In a bid to revive the struggling French economy, president Nicolas Sarkozy is rolling out the welcome mat for thousands of rich French people who fled one of Europe’s most onerous tax regimes. This enterprising, hardworking group are needed to revive an economy that is under performing its neighbors, particularly England and Germany.

It seems that Sarkozy will have to wait a while. It will be difficult for anybody to change a centuries-old French attitude that looks at people who make money with suspicion, leaving the wealthy unsure about whether any pro-rich policies can endure. Once one settles into another country, they are not likely to come back. Popular destinations are Belgium, England, Switzerland and the United States.
If one looks at the French stock index, the CAC 40, the corporations are thriving. The problem for France is that close to 80% of their profits are derived from outside of France. Rather then investing in an over-regulated, highly unionized and over-taxed country, these corporations invest their money in more business friendly countries such as China and the United States.

If Sarkozy is serious about reviving the sick man of Europe, he will have to do more than courting the wealthy exiles to come back. He’ll have to cut social programs, undo the red tape and slash taxes at all levels. Given the current attitude of the French about their nanny state, it will be indeed a daunting task.

The events of last week had been challenging for investors to say the least. Investors’ sudden lost of appetite for high yielding bonds or often referred to as junk bonds were linked to the meltdown of subprime mortgage debt. Bond investors were suddenly paying attention to the quality of the fixed income products they’re buying. As a result, yield spreads are widening out.

The business model of using cheap debt to buy out under-performing companies by private equity firms has been put into limbo. The liquidity source has suddenly dried up. Some deals that were previously announced, such as Private Boots, has been put into jeopardy. Private equity deals will be less abundant due to more difficulties attracting investor money and higher borrowing costs.

Stock investing in this current environment will be about picking well run companies with strong balance sheets. Essentially, it is a stock picker’s market. Like any good investment approach, it is about scooping up quality products at attractive levels. Time to put away the shotgun and take out the rifle.

According to a team of researchers from Johns Hopkins University, who analyzed 20 different studies, comprising data on prevalence of obesity across the U.S., 75 percent of all Americans and almost 24 percent of U.S. children will be either obese or overweight by 2015 if the current trend continues. 

The costs to the United States will be enormous. The health care system will be under strain, there will be loss productivity and energy consumption is likely to go up. So what can policymakers do to reverse this trend towards leading a sendentary and overindulgent lifestyle? The task will be indeed challenging. 

Part of American culture is the right to treat ourselves. The motto is bigger is always better. Food plays a big part in this. Americans expect and demand large portions. We want our money’s worth. Whether it’s shopping, going to school or going to work, we get around in our cars, preferably air conditioned. It’s no wonder we consume 25% of the world’s resources.

We will change our lifestyles not because we want to, but because we have to. To minimize medical bills, we will have to lose weight. With fuel prices going up and expected to continue going up, we will have to lose weight to fit into these more fuel efficient and smaller cars.

Speeches and lectures won’t change the way we live. By hitting us in the pocket books where it counts will probably be the biggest inducements. Whether its energy, agricultural commidities and even water, the US will be duking it out with the developing nations such as China and India to secure the necessary supplies. At this point, we will have to be lean and mean again. 

Despite the housing slump and oil prices going beyond $75, we saw the Dow break a new all time high and the S&P 500 hovering near its 52 week highs. The bears are getting slaughtered. Those who missed the stock rally must feel like idiots. The equity markets are effortlessly knocking down the obstacles on their way up. There are several developments in play.

The Low US Dollar: The cheap dollar makes our goods and services very competitive. Once foreign currencies are repatriated back to US dollars, it translates to plenty more of dollars. The American corporations with extensive foreign operations are very profitable.

Strong Global Economy: The U.S. no longer makes or breaks the global economy. Despite the weak American economy, the slack is being picked up by developing nations such as Brazil, China and India.

Plenty of Liquidity: Thanks to the strong global economy of recent years, governments and corporations are flushed with cash. The money needs to be deployed, keeping interest rates low and stock markets healthy.

In American culture, bigger is better. Whether it’s clothes or food servings , we want more. Despite the talk about saving the environment, Americans still want bigger vehicles. We are not willing to compromise our standards of living or change our lifestyles for anything. We want our vehicles to be big and comfortable and be able to fit in all our gear for the long week-ends. Even the so called environmentalist Al Gore is no different. He still gets around in a private jet and is driven around in a full sized SUV.

Vehicle makers face the challenge of producing vehicles that are roomy, safe and economical. Sales of the less fuel efficient SUVs are dropping while the better mileage crossovers are going up. Let’s be honest. Most Americans are big. Many of us cannot comfortably fit in to a small car such as the Chevy Aveo or the Honda Fit. We simply need roomy cars.

If we really want to fit into smaller cars, we have to change our lifestyles. We are a nation of gluttons where almost a third of the population is considered obese. Our culture of self indulgence is not likely to change anytime soon despite what the doctors and environmentalists say to us. Our habits will likely start changing once a gallon of gasoline hits $5 per gallon.

David Beckham’s American soccer adventure begins today. Among one of the world’s most known athletes, he joined the Los Angeles Galaxy where he will earn close to US$250 million over 5 years. Right now, soccer in the US probably ranks behind poker and even bowling in terms of viewer ship popularity. The hope is that Beckham can help boost the popularity of Major League Soccer (MLS) among the Americans. The MLS will have its hands full.

Beckham is very well know with the celebrity reporters but not so much with the American sports writers. They are probably more interested in covering popular sports such as football, baseball and NASCAR. This where your career as sports reporter is made, not soccer. Americans have preferences for sports that they can call their own. It also includes their athletes. Take tennis for example. American interest was high when Pete Sampras and Andre Agassi were at the top of their games. With no Americans currently ruling, public interest is low despite one of possibly the greatest players of all times competing, Roger Federer. If Tiger Woods weren’t American, the interest in golf would not be as high in the U.S.
Beckham will be popular with the celebrity obsessed audience. He will do well with his merchandising but will not strike a cord with Americans. They just can’t relate to a millionaire Briton and his glamorous wife. Who cares if they are good friends with Tom Cruise. Unless he becomes a punter for the NFL, the average American sports fan simply does not care.

Ford says we could be driving hydrogen powered cars within 5 years. Toyota says we could soon be driving hybrids in the near future. In a time of rising fuel prices, auto manufacturers and government are exploring alternative fuels. So which fuels will dominate? The likely answer is still the gasoline powered engine.  

There are several reasons. The infrastructure is already set up for gasoline distribution. On a cost basis, gas powered vehicles are still the most economical to run. These cars are easily serviceable. Alternative fueled vehicles will become more popular, but will only make up a small percentage of the overall auto market.

Alternative fuels only makes sense if the price of gas continues to goes up. For Americans to change their driving habits, a gallon of gas must breach $4. For the moment, Americans love their big vehicles. They are not willing to sacrifice comfort and size by trading down to a smaller vehicle.

In the long run, there is no denying that we need to look at alternative sources of fuel. New oil is increasingly found in countries that are hostile to the U.S. We are competing with the Chinese and Indians for secure supplies of oil. For now, the key is conservation and switrching to more fuel efficient vehicles. Look for the diesel engine to become popular in the market place. After all, it has performance, it’s fuel efficient and it’s clean.    

First we bought from China cheap plastic toys, then computers and pretty soon cars. In a controversial move,Chrysler Group signed a deal Wednesday with China’s largest automaker, Chery, to manufacture small cars to export to the United States and other markets. The deal represents the first attempt by a major U.S. automaker to use China as a manufacturing base to serve world markets. Chrysler faces an uphill battle to convince the American public that Chinese made cars should be on their shopping lists.

This is the time public mistrust of Chinese made goods are at its highest. It the past few months, there had been deadly pet food, toxic toothpaste, unsafe tires and unsafe seafood. On top of that, there is more anxiety that more jobs will be lost to China. The auto industry tends to create high paying jobs. Chrysler will have to carefully navigate the political waters and work closely with the unions regarding Chinese made cars.

The fiasco with imported Chinese goods starkly reminds us that we get what we pay for. We can’t realistically expect to get high quality goods for a pittance. Our attitudes will have to change. If somebody dies from tainted Chinese goods, all bets could be off for Chrysler.
Meanwhile, buyer beware.