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Post-Party Depression

Occasionally I have lived beyond my means. Most of these occasions were when I was young, but some, I am sad to say, have been later in life. In extreme youth, it was to buy things or experiences for which I needed an advance on my allowance. Later it was sometimes caused by poor planning, and funded by credit cards. Most recently, it has been for fun--weddings or vacations from which it took months to recover. Each time, a little figurative belt tightening was necessary. A reduction in my normal standard of living, before or after or both, was necessary to recover.

My wife and children would notice and be aware of these periods of austerity. They were happy when the bills were paid down or income was up as the clamps were loosened. We announced neither the beginning or end of these austerity periods but the kids knew. They adjusted but rarely commented.

My children are better behaved than the Europeans we read about in the paper. They never considered a lavish vacation as a right. They never considered a big wedding party or a big Christmas as a right. They understand that every day can't be their birthday. However, after decades of state-supported income, extremely low employment rates and extraordinarily easy work rules, it is time to pay the bills on the Continent.

Rather than working for only 30 years at 35 hours a week with 6 weeks of vacation, Europeans are heading for later retirement, fewer dole years, and several more hours in an average work week. Consider this difference: in the USA employers must pay extra to most workers who put in more than 40 hours in a week, while in France until recently, a worker was not allowed to work more than 35 hours a week. In the USA workers often take two jobs, working well over the standard 40 hours. Not in France, where such go-getting wasn't allowed. Retirement is earlier in Europe, generally in a person's mid-to-late 50's rather than mid 60's in the USA. Pretty plush, don't you think?

If I had become accustomed to a few decades of French work habits, I too would be very interested in protecting this "right."

Now it's payback time, and you know what they say about payback. The future of European workers is decades of second jobs, delayed retirement and vastly reduced standards of living. Postparty depression!!

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Additional disclosure: (c) Regions Bank, Member FDIC. The foregoing represents the opinions of the author, Brian Sullivan, and not necessarily those of Regions Bank or Regions Investment Management, Inc. (RIM). RIM provides commentary to clients of Regions Bank, an affiliated company wholly owned by Regions Financial Corporation. The information contained in this report is based on sources believed to be reliable but is not guaranteed as to accuracy and does not purport to be a complete analysis of the security, company or industry involved. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This report is designed to provide commentary on market strategy and the opinions expressed reflect the judgment of the author as of the date of publication and are subject to change without notice. RIM assumes no responsibility or liability for any loss that may directly or indirectly result from the use of such information by you or any other person. Investments discussed in this report are not FDIC-insured, not deposits of Regions Bank or its affiliates, not guaranteed by Regions Bank or its affiliates, not insured by any government agency, and may go down in value. Investment advisory services are offered through RIM, a Registered Investment Adviser. RIM is wholly owned by RFC Financial Services Holding LLC, which in turn, is a wholly owned subsidiary of Regions Financial Corporation.