Paul Jorion's Blog

  • What may happen to you because you live in LA

    A couple of weeks ago we had a lazy summer Sunday much unlike our habitual boogie boarding or being on the lookout for some new budding talent of the LA pictorial underground: we acted in a video clip for My Ruin.

    We had attended the concert in East Hollywood on July 17th; I didn’t mind Heavy Metal forty years ago so why would I have changed my mind? Here’s a picture taken that night.
    Tairrie B. - July 17, 2007
    A tall guy asked me why I was…

    read more…

    0
    comment(s): What may happen to you because you live in LA

  • The ABS and Uncle Sam

    Mr. Paul Schulten is asking me the following:

    “It is true that delinquencies and losses in residential mortgage backed securities (RMBS) are strongly correlated with home price appreciation (HPA) or in the current environment home price depreciation (HPD).
    As we enter a period of possible decline in home prices these losses accumulate first to the lowest rated tranche in an MBS or ABS security and subsequently in order to the next highest rated tranches. Those in the lowest rated tranches, the b piece, have presumably already experienced some discomfort if not some losses on their investment.
    My question…

    read more…

    1
    comment(s): The ABS and Uncle Sam

  • The credit crunch’s cogwheels

    Collective human phenomena are as a rule tricky to analyze and consequently tough understanding and explaining. The reason is learning. Even if at its core a process remains simple, people learn: they observe how things work and they adapt. Adaptation in its turn modifies the process and initiates an endless dynamics of change. Such feedback makes any human collective process out of necessity complex and renders its account arduous.

    Fortunately, in some cases as in the credit crunch, the mechanism is relatively simple and thus relatively simple to work out. The current crisis is the outcome of a distortion of…

    read more…

    1
    comment(s): The credit crunch’s cogwheels

  • Old-style publishing a paper

    Now when you want to publish an article, you write it, you put it on your website and within days hundreds if not thousands of people have read it. Sometimes someone will approach you and ask if they can publish it in the old-fashioned way, in a journal, and you’ll say “Why not?” In the old days, you would write your paper, send it to a journal, wait for six months, then at long last you would receive a letter telling you about hundreds of changes readers who have no clue about what you are writing about expect you to…

    read more…

    1
    comment(s): Old-style publishing a paper

  • The un-American solution to the subprime mess

    Among the remedies mentioned for the subprime crisis, I haven’t seen listed the system I went through when getting a mortgage in England back in those days. Here is how it worked: the first step would be for you to open an account with a building society; then you would start saving, sending a check whenever you could in whatever amount; one month at a time your account would then accrue interest. Until one day, when the fateful 20% threshold was reached you would receive in the mail a letter saying: “Rejoice: the time has come, and we’re going to…

    read more…

    0
    comment(s): The un-American solution to the subprime mess

  • Since we can’t fix the subprime mess can we at least make sure it doesn’t happen again?

    One of the greatest American traditions is for families to get together at Christmas and watch with ever-renewed delight Frank Capra’s “It’s a Wonderful Life.” Recent events in the financial world, and in the mortgage business in particular, suggest that the movie should be introduced with this important disclaimer: “WARNING: The movie you’re about to watch is a work of FICTION. Although it is not unknown for a banker to be essentially driven by the altruistic desire to have every citizen own his own home – and will even contemplate suicide if prevented from doing so – such motivation CANNOT…

    read more…

    0
    comment(s): Since we can’t fix the subprime mess can we at least make sure it doesn’t happen again?

  • Woody Allen’s “Death Knocks”

    In Death Knocks, Woody Allen provides a new treatment to a classical theme: a man seeing himself on a final mission succeeds in buying time from the ineluctability of death by challenging a personified death to a game that he wins, gaining so a temporary reprieve. The allegory reminds us that life amounts in every instance to a similar losing battle where what the highest skill in the game obtains is nothing more than time. Philosophically speaking, Allen’s additional contribution is in suggesting that time isn’t so bad a commodity after all.

    The reason why Allen would treat this theme…

    read more…

    4
    comment(s): Woody Allen’s “Death Knocks”

  • Toons in contemporary LA underground iconography

    Since Roy Lichtenstein made a lasting impression on the fine arts’ scene by turning individual frames of comic strips – or at least a likeness of them – into paintings, expanding to their new scale the standard pointilliste techniques for representing shading on newspaper-quality paper, a point of transit has been established between the exclusive world of fine arts and the prosaic one of comic strips.

    Of course the reversed connection has a much better established ancestry as ambitious comic strips authors have found in the fine arts inspiration for their individual styles. Most notorious of course, the influence of…

    read more…

    0
    comment(s): Toons in contemporary LA underground iconography

  • Trouble’s a Bubble, introducing the stock synthetic

    In January of this year, I gave a talk in Paris, at University of Paris X – Nanterre, to a group of economists on “Value and price.” The paper was published online in April in “La gazette permanente du MAUSS” (1). It is in French – as suits speaking in Paris. There is however an abstract in English that reads like this:

    “What is being referred to as the “value” of a share in a company’s stock is in truth only one of two possible ways for establishing its price: what Adam Smith called its natural price by contrast to…

    read more…

    0
    comment(s): Trouble’s a Bubble, introducing the stock synthetic

  • Now that the housing bubble has burst, who’s to blame?

    Blame is flying in all directions: mortgage lenders had stopped bothering whether or not borrowers could repay as they were passing the buck to Wall Street anyway; Wall Street firms were using subprime mortgages of any denomination as innocuous stuffing in Collateralized Debt Obligations (CDOs); regulators failed to curb the worst forms of abuse – that were no longer restricted to unregulated mortgage companies but had become rampant in the whole industry; homeowners, driven by greed, couldn’t be bothered with reading their loan contracts before signing them.

    I’ve got an alternative explanation: each party was following its own well-conceived best…

    read more…

    0
    comment(s): Now that the housing bubble has burst, who’s to blame?

Contact

Contact Paul Jorion

PRIBOR.AI

Most recent comments

  3. Ouch! The whole of cosmology was standing on its head, and now it’s back on its feet! And everything becomes…

  4. To expand on this reflection, I’d like to propose an image that radically inverts our usual representation of the Big…

Most recent posts

My books

Topics

Tags

"L'avènement de la Singularité" "Thought as Word Dynamics" ANELLA A NEW "US" FOR NEW TIMES Angela Merkel Aristotle Artificial Intelligence Barclays Brexit capitalism CFRT Chair "Stewardship of Finance" China Claude 3 consciousness debt Donald Trump ECB EFSF emergence ESM Europe eurozone France GENESIS Germany GPT-4 Greece Herman Van Rompuy IMF Italy Jean-Claude Juncker José Manuel Barroso Large Language Models LIBOR linguistics LLM Mario Draghi Pribor.io Psychoanalysis P vs NP Spain speculation The Singularity United States