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Warning hazards

Timeri N. Murari

SO, Mr George W. Bush is off on a month long vacation on his Texas ranch. Its the longest vacation any American president has ever taken. Especially one who's already known for being work-shy. I cant blame George W. America's sliding into a recession wit h all the subtlety of the Titanic going down into the cold Atlantic waters. Presidents have guaranteed jobs, others don't.

We all know that when America catches a cold, the rest of the world sneezes. But the sneeze appears to be taking its time. In the UK, everyone's ignoring any thoughts of a recession. Summer is not a good time for such wintry thoughts. It is bad enough th at England is being thrashed in the cricket Test matches and Rugby Tests and that their hero Tim Henman was dumped in the Wimbledon semi-finals. July and August are the holiday season, and the airports were jam-packed with holidaymakers heading out for S pain, Portugal and the West Indies.

Although England was having a glorious summer, with intermittent rain naturally, the affluent Brits were heading out for guaranteed sunshine. When I went across to Paris by the Eurostar, I had never ever seen it so packed. Normally, it runs a half to qua rter empty, a loss-maker if any. Even though it only takes three hours from London to Paris, the business types prefer the three-hour airport-to-airport ride.

Paris was full of foreigners as the Parisians now take their annual vacations in July and August and head south to the Riviera. There was certainly no sign of a recession in France because they believe they are buffered from the American slowdown because of their Euro community. It is probably true.

By the way, if you are holding on to your European money -- francs, DMs, lira, etc. -- they all become worthless in January 2002. Dump them for the Euro. I guess this applies only to all our politicians and bureaucrats who hold bank accounts in all these currencies abroad. The EU switches over to the Euro for good. Only the pound sterling remains stubbornly separated from the EU and the Euro.

In the UK, there's the strange air of waiting for something to happen. The property prices are booming and going through the roof. Banks, real estate agents and building societies are sending out warning signals that this boom is going to collapse any mo ment. Yet, people continue to buy properties that are more expensive, and they are not all foreigners investing in real estate. In the last two months property prices, especially in and around London, have risen around eight per cent.

The strange air also hangs over the city. A couple of years ago, three dealers made the front pages of the newspapers by having a dinner that cost around 15,000 pounds, the wine making up most of that bill. No one was particularly surprised. Britain was booming, and these dealers made commissions in millions of pounds. They had every reason to celebrate another big deal, and everyone revelled in that story. It proved England was booming, the money flowing like water, or maybe wine.

Last month, three other dealers, who remained anonymous, had a dinner that cost around 30,000 pounds. One bottle of wine alone cost 15,000 pounds. The food bill was a mere 500 pounds, and the exclusive restaurant waived it. However, this time around, the city was very surprised and most of the comments were: what were those three men celebrating? As we're all down, they must know something we don't. No one in the city could figure out what these men were celebrating. No big deals had gone through, the s tock market was down.

The Prime Minister, Mr Tony Blair, is dismissing any ideas of the recession and trying his best through sheer bombast to keep the economy up. But some of the cracks are beginning to show. The lay-offs have begun. A big Japanese computer company in the no rth laid off 2,000 workers, while some of the British-owned factories are laying off the few hundred.

But the public isn't paying too much attention to these lay-offs, much to the puzzlement of the economists. People are spending money on real estate, vacations and consumer items as if there's no tomorrow. The pessimists are expecting the crash at any mo ment when the layoffs start to spread like the foot and mouth disease.

Its the same story in the US. The lay-offs have begun slowly and despite Mr Greenspan making any number of interest cuts, there seems to be no slowing of the downturn. The UK will probably catch that cold, but the EU expects to have enough protection to ride through any downturns.