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5.30.2010

When a bottle of water becomes a bottle of wine...

That can only happen in France! Yesterday, I ordered a bottle of Badoit mineral water in a nifty Parisian brasserie - btw, I highly recommend it, "Les Ministères" rue du Bac, where they serve excellent traditional French fare (I had superb kidneys with an old-style mustard sauce). And it is frequented by a seriously eating French clientele, always a good sign in a touristy place like Paris.

But the bottle of water? Yes, I couldn't believe it. My attention was first attracted by a neat tag around its collar, annoucing that it is produced since 1778 - a respectable date of birth, by any means - and that it is "recognized for its digestive and exhilarating virtues" (sic). Exhilarating? Yes, "exhilarantes" in French, and that (aside from being good for your liver) also means, as it does in English, something that makes you laugh hard.

OK, that was my first laugh (a small one), but there was more (and better)to come.

I turned the bottle over and read the description on the back. Here it is in bullet points, just the way it's printed:
"Bulles fines et légères" = fine and light bubbles: that would fit a Champagne...
"Nez discret et frais" = discreet and fresh "nose" meaning scent, which applies to wine of course...
"Attaque ronde et veloutée" = round and velvety "attack", meaning touch which again applies to wine...
"Bonne longueur en bouche" = good staying power in the mouth, i.e. the taste lasts the way good wine does...
"Effervescence délicate" = delicate froth, again a term well adapted to Champagne...
"Finesse aromatique" = aromatic delicacy: hey, are we still talking about water?
"Finale rafraichissante" = refreshing finale: all right, this is definitely wine. Every wine connoisseur worries about the finale.

Naturally there's an explanation on the left-hand side of the tag: the author of this superlative description of mineral water is none other than Dominique Laporte, the best sommelier of France. He also explains that this is how he is initating us to EAUnologie with Badoit. Yes, eaunology not enology.

So when are we going to have mineral water tasting competitions? With Perrier, Vichy, San Pellegrino, Fiji water, Ferrarelle and all the other mineral waters that exist around the globe? I can't wait! There's bound to be a lot of experts out there considering that every year an estimated 200 billion bottles of water are consumed and that this is one of the fastest rising markets in the food industry (it has grown some 50 percent over the past 5 years). In upscale restaurants in Paris and London, it has become elegant among the ultra rich to have Perrier as an apéritif and wash down refined nouvelle cuisine dishes with Evian or Fiji water.

I can just hear the comments of mineral water experts. Fruit and flower-inspired: "mulberry scented...clean as violets...with acerbic echoes of lime and lemon... ". Geological: "crystal-clear...pristine as chalk cliffs...". Meteorological: "a Tsunami of bubbles...effervescent as a spring rain...explosive as a volcano..." Spatial: "cool as outer space...shimmering like the full moon on a midsummer night..."

Yes, this is all about water - a rapidly diminishing resource. It is expected that fifty years from now, half the humans on this planet will suffer from drought. No wonder water is beginning to look like wine!

5.25.2010

Stieg Larsson's Trilogy: Another Black Swan in Literature!

Everyone's heard of that phenomenal blockbuster that's come out of Sweden: the Millenium Trilogy. The author is a Swedish newspaperman, Stieg Larsson, who by the way, is unfortunately dead - he died in 2004 at age 50 from a massive heart attack. We, in Europe, for once have been luckier than Americans in getting to know his work. The three volumes - crime thrillers featuring an improbable couple of mystery-solvers, a middle-aged investigative journalist Mikael Blomkvist and his young bisexual hacker friend, Lisbeth Salander who's a mathematical genius and covered with tattoos - have been translated in all major European languages,since they were first published in 2005 (I read it in Italian). They became a hit in Europe well before arriving in America, a very rare event. Usually, it's the other way round, as notoriously exemplified by Dan Brown's Da Vinci Code.

Now the third volume - The Girl who Kicked the Hornest's Nest - is coming out this week in the US and I thought you might be interested in hearing my...mmmm... opinion! And what a book this is! Once again and like its two predecessors, it's well over 800 pages long and weighs a ton. Anyone who's got an ebook reader would be well advised to load up the electronic version on his/her machine and thus avoid getting muscle cramps.

First, I'd like to point to the amazing odds that faced such a literary product. You'd think that anything longer than 2500 pages (even if divided in three volumes) would be next to impossible to sell. You'd have to be Dostoievsky in person to manage it! Yet Stieg Larsson's masterpiece has been an instant success and has sold millions of volumes all around the globe. His work is the next Harry Potter wonder - with adults this time. Which goes to show that publishers never know from where the next literary juggernaut might come from. In fact, when Larsson proposed his manuscript to publishers in Sweden, convinced that it would make him a millionaire and ensure him a happy retirement, he was the only one who thought so. By the way, that is a very common malady among would-be writers: they're all convinced they're the Next Big Writer... Larsson was turned down by everyone and eventually the only publisher willing to take the risk was a small one. That, of course, is a repeat of what happened with the Harry Potter series, and in the past, it's happened to a great many other big sellers, including Gone with the Wind (it was rejected 20 times!)

In short, books such as these are perfect "black swans", to use Nissim Taleb's famous image: they are totally improbable events - yet they do happen! It does make one wonder what the ingredients for (literary) success are. In any case, they are apparently not what literary agents, editors and publishers are looking for! Left to their own devices, publishers appear to prefer publishing "sure bets", i.e. authors that have already published successfully, like Stephen King, Dan Brown, Danielle Steele, Agatha Christie etc. In this "business model" new writers haven't got a ghost of a chance.

Thank God there are black swans around that remind everybody that it is wise to look beyond the "true and tried". Actually, what publishers forget is that people love anything that breaks the monotony - anything new, and that means, by definition, anything "untried".

The Millenium Trilogy is definitely a break with the accepted genre (mystery, spy stories etc). It's not another Le Carré or anything else you've ever read. Why? First, Stieg Larsson doesn't look down on his reader or takes him for an idiot. He expects him to plod through all kinds of background material, just as any good investigative journalist would. The famous principle of the new American writing school "Show, Don't Tell" is largely ignored - and that in itself is refreshing. Oh,to be sure, there are many suspenseful passages of "show", with plenty of violence, murder, sexual abuse and the like. And they're welcome and fun to read. But in between, you get a lot of thoughtful "tell" and complex disquisitions into highly interesting issues, such as how money is a source of corruption (in the first volume), how violence is linked to sexual abuse (the second volume) and how spies, while necessary for national security, are nevertheless a threat to democracy (the third volume). And a thread running through all three volumes is a definite and refreshing feminist stance. It is nice to read stuff that is unabashedly open-minded and liberal!

So, in spite of the excessive length of these volumes, you never get the impression you're indulging in cheap suspense and wasting your time. His books invite readers to think. Even when the story slows down to snail pace, one keeps reading to find out how the whole thing will get resolved. Because the protagonists - always highly likeable - get themselves entangled in seemingly hopeless situations. The fun is guaranteed.

These elements - dealing with interesting issues, proposing likeable characters in addition to ghastly villains, making the plot so complex that one wonders how it will all end, - are the key to the success of the Millenium Trilogy.

Is it well written? I don't know, unfortunately I can't read Swedish. Because I believe that to judge style, you have to read it in the original. In Sweden, people say it is well written. Indeed, many doubt that Stieg Larsson actually wrote it. They point to his companion,Eva Gabrielsson, an architect who is reputed to be a good writer while he, Larsson, was a graphic designer and reportedly couldn't write. Who knows...A sequel to the three volumes may yet come from his companion who has kept his personal computer which contains, it is said (see article in IHT of 22 May 2010), three quarters of the next volume, plus fragments of more volumes (Larsson had apparently planned on writing ten volumes). Whether we'll ever get to read anymore depends on the outcome of a legal battle between Ms. Gabrielsson and Larsson's father and brother who so far have inherited all rights to his work - a quirky effect of Swedish law that does not recognize any rights to an unmarried companion.


Is there something I don't like about the Millenium Trilogy? Yes, the length! I wish a good editor had taken a red pencil to it. Much of the "tell" parts could be cut back without affecting the book and leaving intact all the issues raised. I'm convinced that instead of nearly 900 pages a volume, it could easily be reduced to 300. And in the process gain in literary value. Because, let's face it, in this form, it's not exactly literature - too often it reads like straightforward investigative journalism.

This said, I highly recommend it. Because it is after all something new in crime thrillers: one could call it "romanticized investigative journalism". Quite a mouthful to describe, but well worth the effort to read...

Do let me know what you think - after you've read it, of course, three or six months from now!

5.19.2010

A neat fish restaurant in Paris: La Marée

Yesterday I tried again what used to be one of the classic fish restaurants in Paris back in the 1960s: La Marée. It's on the angle of rue Daru with the Faubourg St Honoré in an "art nouveau" building, and it has replaced what used to be until 1963 a pharmacy owned by White Russians.

By classic restaurant, I mean a comfortable setting, with wood panelling, almost (wow, the ugly word!) bourgeois but soooo "gemutlich", and with food that was always remarkably "true" - and by that I mean the best ingredients and careful, precise preparation.In short, a whiff of the sea. The last time I went there was some 15 years ago, it was still very good, even though the 1960s had become something of a lost decade. Then it changed hands in 2006, and I was curious to see whether it had maintained its original class...

Well it has! It's now run by a couple of very talented young people: Yves Mutin, the chef, and Stéphanie Bennassar who looks after clients in the dining room (still with the 1960's panels on the walls - but why not, they've become now part of the "classic look of the restaurant). Next time you're in Paris, don't miss out on it!

First Let me tell you where it is: go all the way to the end of Faubourg St Honoré, where it becomes Avenue des Ternes (that's in the 17th Arrondissement). Ah, before I forget, another plus: if you like music, it's right next door to the Salle Pleyel, so you can combine an evening of music and follow up with supper at La Marée. These young people running the place are clever and keep the restaurant open for the very purpose of catering to late music fans - meaning people come in for dinner as late as 11 pm...

The food? I'd give it at least two stars if I were the Michelin Guide (indeed I've been to 2 stars restaurants that didn't deserve them - more on that another time). The classical cuisine was perfect: I had white asparagus with mousseline sauce, flavourful, cooked right (they could be eaten right to the end, yet they were not soggy) and the sauce was light and tasted just right, not too much lemon. My husband had a classic fish soup as entrée, equally good with the usual accompaniment of fried bread, rouille and grated swiss cheese to float on the soup. This was followed by a salmon perfectly done with new potatoes pan-fried in delicate poultry-flavoured butter and an unusual, very "nouvelle" preparation for fish fillets of St Pierre: served in a light purée of fresh peas (it's the season now), the fish was covered with paper-thin slices of raw tomatoes. A striking green-red dish! The wine was satisfying dry and fruity Pouilly Fumé Blondelet 2009 "Domaine Le Bouchot". We closed the meal with a crème brulée, which was ok (probably the only thing that could have been better) and a coffee with "mignardises" (small petits fours and chocolates) that were superlative.

Total cost? A little over €100 for two, which is very reasonable for a well-served meal based on fish fare - always an expensive kind of food - in a pleasant surrounding and well-served (the service is fast).

The address: Restaurant La Marée 258, rue du Faubourg St Honoré
tel: +33 (0)1 43802000
opened every day

PS It's a good idea to call to reserve a table. We went on a week-day and it was really full (we couldn't eat before 10 pm).

5.11.2010

Post-scriptum: The Euro is Saved but it still Hobbles on One Leg!

One whale of a fund is what it took to rescue the Euro: some €750 billion, nearly a $1 trillion, much more than what the American Government set up through the TARP to rescue Wall Street.

A very respectable amount of money - the level most analysts agreed on - and, not unsurprisingly given its size, it worked!

But if you look at the arrangement more closely, you realize that it's not a fund as such but a rescue mechanism: European governments don't expect (they hope) to have to actually put up the money. And, what is more important, they've given the green light to the European Central Bank to start acting as any central bank worth its name should, i.e. buy up bonds directly on the market to stabilize prices.

Seeing the positive reaction of the markets on Monday was a relief. The problem is that it could be short-lived.

Why?

Because the Euro still hobbles along on one leg only. It is still based on the Maastrich Treaty and on unrealistic parameters i.e. pieces of paper, rather than a real pan-European Treasury to prop it up, the way the American Dollar is.

If the European political class had a little courage, it would realize that what needs to be done now is to set up an institutional structure around the mechanism they've agreed on. A structure that would enable a faster response in case of speculative attacks. A structure that in the end, if it were credible enough, would cost a lot less than the €750 billion envisaged by the mechanism they've just agreed on...

Will Europeans have the necessary courage?

What worries me is the grumbling I can hear in the media. A lot of people - respectable economists and conservative politicians - complain that it looks like European Governments have caved in. To save the Euro was ok, they say, but that doesn't mean austerity measures can now be cut back. Of course, they can't. Governments have to learn to balance their budgets, and citizens to tighten their belts. We all agree on that.

But austerity measures shouldn't be pursued at the expense of economic growth. Remember, a healthy economy is what is needed to raise the necessary funds from taxes and eventually balance budgets. But this takes time and time has to be put into the equation. Before raising our arms in despair and calling for more austerity - and run the political risk of general strikes that block the productive machinery, not to mention kill some innocent people as recently happened in Greece - thought should be given to measures that encourage production and raise employment. The International Monetary Fund has learned that lesson after the Asian collapse in the 1990s, and these days it generally tries to accompany its rescue packages with measures to stimulate the economy.

Will our political class follow the IMF example? I hope so. Measures needed to take us out of the Great Recession are just as important as austerity measures, if not more. The only silver lining on a horizon laden with black clouds is that with a weaker Euro, our export industries (including tourism) will fare better.

Let us hope that a weaker Euro will be enough to drag us out of the recession. But it would be nice, wouldn't it, if Euro-zone governments pursued a common economic policy, so that we wouldn't be helplessly tossed about by every speculative attack, like a ship that has lost its sails and compass...

5.09.2010

Propping Up the Euro with an Emergency Fund: A First Step in the Right Direction

A first step, but a (very) small one.

I haven't seen the details of the proposed emergency fund (or mechanism) but rumours are that it would be around €70 billion.

If that is the right figure, it's peanuts! It's just about 10 percent of the TARP launched by the US Treasury to save the American banking system from collapse after Lehman Brothers had defaulted in September 2008. I know that the Greek crisis - around some €130 billion, give or take a dozen - is much, much smaller than Lehman Brothers which was "worth" some $600 billion. But €70 billion is puny if it's supposed to prop up the Euro, considering that Portugal and Spain are certain to be the next target of speculators. And then Ireland, Italy...

In short, a fund is a first step in the right direction...assuming that all Euro-zone finance ministers have understood that the said "direction" is setting up a European-wide Treasury or Ministry of Finances, like the US Treasury.

But has the European political class understood what is at stake? I doubt it. Consider what props up the American Dollar and has kept it going through the worst storms we've seen in History, including the latest one, the Big Recession. The American Dollar has two legs that keep it walking: one is the Federal reserve, the other is the US Treasury. What has the Euro got? One leg only: the European Central Bank. And not a very strong leg either, because it is limited by mandate to focus only on fighting inflation (unlike the Federal reserve which covers much broader questions of economic growth, unemployment etc) So far, we've been lucky with Mr. Trichet, the ECB head, who looks well beyond inflation (in these deflationary times, a singularly irrelevant question) and talks about a "systemic crisis".

Right he is. It is a systemic crisis, because the Euro is lacking a second leg to stand on: there's nothing like the US Treasury. As I've pointed out in my previous blog, the Euro has only got the Maastricht Treaty and a bunch of (now largely irrelevant) parameters. Will adding a small fund to this sorry cocktail make a difference? I seriously doubt it. It's not a question of money, but a question of mechanism. What is needed is a mechanism to tap as much money as is needed. If 70 billion will do the trick, fine. But if more is required, the decision process cannot take weeks the way it has happened for Greece.

It won't work.

What will work? Obviously, setting up a Euro-zone wide financial ministry. Because Europeans are hopelessly nationalistic, it can't be done politically. What can? I'm curious to see what Mr. Barroso and the EU Commission are coming up with. We should know by Monday morning what exactly they've been cooking in Brussels and whether it will work.

That's for the short term. Over the medium term, I still think that more is needed than an emergency fund. Maastricht has to change: a set of rules that are rigid and immediately disregarded cannot be a serious foundation for a currency. What is needed is a supranational Ministry of Finance responsible to the Finance Ministers of the Euro-member countries.

If that's too much to ask for, forget the Euro. And forget Europe too!

5.07.2010

How to Fix the Euro and Avoid a Double Dip Recession: Change the Maastricht Parameters!

It sounds like what the French call “l’oeuf de Colomb” – Columbus’ egg: the great man was asked how to stand an egg on its head and he simply cracked the bottom to keep it upright.

Here too we need to crack the bottom to keep the Euro upright and avoid sliding again in a deep recession – making it a double dip recession, the kind that is most frightening, because the second dip could be far worse than the first caused by the fall of Lehman Brothers. To those outside the Euro-zone who are gleefully watching the Euro collapse and congratulating themselves for not having joined in (and here I’m thinking of the British in particular), beware! If the Euro-zone area goes into an economic tailspin, it means European markets for British, Chinese, Japanese, American goods etc will dry up. International trade is a two-way street: if you block one end of the street, the traffic stops. So any excessive weakening of the Euro is highly contagious worldwide. I don’t need to go on, I think you get the picture.

What about this business of cracking the bottom of the egg? To paraphrase one of Bill Clinton’s famous slogan: to fix the Euro, fix the Maastricht parameters, stupid!

It seems that so far in this Greek-induced crisis, no one has thought of it. Everybody’s attention has been taken in by proximate causes, first among them, Greek corruption and profligacy. In this respect, many statistics could be quoted but one stands out: 40% of the Greek working population is employed by the Greek State! That’s incredible. Greece has been swept over by a tsunami of clientelism: every politician that has ever been in office has created a string of jobs for his voters. Of course, that game is over now. The Germans have no sympathy for this sort of thing, and in this at least they’re right. On the rest they’re wrong. In particular, in insisting on austerity measures that are so severe that they will push the economy into a long-lasting depression, some say ten years, ultimately making it impossible for the Greek Government to ever pay back its debt. This is not a win-win situation, but a loss-loss situation – or if you prefer to use a more sophisticated term: deflation. The Germans naturally have to share much of the blame for the depth – and probable length – of the Euro crisis. If they had been more cooperative and moved sooner in unison with the French (as they used to do in the past), we wouldn’t have the problem we have now.

More recently – as I indicated in my previous post – the ratings agencies have been pointed out as the villains of the piece. When Standard and Poor’s reduced Greek bonds to junk status a few days ago, there was an outcry in Europe, and a call to create a European ratings agency. It is true that the major ratings agencies – Standard & Poor’s, Moody’s etc – are all American. But that, in itself, is not the problem. Many countries – China, Canada, Japan – have created their own national ratings agency but these have no effect beyond national borders. The only ratings that count are precisely those issued by S&P’s, Moody’s etcc and no other. You can’t change capitalism overnight.

Creating national (or European-wide) agencies is not the answer. What’s wrong with the likes of S&P’s and Moody’s is not their nationality but that they are not independent. They’re in the pay of international finance. The ratings they issue are necessarily biased.

The solution would be to force ratings agencies to come clean about how they do their analyses and why. More transparency is what is needed. More transparency and more control by international agencies such as the International Monetary Fund that are entities independent from private finance. And when a rating is issued on a Euro member country’ sovereign debt, a vetting by the European Central Bank should be required. If the Bank is convinced of the soundness of the rating, then it could be issued. If not, then it should be stopped. But that implies a deep institutional change and it is likely to take time before all the major players concerned (the G20 and others) can come to an agreement on how to control the ratings agencies.

In the meantime, the drama goes on. Now speculators (and I mean hedge funds and other big investors), having cleaned out on Wall Street, are looking for new opportunities for a fast buck. They have turned their attention to sovereign debt. This is only natural. They always search for chinks in the armour: in the case of Wall Street, the chink was sub-prime mortgages embedded in derivatives. In the case of sovereign debt, it was first Dubai and they had to test whether it would be saved by the United Arab Emirates (it was). Now it’s Greece, and they have to test whether it will be saved by the European Union (it will).

But at what cost! And yet much of the pain could be easily avoided with a single stroke of the (Euro-zone) pen: move the Maastrich parameters from the present 3 percent rule (the ratio of debt to GNP) to something more realistic, say 5 or 6. The exact percentage is something economists could work out, but it should be in line with the capacity of the Euro-zone economies to function and recover from a down turn in the economic cycle. The problem for Greece is that it is asked to function and apply fiscal policies that would be appropriate for the German economic situation. The Greeks have to reign in their debt and adopt austerity measures, no one is arguing they shouldn’t. But the measure shouldn’t be excessive, or else they will kill the productive machinery of the Greek economy. So the deficit/GNP goal set by the Maastrich agreement should not be 3 percent. It is in any case hypocritical to argue that 3 percent is the right figure. It may have been at the time the Euro was established (although that too is arguable) but it no longer is so under present circumstances.

I know I sound like I am arguing about abstract percentages rather than the real world. But there is nothing abstract about the so-called Maastricht parameters. Why? Consider what the Euro is based on. To make the currency work, Eurocrats were faced with a real difficulty. They were able to set up a Central Bank but had to replace with an agreement the fact that there is no overall Euro-zone financial ministry. That’s what the Maastricht parameters are all about: iron-clad guidelines for all Euro-zone members, dictating how far into debt they are allowed to go. Three percent and no more. Of course, since the beginning of the Euro that three percent rule has been repeatedly broken, first by the French and the Germans. Then everybody got into the act, though it was done discreetly. But it was done. In other words, the Greeks weren’t the first to break the rules, even if they did so with greater abandon than anybody else, and for years kept hidden from view how far they had sunk into the red.

The Euro is not (not yet) the currency of a United Europe. The American dollar has a huge advantage: it is protected by a central bank (the Federal Reserve) which has political clout (the US Treasury). The European Central Bank hasn’t got that kind of clout. Why ? Because every Euro-member has jealously guarded its sovereignty over fiscal and financial matters. There is no Euro-zone Treasury or federal financial ministry, like in the US. When an American State goes bankrupt, or nearly so like, say, California, nothing happens to the dollar. When Greece threatens to fail, so does the Euro. The European Central Bank can do nothing about it, except take Greek bonds as collateral even if rated junk, and perhaps buy up Greek bonds as needed. I write “perhaps” because so far it hasn’t said it would do so. Jean-Claude Trichet, the head of the European Central Bank, has recently told the press that so far the matter hadn’t even been considered. And this should come as no surprise. Mopping up Greek bonds from the market is a measure of last resort, something it is rumoured (probably rightly so) that the Germans are opposed to. And of course, somebody has to finance the purchase of bonds by the European Bank. In other words, Euro-zone financial ministers have to agree to it. Fat chance!

So what is the solution? Some have suggested Greece should drop out of the Euro, others that Germany should. Such suggestions make no sense whatsoever. Dropping out of the Euro for any Euro member would mean declaring bankruptcy. Should Greece do so, all the banks across Europe that hold Greek debt would be endangered – and many would fail. Remember, French and German banks hold between them well over €100 billion in Greek debt. Then there’s the rest of Europe (Italy, Spain etc) who also hold Greek bonds.

Such a scenario is obviously unthinkable.

I believe that so far the right policy decisions have been taken and the Euro-zone’s bailout plan for Greece makes sense. What does not make sense is the severity of the austerity measures imposed today on Greece, tomorrow on Portugal, and next Spain.

Austerity is required but not to the point of jeopardizing economic recovery. The way out of this dilemma is to fix the Maastricht parameters, introducing sufficient flexibility in them to safeguard recovery. It won’t be easy because it is a political decision. The Euro-zone finance ministers have to get together and agree on a new set of guidelines to govern the debt/GNP ratio (and several other related matters). But they must do something fast, or else speculation against the Euro will continue unabated. If nothing is done, we’ll be heading straight into a Big Recession – perhaps a bigger one than the one we are so painfully climbing out – a recession that will affect not only Europe but the rest of the world too. Remember, because of international trade, any imbalance in the system is instantly globalized. There is no escape.

Do you agree? If I have convinced you, please help me in spreading the word. We need to make our political class aware of the danger. Ms. Merkel has already lost enough time before accepting to bail out Greece, there is no more time to lose.

We MUST change the Maastricht parameters as soon as possible. It may not be easy – anything involving politics never is – but it IS FEASIBLE. It’s a matter of political will.

Send my blog around, make comments, add to it, do whatever you like but spread the word to your friends and everyone you know.It is our only chance to keep speculators at bay and stop them from wrecking havoc and causing untold poverty and suffering.

We’ve got to make the politicians listen to us.Please help out and spread the word! CHANGE MAASTRICHT!
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