigueur’ or epic U-turn.

    Markets won’t wait so long this time.

    Yet he may be prisoner of events if he fails to win an outright majority in the legislative elections in June and has to rely on the fast-rising Front de Gauche — the neo-Communist movement of Jean-Luc Melenchon with 11pc of the vote.

    History buffs will remember the events of 1936 when Leon Blum’s Front Populaire came to power with “New Deal” rhetoric and Communist backing. Investors rushed for the exits, forcing the franc off the Gold Standard. The money crossed the Channel.

    “Conversations in French became increasingly commonplace in the City of London, as French citizens made arrangements to open sterling bank accounts,” writes Barry Eichengreen in Golden Fetters, my favourite book on the Great Depression.

    There are signs that it is happening again, says Louise Cooper from BGC Partners. If Italians were the biggest foreign buyers of top properties in London last year, the French are catching up this year in the £3m to £5m range.

    “London property is like German Bunds – somewhere safe to park cash,” she said. Is it capital flight? Hard to tell.

    Historian Nicolas Baverez said the French are in a natoinal sulk, idealizing a mythical past and retreating behind a new Maginot Line. Europe has become the great scapegoat.

    “I am convinced that France will stand at the centre of the next Euro zone crisis,” he says.

    Luckily for Mr Hollande, global markets have not yet reached their merciless verdict.

  42. If France travels down the road of increased spending and taxes they are likely to spend themselves into unsustainable comfort resulting in insolvency, which could collapse the euro. If that were to happen, Germany would be left holding the debt. History has shown that when Germany is economically isolated and placed in debt, they do not just accept it.

  43. when Germany is economically isolated and placed in debt, they do not just accept it.

    As it should be.

  44. To all of the above: Yes and No.

    JHoward’s commentary on the dollar and global banking/fiat money–Sadly, yes.

    But the link Geoffb provides concludes on the wrong note(though is broadly correct, and pretty sage for a college kid): Germany and its reaction to what HappyFeet (incredibly) notes was near to a classic bait-and-switch isn’t the problem.

    The problem is that France IS actually likely to try and stand up to its commitments, despite being in poor economic shape. Socialist blather aside, this experiment can last four years or less at current rates, before the market shifts unbearable pain upon the French government.

    Germany will be left standing. Then it gets interesting.

  45. Roddy, I’m struck with how terribly myopic Krugmanism is — the articles above all have some sense of term.

    Fatalists like myself understand that it’s a very long systemic fail of inherently faulty systems (and fraudulent, indicating malicious intent). The “Keynesians” (which they strictly are not) side on very short term views that in a sense correctly say that QE-13 is the only way out of the trainwrecks of the previous dozen.

    Well, it is. Like heroin gets you past heroin withdrawl, every time.

    Would like your thoughts on this, if you care to.

    It’s a fundamentally dishonest view, the Krugman view. But bullshit has sold well throughout history.

  46. To that point, Paul vs Krugman.

    Consider that if a guy as badly presented and spoken as Ron Paul can wipe his feet on the lying intellectual Perfesser Paul Krugman, the client statist view has nothing to recommend it. Here Krugman deals entirely in platitudes and canards. When Krugman wants to get real, get back to me.

  47. I think Krugman is actually a lot better in that forum than he is as an opinion columnist.

  48. Oh, and Putin was sworn in as Russia’s president today. Ain’t life grand?

  49. I guess I’m wondering how long until the end. Very short term? Shortish term? Medium term? Does it just stagger on for a decade?

    Beats me. I was sure it would have collapsed before 2000. You gotta give the Eurocrats credit — when they stubbornly defy reality with their big-gummint schemes, they don’t do it lightly. They have thousands of years of history to not learn from, and they’ve been doing exactly that for… thousands of years.

  50. I think Krugman is actually a lot better in that forum than he is as an opinion columnist.

    Forum, hell. I want to see him in the Colosseum.

  51. The bad news for Obama, recovery summer just got kicked into next summer


    The good news for Obama: It seems that as long as there’s some third party to blame for current conditions —a party whom, the government can promise, will be made to pay for their perfidy and compelled to shoulder the responsibility for repairing the economic malaise— then the voters will opt for blame/burden shifting.

    That’s assuming the typical American voter is as stupid and irresponsible as the typical French voter, of course.

    New slogan for the Romneyites

    We’re better than the French! (Aren’t We?)

  52. An handy dangerousness addendum:

    0. bearfoot

  53. Jhoward, I would note that the clip presented the uber-rational version of Krugman (NB: That’s actually, based on my understanding, him naturally. The spleen-emptying, bile-spewing democratic flack is something he saves for writing. Make of that what you will.)

    I take the middle road, a la Jim Grant, as Paul can often be reasonably be charged with wishing for some Libertarian paradise that never was. See this:

    Partisan bullshit aside, and as many here know fully, the GOP is often as bad as the Dems on these matters, I simply do not see how what Grant argues is readily refuted.

  54. In which Paul Krugman and Larry Summers inspect one another’s navels.

  55. It’s the “baby with the bathwater” aspect of this disaster that bothers me the most. The EU’s free trade aspect, the common weights and measures, and the discouragement of nationalist policies with respect to purchasing are all good things. The prioblem was always the Euro, the extra-national support of silly entitlement programs, and idiotic banking oversight. Unfortunately, because of this crisis, protectionism and economic nationalism might rekindle, making things even worse.

  56. You’ll know that the shit is headed in a fanward direction when the Germans stop clamoring for the Deutschmark, and start clamoring for the Reichsmark

  57. I only like bears of the teddy variety.

    I like teddies too, but not on bears.

  58. I really feel like I am seeing a repeating event in human history. If one only goes back to the post-WWI era, one can see the social unrest of overwhelming debt versus “Forward” . The French have just voted themselves more dessert and the Germans have found themselves paying the tab.
    Even with the pacifism that Gemans have forced upon themselves, the Fourth Reich is lurking beneath the surface. Given the proclivities of the Greeks, Spanish, French, etc., I have a modicum of sympathy for the Germans, as long as they keep that Uber Mensch thing out of it.
    Here, we are about to see in November whether the 51% vote themselves more bread and circuses. If so, this experiment is over and we will have to try again next time, if there is a next time. Robert Heinlin (PBUH) had it pegged and I apologize for over-citing:
    “Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.

    This is known as “bad luck.””

    — Robert Heinlein