A broker is seen at the stock exchange in Frankfurt, central Germany, on Friday. Europe's stock markets plunged Friday after Wall Street opened a breathtaking 7 percent lower, below the 8,000 level, but they soon recouped some of those losses when the Dow Jones index made a partial comeback.

Tim Lister
CNN Executive Editor

Word of the Day: schadenfreude (n) the malicious enjoyment of the misfortune of others.

Not a word one often sees in newspapers, least of all in stories about financial markets. But over the last few days, this German conglomeration of ‘harm’ and ‘joy’ has been writ large in European publications as the Great American Bailout has lurched from one drama to another. An upscale alternative to “I told you so”, schadenfreude is most keenly felt in Germany, where banks and industry have a closer, more sustained relationship than their American cousins. The head of one large German bank wrote: “Companies want to have a stable anchor on the finance side” – as opposed to being set adrift presumably. Not even the Finance Minister could contain himself. Peer Steinbrueck told the German legislature: “One thing seems likely to me: the USA will lose its status in the global financial system.” The echo of hands rubbing with glee could just be made out. No wonder the Financial Times’ German edition ran the headline “Schadenfreude stirs in resilient Germany.”

The French have also chimed in. President Nicolas Sarkozy: “The idea that markets are always right was a mad idea....Laissez-faire is finished.” And that from the Frenchman sometimes labeled “l’American” who has gone out of his way to improve relations between Paris and Washington.

Hypocrisy and schadenfreude are often soul-mates. It’s not as though European banks have turned up their noses at the trough of lucrative derivatives and other exotic instruments. Ask the several thousand employees of Swiss Bank UBS who are now ex-employees. And within days of his moralizing at the German parliament, Mr Steinbrueck was throwing together a $40 billion bail-out plan for a big German property bank. As the German magazine Spiegel put it: “No More Cause for Feeling Schadenfreude.”

Not everyone across the pond shares this sense of superiority – especially in Britain, which has seen its fair share of bank collapses in the last few months. A piece in The Times (of London) ridicules the Germans and the French for “stamping on the grave of Anglo-Saxon capitalism” and recalls that a century ago one J.P. Morgan stepped into to rescue America’s financial system – a move that incidentally led to the creation of the Federal Reserve.

And some Europeans who can’t stand the unbridled free market are nevertheless anxious about the consequences of the implosion of the US banking industry and impending recession in the world’s largest economy. The current edition of The Economist quotes the editor of the left-wing French daily Liberation: “There would be something comical, even pleasurable, in watching the frenetic agitation of the banking world if millions of jobs were not at stake, not to mention the economic balance of the planet.”

Europe’s sneers have not been lost on some American bloggers. “Thanks a lot Europe for pressing our noses into it,” wrote one. “This financial crisis will cripple the US and the beat cop for the world will no longer be able to stop wars and terrorism.”

Now let’s not start another argument.