From a small northwestern observatory…

I have a habit of not mentioning my travels until I get back — it helps to dissuade burglars if they don’t know I’m out of town.

That said, I just returned to the good old US of A from 3 weeks in Spain and France.  I was the lead testifying expert this past Spring in FHFA v. Nomura (more on that eventually), and headed to the land of good wine and cheese for some much needed R&R.  Of course, it’s impossible for me to travel through two of the great countries in Europe and not think about real estate.  Following are some relatively off-hand thoughts about two countries that share a lot of history with the U.S., and considerable high-level political and economic thinking, but surprisingly little else at a granular level.

First stop was Barcelona.  There is a saying in Barcelona — “it’s a great town if your pockets jingle.”  Unfortunately, I have no basis to disagree.  We were in Barcelona for 4 days, mainly touring the great architectural works of Gaudi.  It’s hard not to like Barcelona if you’re able to stay at the beach — and by the way, Barcelona has one of the best beaches in the world.  However, Spain as a whole is suffering 20+% unemployment (remember that during the great depression, U.S. industrial unemployment never really got higher than 35%) and its no surprise that in last months regional elections, the far-left parties captured control from the center-right parties.  Spain is a spectacularly beautiful country, with terrifically friendly people.  However, their government has never really been able to come to grips with the central problem in Europe, which is how to be relevant in a 21st century economic world.  The leftist view sounds good on paper, but there simply aren’t enough industries and raw materials in Spain to nationalize and gain any sort of short-term traction.  (Of course, in the long-term, such nationalization and confiscatory taxation is self-defeating.)

Next, we headed for Toulouse and tour of western France, Normandy, and eventually Paris.  From a purely tourist perspective, one cannot pick a better part of the world to unwind.  I will note, however, that all too many tourists head for “Paris” when they want to go to France.  Don’t get me wrong — I like Paris.  However, all too much of Paris is geared to the tourist trade, and it’s hard to figure out what to do and what not to do.  For example, the Louvre is perhaps the greatest museum in the world, but it’s packed to the gills most days (although I’m told if you are REALLY an art aficionado, head there in January).  On the other hand,  Musee de l’Orangerie right down the road has perhaps the greatest collection of impressionist art in the world (including Monet’s Water Lilies, around which the museum was built).

For a really terrific tour of France, head for the small towns.  We started in Toulouse, which is actually a fairly major city — the 4th largest city in France and the home to Airbus and significant military and space assets.  However, Toulouse was also the capital of the Visigoths in the 5th century and a center of the heretical Christian movement called Caharism in the 12th to 14th centuries.  The architecture and history of the regions is spectacular.  On top of that, the wine and food cannot be beat.

From there, we headed up to the Loire Valley (again, history, architecture, food, and wine) and then headed over to Normandy to tour Mont Saint-Michel Abbey, Omaha and Gold beaches, as well as Point du Hoc.  If you try to duplicate this trip (and I highly encourage it), be sure to wear comfortable walking shoes.  Between Normandy and Paris you hit the town of Giverny and Claude Monet’s home and gardens. Carve out a couple of hours, even if you are not a fan if impressionism, and plan to have lunch (and yes, French wine) in one of the delightful little cafes in town.

France has figured out the trick to monetizing tourism.  They have a massive infrastructure, at a very local level, devoted to attracting, feeding (and yes, watering), and entertaining tourists from all over the world.  The cathedrals, caves, abbeys, castles, and colorful towns are in first-rate order, and every small town in the country is prepped to handle tourists in season.  The bed-and-breakfasts are first-rate, and the amenities meet or exceed anything you would expect in the U.S.  At the worst, a b&b is small and un-air conditioned, but the food and wine will be better than expected.  At best, a b&b will have a room and service to compete with a top-tier U.S. hotel.

Well, enough about that.  More on the more interesting FHFA v Nomura later.  Oh, and by the way — a tip of the hat to Air France.  What a great airline!