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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