Reason 283 We All Hate the French

Blain’s Morning Porridge – 23 March 2022: Reason 283 We All Hate the French

“We offered kindly to donate them Calais, but all they gave us back was the bidet,” 

This morning: Lots of stuff we should be worrying about this morning, but who can resist the opportunity to take a pop at the perfidious, shameless French.. They threaten the future of Europe and everything else. (Well… maybe..)

So often the porridge just writes itself.

I know I really should be writing about the US yield curve inversion threat and the prospects of recession later this year. Maybe I should write about the bounce back in tech, the divergence between stocks and bonds, and why this looks like a potential equity ambush to play out badly later this year if the yield curve moves prove correct.

I did briefly consider today’s top story should be a deep dive into what may be happening in China as the party considers just what the opportunity presented by the Ukraine “distraction” offers in terms of reengagement and encouraging a bounce back in China stocks.. Or maybe it should have been a dive into the global housing market?

Or perhaps I should focus on Blighty. As I switched on the Beeb I was listening to ladies from “oop North” somewhere grim – like Yorkshire on a sunny day – tell the reporter how they are freezing, the kids are starving, and they are walking to work because they can’t afford petrol, but they trust Rishi Sunak balancing the books is the right thing to do by increasing taxes by around £1000 a head across the country, while inflation is 6%, and wages are stagnant.

Rishi and the rest of the Tory party are wrong – utterly wrong. Austerity is never the answer. This will become an avoidable policy mistake. But how would they know that…? Their heads are elsewhere. Their leader is a buffoon. Rishi just happens to be the son-in-law of a very rich Indian businessman. Just saying… While some Tory MPs are far too busy counting their gains from PPE sales during the pandemic. It’s tempting to write about how Tory Sleaze will ultimately destroy the UK… but who would bother to read it…

Or maybe I should take a pop at Tesla stock going up a gazillion points because Musk finally got his Berlin Gigafactory open? Bah humbug. I am not going to even bother commenting – it’s massively overvalued, lithium is scarce, dirty and impossible to recycle, and Elon is .. a complete Elon. Check out this guest post from last week: How Green is your Telsa?

However… all these things pale into insignificance compared to the latest tragedy being inflicted upon the Russian people as a result of their President’s invasion of Ukraine. Yes, they deserve to suffer… but the latest news really is too much… French carmaker Renault is going to keep making cars in Russia.

Yep, despite global sanctions, and while the rest of Western business and commerce puts blocks on any further Russian business, Renault is going one step further to make Russia suffer. They are going to punish Russian consumers by making even more of the miserable, piss-poor cars, hoping to make the void in Russian drivers lives even deeper by continuing to sell them more of the least inspiring vehicles on the planet.

I can imagine two Russians on the Metro: “The bad news Ivan is sanctions mean we can’t buy anything, but the good news is we can’t buy French cars.” How wrong they were.. it can get worse.

If God was to intervene in Russian Sanctions I am sure he’d say…. “The shoot oligarchs on sight policy is good, stop all medicines, and make them suffer, but please, please, stop selling them Renaults.. for the love of Me, it’s too cruel and unusual a punishment to make them drive French cars.”

For all my youthful misdemeanours, I only ever drove a French car for a couple of weeks – it was a deliberate punishment by my office for “bending” my Toyota MR2. The Pig was a horrible thing. It was a pig. Literally. A Peugeot. I can’t remember anything nice about it.

But I did drive a girlfriend’s Lada for a while. Lada is now operated by Renault. The Lada… well it was different. It was a 1950’s Fiat with an engine designed to maintained by a man with a single spanner and a bottle of vodka. Surprisingly it had a heated rear window, but that was only there to keep your hands warm while pushing it. I wonder if the Russian tanks abandoned in Ukraine were made by Lada/Renault?

If we really want to punish Russia – make them drive Ladas.

But… It’s not only Renault that’s still selling crap into Russia. Apparently, the unified Global Sanctions against Russia don’t apply to France. Sanctions are for other countries… Renault’s biggest shareholder is the French government. And we all know how unified and aligned with the rest of Europe, M. Macron is…

I stopped skiing in France decades ago after a Frenchman barged his way to the front of a lift queue. When stopped and told to behave, he shrugged, and explained it in two words: “I’m French,” and pushed past.. no doubt stubbing-out his cigarette on the ski jacket of some English child as he wrenched them off the chairlift… (To be fair… I love the French. Its Parisians who are the problem..)

So, I was not surprised to read yesterday how French stores, and the uber wealthy French Oligarch families than own the likes of Decathlon and Leroy Martin are not only ignoring Sanctions, but actually expanding their Russian retail presence into the retail spaces vacated by other sports stores and Ikea in Russia. Decathlon are scouring suppliers for extra goods to meet the increased demand they are encountering.

A twitter campaign is underway against French firms like Danone, Auchan and Credit Agricole which are all not only open in Russia, but touting for business. No doubt the French armaments industry will be in town offering supplies.

I shall not stoop to using the expression Cheese-Eating Surrender Monkeys, (and certainly would not put it in italics or bold), but French elites have the moral-fibre and integrity of a wet paper bag.

There are serious implications. How can Europe maintain a united front against Russia, take the difficult and recessionary decisions to cut Russian energy, and pull businesses out of Russia.. when France simply steps into the breach to grab market share? The only way the West can truly beat Russia without putting boots on the ground is to smash them with 100% sanctions – I wrote about it a month ago: Financial Blitzkrieg.

This morning I will be writing to a French bank to tell them we are removing them from the list of potential funders on a current project. I am peeved at myself for buying a yoga mat from Decathlon (yes… a yoga mat!) recently… Its back to JD Sports for me.. (yet another exercise in scumbaggery…)

Five Things to Read This Morning to make you ditch your crossiant.

Torygraph – French founders of Decathlon face outrage over Russian expansion plan

Torygraph –  Emmanuel Macron under fire as Renault resumes Russian production

Garuinad – “Mysterious”: the $700mm superyacht in Italy some say belongs to Putin

FT – Foreign businesses in China need to heed the lessons of Russian exodus

WSJ – Lip Gloss, Potato Chips, Air Fresheners Are Among the “Essentials” Still sold in Russia

Out of time and back to the day job…

Bill Blain
Shard Capital – Strategist