Are The French Fortune Tellers?

Maybe it’s because they’re French. Maybe it’s because they come from an intellectual tradition preoccupied with misery. After all, Victor Hugo wrote Les Miserables; Jean-Paul Sartre wrote Being and Nothingness and Nausea; and let’s not forget Albert Camus’ masterpiece The Plague. Hope doesn’t exactly spring eternal within the borders of our European ally. Could it be this mindset that is responsible for Societe Generale‘s recent actions? Or is the French bank two steps ahead of the rest of the world with respect to the economic fate that awaits us all?

According to the London daily The Telegraph, Societe Generale “has advised clients to be ready for a possible ‘global economic collapse’ over the next two years.” In its report (Worst-Case Debt Scenario) the French bank warns its clients that “as yet, nobody can say with any certainty whether we have in fact escaped the prospect of a global economic collapse.” When one of Europe’s most powerful banks institutes contingency plans to help its clients survive losses from a worldwide economic devastation, it is time to recognize that our financial health is in even worse condition than we thought.

President Obama and Congress are desperately trying to convince Americans that things are slowly improving. They cite recent gains in the stock market and four consecutive months of increased U.S. Industrial Production. But those positive indicators are overwhelmed by the bleaker and more numerous negative indicators, such as a 10.2% unemployment rate and the possibility of a second round of home foreclosures. With its “things are getting better” PR campaign already taking a beating, the last thing the federal government needs is the release of a report like the one produced by Societe Generale.

That is the problem with public relations: it is only as good as the subject it is promoting. If that subject is without substance it will collapse eventually like a house of cards . . . sort of like what the French believe is the destiny awaiting the global economic community.