Greek Debt

Goldman Sachs helped Greece hide its debt, according to this article. "Beware of Greeksinvestment bankers bearing gifts." (with apologies to Virgil)

By the way, Harvard University was also burned by rate swaps promoted by its former president--Larry Summers.

And here's Paul Krugman on the real problem--Spain.

"From Revolution to Ethics"

H-France hosts a forum on Julian Bourg's book From Revolution to Ethics, about May '68 and its aftermath, with contributions from Rosemary Wakeman, Michael Scott Christofferson, Xavier Vigna, and Jonathan Judaken.

Food for thought: “The twentieth century began with Vladimir Lenin’s observation that
making an omelet meant breaking eggs; it ended with the assertion of the rights of chickens” (Bourg, quoted by Judaken).

Another "Petite Phrase" from the Uninhibited Right

Valérie Pécresse visited the 93 yesterday. A man in the audience of African descent asked her about enforcing a law on anonymous CVs in order to eliminate discrimination against candidates with "foreign-sounding" last names. Pécresse told him that spelling errors did more damage to a candidate's prospects than a photo--as if, in her mind, the correlation between "foreignness" and "inability to spell" were perfect. I should send her some of the e-mail I receive from Français de souche ...

A un homme d’origine africaine qui lui demande l’application de la loi sur les CV anonymes, la ministre répond en le renvoyant sur les bancs de l’école. Selon cette native de Neuilly-sur-Seine, “une lettre de motivation avec une faute d’orthographe a plus d’impact” sur un recrutement qu’une photo…

Riding to Hounds with Nicolas le Petit

This is precious (h/t MYOS):

Les chasses présidentielles! On avait oublié que ça existait. Ou plutôt on pensait que ça ne pouvait plus exister. D'ailleurs, un président du XXIe siècle qui avait dit, je cite... «Je veux changer la pratique de la république: plus de simplicité plus de proximité, plus d'authenticité» (spot de campagne, avril 2007) ne pouvait pas réactiver cette institution caricaturale de notre république aux accents monarchiques que sont les chasses présidentielles.
...
Sont invités des préfets, des ministres, surtout des partons du CAC40 et des grands flics aussi. On dit que Martin Bouygues, Serge Dassault, l'ancien procureur Yves Bot, le sans doute futur membre du Conseil constitutionnel Michel Charasse y ont tiré quelques gibiers récemment. Le but avoué est de créer des «obligés de l'Elysée». On se promet des rosettes, des pistons, des prébendes, des marchés... On y fomente des trahisons, des alliances... après avoir descendu un vieux faisan qui n'avait sans doute jamais volé avant d'être lâché fort opportunément devant les calibres de cette nouvelle noblesse bling bling.

Euro

From Calculated Risk:

"Europe has become a huge game of chicken, whereby the Greeks are waiting for help from the outside and donors are waiting for Greece to take a step forward."
Mohamed El-Erian, Pimco, Feb 8, 2010

And from Simon Johnson:

Some financial market participants cling to the hope that the stronger eurozone countries, particularly Germany, will soon help out the weaker countries in a generous manner.   But this view completely misreads the situation.
The German authorities are happy to have the euro depreciate this far, and probably would not mind if it moves another 10-20 percent.  They are convinced that they must – in fact, should – export their way back to acceptable growth levels.
Competitive depreciation is of course a no-no in international policy circles.  But if your dissolute neighbors – with whom you happen to share a credit union – threaten to implode their debt rollovers, and makets react negatively, how can you be held responsible?
Germany and France have no objection to euro depreciation – they are confident that the European Central Bank can prevent this from turning into inflation.
It’s the US that should be concerned about the effect on its exports (and imports; goods from the eurozone become cheaper as the euro falls in value) if the euro moves too far and too fast.  But the US failed to raise the issue with sufficient force at the G7 finance ministers conclave in Canada and the course is now set – at least until Thursday.
The euro depreciates, the dollar strengthens, and our path to recovery starts to run more uphill.
And if these European troubles start to be reflected in difficulties for leading global banks over the next few days or weeks, the negative impact will be much greater.

Recidivist

Try as I might to avoid being drawn into the publicity machine of France's ubiquitous bare-breasted philosophotaster (a neologism I base on the analogy with "poetaster"), his sins continue to grow increasingly outrageous with age, so that I cannot avoid commenting on them, if only as a member of the Committee for the Promotion of Intellectual Virtue and the Eradication of Intellectual Vice. I shall avoid enlistment as an unpaid PR flack by refraining from mention of the sinner's name, or even his regrettably familiar initials, and refer you for further details only to this article, where it is revealed that our recidivist has this time launched an attack on one Immanuel Kant, no less, bolstered by the arguments of a non-existent Kant scholar who, under another pseudonym, authors "Le Journal de Carla B." for Le Canard enchaîné. Writing as Jean-Baptiste Botul, this prolific satirist produced a book that sits on my shelves, La vie sexuelle d'Emmanuel Kant, which is as amusing as it is fraudulent, from end to end. But apparently our learned ex-Normalien, ex-nouveau philosophe, gravedigger of the cadaver of the left, intrepid war correspondent, and ubiquitous man about town was not let in on the joke and fell for the ruse hook, line, and sinker.

Will this be enough to kill his kudzu reputation once and for all? Alas, probably not.

Lingua Non Franca

French has found its defender in the person of Jean-Pierre Raffarin:

Jean-Pierre Raffarin, the former prime minister who is President Nicolas Sarkozy’s special envoy to promote French, was in New York at the end of last week to insist that its status as one of the two working languages at the UN must be respected.

...
French sensitivities about the declining role of the language were emphasised mid-week when Gérard Araud, France’s multilingual ambassador to the UN, declined to outline the programme for his country’s presidency of the UN Security Council in English, even as aides scurried to set up translation facilities. “I don’t speak English. Point [full stop]!” Mr Araud told the UN’s mostly English-speaking press corps. “It’s unacceptable,” he said.

Blame Lady Ashton for this latest crisis of French confidence:

Her faltering French, once unthinkable in a senior EU official, has been seized upon by the French media, reflecting concerns in Paris that the diplomatic machinery she is building will be Anglophone.

Trouble Ahead

Back in 1831, as cholera was sweeping across Europe, French authorities confidently announced that France, with its advanced medical knowledge and modern public health system, was safe, and indeed the crisis seemed to strike all around while leaving France unscathed. But the next year the epidemic came to France and killed, among many others, the prime minister, Casimir Périer. Now it is 2010, and we have all heard how France has avoided the worst effects of another crisis. But here is a warning from a former chief economist of the IMF, Simon Johnson:

What are the stronger European countries, specifically Germany and France, doing to contain the self-fulfilling fear that weaker eurozone countries may not be able to pay their debt – this panic that pushes up interest rates and makes it harder for beleaguered governments to actually pay?

The Europeans with deep-pockets are doing nothing – except insist that all countries under pressure cut their budgets quickly and in ways that are probably politically infeasible.  This kind of precipitate fiscal austerity contributed directly to the onset of the Great Depression in the 1930s.
...
As this pressure mounts, we’ll see cracks appear also in the private sector.  Significant banks and large hedge funds have been selling insurance against default by European sovereigns.  As countries lose creditworthiness – and, under sufficient pressure, very few government credit ratings will hold up – these financial institutions will need to come up with cash to post increasing amounts of collateral against their derivative obligations (yes, the same credit default swaps that triggered the collapse last time).

Remember that none of the opaqueness of the credit default swap market has been addressed since the crisis of September 2008.  And generalized counter-party risk – the fear that your insurer will fail and this will bring down all connected banks – raises its ugly head again.
In such a situation, investors scramble for the safest assets available – “cash”, which actually (and ironically, given our budget woes) means short-term US government securities.  It’s not that the US is in good shape or even has anything approaching a credible medium-term fiscal framework, it’s just that everyone else is in much worse shape.

Another Lehman/AIG-type situation lurks somewhere on the European continent, and again our purported G7 (or even G20) leaders are slow to see the risk.  And this time, given that they already used almost all their fiscal bullets, it will be considerably more difficult for governments to respond effectively when they do wake up.

Review of Edelstein

An interesting review of Dan Edelstein's book The Terror of Natural Right by Annie Jourdan.

Professor of Durable Development

The Collège de France now has a chair of "durablesustainable development," and its first occupant is Nicholas Stern, who gave his inaugural lecture last week.