"The imitativeness of our early years makes us acquire the passions of our parents, even when these passions poison our lives."
—Stendhal (1783-1842), Love, 1822"Kleptomaniac, n. A rich thief." —Ambrose Pierce (1842-1913), The Devil's Dictionary 1906
(Swans - January 30, 2012) SHORT BLIPS: In the past two weeks I've spent considerable time trying to find a solution to Swans RSS Feed, with unfortunately no successful result. Then, as co-editor and spouse, Jan Baughman, is traveling to France and will have a very first reunion with my family next weekend, I also spent much time looking for gifts I want Jan to give to everybody. Not an easy task: Two brothers, two sisters-in-law, six nieces (three of whom I have never met), two nieces who are now married and have children whom I have never met either. It's funny the notion of "family." We are all so geographically apart -- one niece, Alexandra, lives in South America. Another, Marie-Astrid, lives in Belgium. Ségolène, the second daughter of my elder brother, Patrick d'Aymery, and his loving wife Véronique, lives in Paris, or nearby (Boulogne). The other three nieces, daughters of my younger brother Marc-Antoine and his charming BCBG wife Carole -- Priscille, Eléonore, and Constance -- live near Reims, where my brother is a reputable courtier en champagne.
HARD TO FIND meaningful gifts for ce joli monde (these good people). I wanted to give them things that related to my past, things that they could possess and that would remind them of me, the black sheep of the family. It's been difficult to figure out what to give and what to keep, especially because my life's belongings have mostly been kept in boxes for some 40 years. While my physical life has kept going, my emotional one died around 1967, and since that year, I have been moving from one place, one country, one state, one location, one whatever with boxes filled with, I suppose, other boxes, filled with...with...with...whatever. So how do you give away whatever?
A WATCH -- Rolex, Jaeger-Lecoultre Reverso, Tiffany; the family ring that I never really wore and could not even if I wanted to because my old, loving Priam mauled my ring finger; Hermès ties, cufflinks, and beautifully-crafted leather calendar and address books (which no one will use since they all must own iPads and the like); sterling silver Tunisian jewelry; a Babar book collection; and more stuff -- beautiful stuff, mind you -- that has stayed in boxes or drawers, unused, for decades.
THERE WAS always the hope that I would go back to where I came from, so things remained boxed. I recall asking Jan to go back east -- that was more than 20 years ago. It did not work out, did it? So here I am, knowing that I'll die in a country and a culture I dislike (and this is to remain polite). Nothing I can do about it, except winning the lotto big time! So, slowly, I am taking the time to give away things I have, which were of no material meaning but had an emotional raison d'être. Now has come the time to give away everything and share it with people who have a semblance of attachment to me.
VICIOUS AND DESTRUCTIVE CIRCLE: Talk about a fine and calibrated attack on the eurozone. Recall that on January 13, Standard & Poor's downgraded nine countries belonging to the eurozone. Then the following Monday, January 16, S&P lowered the European Financial Stability Facility to AA+. The next day, it lowered the ratings of several French public utilities. Then it was the turn of Fitch, which downgraded the ratings of Italy, Spain, Belgium, Cyprus, and Slovenia, adding a negative perspective to their outlook -- meaning that they will downgrade them again in the near future. I've been saying that the euro was deliberately targeted. I am not alone in thinking that way. German economy minister Philipp Rösler said that "the euro is under attack." A prominent European parliamentarian from the German CDU (Merkel's conservative party), Elmar Brok, said that he considered the downgrades to be "almost the equivalent of a currency war" -- which I have contended as early as January 2, in my Blips #120 and followed suit in my Blips #121 two weeks ago. The orchestration is pretty evident. See the unraveling process:
Rating agencies to governments: You have too much debt. You are spending too much. So we downgrade your credit ratings.
Governments: Okay, we are implementing policies to save public expenses, known as austerity measures. The impact of such measures is immediate. People lose jobs (e.g., unemployment in Spain is now over 22%), consumption drops. Growth stalls. Recession rears its ugly head. Tax revenues decrease, thus making the level of debt steeper.
Rating agencies to governments: Your economies are not growing, which means that you are facing harder times to service your debts. So we downgrade your credit ratings.
Next: The dance begins again, round in an ever-ending circle.
ADD TO THIS IGNOMINY the circling vultures. Greece, a financially crippled country that will never be able to pay her debt load in full, sees the renegotiation of that debt blocked by hedge funds. These funds are reported to carry about €70 billion of the nominal Greek debt (nominal meaning the paper value of Greek bonds). But these hedge funds bought those bonds at a very low price, paying between 30 and 40 cents on the euro. However, when the bonds come to maturity, the Greek government is currently obligated to pay the full value of these bonds -- 100 cents. So the funds can expect to make a 60 or 70% profit. One could argue that these funds would be better off taking 50 cents on the euro (they still would make a profit) instead of incurring the risk to see the Greek government eventually default on its sovereign debt and thus losing their entire investments. But one would be wrong. These funds have insured their investments for the full nominal value of the bonds through credit default swaps -- these opaque "weapons of financial destruction" (remember AIG?). If the Greek government defaults, they will be paid in full by the issuer of the CDSs. In other words, heads they win, tails they win too. (Believe it or not, these hedge funds have even threatened to bring a suit at the European Court of Human Rights to defend their "property rights.")
BUT THE GREEK people suffer, and there is no way to decouple the world banking system from a Greek default. The majority of these hedge funds are located in London and the US east coast. The issuers of CDSs are also located there. Want Greece to default in the name of short-term profits? Then watch the financial consequences worldwide.
WHEN, BUT WHEN will politics tame and take over the financial markets? Just to give an idea of the challenge ahead: The "real" economy of the entire world, measured in terms of GDP, is about $70 trillion. Financial transactions are estimated at $1,000 trillion, or one quadrillion dollars per year. This is pure destructive madness!
. . . . .
C'est la vie...
And so it goes...
La vie, friends, is a cheap commodity, but worth maintaining when one can.
Supporting the life line won't hurt you much, but it'll make a heck of a
difference for Swans.
Legalese
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Gilles d'Aymery on Swans -- with bio. He is Swans publisher and co-editor. (back)