Mass Media controled by French State

France Television is one of the group of mass media in France. They possess six channels on French television. Consequently, they are really important on information flows. Their audiences are mostly masses and they provide general information and also cultural information with the channel France 5. They were independant until then but partly financed by state.

But now, the French Parliament has taken the control on the financial aspect of the firm and on the level of the direction. Indeed, the president of France Television is now named by the French President. This questionned a lot the independance of the channels and therefore the independance of the journalist. Will the president of the firm let the political journalist make criticism about the political class ? Because the president of France Television was named by the man who is criticised by his journalist. Choose the right side: political class or jounalists ?

This could be very bad for the information flows in France. Because TF1 is also controlled by the director of campaign of Sarkozy and now the president of France Television will be controlled by probably a "friend" of Sarkozy.

So what do you think bloggers, will the president of France Television choose politics or journalism ?

Crisis and deflation

In the United Kingdom and throughout Europe, the crisis has expanded a lot and has made strong damage on the financial markets. Well, that's a fact and everybody knows that.

However, the crisis in the real economy could be solve by the deflation which is happening at the moment. First of all, the deflation is only due to the oil price which has came down as you can see on the graph of the brent quoted in London. The deflation is not a consequence of the decreasing economy but of the decreasing oil price.

Consequently, as the price of goods are going to be lower, if the firms are likely to decrease their prices, the consumers are going to spend more. I know that for a fact, the income of employees are very hard to reduce. Well, it is the case for instance in France. So, the crisis could be solve by the consumption. Keynes may be very happy at the moment (relaunch economy by the state and by consumption).

Although, the deflation is not a very good sign of economic growth, it could relaunch real economy. But the financial markets reacted very badly to this deflation because they tend to look only at the bad point of this: the sign of an economic slowdown.

The Central Banker's Chain Saw Massacre

Bank of England and ECB have cut their interest rates in order to pour more money in the markets and stimulate borrowing. Bank of England cut from 150 basis points so 1.5%. ECB cut from 50 basis points so 0.5%.

These cuts are going to pour money in the markets. Well, theoritically. Indeed, these cuts are not going to be effective if the banks do not pass the cuts to the customers of new loans or on credit cards. Actually, the banks are not sending back the cuts to customers like you and me.

But which is even worse, the firms which want to invest in new projects do not see the cuts because the interest rates at which they borrow are high. So the global crisis is slowing down the real economy.

Even on the interbank market, the banks do not want to lend money to each other because they do not know if the bank borrowing overnight is going bankrupt tomorrow. So the banks are lending only on a daily basis, if they are lending anything.

So when will the cuts be effective ? And if they are not effective, what are going to do the central bankers ? Because if the cuts are not effecient, the central bankers will not have to decrease the interest rates another time because they have already made huge cuts.

I think that the cuts will be effective if the commercial banks reduce their interest cuts. But if not, the government will have to play on fiscal policy to dynamise the economy. However, this was the Bush's policy which has partly lead to the crisis....