Holy Leverage?

Is there such a thing as Holy Leverage? I don't think so.

Church debt increased along with other flavors of debt in the U.S. Being the free-marketeer that I am, I think churches should have the same access to capital markets as any other business. Hell, let 'em sell stock if they want. But let's drop the veil of holiness on these businesses, shall we? Like all businesses they should function in the world of bankruptcy, disclosure of executive compensation, hostile take-overs, independent boards, and ... taxes! Just their fair share of course.

Exports

Back in the U.S. for a few weeks, I've continued to watch the Madoff situation unfold. There's still a lot unknown here -- not just from that firm but from its feeder firms. I also won't be surprised if some unrelated but similar stories emerge from other hedge funds in the coming weeks.

I spent the first half of 2008 in the U.S. and the second half outside the country. Of course, the housing bubble popped and the credit crunch swept around the world followed by the various related stories like forclosures, bailouts, nationalizations, etc, etc, etc. The global participation was apparent from where I sat in Europe. And while much of the roots of those events were American, I didn't get the sense of widespread finger-pointing at the U.S. And that was appropriate. Sure, American firms were the primary manufacturers of sub-prime mortgages, their securitization, and distribution around the world. But, in my humble opinion, that was a buyer-beware situation. If you buy complex, high-risk securities then you should understand ... well ... the complexities and the risks. The bottom line is that the sellers were selling exactly what they said they were selling. And buyers bought 'em. Maybe it's the wild west of free markets, but personally I don't have a problem with that.

But the Madoff thing is different. This is a case of a seller flat-out lying about what he's selling and prohibiting buyers from assessing the complexities or risk levels. Buyers of shares in Madoff funds appear to have thought they were buying hard assets but, in reality, they bought monthly account statements with made-up numbers on them. And this went on for years and included SEC exams and warnings sounded by third party consultants. The scam succeeded because of lax hedge fund oversight in the U.S. And it is impacting buyers around the world.

This is a truly American export and a really bad one at that. In classic ambulance-in-the-valley-vs-fence-on-the-cliff fashion, the U.S. will implement new, reactive restrictions on hedge funds. This is appropriate but I expect an overreaction (see: Sarbanes-Oxley).

More Christmas Eve photos around the 1-8-5. It's good to be home.

Not So Original

OK - So I must have seen this somewhere (I'm not naming names or households!) - even down to the Ernest Borgnine reference. Guess it got lodged in my long-term memory and popped out as a blog post. BTW - it was on earlier today but no worries ... it will be rebroadcast at Noon on Christmas day.

Les Marchés de Noël

A few weeks ago these little temporary Christmas villages started popping up around Paris. I've personally seen four of them and my Pariscope magazine indicates that there are at least a few others scattered around the city. The first photo is the Marché de Noël at Saint-Germain-des-Prés and the second one is at Saint-Sulpice. This gives you some indication of how seriously this city takes its street markets: seasonal or otherwise. There is a huge workforce of city employees who set up the little houses, clean up afterwards, etc.

































It's been a little strange to watch all the Christmas preparations. As I said to sis a few days ago, sometimes it feels like I'm living inside a Hallmark Channel movie called "A Grandpa for Christmas" (of which I am confident there are at least a half-dozen by that name in rotation on that channel as we speak). Grandpa lives alone in some far away place ... except in the made-for-TV production I will be played by an actor with more of an Ernest Borgnine quality ... wandering the streets of an ancient city - watching the locals set up Christmas trees, buy presents, etc. He long ago closed the doors of his departed wife's (well, she is!) sewing room. He makes dinner alone and consumes a demi-bouteille of Pinot Noir every night. Wait, check that. The Hallmark Channel would never go for the drinking alone part - but the sewing room thing is perfect.

And then through some mystical myrical loosely associated with the Baby Jesus - in our case it's the home leave clause written into my Letter of Assignment compensation package - Grandpa has an opportunity to be reunited with his long lost family and, importantly, the granddaughter he's never met. I mean, without that part it would hardly qualify as a Hallmark Channel vehicle.

But wait, there's a barrier for Grandpa to overcome before he sees his distant family in the new world. Every Hallmark Channel holiday movie has to include this part too. It needs to be some seemingly insurmountable problem imposed by villains wearing neckties who are completely lacking in Christmas spirit. Oh, and Grandpa has to be wearing a red or green sweater at this point (it's contractual). And it should be snowing. In my case, the role of the insurmountable barrier will be played by a transfer at O'Hare the week before Christmas (I'm actually kind of worried about that). But when we return from the final commercial break (Wilford Brimley selling insurance to seniors) a mysterious member of the airport maintenance staff - who may or may not be an angel in disguise - appears to provide sage advice and some type of moral lesson to Grandpa - possibly involving the Pinot. He just barely makes his connection to SFO.

Cut to the tearful reunion with Grandma (played by Morgan Fairchild), the loving daughter (played by Shannon Doherty), and the long-haired spandex-wearing rocker son (Kirk Cameron). Loving daughter places the grandbaby in Grandpa's arms, group hug, tears all around, cue the strings .... and, scene.

Or something like that.

Home Leave Next Week

... and I'm looking forward to seeing these people (and some others too but I don't have pictures of them ...

Another Saturday Night in Paris ...

... in which I willingly entered a church and emerged without anger, sadness, or snark. In fact I was inspired. I've come a long way.

L'eglise Notre-Dame-du-Travail was the church and I went to hear the Concert de Noël Franco-Allemand. The church was built back in the 18-whatevers and was dedicated to the dignity of the worker (hence the "du Travail" part of the title). That plus a little inspiration from Gustav Eiffel gets you kind of an interesting, stark look. At least it's stark for a Napoleon III era building:















The music was incredible - said to be traditional Christmas music popular in Germany (Allemagne) and France. Of the 90 minutes or so, I only knew one piece: "The Holly and the Ivy" which they performed in English.

Then one shot from the walk home. Many of the Parisian streets are decked out for Christmas. This one is a few minutes walk from Chez Burnett ...

Petersens in Paris

With all the baby action unfolding thousands of miles away back in California, it was good to have the Petersens here in Paris this weekend. It was cold and windy around the city today but we went out and did some of the sights anyway.

Paris just does this to people ...



















Justice as a mujahideen:

A quand un Obama ici?

I didn't have my camera with me at the time to capture the visual evidence, so you'll just have to trust me when I say that I saw that grafitti scrawled in Les Halles metro station this evening. Basically, it means:

When will there be an Obama here?

A number of people have asked me what it's been like to observe the U.S. presidential election from Paris. That grafitti captures the experience: America has inspired Parisians. And my feelings have been pride and relief.

I am proud of the American electorate for taking a huge step in racial equality and moving from the "don't do what I do, do what I say" position to the "do what I do" position.

I am relieved because America resumed its role as an inspirational leader in the world. The fact is, we have not played that role in several years. Seeing it again now, I realize that I expect it of us. And when it went missing, there was a vacuum in global leadership.

A Long Week

This was one of those Sunday-to-Friday travel weeks. I'm home now but too mentally fatigued to say anything cogent. So for now, here are some photos from the trip.

Dublin:















































Cork





























Birmingham:

Fall in the City: Part Trois

All Saints Day

Actually, these photos are from the day after All Saints Day. And there's nothing like a stroll through Montparnasse Cemetery for perspective. Or as that great philosopher David St. Hubbins said while standing at Elvis' grave, "Too much, there's too much [bleep]ing perspective now."

Parisiens take All Saints Day seriously - people go to the cemeteries and decorate graves, clean them up, pray, cry, grieve. It's a bit foreign to us Anglo-Saxons. A few days ago in our cultural training session, one of our instructors "insisted" [her word] that France is a Latin country. This was in response to my question that went something like, "Why do they call us Anglo-Saxons? Aren't we basically from the same genetic background?" And that led to a very interesting history lesson about Gauls and Romans and Francs and Norsemen and William the Conqueror and many others. Bottom line: no, the French are different. She insists.

Final Thoughts on the 2008 Election

Loyal pets, rich conversation, and comfortable shoes. Earl Grey tea and a nice, but affordable Médoc. Peets Coffee? Don't mind if I do. Reunions at Christmas, sleeping late, warm memories that may or may not have actually happened. A grandbaby.

Health, curry, and organic produce. Fresh bread - olive oil or butter? Tortellini with pesto.

Community, acceptance, forgiveness, and mutual respect. Relationships that survive time, distance, and disagreement. Visiting family / friends in Paris ... free lodging ... I SAID FREE LODGING IN PARIS!

Well ... acrylic or oil on canvas, sculpture, charcoal on paper. Rapidograph! Lots of Rodrigo, Rachmaninov and the odd Mozart symphony. Tom Petty, Bob Dylan, The Weepies, Augustana, Sufjan Stevens ... Andy Williams? Yes please. But in any event, art.

Requiem for a Canon SD200

I don't think I owned a camera before 2004 - maybe there was a 110 back in the 70s. But when digital cameras started getting small, I went out and bought the smallest, cheapest shirt-pocket Canon I could find: the SD200. It's pretty much traveled with me since then wherever I took my briefcase. I'm not a real photographer so the simplicity of a frame and a button suits me. And it's been gratifying to test the creative limits of that simplicity and to capture little pieces of those various destinations.

But lately I've begun to notice that the little guy is beginning to show the wear and tear of travel. The switches are less reliable, I have to hold it a certain way in order to upload photos, it randomly shoots video without my prompting. I will be sad when it finally gives up the ghost. But as a celebration of its workmanlike performance under stressful conditions, I'll try and stay current in posting its final works here at the end of days. It would want it that way.

Friday morning at La Défense ...















Sunday morning in Montparnasse ...

Done and Done

When the presidential campaign started lo these many years ago (I believe it was back in aught-1) my two favorite candidates were McCain and Richardson. They both had compelling resumes and seemed like honest fellows with good ideas. We lost Bill early in the process so my vote defaulted to McCain.

But over time that connection became diluted to the point where I began to seriously consider the other candidates. And in the end I took my ball-point pen and marked it as such:



















I wish Senator Obama had more experience. But given the choice between him and Senator McCain, I think Obama is the better option at this point in history. Here are my reasons:

• Global Relationships. I am convinced that Obama will be a more effective global leader than McCain. The next president needs to rebuild the U.S. reputation abroad, restore a spirit of cooperation among allies, and pursue rapprochement with in-betweeners like Russia. This is critical to economic and national security. As Nicholas Kristof recently said, "you can’t fire cruise missiles at the global financial crisis." For the next several years, the U.S. president will need to work in a complex network of global relationships. Obama seems more suited to that future than McCain.
• Financial Crisis. Now that we have partially nationalized the financial services industry, we will need a president who believes in government leadership. It would be a mistake to appoint someone with a "government is the problem" perspective (would you appoint Ellen DeGeneres CEO of Focus on the Family?)
• Healthcare. Obama's healthcare reform plan has some problems, but it is viable and implementable. McCain's plan isn't either of those things - in fact, I doubt that even he takes it seriously. It's too much of a radical paradigm shift to get through congress and it's the wrong tool for the job (applying a financial market solution to a social problem).
• Advisors. Based on recent evidence, I expect Obama to assemble a better team of senior advisors. Although, I should note that this was also one of the primary reasons I voted for George W. Bush in 2000 so my track record is spotty at best. See: Rumsfeld, Donald H; Cheney, Richard B; Gonzales, Alberto R; Brown, Michael D; Ashcroft, John D; Wolfowitz, Paul D ... [I'm tired of typing]
• VP. Governor Palin just isn't up to it. Granted, Senator Biden has a serious problem with his mouth but he can do the job.

If It's Thursday ...

... there must be a protest in Paris. Actually, it would be more accurate to say, "If the earth is still spinning, then there must be a protest somewhere in Paris." This one inched its way oh-so-slowly through our neighborhood on Boulevard Montparnasse yesterday.

For an American, this is very novel behavior to observe because labor unions are so weak in the U.S. Here in France, labor unions are very powerful. They frequently stage demonstrations like this one including thousands of workers. And they aren't open-ended strikes. They just seem to be isolated and helpful reminders so that employers know that there remains a balance of power.

Market fundamentalists mock this arrangement while pointing and laughing at France for its lack of labor market fungibility. But democracy fans should applaud it for the "checks and balances" effect against unilateral power.

Patriotism

Often when I visit colleagues in other countries, there is a social event where local adult beverages are served and people forget about work and clients for a few hours. In some cases, these are painful experiences where one excuses oneself to head back to the hotel and catch up on email. But some of them are very enjoyable and the conversation flows freely. In these cases, I usually look for an opening to ask for the local view of the U.S. It's usually a very interesting exchange.

This week, I was in Spain (the local beverage was Cava) and it was one of the enjoyable type events. I asked my dinner companion about Spaniards' view of the U.S. He gave me several positives: the friendliness of New Yorkers [sic], the beauty of San Francisco, the inventiveness of Las Vegas, and several other items. And then, "but ...." I am now used to the "but" in these conversations. It usually leads to comments about the Iraq War or U.S. foreign policy in general or President Bush. But this time the "but" was followed by, "Americans are too patriotic."

Huh?

Now, I realize that I haven't lived in Goveror Palin's "Real America" for a long, long time. Maybe I've lived in places where it just seemed like Americans had developed a healthy self-criticism. But "too patriotic?"

Pressing back on my colleague, he clarified that in Europe they had experienced the extreme pain and suffering that can follow from being overly patriotic and nationalistic. And that experience teaches a certain humility and balance. Since the U.S. has not experienced those extremes, we sometimes lack humility and balance.

Fall in the City Part Deux

More random Fall photos from around Paris. These are from last weekend, when Kate and Trinh visited us in Paris, and this weekend.

Lora, Junior, Kate, and Trinh on the Vélib. They call her Argyle on Wheels ...







































































Ah, the newlywed smile ...



















Another day, another protest in Paris. This one was a HUGE march by various unions in the education sector. Evidently, they were protesting job cuts and other assorted government policies. The advance estimates were expecting around 80,000 protesters but having cycled through the thing, I estimate that turned out to be low: there were easily 100,000 protesters. Lolly and I wondered what would inspire that size protest in the U.S. -- we couldn't come up with anything.

Down by the river ...











































Marching past the Sorbonne ...