November 09, 2005

Financial Tips: Investing during an Intifada

Almost two weeks before Islamic youths rioted throughout France, I came across this article - “Islamic extremism hikes France investment risk.”

Now two weeks have passed and “the spread of social unrest in France is undermining investor confidence in the euro and raising fears of an interest rate hike in the euro zone” as the euro falls to a “two-year low against the dollar.”

The euro is going down as many suburbs in Europe go up in flames.

ITV reports:

BAA, the company that operates seven major UK airports, has pinpointed the "lingering effects" of the London bombings as a major reason for a weakening demand for flights.

Many countries have issued travel warnings to their citizens against traveling to France. They include the United States, Japan, Australia, Britain, Germany and Russia. France's tourism industry will most likely suffer setbacks as travelers opt for elsewhere. This article on France tourism also includes an important quote from a traveler on lonelyplanet.com: "This isn't a French problem. It can spread through Europe if it keeps going. One spark across the border to Germany or Italy or Belgium, and it can go like wildfire."

And tonight, Jordan's tourism is likely to take a blow from bomb blasts ripping through three five-star hotels in central Amman - the Radisson SAS, the Grand Hyatt and the Days Inn. What "sets this series of attacks apart from others is that it is apparently the first attack in Jordan by suicide bombers."

Will investors now factor in a potential "Generation Jihad" when making financial decisions?

Posted by Mike Tate at November 9, 2005 10:04 PM
Comments
Comment #91671

That’s what happens when you try to appease terrorists, they take advantage of you. France had nothing to do with Iraq; in fact, they did everything they could to stay out of it, even took bribes from Saddam.

And now, they can’t even use force on the rioters to get control of their country. Keep trying to appease and hope it goes away; that’s similar to how they acted in WWII.

Posted by: rahdigly at November 9, 2005 10:35 PM
Comment #91674

Funny how the Republicans are so happy with France’s troubles, their first major riot in 50 years. No doubt Mike was just as happy during the LA Riots and that recent KKK-induced rioting in that black neighborhood. Can you tell me the investor outlook in those areas?

Posted by: Aldous at November 9, 2005 10:38 PM
Comment #91675

rahdigly:

Ignorance seems to be the common staple in this column. The problems in France is an immigration/integration issue. It has nothing to do about Iraq or terrorism. I know this is a hard concept to understand but the world does not revolve around 9/11 no matter how many times Shrub says so.

Posted by: Aldous at November 9, 2005 10:42 PM
Comment #91680

Aldous

You are right that this is an integration issue. The French have not done a good job of integrating. But the causes are deeper. France creates almost no new jobs. That contributes to the unemployment that contributes to the anger. In addition, this particular integration problem has to do with the problems of Islamic radicalism. It comes around to the same fertile ground for terror.

I take no pleasure in France’s problems. European countries are our biggest trading and investment partners. Their problems become our problems. (Euros should remember this about us too) In addition, such unrest tends to cross borders. The French need change their ways when it comes to immigration and job creation. It will be painful for them.

The drop in the Euro is also not good for America if it comes as a result of civil unrest. In an integrated free market system, we all benefit from each others prosperity and so we all suffer from their setbacks. “therefore never send to know for whom the bells
tolls; it tolls for thee.”

Posted by: Jack at November 9, 2005 11:00 PM
Comment #91684

Aldous,

I agree that it’s a immigration and integration issue, as well. And the French have had as much success in that issue as they’ve had in terrorism.

They’re weak. They keep taking the passive approach and you can’t do that. Case in point, after two weeks of rioting, the french gov’t impose curfews. “?????” Yeah, curfews will do the trick.

The liberals have been referring to France and Germany when it comes to not going into Iraq for the last few years. How are those countries doing now? Economically? Politically? Multiculturally?

They’re pathetic!

Posted by: rahdigly at November 9, 2005 11:14 PM
Comment #91688

rahdigly:

So says a guy who probably never went to Europe. FYI, Germany’s problems stem from trying to absorb East Germany on a 1=1 basis. You also forgot to add Canada, Scandanavia and the other nay-sayers on Iraq. How about England? The English got their subway blown up. Great anti-terror tactics there.

You really should study history. The French tried the “Active” approach in Algeria. Perhaps they learned something in their own little war? Certainly, the French and Germans never stood in the UN giving a speech on Anthrax that no longer existed. Their President never gave a State of the Union Speech full of lies and half-truths.

Again, this is the first major riot in France in over 50 years. When was the last US Riot? Yesterday?

Posted by: Aldous at November 9, 2005 11:28 PM
Comment #91691

I got this out of a website. It proves that there are similarities between Republicans and the French:

“The French employment agency will focus on 239 hot zones, he said, to help provide jobs for 1.5 million people.

Although France’s national unemployment rate is about 10 percent, in areas hit by rioting the level is nearer 40 percent.

France has no affirmative action; an official French study found that youths with Arab-sounding names have their job applications rejected up to five times as often as those with traditional French names.”

See? The French can be racist too!!!

Posted by: Aldous at November 9, 2005 11:38 PM
Comment #91715

Aldous,

France has no affirmative action; an official French study found that youths with Arab-sounding names have their job applications rejected up to five times as often as those with traditional French names.â€

See? The French can be racist too!!!

Yep. And that’s the major root of rioters anger if I believe what all rioters interviews I heard on TV and radio these last two weeks. We fail to recognize these youth born in France what we *do* promise them: being french.

It’s just wrong calling them immigrants. By laws, all the young rioters born in France are french, as all immigrants’s children born here. Since day one they only live in France for most of them. Sure, today they’re breaking the law by rioting, and I’m full for arresting rioters and putting them in jail.
But, still by french law, people that deny them a job interview or to rent their apt because they don’t like the way a name sounds or a face/skin looks should be put in jail too. Right?
Alas, these racists are never worried by justice. Or only very occasionnally. That’s not fair, period.

I’ve made many friends from the so-called “immigrants’s children” community while living in Paris during my last year studies, and all of them, being born in France, aim at staying here, working here and enjoying what all frenchs enjoys. Some of them are muslisms, but not all. I never feel they were anger about french culture vs their culture. Religion was not an issue too. In fact, my muslims friends are a bit shy about their religion and don’t often talk about except if you show some interest.

The main issue is they’re target of harrasment and silent racism everyday.
For example, I was *never* ID controlled during the 5 (!) years I lived in Paris while they are once a week in average. Try to imagine it. And I *did* take metro without paying it sometimes, I *did* forgot my ID card sometimes, I was not always *that* clean exiting a bar…
Why I was never controlled? Why if not because I’m lucky to be white?
Why while being with some white friends they could actually enter the same night club a week before they were rejected without “white-friend” pass!?

In their situation myself, I will desperate to be consider french one day…

My own mother is racist. She never have one problem with immigrants, not even talking about french immigrants’s children. She live in a small upper-middle-class town where immigration is not at all an issue. She or his family members never lost his/her job due to immigrants working for low er wages. We occasionnally have fight me and her on this topic. I really don’t understand why she fear this community. Maybe she show her age there…
I think most of racism come from such people like my mother that have no particular reasons to fear or dislike immigrants but a lot of prejudices against them. Prejudices fueled at each possible occasion by some politicians pushing their (presidential) agenda, Sarkozy, De Villier & Le Pen being the most notorious these days.

Sure, in any case all this is NOT an excuse for rioting. One solution is to apply laws, but all laws. Laws against racism included.
It’s really time french start to fight their racism and drop their prejudices.

—— To all others posters:
Sad but true, I’m not suprised anymore that some of you are trying to make these riots a new front of a “Western vs Islam War” of yours. The realities on the ground are a little bit different but I guess some of you don’t care that much about realities, as they did previously for WMDs, yellowcake, torture…

Your frenchly,

PS: sorry for my english, posted in an hurry, no time to double check…

Posted by: Philippe Houdoin at November 10, 2005 07:01 AM
Comment #91716

Aldous,

You’ve got problems, man. Republicans and French are similar? Wow, you don’t hear that comparison too often. Ha!

France, and most of Western Europe for that matter, have been the “Uptopia” for the liberals. We’ve heard that for years. Years! And, b/c they are one of the left’s favorites, you never hear about the racism problem there. And, they have a big racism problem! They’re extremely Anti-semitic. You also don’t hear about their economic stagnation and lack of National Defense either. Until now. They can’t run (or hide) from this probem, anymore.

And, Aldous, Great Britain is now (slowly) moving to a more conservative gov’t. Sweden and Holland are starting to tighten up on these Muslim fanatics, as well.

And you said they haven’t had a riot in over 50 years. Well, their solution to this riot is the same one they used 50 years ago, curfews. Like I said, they’ve been dealing with this problem just like they dealt with the WWII, Vietnam and the War on Terror: denial, passivism and cowardice. And, not in that particular order, either. Aldous, here’s an article for you: http://www.usatoday.com/news/opinion/editorials/2005-11-08-french-riots-edit_x.htm


check out this article, as well:
http://www.latimes.com/news/opinion/commentary/la-oe-boot9nov09,0,1537601.column?coll=la-news-comment-opinions

Posted by: rahdigly at November 10, 2005 07:17 AM
Comment #91721

Aldous

You have made some good points. Congratulations. But your conclusions don’t hold.

Europe has trouble integrating immigrants for a variety of cultural and historical reasons. The U.S. is much better at it, also for various reasons unrelated to being Republican or Democrat. What are some of them?

European concept of nationality - even today - has a very strong ethnic component. Lefties can criticize America on this score, but if you have been to Europe you know it is different there. Does any American you know have trouble considering Colin Powell American? Yet he is a first generation American. In France, he would still be seen as “an immigrant” by many people. The governor of our biggest state is an immigrant and nobody thinks this is odd. This is not the European way. the same thing that gives Europeans a greater sense of their history and culture makes them see outsiders in a less welcoming way.

Now somebody is going to tell me how welcome he felt when he went to Europe. Guest are different than immigrants.

These tendencies are exacerbated by state run policies. There are more entitlements in Europe than in the U.S. That makes people more suspicious of outsiders. In the U.S. you are much more on your own. An immigrant to the U.S. has to show he is useful. If he is, we come to accept him. If not, it is his problem. This sounds cruel, but it makes people more willing to accept others. In the Euro welfare states, if a person doesn’t make it, it is the state’s problem. It is the taxpayers problem. It is your problem.

BTW - you can get more of what you need in the U.S. than in Europe. Many times in Europe you are entitled too things, but you cannot actually get them from the bureaucracy. This is very bad policy. When promises are not kept, it makes people mad. If you never offer, they are happier. It is not logical, but it is true.

The big obvious problem in France (and Europe) is that the system doesn’t create very many jobs. Since the 1970s, the U.S. created 57 million jobs. Europe, which is a similar sized economy with MORE people, has created only 4 million. Long term unemployment is also much higher in Europe than in the U.S.

Each system of government and economy creates its own problems. The beauty of the American free market is not that it always works right, but that it is very flexible. The European system works better when things are not changing much, but it is rigid. Unfortunatley, the world changes faster than the state can react. It is like the old nursery rhyme: when it is good it is very, very good, but when it is bad it is horrid.

In France, if you have a job, you have security, vacations and you don’t have to work very hard. The operative word is IF. That is a big danger. Those who are established have little reason to want change and they do most of the voting and decision making. The outsiders burn cars and may fall prey to Islamic radicalism.

Posted by: Jack at November 10, 2005 08:11 AM
Comment #91741

The French don’t seem to be very good at conflict. They have only won two wars that they have been involed in, one was lead by a mentally disturbed teenage girl and the other was the French revolution where both sides were French.

Having said that, it is in their best interest, as is with most liberal countries, to just go ahead and give away everything and maybe they won’t kill you too bad.

Posted by: Lowell at November 10, 2005 09:39 AM
Comment #91751

Jack-

Just one point, in France education is given high emphasis in the workplace. Therefore, even immigrants who attend the more prestigious schools like Polytechnique for engineering have a better chance than do French borns.

Posted by: George in SC at November 10, 2005 10:26 AM
Comment #91777

Philipe - great post.
Aldous, you too, several, in fact.

Posted by: Adrienne at November 10, 2005 12:07 PM
Comment #91887

Lowell -
Perhaps you never heard of a guy named Napoleon Bonaparte. He was pretty sucessful for some years.

Posted by: Warren Dace at November 10, 2005 06:23 PM
Comment #91901

Able was I ere I saw Elba

Posted by: Jack at November 10, 2005 08:42 PM
Comment #91984

Warren,

If my memory serves me correct, that kind of ended at the battle of Waterloo after which he spent the rest of his life in Exile. It seems since that time they have taken the suspense out of war by surrendering on the front end and avoiding all the messiness to the same end anyhow. Who am I to judge whether it is an effective strategy or not, just that not sure I would want them on my side in a fight.

I was just noting that if you are investing in an outcome, it doesn’t sound like a good investment when you know the enterprise is destined to fail on the onset.

Posted by: Lowell at November 11, 2005 10:22 AM
Comment #92041

It’s all about picking your battles. France has won wars recently - Gulf War 1 and Kosovo. They managed to avoid Somalia and Gulf War 2 though.

Posted by: Paul at November 11, 2005 01:22 PM
Comment #92059

Paul,

Sorry, I forgot, and then they could have won in Libia too if they only would have let us fly our planes over their country.

Posted by: Lowell at November 11, 2005 03:03 PM
Comment #92650

Lowell,

25000 french troops served during Gulf War.
5000 in Kosovo.
Hardly a “give us this f* flight autorisation” involvment.

Sure, that’s tiny numbers compared to US troops on foreign ground worldwide anytime these days. But our country is not a warmonger for a reason.
Since WW1 and WW2, we try to fight for peace FIRST, and prepare for war only if peace failed…

As Bush Junior’s Iraq War shown, your country is still (like always) the best military power for war, but fails to win peace after. How sad.

Maybe french are not so good at fighting war, yes. But we *do* know wars well. We were involved in a lot. Far more than US.
Oh, well at current pace, maybe soon your country will rank better/worser (depends on your POV) than mine.

Posted by: Philippe Houdoin at November 14, 2005 07:20 AM