Winter hit Versailles with a vengeance this weekend. It rained on both Saturday and Sunday and the wind blew just enough to chill my bones.
To make matters worse, we still have no heat. The committee that manages our building always waits until the last possible minute to get the central heating started - they don't move until they are legally obliged to do so. We could have sat and shivered all weekend like all the other residents of our building but the Flophouse has the very good fortune to occupy a ground-floor apartment with a fireplace. So we built a roaring fire, made big pots of steaming hot tea and read books, watched movies and talked with each other.
The main topic of conversation is, of course, the Crisis. The Flophouse has family and friends in many corners of the world who seem to all be experiencing the economic downturn in different ways. A recent book by Michael Lewis seems to confirm this. Boomerang: Travels in the New Third World explores how the crisis has manifested itself in different countries around the world - regions that have imploded or seem likely to implode in the near future: Iceland, Greece, Ireland and the state of California.
The book was born when Mr. Lewis was talking with an investment banker after the sub-prime meltdown. The thesis of this gentleman was that the U.S. mortgage crisis was more symptom than cause, masking much deeper economic and social problems in many countries. In 2008 he predicted another larger crisis just over the horizon. He appears to have been right. Mr. Lewis took that piece of information and then went out to find out. Call him an "economic trouble tourist."
Boomerang is not a book about finance (though Mr. Lewis has a few years as an investment counselor under his belt and he speaks knowledgeably on that subject). Rather it is a book about people, governments, cultures and beliefs. For all that we rattle on about sovereign debt and defaults, euros and dollars, deficits and Laffer curves, our financial systems are based on faith. We have faith (or we don't) that the French banks will survive a default. We believe (or we don't) that the Germans will save the Euro-zone. We tell ourselves that surely the housing market in California will recover. Or it won't, in which case perhaps the best thing to do is to turn the key over to the bank and walk away. On the desk in my study is yet another note from my bank, the BNP Paribas, telling me not worry but I do. It is hard to determine what the rational thing to do is when all the appeals are to emotion and the facts are hidden or unknowable by mere mortals such as myself.
I highly recommend Mr. Lewis' book. He is an engaging writer and an interesting speaker. Here is an interview he did with Jon Stewart of the Daily Show which will give you a sense of his style.
To be very clear, this book will not give you information about how to dodge raindrops, nor will you finish his work with a sense of serenity and a clear path forward. What it will give you is a much broader view of what happened, what is likely to happen, and how we are all just trying to muddle though in our own curious culturally-specific ways.