World View: France's President Francois Hollande Suffers Election Debacle

This morning's key headlines from

  • Thailand approaches a crisis point in anti-government riots
  • France's president François Hollande suffers election debacle
  • Russia, U.S. remain deadlocked over Ukraine after 4 hours talks
  • Michael Lewis: How the stock market is rigged

Thailand approaches a crisis point in anti-government riots

Thailand's "red shirt" supporters of prime minister Yingluck Shinawatra have remained relatively quiet, in the face of "yellow shirt" anti-government protests that have been going on since December. But on Monday Yingluck will have to defend herself against corruption charges before a National Anti-Corruption Commission (NACC), and if the commission recommends impeachment, then it could trigger counter-protests and riots by the "red shirt" supporters.

The anti-government protesters are demanding that prime minister Yingluck Shinawatra resign, and allow the protesters to appoint an unelected "People's Council" that will rule in place of the elected government. The Bangkok protests are a clash between two ethnic groups: the "yellow shirt" market-dominant light-skinned Thai-Chinese elite minority, vastly outnumbered by the "red shirt" dark-skinned Thai-Thai who do most of the menial labor, and who continue to support the Yingluck's Pheu Thai political party. Because of the Thai-Thai majority, the Pheu Thai have won the last five elections and can continue to do so. That's why the elite Thai-Chinese anti-government protesters want to throw out democracy and replace the elected government with their own People's Council that they can control.

There are fears that any red shirt march on Bangkok could end in a bloodbath, similar to one that occurred in 2010. Reuters

France's president François Hollande suffers election debacle

Sunday's nationwide municipal elections in France have dealt a stunning blow to president François Hollande and his governing Socialist party. Turnout was low, and it's thought that the reason is that his supporters, furious that he's not left-wing enough and embarrassed by his scandals, stayed home without bothering to vote.

France's economy has been tanking. The number of people out of work is at a record high, and earlier this month, the European Commission warned that France's debt is going out of control, blaming it on lack of competitiveness in the unfavorable business environment:

"France is projected to miss both headline deficit and structural adjustment targets over the entire forecast period.

Despite measures taken to foster competitiveness, so far there is limited evidence of rebalancing. While wages have developed in line with productivity, the labor cost remains high and weighs on firms’ profit margins.

The unfavorable business environment, and in particular the low level of competition in services, further aggravate the competitiveness challenge. In addition, rigidities in the wage setting system result in difficulties for firms to adjust wages to productivity."

Further, President Hollande has been through two recent scandals that would be fit for a televised situation comedy.

The first occurred in January, when Hollande called a reporter and announced:

"I wish to make it known that I have ended my partnership with Valérie Trierweiler."

Trierweiler was his 48 year old girlfriend, who had lived with him in the Élysée Palace since he took office last year. But a reporter had discovered that Hollande was sneaking out of the Palace and spending nights with a 41 year old actress, Julie Gayet.

The second recent scandal occurred earlier this month, over an investigation in the wiretapping of the phone of Hollande's predecessor, Nicolas Sarkozy. Hollande denied that this government had anything to do with it, and France's Justice Minister Christiane Taubira gave a press conference denied knowing anything about it. During the press conference she held up two documents, assuming that no one could read them. But Le Monde was able to zoom in and read the documents, and the documents proved that she was lying, as she had to admit the next day.

Beyond the theatre, French voters were looking for a change. Many had expected Marine Le Pen's far-right National Front party would score well in the elections. The National Front did well, though not nearly as well as they had hoped. The big winner was the center-right Union for Popular Movement (UMP), which is headed by Nicolas Sarkozy. However, Sarkozy himself is also under investigation, for involvement in irregular party funding practices (which is the reason why his phone was being tapped in the first place). BBC and Reuters and Reuters

Russia, U.S. remain deadlocked over Ukraine after 4 hours talks

US Secretary of State John Kerry and Russia's Foreign Minister Sergei Lavrov talked for four hours on Sunday, with no agreement. At the end, according to the BBC, Lavrov looked "satisfied," while Kerry "just looked tired." (I believe I also heard an on-air female BBC reporter actually say, "Awwww. Couldn't they reach any agreement? That's a shame.") Lavrov denied that Russia has any plans for an invasion, but continued to lay the groundwork for such an invasion, by calling the government in Kiev "fascists," jeopardizing the safety of ethnic Russians and Russian speakers. Russian troops massed on Ukraine's borders will not be pulled back. The impression, according to the BBC, is that the U.S. is "bending over backwards" in the hope of getting a diplomatic solution. The meeting had been arranged on Friday, when Russia's president Vladimir Putin telephoned President Barack Obama. BBC

Michael Lewis: How the stock market is rigged

Most people who are active in the stock market these days are large hedge funds and institutional investors, who run "high-frequency computerized stock trading" shops. These huge companies have invested millions of dollars in software algorithms and high-speed networking to be able to make dozens of stock trades in a second.

So it won't come as a surprise to anyone that the wealthiest investors have rigged the stock market so that they can make unethical profits at the expense of less fortunate investors. According to best-selling financial investigative reporter Michael Lewis, they use a technique called "front running."

The way it works is that if you buy a million shares of something, then your order will go through another company's computer. That computer will allow only half your order to go through. Then it will purchase the other half of your order, and resell it to you at a higher price. All this goes on in a fraction of a second on a computer server in New Jersey linked to the NY Stock Exchange. CBS News 60 Minutes

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