A Few Sparks

To my surprise, the G20 pre-meeting blather has produced a few interesting items.

The Prime Minister of Japan lectured German leaders on complacency, saying that his nation learned better how to deal with a severe downturn.

From FT: "Taro Aso has dismissed Angela Merkel’s warnings about the risks of excessive public spending in the global downturn, saying Germany has failed to understand why strong fiscal action is vital for recovery. ....

"Ms Merkel, German chancellor, said last week that spending more public money as part of a co-ordinated stimulus risked creating an unsustainable recovery.

"However, Mr Aso said that what his country went through after its asset price bubble burst in the early 1990s made clear that fiscal stimulus played a critical role in restoring growth. 'Because of the experience of the past 15 years, we know what is necessary, whilst countries like the US and European countries may be facing this sort of situation for the first time,' Mr Aso said. 'I think there are countries that understand the importance of fiscal mobilisation and there are some other countries that do not – which is why, I believe, Germany has come up with their views.' "

That's a good development - other nations showing leadership.

Here's another one: "In a further sign of tensions ahead of Thursday’s summit, Nicolas Sarkozy, France’s president, has threatened to walk away from the negotiating table if his demands are not met. Mr Sarkozy reportedly told cabinet colleagues on Monday that there would be 'an empty chair' – a reference to Charles de Gaulle’s seven-month boycott of the European Economic Community in 1965 – if he was not satisfied, although diplomats in Paris later downplayed his comments. "

The French leaders - the energetic Sarkozy and his finance minster Christine Lagarde - have shown considerable verve in wanting action, not words. In Latin, the idiom is "acta non verba" - "action, not words". France seems to lead in wanting hedge funds regulated and wanting limits on CEO looting, oops, I mean pay. Maybe I chose a language to learn wisely.

I read in Le Figaro and Le Monde that workers in France are protesting actively, too. From the WSJ: "PARIS -- French workers besieged bosses, including luxury and retail tycoon François-Henri Pinault, as anger at proposed layoffs generated more forceful protests. Mr. Pinault, the son of François Pinault, is chief executive officer of PPR SA, which controls exclusive brands such as Gucci and Yves Saint Laurent. Employees surrounded his car as he left a meeting in Paris early Tuesday evening and refused to let him leave for nearly an hour. Eventually riot police dispersed the protesters. Separately, workers facing layoffs at a Caterpillar Inc. factory in the French Alps detained four of their bosses Tuesday in a bid to secure better severance packages.
The incidents followed several others in France in recent weeks, and show how social unrest is mounting as the economic downturn deepens."

What would be a US equivalent? A march of the unemployed or foreclosed persons in the Hamptons or in Greenwich? Most US protests are silly affairs led by the loony left. They need to learn from the French, where protests by the common man seem to work.

Markets

A small rally yesterday. I'm wary, as most pullbacks from a primary trend - if this bull move is a primary move and not a bear rally - should be two pulses down with a rally in between them. Futures today show red, so perhaps I'll get some lower prices for my re-buys soon.

Word of the Day

"Affray" - noun and verb, transitive [$10] from the card file
Affray means (noun) a noisy quarrel or brawl; (verb - archaic) to frighten or to disturb as in to affray the peace.
Sentence: With such egos involved, the G20 meeting could degenerate to an affray; that would be very bad for recovery prospects.

Le Mot du Jour

"S'extasier - verb, pronominal, conjugated like 'prier'
S'extasier means to go into ecstasies or raptures over; takes 'devant' or 'sur' for the 'over' something or someone.
La Phrase: Les européenes se extasient sur Obama. Ont-ils raison ou ont-ils tort?
Sentence: The Europeans are going into ecstasies over Obama. Are they right or are they wrong?