Monday, August 29, 2011
Saturday, August 27, 2011
Friday, August 26, 2011
Tuesday, August 23, 2011
Ciggie(2)
from : Didier Nourrisson, Cigarette; histoire d’une allumeuse, Payot, 2010.
Magritte’s famous painting (the pipe «This is not a pipe») is at the cross-roads of all of these publicity venues. It shows in finality that :
- a certain usage of tobacco can mask another;
All is representation of, all is publicity (publicity and propaganda). ‘All objective judgement, be it esthetic judgement or moral judgement, is based on representation’, wrote Jean Beaudrillard. Neither esthetician nor moralist, the historian is taken upwith decrypting the representations which a society gives of itself.
The consumer society became the communication society after the Second World War.Commercial publicity is the underpinning to one and the other. Publicity ‘is the characterof a crime committed to the view and knowledge of all’, proclaimed the Dictionnairede l’Académie française of 1694. Publicity has become a kind of «expandeable belly» capable of digesting everything and in particular all forms of artistic expression : the adult comic-strip, avant-garde painting, the picture-story, the suspense thriller which now takes the form of publicity scenarios and «teasing». Publicity becomes ‘the last scene in representation, that in which all others are abolished : social, political and cultural’.
Magritte’s famous painting (the pipe «This is not a pipe») is at the cross-roads of all of these publicity venues. It shows in finality that :
- a certain usage of tobacco can mask another;
- if tobacco has finally disappeared from public space, it is still very much in consciousness;
- smoking then takes on a sexual connotation, a provocative allure, it is thus a form of exhibition, it is attrative. Smoke, tactility, mouvement, are so many emotions, agitations of the senses, motricities, ambiguous advances.
Society smokes as it breathes. The cigarette imposes its presence on us. Ot it is imposed. And then it goes up in smoke. The history of representations could not ignore the allures of this «provocative lady».
- smoking then takes on a sexual connotation, a provocative allure, it is thus a form of exhibition, it is attrative. Smoke, tactility, mouvement, are so many emotions, agitations of the senses, motricities, ambiguous advances.
Society smokes as it breathes. The cigarette imposes its presence on us. Ot it is imposed. And then it goes up in smoke. The history of representations could not ignore the allures of this «provocative lady».
Sunday, August 21, 2011
Gaulois(1)
from : Le Nouvel Observateur, hors série Juillet/Août 2011.
Jean-Louis Brunaux, La Gaule Indépendante.
In spite of this great diversity, is it possible to define a gaulois physical type?
You are telling us the Gauls were hospitable to foreign populations, that they took care of their hair...This is far removed from their traditional image as Barbarians.
Is that infamous Gaulois moustache also a sign of refinement?
Must we also give up the notion that his people, which did not write, was relatively obtuse, if not downright know-nothing?
The Gaulois reputation would seem unjustified. This misunderstanding would not perhaps be due to the fact that we know them from the less than friendly perspective of Greek and Roman authors?
Jean-Louis Brunaux, La Gaule Indépendante.
Le Nouvel Observateur. You have dedicated an entire book to denounce commonplace ideas concerning ‘Nos ancêtres les Gaulois’(Seuil 2008). Thus there are many. First of all, are the Gauls truly our ancestors?
Jean-Louis Brunaux. They are, without doubt, but no more or less than the Neolithic populations and then those of the Bronze Age which preceeded them on this territory - prehistoric populations which left dolmen and menhirs that have strictly nothing gaulish about them. Overall, it is important to understand that the Gauls, who are themselves descendants of these constructors of megaliths, do not represent a homogeneous and stabe ethnic group from which we, Frenchemn, would descend directly. The world of the Gauls is an extremely varied one. Differences in culture and physique are thus considerable between Aquitaine, in the south-west, and Belgium, in the north. And very soon, no doubt as soon as the 4th century B.C., these autonomous peoples received population increases from external sources, waves of immigration limited in number but quite diverse. In Gaule settled the Iberians, from the other side of the Pyrenees, the Ligurians, a mountain people fro the Alps, or again others from central Europe. These peoples mixed in with the Gauls, who lived by law based on landholding and not blood. As soon as a population managed to settle down and prosper in Gaul, it was considered Gaulois. Gaulish identity was tied to territorial, political criteria and not ethnic ones. And if one finally takes into consideration the numerous waves of immigrants who populated French territories in the following centuries, heterogeneous populations, one sees how vain it is to consider the Gauls our direct ancestors.
I would say that the Gaulois were without doubt rather tall for the period. During the digswhich I undertook in Ribemont-sur-Ancre, in the Somme, I discovered the skeletons of warriors who measured for the most part 1,80 meters, sometimes, 1,90 meters. These are heights similar if not superior to those of current Frenchmen. Certainly, warriors were selected on the basis of physical characteristics and the rest of the population would have been less athletic. Yet it has been attested, through Roman witings, themselves being rather short, what is striking about the Gauls, what one finds is surpirse at their great height. Moreover, the majority of the population had clear skin and tended to be blond. We know that certain among them cultivated their blondness by washing their hair with chalk, even ammonia. A practice no doubt linked to the cult of Apollo, a solar divinity venerated by the Celts as much as by the Greeks and Romans.
This is an unfair legend about a people who were rather refined. Beyond hair, the Celts took great care of their bodies. To understand why this is so, one must know that in Celtic civilization, the Druids, in order to secure their monopoly on religious and political questions, forbade not only writing, but all representations of gods and humans, making these tabou. In reaction, the Gauls always considered their bodies as a work of art, being very attentive to their physical appearance. Men worked on their muscle-tone and, like women, were attentive to hygiene and clothing. Greek and roman authors of antiquity point out that, regardless of their social condition, the Gaulois never wore tatters.
Is that infamous Gaulois moustache also a sign of refinement?
There again, the moustache was much less widespead than in Asterix comic-books. The majority of the population would have worn a total beard, bacause only the aristocracy had access to rasors. The latter could keep a moustache out of vanity, but many aristocrats were clean-shaven, and wore rather short hair. Female aristocrats, for their part, had elaborate hair-does, close to those of Greek antiquity.
Must we also give up the notion that his people, which did not write, was relatively obtuse, if not downright know-nothing?
Without even mentionning the Druids and certain aristocrats, who were very knowledgeable, the Gauls were, yet again, far from being retrograde Barbarians. The Greek philosopher Poseidonios of Apamée, who travelled in Gaul some fifty years befor Caesar’s conquest, presents the Gauls as a people a bit short-tempered, but at the same time very concerned with justice. He also describes them as without guile, rather peace-loving, and especially curious and inventive. In effect, when a stanger arrived in a Gaulois village, he received certain marks of deference, was offered a meal and lodgings. And then he would be assailed with questions about his country of origin, about his beliefs... If this stanger had unknown objects in his possession, Gaulois artisans would be quick to analyse them in order to reproduce them. The Gaulois of their time were the kings of the illegal copy! When Phoceen colonists settled in Marseille around 600 B.C., they were well received, and contributed to tranforming the populations in the south of Gaul by initiating them to Greek modernity. Celtitude was open to otherness. In this manner, the Gaulois were closer to mediterranean civilizations than to the Germans on the other side of the Rhine, who inhabited regions which the Romans significantly called the Barbaricum.
The Greeks were less severe than the Romans in their appreciations of the Gaulois. Certainly they refer to them as «barbarians». But, for the Greeks, all foreigners are barbarians. They in fact considered them to be rather friendly and Greek-loving. Poseidonios, to mention him again, points out that one can travel in Gaul within fear of being massacred, one might even be invited to a banquet... If there is an unflattering caricature of the Gauls during Antiquity, it is that of the Romans. In opposition to the Greeks, they showed little interest in strangers, whom they considered as inferior proples. With respect to the Gaulois in particular, they never forgave the episode of the taking of rome in 390 B.C. by a Gaulois army that had ventured in Italy. It was the only time in its history that the Urbs, the city to end all cities, was vanquished and humiliated. This profound traumatisme within Roman imagination, which has not totally been dealt with at the time of the creation of the Empire, explains why the Gauls were always considerd savage and primitive warriors. This unflattering image is even the basis of their latin name : compared to roosters for their pride, the Romans gave them the derisive name, gallus. This is how they became Galli, theGaulois.
Gaulois(2)
What opinion on the Gauls did Cicero and Caesar have?
Cicero was particularly prone to caricature with respect to the Gauls, which is surprising because he did not have much contact with them. Some of his friends used to export wine to the Morvan region, and he himself may have held some interest in these transactions. He also played host, in Rome, to the Eduen Druid Diviciados, whose vast culture he thus had a chance to measure. But that did not stop him, while entering legal arguments where he referred to the Gauls, to speak of them as retarded aliens, who practiced human sacrifice on the grand scale. With Caesar the carricature is also there, but it is not deliberate. It was not in his interest to present them as primitive beings, which would have devalued his exploits as conqueror. In his Commentaires sur la Guerre des Gaules, he thus seeks to emphasize the qualities of the Gauls, and looks to long passages form Poseidonios from Apamée to do so. He gives a resumé of the work, but a bad one, where he distorts the argumentation. It is Caesar, in effect, who downplays the role of the Druids, whom he reduces to mere priests whereas in fact they were also historians, philosophers or again, diplomats.
Are not the Gauls primarily responsible for the misunderstandings which surround their civilization, because they left but very few traces or accounts?
Indeed, and this makes sense because, in contrast to the Romans, the Gauls were not obsessed by the idea of leaving a mark on history, of engraving in marble stone their exploits or constructing grandiose monuments. This is due to their religious and philosophical ideas: believing in the reincarnation of souls, they thought man belonged to an on-going life-cycle, which rendered relative individual and even collective fate. Nonetheless, they had a certain sense of history, a purely oral history kept safe by the Druids, whcih transmitted one to the other extremely elaborate information on the origins of their civilization, or again detailled genealogies of certain aristocratic families. All of these things have been lost, due to a lack of written records.
Can we expect new archeological discoveries in the coming years?
We can always hope for occasional and miraculous finds, such as that of the riches of Tintignac, in Corrèze (Yo, Beaulieu-sur Dordogne), in 2004, which gave us headgear of amazing detail and inventiveness, dating from the third century B.C. We are also hoping to find a few texts, be they in Greek or in a cursive handwriting, which would give us more information on commercial circuits in an independant Gaul. But I am not sure we can expect the image we have of the Gauls which we have to change much from now on end, as it has been largely corrected in the past few years.
interviewers : Caroline Brun and Charles Giol.
Cicero was particularly prone to caricature with respect to the Gauls, which is surprising because he did not have much contact with them. Some of his friends used to export wine to the Morvan region, and he himself may have held some interest in these transactions. He also played host, in Rome, to the Eduen Druid Diviciados, whose vast culture he thus had a chance to measure. But that did not stop him, while entering legal arguments where he referred to the Gauls, to speak of them as retarded aliens, who practiced human sacrifice on the grand scale. With Caesar the carricature is also there, but it is not deliberate. It was not in his interest to present them as primitive beings, which would have devalued his exploits as conqueror. In his Commentaires sur la Guerre des Gaules, he thus seeks to emphasize the qualities of the Gauls, and looks to long passages form Poseidonios from Apamée to do so. He gives a resumé of the work, but a bad one, where he distorts the argumentation. It is Caesar, in effect, who downplays the role of the Druids, whom he reduces to mere priests whereas in fact they were also historians, philosophers or again, diplomats.
Are not the Gauls primarily responsible for the misunderstandings which surround their civilization, because they left but very few traces or accounts?
Indeed, and this makes sense because, in contrast to the Romans, the Gauls were not obsessed by the idea of leaving a mark on history, of engraving in marble stone their exploits or constructing grandiose monuments. This is due to their religious and philosophical ideas: believing in the reincarnation of souls, they thought man belonged to an on-going life-cycle, which rendered relative individual and even collective fate. Nonetheless, they had a certain sense of history, a purely oral history kept safe by the Druids, whcih transmitted one to the other extremely elaborate information on the origins of their civilization, or again detailled genealogies of certain aristocratic families. All of these things have been lost, due to a lack of written records.
Can we expect new archeological discoveries in the coming years?
We can always hope for occasional and miraculous finds, such as that of the riches of Tintignac, in Corrèze (Yo, Beaulieu-sur Dordogne), in 2004, which gave us headgear of amazing detail and inventiveness, dating from the third century B.C. We are also hoping to find a few texts, be they in Greek or in a cursive handwriting, which would give us more information on commercial circuits in an independant Gaul. But I am not sure we can expect the image we have of the Gauls which we have to change much from now on end, as it has been largely corrected in the past few years.
interviewers : Caroline Brun and Charles Giol.
Thursday, August 18, 2011
English Paradox
I have been spending a fair amount of time in the ice cream isle of the supermarket this past summer. I know that studies show a strange propensity for vanilla and I must admit I am partial to it. Premium ice creams are getting silly : what is cookie dough ice cream supposed to be about : fond memories of boulimia? I have a sweet tooth but not that sweet!!
I have been reading a very fascinating book about European attitudes to food and eating, a quite sociologically complex topic. Abundance is the stuff of fantasy in times of want, but needs to be regulated in times of plenty. And table manners become central, certainly in continental Europe - France and Italy - where ways of being and feeling are the object of self-conscious attention for the honest man. The sexual cleavage enters into play : only men become gourmets while women and children are relegated to having a weakness for sweets (along with anglophones): a must read!
Florent Quellier, Gourmandise : histoire d’un péché capital, Armand Colin, 2010.
Comparing the English and the French with respect to the table, sociologist Stephen Mennell recognizes that ‘it is certainly not unfair to say that in England, in the XIXth century, the fair proposed in the home-maker cookbooks seems rather monotonous, and especially deprived of all feeling that eating is a pleasure’. Characterized by the rejection of all expressions of papal authority, of absolutism, and court-led civilization, the English cultural model, very logically, resisted, in modern times, the Franco-Italian art of good eating which made of cooking not only a lifestyle art and subject of conversation, but especially one of the Fine Arts. In opposition to France where the bourgeoisie imitated an aristocracy modelled on the Court, the anglo-saxon world never experienced that social consensus which led to the triumph of the art of good food. But this does not mean a total absence of forbidden pleasure. Are the English not the most sweet-loving people of all of Europe? Already marked at the end of the Middle Ages, the anglo-saxon love of sugar survived the religious reorientations of the modern epoch and is still a noticeable factor.
Tuesday, August 16, 2011
Monday, August 15, 2011
Sunday, August 14, 2011
Adrianople
from : Jacques Gravereau, Jacques Trauman, L’incroyable histoire de Wall Street, éditions
Albin Michel, 2011.
Albin Michel, 2011.
Andrianople is a city within the great province of Thrace, a region currently divided between Turkey, Bulgaria and Greece. It is a frontier region for the Roman Empire, with vast territories occupied by the Goths all around. The Goths are definitely Barbarians (literally, «peoples from the outside»), but they have been peacefully implanted in Thrace for a long time and are well accepted. However, Roman tax collectors have taken to racketeering them little by little and they have taken up arms. They have been engaging in violent actions for two years, with at their head a brilliant leader, Fritigern, whom no Roman general has been able to put down. Well decided to settle the matter, the Roman Emperor of the Orient Valens, who resides in Constantinople, has sent his army to fight the rebels.
The Roman army is, by tradition, disciplined and above all extremely slow. The infantry is in appearance not much and no one member attains individual glory, but it is a steam roller. It is this slowness, in effect, which has always been its strength, this respect for strict procedure to the last detail. A Roman general is first and foremost a leader who applies the rules, not a hero. While on a campaign, whatever is happening, whatever the circumstances, the army stops marching in the beginning of the afternoon and then spends three hours, everyday, digging ditches and putting up fences to protect its camp for the night. Thanks to this organisational model, the Roman army has policed the largest and longest-lasting empire on earth.
Valens has informed his counterpart, the Western Emperor Gratien, who lives in Rome,and Gratien’s army has undertaken the long voyage to back up Valens. But it is slow getting there. On August 8, Valens presides a war council. Two views are in conflict. Victor, a true Roman general pleads for prudence : now that Gratien is coming with his numerous forces, we are sure to win. Victor is Sarmatian, an immigrant who has come from the steppes, but he has been educated in the Roman style and has become Roman to a fault : given to temporizing and respectuous of procedure to extremes.
The hawks didn’t see things that way, swayed by the impetuous Sebastianus. Roman by birth, considered the best commander of his time, a fair and straightforward leader of men, well-loved by his men, he has formed three thousand perfectly trained men and has led awe-inspiring commando operations against the Goths. Indeed he admires the profound commitment and bravery of his enemy and has come to function like them. Sebastianus has become a Barbarian warrior! That day, he estimates that the Goths are outnumbered and that he can thus attack right away and reap alone the glory of the victory. This is the paradox : Victor the Samartian argues for Roman prudence, Sebastianus the Roman argues for Barbarian impetuosity. Valens chooses in Sebastianus’ favour. He decides to attack the next day.
August 9 378, the Romans and Goths face off on the plains of Andrianople. As a good Roman army should, the infantry awaits the moment to attack, stroïc as ever, not much worried about the Goth army, which doesn’t look all that impressive. Strength and numbers appear to be on the side of Rome. But then something extraordinary happens, which no one had foreseen. Thousands of horsemen allied with the Goths, who had gone in search of forage, return to camp at that precise moment. Roman intelligence had done a count of ten thousand Goths before the battle, but did not know of this cavalry. Seeing their camp under attack, they charge the Roman cavalry and decimate it.
The roman infantry are thus surrounded by an ennemy cavalry. They are professionals : they resist one, then two, then a third assault but finally break due to greater numbers. Roman estimates had been dramatically off. The Goths and their Allies disposed of one hundred and fifty-five thousand men while Rome (without Gratien) tallied a mere fifty-seven thousand, cavalry, infantry and auxiliaries included. Losses are estimated at forty thousand men for the Romans, including Valens himself and Sebastianus. Andronipole is the worst defeat of the Roman Empire, the final battle from which it will never recover. The Barbarians no longer have any opposition. In 410, the Wisigoth («Western Goths») Alaric defeats and plunders Rome. The Roman Empire is no more. It is at Andrianople that all came tumbling down.
Wednesday, August 10, 2011
Debt_13
Source : Le Nouvel Observateur
Donald Hébert, The Debt Crisis in 13 questions.
The downward spiral of the Stock Exchange comes on the heels of investor worries about the size of the public debt of many countries, who in order to shore up the banks financed themselves on the bond market.
What is a bond?
A bond is a contract which specifies the modalities of reimbursements (interest rate and timing of paiements) for a loan. This entitement is given to the lender who is then free to re-sell it on the bond market. It is a form of investment alledgedly less risky than a share.
Why is a sovereign debt rated?
The sovereign debt is the whole of the loans put out by a State : bank credits, loans from other States, emissions from the Public Treasury.
The latter can be exchanged on the bond market.Their value is thus determined by supply and demand, the majority of buyers and sellers taking their lead. to determine a fair price, by the capacity of the State to reimburse. This information is given by the rating on the debt of the State in question.
Which States are most indebted?
Among the most indebted States of the world we find Japan (229% of Gross Domestic Product), Greece (152%), Jamaïca (137%), Ireland (114%), Iceland (103%), and the United States (100%).
France’s debt represents 88% of its GIP. But, according to Standard and Poor, France is currently extremely stable. It s not necessarily the most indebted who are the most worrisome.
Financial actors fllow the lead of the three large rating institutions : Standard & Poor, Moody’s and Fitch.
France enjoys the best rating from all three agencies (AAA), which is not the case for the United State, whose debt rating from Standard and Poor has just been downgraded
from (AAA to AA+).
Those countries which, like France, enjoy the highest rating from all three agencies are :
Germany, Austria, Canada, Danemark, Finland, Luxemburg, Norway, Holland, Great-Britain, Singapoor, Sweden and Switzerland.
Australia has AA+ from Fitch, and the best mark from the other two.
Japan, Ireland and Spain have lost their triple-A from all agencies. Greece has the worst rating, with CC from Standard and Poor, behind Jamaïca, Grenanda, Belize, Equator ad Pakistan (B-).
Why is there a crisis?
In order to save the banks during the financial crisis of 2008, States loaned them large quatities of money. They had to borrow massively, thus putting a great number of bonds on the market.
As a function of the economic context, not very bright, the debt bonds of certain countries(Greece, Portugal, Ireland, Spain, Italy) found themselves to be too numerous and not attractive, which made their value go down.
In effect, the interest rate of the bond goes up as the value goes down. Those countries whose bonds were less attractive , those whose ratings are less good, thus saw the rates at which they could borrow go up.
Borrowing costs more, while these are the very countries in greatest need of liquidity to stimulate the growth of their economies, finance social programs, and control their deficits to, in the long run, reduce their debt.
Where a country is on the verge of defaulting, it is sometimes desirable to restructure their debt, so they can pay back a portion of it rather than none at all. The country then buys back the debt using a new loan with better conditions : a re-imbursement deadline - one thus speaks of a new calendar - with lower interest rates.
What is a loan default?
When a country does not honor one or many loans, one then concludes there is a payment default. If it is a question of restructuring the debt, as with Greece, then we have a partial default.
How does the European Central Bank try to help those countries whose sovereign debt is problematic?
The ECB has gone back to a program of buying up debt obligations which it had activated for Greece, Portugal and Ireland in 2010. It had then bought 70 billion euros’ worth of obligations. This time it is the debts of Italy and Spain that are caught in the machinery of the markets.
By buying these bonds on the markets, it hopes to make their prices go up and thus lower the interest rates for Italian and Spanish loans. This course of action is aimed at a psychological effect on investors for, taking into account the volumes concerned, the ECB does not have the political mandate to inject the sums necessary to result in a mechanical rise in prices, the Italian and Spanish debts being much larger than the Greek and Portuguese ever were.
According to economist Anton Brender, States intervene too little, too late. The ECB is like a firefighter. Its intervention is held back by countries such as Germany, Holland or Finland, whose public finances were fine-tuned at the price of a great deal of rigour, and who refuse to pay for their too easy-going neighbors.These countries demand the putting in place of austerity measures in the countries concerned.Yet it is in their interest to help because the latter are their commercial partners.
ECB intervention opens yet again the question of the political future of Europe. Debt risk could be mutualized through the use of European bonds «eurobonds». But in order to proceed one would need a convergence of European budgetary policies, only possible with economic government on a European scale.
What are the criteria used by rating agencies?
The ratings of Moody’s, Standard and Poor and Fitch evaluate the pay-back capacity of businesses - but also of regions, cities, administrations - and of States. To evaluate the debt of a country, they use economic fundamentals.
They also look to political elements. Thus Standard and Poor, which downgraded the United States for the first time, issued a reprimand to the incapacity of the American governent to take necessary measures to redress its public finances. Barack Obama asserts that the U.S. still deserves an A rating, but with expenses too large with respect to income, the deficit gets worse every year, making the debt burden heavier, which grows more quickly than GDP. Given these conditions, the risk that the U.S. might not reimburse is less low than before.
The agencies also use contextual elements, such as the attitudes of markets toward a certain country. Thus was integrated the difficulties which Greece faced in finding financing on the markets, as it is penalized by higher interest rates.
Why are the agencies often accused of being pyromaniacal firemen?
The downgrading of a country’s rating automatically makes it more expensive for that country to borrow on financial markets. The higher the rates, the more expensive re-payment is.. and the more putting it at risk of being downgraded.
Thus, when a country is in difficulty, the ratings act as a negative spiral and «self-fulfilling prophesy». One can then accuse the rating agencies of being «pyromaniacal firemen».
Wen things are going well for the economy of a country, the revere effect comes into play. The positive rating makes interst rates go down, which permits those countries to finance themselves at lesser cost. One has also acused the agencies of over-rating certain countries, such as the U.S. which, notwithstabding the importance of its debt, long enjoyed excellent marks.
The independence of Moody’s, Standard and Poor and Fitch is often doubted with respect to ratings given to the private sector, because they get the most of their income from banks which they rate.
Many economists, who feel that economic actors put too much weight on the ratings given to countries, often argue that these are only one more bit of information. This is the argument the agencies themselves put forward to protest their innocence after the 2007 crisis, after they had largely overvalued the subprimes, whose depreciation took down the world economy.
Yet there is currently no alternative to the work of these agencies, who try to give a real-time picture of the situation for a country or an enterprise.
With respect to the rating of sovereign debts, the creation of a public European agency is currently under study in Brussells. The crucial question is that of its independence with respect tot the administrations to be evaluated.
It is the problem one might raise with respect to the Chinese Dagong agency, which rates certain sovereign debts since 2010, and which rates less well European countries and the U.S. than the West but gives higher marks to China.
To avoid the independence question turning up in the public sector,certain elected representatives, such as the Green euromember Pascal Cantin, has proposed a public bidding process for private agencies, which would permit breaking the link between the agencies and the rated institutions, as well as avoiding administrative pressure on such agencies.
Donald Hébert, The Debt Crisis in 13 questions.
The downward spiral of the Stock Exchange comes on the heels of investor worries about the size of the public debt of many countries, who in order to shore up the banks financed themselves on the bond market.
What is a bond?
A bond is a contract which specifies the modalities of reimbursements (interest rate and timing of paiements) for a loan. This entitement is given to the lender who is then free to re-sell it on the bond market. It is a form of investment alledgedly less risky than a share.
Why is a sovereign debt rated?
The sovereign debt is the whole of the loans put out by a State : bank credits, loans from other States, emissions from the Public Treasury.
The latter can be exchanged on the bond market.Their value is thus determined by supply and demand, the majority of buyers and sellers taking their lead. to determine a fair price, by the capacity of the State to reimburse. This information is given by the rating on the debt of the State in question.
Which States are most indebted?
Among the most indebted States of the world we find Japan (229% of Gross Domestic Product), Greece (152%), Jamaïca (137%), Ireland (114%), Iceland (103%), and the United States (100%).
France’s debt represents 88% of its GIP. But, according to Standard and Poor, France is currently extremely stable. It s not necessarily the most indebted who are the most worrisome.
Financial actors fllow the lead of the three large rating institutions : Standard & Poor, Moody’s and Fitch.
France enjoys the best rating from all three agencies (AAA), which is not the case for the United State, whose debt rating from Standard and Poor has just been downgraded
from (AAA to AA+).
Those countries which, like France, enjoy the highest rating from all three agencies are :
Germany, Austria, Canada, Danemark, Finland, Luxemburg, Norway, Holland, Great-Britain, Singapoor, Sweden and Switzerland.
Australia has AA+ from Fitch, and the best mark from the other two.
Japan, Ireland and Spain have lost their triple-A from all agencies. Greece has the worst rating, with CC from Standard and Poor, behind Jamaïca, Grenanda, Belize, Equator ad Pakistan (B-).
Why is there a crisis?
In order to save the banks during the financial crisis of 2008, States loaned them large quatities of money. They had to borrow massively, thus putting a great number of bonds on the market.
As a function of the economic context, not very bright, the debt bonds of certain countries(Greece, Portugal, Ireland, Spain, Italy) found themselves to be too numerous and not attractive, which made their value go down.
In effect, the interest rate of the bond goes up as the value goes down. Those countries whose bonds were less attractive , those whose ratings are less good, thus saw the rates at which they could borrow go up.
Borrowing costs more, while these are the very countries in greatest need of liquidity to stimulate the growth of their economies, finance social programs, and control their deficits to, in the long run, reduce their debt.
Where a country is on the verge of defaulting, it is sometimes desirable to restructure their debt, so they can pay back a portion of it rather than none at all. The country then buys back the debt using a new loan with better conditions : a re-imbursement deadline - one thus speaks of a new calendar - with lower interest rates.
What is a loan default?
When a country does not honor one or many loans, one then concludes there is a payment default. If it is a question of restructuring the debt, as with Greece, then we have a partial default.
How does the European Central Bank try to help those countries whose sovereign debt is problematic?
The ECB has gone back to a program of buying up debt obligations which it had activated for Greece, Portugal and Ireland in 2010. It had then bought 70 billion euros’ worth of obligations. This time it is the debts of Italy and Spain that are caught in the machinery of the markets.
By buying these bonds on the markets, it hopes to make their prices go up and thus lower the interest rates for Italian and Spanish loans. This course of action is aimed at a psychological effect on investors for, taking into account the volumes concerned, the ECB does not have the political mandate to inject the sums necessary to result in a mechanical rise in prices, the Italian and Spanish debts being much larger than the Greek and Portuguese ever were.
According to economist Anton Brender, States intervene too little, too late. The ECB is like a firefighter. Its intervention is held back by countries such as Germany, Holland or Finland, whose public finances were fine-tuned at the price of a great deal of rigour, and who refuse to pay for their too easy-going neighbors.These countries demand the putting in place of austerity measures in the countries concerned.Yet it is in their interest to help because the latter are their commercial partners.
ECB intervention opens yet again the question of the political future of Europe. Debt risk could be mutualized through the use of European bonds «eurobonds». But in order to proceed one would need a convergence of European budgetary policies, only possible with economic government on a European scale.
What are the criteria used by rating agencies?
The ratings of Moody’s, Standard and Poor and Fitch evaluate the pay-back capacity of businesses - but also of regions, cities, administrations - and of States. To evaluate the debt of a country, they use economic fundamentals.
They also look to political elements. Thus Standard and Poor, which downgraded the United States for the first time, issued a reprimand to the incapacity of the American governent to take necessary measures to redress its public finances. Barack Obama asserts that the U.S. still deserves an A rating, but with expenses too large with respect to income, the deficit gets worse every year, making the debt burden heavier, which grows more quickly than GDP. Given these conditions, the risk that the U.S. might not reimburse is less low than before.
The agencies also use contextual elements, such as the attitudes of markets toward a certain country. Thus was integrated the difficulties which Greece faced in finding financing on the markets, as it is penalized by higher interest rates.
Why are the agencies often accused of being pyromaniacal firemen?
The downgrading of a country’s rating automatically makes it more expensive for that country to borrow on financial markets. The higher the rates, the more expensive re-payment is.. and the more putting it at risk of being downgraded.
Thus, when a country is in difficulty, the ratings act as a negative spiral and «self-fulfilling prophesy». One can then accuse the rating agencies of being «pyromaniacal firemen».
Wen things are going well for the economy of a country, the revere effect comes into play. The positive rating makes interst rates go down, which permits those countries to finance themselves at lesser cost. One has also acused the agencies of over-rating certain countries, such as the U.S. which, notwithstabding the importance of its debt, long enjoyed excellent marks.
The independence of Moody’s, Standard and Poor and Fitch is often doubted with respect to ratings given to the private sector, because they get the most of their income from banks which they rate.
Many economists, who feel that economic actors put too much weight on the ratings given to countries, often argue that these are only one more bit of information. This is the argument the agencies themselves put forward to protest their innocence after the 2007 crisis, after they had largely overvalued the subprimes, whose depreciation took down the world economy.
Yet there is currently no alternative to the work of these agencies, who try to give a real-time picture of the situation for a country or an enterprise.
With respect to the rating of sovereign debts, the creation of a public European agency is currently under study in Brussells. The crucial question is that of its independence with respect tot the administrations to be evaluated.
It is the problem one might raise with respect to the Chinese Dagong agency, which rates certain sovereign debts since 2010, and which rates less well European countries and the U.S. than the West but gives higher marks to China.
To avoid the independence question turning up in the public sector,certain elected representatives, such as the Green euromember Pascal Cantin, has proposed a public bidding process for private agencies, which would permit breaking the link between the agencies and the rated institutions, as well as avoiding administrative pressure on such agencies.
Monday, August 8, 2011
Neolithic!
Source ; Philippe Hecketsweiler, Histoire de la médecine, Ellipses, 2010.
Cro-Magnon man lived throughout the last great Ice Age - called Würm III - which reached maximum intensity 18 000 years ago. Scandinavia, the Alps and a good part of the British Isles, were covered by high glaciers reaching 3 kilometers in height. Sea level was so high that Great Britain was largely connected to the continent. The Adriatic was a large plain, as was the Persian Gulf. One could walk from Asia to America taking the Behring Straight. In France, vegetation was that of cold countries with tundra and birch forests. Deer and mammoths crossed frozen lands. The men of Cro-magnon hunted these in groups. They took refuge in huts or caverns. Funeral rites, sculpted objects such as the famous voluptuous Venus figurines or the Lady of Brassenpouy, and certainly decorated caves tell us of their aesthetic and spiritual pre-occupations and suggest a common religious source, a « religion des origines ».
The end of Würm III glaciation was for Cro-Magnon man an astounding adventure. Around 10 000 B.C., the climate changed radically, first slowly and then quickly. It is known as the ‘bolling’ : in one century, Sea levels went up by 28 meters! Everywhere men seem to have kept the memory of great climatic changes, inundations, a deluge. Waters from the Mediterranean seems to have precipitated into a fresh water lake to form the Black Sea. Vegetation quickly changed. The deer and mammoths from our regions went north. One then had to, either follow, which is what Artic peoples did, or else learn to chase rabbits and snails.
This change in climate certainly contributed to the Neolithic revolution which we can recognize in five domains :
1- the appearance of new techniques, in particular the polishing of stones,the metal working of copper, pottery, the bow, later the wheel;
2- a sedentary lifestyle with the creation of villages, later cities;
3- the domestication of animals making for better nutrition and furnishing means of transport and work;
4- mastery of vegetable species, in particular wild cereals and beans, transforming pickers into agricultural workers;
5- finally, demography, which saw world population augment dramatically, going from 10 to 100 million between 8 000 to 2 000 B.C. On the surface of modern-day France, during this same period, we seem to have gone from 20 000 inhabitants to some 4 000 000, witness to better living conditions.
This neolithic period formed the first stage to a mastery of Nature and represented an immense cultural leap.
Cro-Magnon man lived throughout the last great Ice Age - called Würm III - which reached maximum intensity 18 000 years ago. Scandinavia, the Alps and a good part of the British Isles, were covered by high glaciers reaching 3 kilometers in height. Sea level was so high that Great Britain was largely connected to the continent. The Adriatic was a large plain, as was the Persian Gulf. One could walk from Asia to America taking the Behring Straight. In France, vegetation was that of cold countries with tundra and birch forests. Deer and mammoths crossed frozen lands. The men of Cro-magnon hunted these in groups. They took refuge in huts or caverns. Funeral rites, sculpted objects such as the famous voluptuous Venus figurines or the Lady of Brassenpouy, and certainly decorated caves tell us of their aesthetic and spiritual pre-occupations and suggest a common religious source, a « religion des origines ».
The end of Würm III glaciation was for Cro-Magnon man an astounding adventure. Around 10 000 B.C., the climate changed radically, first slowly and then quickly. It is known as the ‘bolling’ : in one century, Sea levels went up by 28 meters! Everywhere men seem to have kept the memory of great climatic changes, inundations, a deluge. Waters from the Mediterranean seems to have precipitated into a fresh water lake to form the Black Sea. Vegetation quickly changed. The deer and mammoths from our regions went north. One then had to, either follow, which is what Artic peoples did, or else learn to chase rabbits and snails.
This change in climate certainly contributed to the Neolithic revolution which we can recognize in five domains :
1- the appearance of new techniques, in particular the polishing of stones,the metal working of copper, pottery, the bow, later the wheel;
2- a sedentary lifestyle with the creation of villages, later cities;
3- the domestication of animals making for better nutrition and furnishing means of transport and work;
4- mastery of vegetable species, in particular wild cereals and beans, transforming pickers into agricultural workers;
5- finally, demography, which saw world population augment dramatically, going from 10 to 100 million between 8 000 to 2 000 B.C. On the surface of modern-day France, during this same period, we seem to have gone from 20 000 inhabitants to some 4 000 000, witness to better living conditions.
This neolithic period formed the first stage to a mastery of Nature and represented an immense cultural leap.
Friday, August 5, 2011
Thursday, August 4, 2011
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