Paul Jorion's Blog

Category: Economy

  • NOTHING TO WORRY ABOUT ! , by François Leclerc

    Guest post. Translated from the French by Tim Gupwell The G20 in Los Cabos seemed like a preparatory meeting for the Summit of the Heads of State and European Governments! This seems to highlight the fact that they no longer know what to do, and are running round like headless chicken. The same ideas that…

  • BACK FROM LOS CABOS, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell Given that the G20 has confined itself to mere generalities and that the European Summit on the 28th and 29th June is dangerously close, what can be expected of the meeting in Rome on the 22nd June between Angela Merkel, Mario Monti, Mariano Rajoy and François…

  • THE SPANISH RISK PREMIUM

    The Spanish risk premium There were two bond issues today, one in Spain, the other in Denmark, which allow us to carry out an interesting little calculation of the risk premium required of Spain when it borrows on the capital markets. A short while ago the Spanish Treasury department issued more than 3 billion Euros…

  • Le Vif/L’Express, « There is ALWAYS an alternative », June 22, 2012

    This is an exclusive preview – in English! – of my column which will be published in the Belgian weekly Le Vif/L’Express this coming Thursday The phenomenon is the way in which things manifest themselves to us, and this can be real – either with things appearing as they really are; or it can be…

  • FRANCE AND THE FUTURE OF EUROPE

    France and the future of Europe The fact that Spain seems to have lost all access to the capital markets for the foreseeable future, seeming thus, at first glance, to condemn the entire existence of the Eurozone, was headline news on Paul Jorion’s blog yesterday. Firstly, as discussed in the article ironically entitled “The Greeks…

  • THE LOSS OF CONFIDENCE IN SPANISH DEBT: LIVE

    In my article this morning ‘The Greeks have made the right choice’ I indicated that: …the 10 year rate for Spanish bonds was 6.82% at opening time this morning and now stands at 7.13%. (10.25 AM). The dramatic progression has continued: it is 2.40 PM and the rate is now at 7.22% The correct Greek…

  • “THE GREEKS HAVE MADE THE RIGHT CHOICE!”

    “The Greeks have made the right choice!” Oh blast, the markets see it differently: the 10 year Spanish rate was at 6.82% at opening this morning and now it’s at 7.25% (3:30 PM). Unheard of, one has to say. Damned markets! Voting for the Troïka method – it was pretty obvious – was voting to…

  • A BIG BANG, OR NOTHING , by François Leclerc

    Guest post. Translated from the French by Tim Gupwell With the G20 meeting being held in Mexico at the start of the week, our perspective will find itself altered, falsely accustomed as we are to only seeing the debt crisis from a European angle. On the 18th and 19th June, the greats of this world…

  • STEPS TOO STEEP TO CLIMB, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell François Hollande is on the offensive and Angela Merkel firmly on the defensive, with both setting their sights on a compromise in the summit at the end of June (a compromise which remains inconceivable for the moment). How is it viewed by Paris, with Berlin continuing…

  • AND NOW?

    And now? 14 juin 2012 par Paul Jorion And now? What are we going to do? Now that Spain has lost access to capital markets for its debt? True, the downgrading yesterday evening of Spain’s rating by three notches by Moody’s, from an A3 to Baa3 has not helped matters. But after all, it hasn’t…

  • NOW THE CHAINS ARE GIVING WAY, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell The chorus of voices is becoming increasingly strident and events are moving very fast: the now inevitable Spanish request to benefit from a rescue package; plus the impending recognition of the failure of the second Greek plan, followed by the negotiation of a third one with…

  • SPAIN IN STORMY WATERS

    Spain in stormy waters 12 juin 2012 par Paul Jorion The 10 year rate for Spanish debt has just reached a historic high. On the 25th November of last year, the rate had beaten a record when it reached 6.72%. Yesterday early in the morning, when the European markets were in ecstasy about the news…

  • HOW CREDIT DEFAULT SWAPS WILL HAVE DESTROYED THE EURO

    How credit default swaps will have destroyed the Euro 12 juin 2012 par Paul Jorion And what of the CDS (credit-default swap) speculators who don’t pay taxes? Why don’t we hear anything about them? We hear a lot about the Greeks not paying their taxes, and at the moment, due to the tactlessness of some,…

  • THE GOLDEN TOUCH, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell and Bernard Bouvet In spite of the promise of a hundred billion Euros which has been brought to the table, the markets are still not convinced, and it didn’t take them long to react. By late afternoon, Spanish borrowing rates were edging up again, reaching 6.508%,…

  • WHEN THE WISE MAN POINTS AT THE MOON… (I), by François Leclerc

    Guest post. Translated from the French by Tim Gupwell. The chaotic ups and downs of the deleveraging process continue inexorably, affecting not only the debt of the member states but also a European banking system which is now in the same mess. What it had been concealing has now been revealed: it is in a…

  • THE RAMIFICATIONS OF THE SPANISH BANKING BAIL-OUT, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell. Some important details are still lacking with regard to the Spanish banking bailout plan: its final amount, which is going to depend on the results of the audit commissioned by the government; its rate, which we will be coming back to; and the stabilizing measures for…

  • A HUNDRED BILLION EUROS FOR SPANISH BANKS, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell. It was no longer possible to carry on. Two and a half hours of videoconference between the Eurozone’s finance ministers (joined by Christine Lagarde on behalf of the IMF) were needed to finalize the scheme, allowing the German and Spanish governments to save face. Germany made…

  • KEEP KICKING THE CAN DOWN THE ROAD…, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell. The case has been heard: Barack Obama and David Cameron demanded immediate action from the Euro zone leaders, frightened by the prospect of the Spanish and Greek crises occurring at the same time, and Angela Merkel responded by announcing that no miracles should be expected from…

  • DIFFERING DELUSIONS, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell. Worried by the sight of the Europeans entrenched in their respective positions, Barack Obama reached for his telephone. The day after the G7 videoconference between the Finance ministers and the central bankers, of which nothing came, he successively called David Cameron, Angela Merkel and Mario Monti.…

  • THE INSURERS WILL NOT BE LEFT UNSCATHED, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell. In the United States, bad news often arrives via the Congressional Budget office (CBO). Reputed for its analyses, this non-partisan Congressional body has just produced a forward-looking report on American debt. According to the CBO, if the tax cuts are renewed and public spending is maintained…