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What Sartre and Nietzsche could teach Sarkozy and Merkel Expectations are growing in advance of a meeting tomorrow between French leader Nicolas Sarkozy and his German counterpart Angela Merkel.
While German officials are trying to manage down those expectations, and stress there will be no discussion on the idea of a euro bond, the meeting is sparking speculation.
"Weekend talk about some form of a euro bond solution to the debt crisis in Europe has been swiftly rebuffed by both Germany and France who insist it is not on the agenda for tomorrow’s meeting between Sarkozy and Merkel in Paris," said CMC Markets analyst Michael Hewson.
"The concern remains that tomorrow's meeting between the two leaders will not give the markets the solution they crave, and as such sentiment will remain susceptible to significant price swings despite today's gains."
Europe's leaders have so far been flailing about with little to show for it, as far as the world's markets are concerned. There have been meetings over how to save the 17-member euro zone, with each step taken eventually seen as a Band-Aid.
I decided to go trolling to see whether there was anything their own great philosophers could tell them from the grave. Here's what I found:
Jean-Paul Sartre, the French existentialist philosopher and writer who died in 1980
A lost battle is a battle one thinks one has lost. (In this case, they keep thinking they've won. The leaders of the euro zone have come up with plan after plan, meeting several times, only to have them fall flat with investors.)
Man is not the sum of what he has already, but rather the sum of what he does not yet have, of what he could have. (The sum of what Europe doesn't yet have? Unity, decisiveness, policy, the list is endless. The various euro zone governments have not been in agreement amid criticism that they have not taken the proper steps.)
When the rich wage war it's the poor who die. (Many in the euro zone are suffering, particularly as unemployment rages. In Greece, for example, the jobless rate is almost 17 per cent, and in Spain 21 per cent. Across the euro zone, unemployment is almost 10 per cent. Of course, Mr. Sarkozy did cut short his Riviera vacation to deal with the crisis.)
If I were in their place, I’d fall over myself. (And that they have.)
Why do you keep maintaining your ideas are right if you can't prove them? (First, you've got to actually have workable ideas. Some observers say that pumping up the region's bailout fund will only kick the can down the road, allowing debt-burdened nations to borrow more without fundamental changes.)
This then is the age of reason. (Or in the case of Europe ...)
Friedrich Nietzsche, the German philospher-poet who died in 1900
Great indebtedness does not make men grateful, but vengeful; and if a little charity is not forgotten, it turns into a gnawing worm. (Germans, in particular, who are supporting the bailouts, are just about giving up on charity, and that's proving to be a big political issue for Ms. Merkel.)
He who cannot give anything away cannot feel anything either. (Which is why the Germans are numb.)
If you gaze long into an abyss, the abyss will gaze back into you. (Mr. President, Ms. Chancellor meet the Abyss.)
In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. (Case in point.)
It is impossible to suffer without making someone pay for it; every complaint already contains revenge. (Greece, Ireland and Portugal, at latest count, are suffering, and everyone's paying for it. On Friday, for example, Italy rushed through new austerity measures as its public debt reached almost €2-trillion, partly because it helped bail out its neighbours. And Mr. Sarkozy has ordered his governments to cut.)
Many are stubborn in pursuit of the path they have chosen, few in pursuit of the goal. (Which pretty well sums it up.)
Not only have Ms. Merkel and Mr. Sarkozy gained the spotlight in the euro crisis, the debt troubles spread last week to France as well, heightening the pressure on the French leader, at the same time as a new reading of the economy showed French growth had stalled.
"This lack of growth in the face of proposed new fiscal tightening measures has increased concerns that France may not meet its growth targets and increases concerns about its triple-A rating," said Mr. Hewson said.
"If that weren’t enough to worry about concerns remain concerning Italy’s fiscal situation after last weeks new austerity budget was passed through the cabinet, in the face of stiff opposition from all sides including Italy’s largest trade union who have threatened a general strike," Mr. Hewson said in a research note today.
"Italian finance minister Tremonti also cranked up the pressure on Angela Merkel ahead of her meeting with Sarkozy tomorrow once again, calling for some form of euro bond, a call that was dismissed immediately out of hand by German finance minister Schauble."
Google nabs Motorola Mobility Google Inc. has dramatically upped the stakes in the smart phone wars, striking a deal to acquire Motorola Mobility Holdings Inc. for $12.5-billion (U.S.).
Along with the handset maker, Google is getting thousands of patents, The Globe and Mail's Iain Marlow and Omar El Akkad report.
The $40-a-share cash deal comes amid the growing popularity of Google's Android operating system, whose market share has surged in competition against the system used on the iPhone from Apple Inc. and the one used on the Blackberry by Research In Motion Ltd. .
Motorola Mobility is the cell phone manufacturer left by the split in Motorola.
“Motorola Mobility’s total commitment to Android has created a natural fit for our two companies," said Google's chief executive officer Larry Page.
"Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers."
- Google to buy Motorola Mobility
- Google arms itself in smart phone wars
- Apple opens store on RIM's home turf
TD to acquire MBNA Canada card business Toronto-Dominion Bank is buying the Canadian credit card business of Bank of America Corp. , a deal that significantly expands its consumer lending business but comes at a time when Canadian households are carrying record levels of debt, The Globe and Mail's Grant Robertson reports.
TD did not disclose a price for the deal, which includes the assets of the MBNA credit card business in Canada, however the premium is said to be about $100-million. The portfolio has $8.6-billion of assets.
Analyst John Aiken at Barclays Capital said the deal will more than double TD’s domestic credit card portfolio. TD had credit card balances of $8.1-billion at the end of the second quarter. TD plans to issue up to 8-million shares, worth about $600-million, in conjunction with the deal in order to boost its capital levels.
- TD to buy Bank of America's Canadian credit card unit
- Streetwise: TD tired of lagging in credit card issuance
Huge oil spill in North Sea Royal Dutch Shell PLC estimates that some 1,300 barrels of oil have spilled into the North Sea from its Gannet Alpha platform off Scotland.
The leak from the underwater pipeline is "under control," with the well shut in, the energy giant said today.
“We continue to expect that the oil sheen will disperse naturally due to wave action and that it will not reach the shore," said Glen Cayley, the technical director of the company's exploration and production business in Europe.
Britain's Department of Energy & Climate Change said in a statement the spill is "disappointing" given the track record in the region, and it is investigating the causes.
“Although small in comparison to the Macondo, Gulf of Mexico, incident, in the context of the U.K. Continental Shelf the spill is substantial – but it is not anticipated that oil will reach the shore and indeed it is expected that it will be dispersed naturally," it said.
Japan economy sinks again Japan's economy continues to suffer, though it's not as severe as some have feared.
Gross domestic product contracted again in the second quarter - it was the third consecutive quarter to mark a pullback - at an annual pace of 1.3 per cent.
Economists had expected the Japanese economy to be much harder hit in the wake of the earthquake, tsunami and nuclear crisis that struck the country in mid-March. Japan is not only struggling to rebound from the devastation, but also grappling with a rising currency amid the global financial turmoil.
"The rising yen, also near all time highs, is making the recovery from March’s events doubly difficult for the Japanese economy as data released this morning showed that the economy contracted for the third quarter in a row," said CMC's Mr. Hewson.
One of the major trouble spots was trade, noted Benjamin Reitzes of BMO Nesbitt Burns, as exports plunged 18.1 per cent, at an annual pace, and imports gained 0.2 per cent.
"That should partially reverse in Q3, though weaker global growth and the strength in the yen won’t help," Mr. Reitzes said.
"Indeed, Japan should see solidly positive growth in Q3 as trade becomes a net positive and government reconstruction continues. Household spending could also provide a boost after contracting for three consecutive quarters. If the [Bank of Japan] and government see the rebound as lacking sufficient vigour, expect more intervention to weaken the yen."
As The Globe and Mail's Kim Mackrael reports today, the economic reading from Japan is just one of several showing a stalling recovery.
Swiss franc dips The Swiss franc is losing some steam amid rumours and speculation that monetary officials are poised to take more definitive action to stem the high-flying currency.
There were rumours over the weekend that the Swiss National Bank could take steps to limit the appreciation of the franc, or establish a peg.
Chief currency strategist Camilla Sutton said that while she doesn't expect a peg to be set, she wouldn't be surprised to see the central bank intervene in currency markets.
As Catherine McLean reports today, businesses in Switzerland are bracing for the potential slowdown the strong currency could bring.
Roubini ponders capitalism Nouriel Roubini, the man who forecast the financial crisis, strikes at the very heart of America today with an article that questions the fate of capitalism.
Mr. Roubini, the New York University professor and chairman and co-founder of Roubini Global Economics, writes on the Project Syndicate website about the economic and financial chaos in the world today, citing everything from the turmoil in the Middle East to the fiscal woes of the U.S. and the euro zone. Even emerging markets like China are slowing, he notes.
Up until last year, policy makers could "produce a new rabbit from their hat," but now "they have run out of rabbits." More bank bailouts would be frowned upon and not feasible, monetary policy can't help much, and currency depreciation isn't realistic for all the advanced countries.
All of which leads to Mr. Roubini's assertion that "Karl Marx, it seems, was partly right in arguing that globalization, financial intermediation run amok, and redistribution of income and wealth from labour to capital could lead capitalism to self-destruct (though his view that socialism would be better has proven wrong.)
Companies are cutting jobs because of slack demand, which in turn cuts income, heightens inequality and reduces demand further.
"Recent popular demonstrations, from the Middle East to Israel to the U.K., and rising popular anger in China – and soon enough in other advanced economies and emerging markets – are all driven by the same issues and tensions: growing inequality, poverty, unemployment, and hopelessness," he writes. "Even the world’s middle classes are feeling the squeeze of falling incomes and opportunities."
Mr. Roubini's answer is to strike the correct blance by creating work partly through more stimulus whose goal is "productive" infrastructure investment, progressive taxation, debt reduction, "lender of last resort" support from central banks, greater supervision of the financial system, and breaking up banks deemed too big to fail.
"That means moving away from both the Anglo-Saxon model of laissez-faire and voodoo economics and the continental European model of deficit-driven welfare states. Both are broken."
In International Business today Warren Buffett urged U.S. lawmakers in a New York Times opinion piece to raise taxes on the country’s super-rich to help cut the budget deficit, saying such a move will not hurt investments. Reuters reports.
From today's Report on Business
|MMI-N Marcus & Millichap||17.11||
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|TD-T TD Bank||51.65||
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|BAC-N Bank of America||16.13||
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