Paul Jorion's Blog

Category: Finance

  • UNDERSTANDING THESE TIMES IN WHICH WE LIVE

    Translated from the French by Tim Gupwell. In the Wall Street Journal today: Since the beginning of the crisis in 2007, one thing has become clear in European politics: the outgoing parties are not voted back in. Confronted by the incapacity of the governments and the majorities in place to resolve the problems of the…

  • THE LOBBYISTS AND US

    Translated from the French by Tim Gupwell. In the Wall Street Journal today: A new American law requires US-listed companies to mention on products containing certain minerals that their extraction fuels conflict in Central Africa. Too expensive for businesses, said the lobbyists! Get rid of it! The Securities and Exchange Commission (SEC), the financial regulator…

  • AH! THE IMAGE OF FINANCE!

    Translated from the French by Tim Gupwell. We learned on Tuesday that the fifth largest British bank, Standard Chartered, had promised the New York State regulator that it would pay a fine of 340 million Dollars for illegal transactions with Iran. The matter is not yet closed, as four other American regulatory bodies continue to…

  • THE GOLDMAN SACHS AFFAIR: CORRUPTED JUSTICE, OR AN UNTOUCHABLE FINANCIAL SECTOR?

    Translated from the French by Tim Gupwell. The first hypothesis which comes to mind with regard to the American Justice Department’s decision on Friday not to prosecute the bank Goldman Sachs for its alleged role in the Subprime crisis, is of course of corruption at the very heart of the Department. The facts are well-established…

  • LAST CHANCE FOR THE EUROSYSTEM, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell While the parties in the Greek Coalition government are trying to come to an agreement on a plan to make savings of 11.6 billion Euros over the coming two years, which is going to be painful even though they have to present it as a pledge…

  • MARIO DRAGHI: WHAT IF IT WAS ALL A TERRIBLE MISUNDERSTANDING?

    Translated from the French by Tim Gupwel. A short while ago, I was taking a siesta, sleeping with a sound conscience, when I woke up with a start, my heart beating wildly, my forehead soaked with sweat and prey to a strong emotion: what if we had completely misunderstood the words of Mario Draghi, President…

  • THREE STRATEGIES FOR REDUCING THE DEBT, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell Whenever monetary creation, or the famous concept of printing money, is alluded to, the idea of hyperinflation is never far away. Subsequently, reference is made to history to predict a return to these episodes that left such an indelible mark in people’s memories. The conclusion immediately…

  • WAITING IS NO LONGER A VIABLE POLICY, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell Once again, the European stock and bond markets have sounded the alarm. The fall in stock values has been accompanied by an increase in bond rates for the countries in the firing line. The capacities of the banks and of the states to fulfill their commitments…

  • SPAIN : THE MARKETS ARE EXPECTING NEW DEVELOPMENTS SOON

    Translated from the French by Tim Gupwell Exceeding 6% on 10 year debt is already dangerous. According to the terms of the balanced budget rule, this signifies that a nation will require growth of around the same amount, whereas in fact Spain has registered a negative growth since the beginning of the year! So, 7.567%…

  • QUIET ON THE SET, AND… INACTION!, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell Events are moving fast. We were expecting it of Greece, but Spain is overtaking it. Yesterday evening, a human tidal wave invaded Spanish town streets, which these days have become virtually permanent places of mini-demonstrations at midday or after work. Today, at the very moment when…

  • FIRST IT WAS THE AGENCIES, NOW ITS THE FORECASTERS’ FAULT, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell “I can’t see any time soon when…the pressure will be off” replied David Cameron, the British Prime-Minister, in an interview with The Daily Telegraph. He continued, “this is a period for all countries, not just in Europe but I think you will see it in America…

  • LIBÉRATION, “Plundering and looting must be punished”

    Plundering and looting must be punished? For the economist and anthropologist Paul Jorion, the financial system needs regulating. The LIBOR scandal took place in 2008 against a backdrop of almost total indifference. This time there has been a huge outcry. Why? It is a situation specific to Great-Britain. It is in this country that a…

  • THE PROVERBIAL OBJECTIVITY OF THE COLUMNIST, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell The case is clear-cut judging by the current climate! The banks are behaving like louts, the regulators supervising them are looking the other way, and the politicians are covering their backs. Indeed, it is difficult to draw up a full list of the scandals which have…

  • ATLANTICO.fr, The LIBOR scandal : are bankers totally untrustworthy?

    The LIBOR scandal : are bankers totally untrustworthy?? Translated from the French by Tim Gupwell Can a banker be trusted? This is indeed the question one is obliged to ask in the light of the “LIBOR affair” which broke in April 2008 and saw a dramatic turn of events four years later, on the 27th…

  • FORMER C.O.O. OF BARCLAYS, JERRY DEL MISSIER’S HEARING, BEFORE A BRITISH PARLIAMENTARY SELECT COMMISSION

    Translated from the French by Tim Gupwell Up to now in the LIBOR affair, the witness statements before the parliamentary select committee have essentially seen everyone lying to protect their own interests. The inevitable result is a sort of cacophony, compounded by strategy changes half-way through, which was particularly the case for Bob Diamond, former…

  • THE RESULT OF UNRAVELLING A BALL OF WOOL… FROM THE WRONG END, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell François Hollande has confirmed that the Government is going to propose for adoption an organic law (which a simple law cannot undo) in order to have the balanced budget rule adopted, on the advantageous pretext that it is provisional. There have been many occasions in recent…

  • LE MONDE-ÉCONOMIE, The LIBOR affair…… a scandal postponed from 2008, Monday 16 – Tuesday 17 July 2012

    My most recent column in the French daily paper Le Monde : Le scandale du Libor, c’était en 2008. Translated from the French by Tim Gupwell. When the LIBOR affair first broke in April 2008, the press comments were laconic to say the least. Last month, when the fire that had been smouldering flared up again with…

  • THE FOUR YEARS NEEDED TO CREATE A SCANDAL

    Translated from the French by Tim Gupwell Over recent years you may have seen me carrying out extremely complex complications such as this: “it needed four years – between 1929 and 1933 – before any genuine measures were taken at the time of the Great Depression!” And it was this kind of calculation which led…

  • PROGRESS, TOO GOOD TO BE TRUE, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell When there seems no way out, and the future seems unclear, it is then that promising visions of the future seem to abound. The Bundesbank, accompanied by all those who take their cues from it, never miss an opportunity to remind us of the formula they…

  • PERPLEXING MATTERS, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell Two days ago, Christian Noyer, the Governor of the Bank of France, confidently commented on the decision taken by the BCE to put an end to all remuneration on the liquidities parked in the Eurosystem by the commercial banks. The banks prefer placing their holdings in…