To save $2 billion in some distant year—at least that’s the official story—GM bought 7% of French automaker PSA Peugeot Citroën. Perhaps it hoped that the alliance would bail out its bleeding subsidiary Opel. But what GM bought into was one of the most uncompetitive automakers in one of the toughest auto markets in the world. And there is no happy end in sight.
The crowd at the Place de la Concorde in Paris on Sunday, one week before the first round of elections, had come to hear French President Nicolas Sarkozy beg for his job. And politicians were listening warily ... in Germany. He’d already shocked them in March when he’d declared that he wanted to renegotiate the Schengen Treaty. Now he went after the independence of the European Central Bank. Germany’s answer was swift.
Contributed by Chriss Street: Like the Titanic that ignored warnings and ran full-speed into a massive iceberg, Orange County is taking enormous financial risks rather than addressing its gapping cash-flow deficit. The county quietly entered into $518 million of illiquid and unsecured interest rate wagers, mostly financed from payroll and savings accounts of local schools and other government agencies.
Tokyo, June 1996. Wouter the Dutch guy’s words course through my head like a refrain in a traveler ballad: You’ve got to go to Russia, you’ve got to go see Inga in Irkutsk. And I’m researching the first steps in that direction at the Maruzen Bookstore in Ochanomizu, which has a gaijin corner with a Lonely Planet shelf. I pull out Russia. But next to it are other evocative titles, like Vietnam, China, and Mongolia.
The meltdowns at Fukushima that have caused so much havoc have also paralyzed Japan’s nuclear power industry. The last of its 54 reactors will be taken off line in May. “Deindustrialization” grips power-starved Japan. TEPCO, owner of the plant, is bailed out with trillions of yen in taxpayer money. And now, halfway around the world, in the EU, nuclear power is lining up to suck at the teat of the taxpayer, but ingeniously, those in other countries.
Contributed by Chriss Street: President Obama doesn’t need to campaign for financial support from the highest 1% of income earners; his economic policies have already won their financial backing! During the Great Recession the top 1% suffered a lower percentage decline in income than during the Bush Recession of 2000 to 2002. During the 2009 to 2010 expansion the top 1% captured a staggering 93% of all income gains.
It's not like the hapless Greeks—and by extension their foreign sponsors—don't already have enough problems on their hands. Now comes the Hellenic Statistical Authority with its just released Labor Survey that showcases a job market and unemployment issues that were the ugliest ever. And within this sobering picture there was one number that knocked the breath out of hope itself.
The first quarter of 2012 was brutal for businesses in France: 16,206 filed for bankruptcy. A trajectory that may demolish the prior annual record set in 2009 during the financial crisis when 61,595 firms went bust. Since then, bankruptcy filings eased off. Now the direction has changed—and worse, it is hitting larger companies and a lot more jobs. But the French have a solution, one that would violate fundamental rules of the EU.
Contributed by Chriss Street: Orange County's financial crisis spirals out of control as the State of California filed a law suit to force return of $73.5 million of property tax revenue the County skimmed from schools and community colleges last November. At the time, it seemed bizarre that the “Most Conservative County in America” would increase spending by $145.8 million, then grab the school’s cash and cancel layoffs of 490 union workers.
It's always the same thing: for decades they tell us there's no problem with radiation from x-rays or other sources; the doses are so minuscule and infrequent that it would be like.... And they come up with some hoary example, such as "a 42-minute walk outside." Decades later, after millions of gullible or option-less people have been exposed to it, a new study comes out linking that very type of radiation and those doses to some nasty disease
A friend, who was installing Skype on a new computer, was baffled when Skype suggested contacts that weren’t on his Skype contact list but in his address book. Turns out, apps are gateways that pilfer voluminous personal information, not only address book data but also ... sexual preferences. Nothing is safe. And not just of the user but also of his or her friends. And now the government is trying to catch up in the race to get our information.
Japan, June 1996. With 40 minutes left before the departure of our train, we make a beeline for the restaurant, a boisterous Formica-steel-and-plastic kind of place. Izumi orders mountain-vegetable pilaf. I order deer sashimi, a mountain specialty. The thin slices of raw deer are served with raw onion rings, fresh garlic, fresh ground ginger, and a vinegar-soy sauce. Possibly the best meat dish I’ve ever eaten. But I shouldn’t have eaten it.
Japan was a shockingly expensive country twenty years ago. Back then, the US government pushed Japan to open up its markets, and it is still pushing, in some sectors with little success. But over the years, Japan has become less restrictive to imports. The result: more competition and lower prices—but surprising barriers remain, and some prices are still astoundingly high.
Updated on Wednesday, April 11, 2012 at 11:05AM by Wolf Richter
Transparency International just published the results of its National Survey on Corruption in Greece, which tried to sort out the kind of bribery and petty corruption that households had to deal with in their daily lives. The results were sobering, as they tend to be with corruption surveys—but in an unexpected way: for those asking for bribes, an outright depression has commenced.
On April 20, finance chiefs and central bankers of the G-20 hold a shindig in Washington DC. At issue is money. Bailout money for the Eurozone. The IMF wants to dig deeper into its pocket, but the amounts are skyrocketing, and ... “We certainly need more resources,” explained IMF Managing Director Christine Lagarde. Bankrupt countries try to bail out bankrupt countries. And taxpayers everywhere get to foot the bill.
Boston Dynamics develops a variety of ultra-cool mechanical creatures: the four-wheeled SandFlea that jumps 30 feet into the air, the two-legged Petman, or four-legged dog and donkey-like creatures that run and clamber over rocks. While they aren’t particularly useful in daily life, they’re the ultimate toys: noisy, expensive, rare, and hard to maintain. One called Cheetah is my favorite ... because it's reminiscent of the Fed (video).
April 1 marks a new beginning in Japan and coincides roughly with the arrival of cherry blossoms. The first ethereal pink was sighted last week in Kochi. Now blossoms have appeared in Tokyo. Full bloom is expected by Friday. Last year, after the horrific earthquake and tsunami that took over 18,000 lives, cherry-blossom events had been canceled. But this year, it’s different. And there is even an uptick in the numbers.
Japan, May 1996. The joys of eating cement us together, and the harmony between us emboldens me. We finish the fifth course, sautéed almond trout, and as I’m pouring the remainder of our bottle of wine, I broach the subject that has been on my mind for weeks and that I’ve broached in subtle ways before without getting a response. Now I want to violate yarikata. I want to communicate with her clearly and directly, with personal pronouns and all.
Economic reforms are tough. While they’re supposed to open opportunities, put budgets on sounder footing, or make the country more competitive, they invariably cut into the flesh of some groups, who then react with demonstrations and strikes to put pressure on the reformers to preserve the status quo. But in Italy, pharmacists have come up with an ingenious and tongue-in-cheek strike aimed straight at the reformers personally.
Italian Prime Minister Mario Monti, while in Japan, summarized it eloquently when he said, "The financial aspect of the crisis is over." The ECB, despite apparently fake German reservations, has jumped with both feet on the money printing bandwagon where it happily joins the Fed, the Bank of Japan, and other central banks. The endless flow of money has started in the Eurozone, and Greek politicians have figured this out.