Paul Jorion's Blog

Category: Finance

  • WELL SPOTTED, BRAVO!, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell As already highlighted the Spanish government is already benefitting from a de facto rescue plan under another name. To save appearances, the new austerity measures put forward for vote in parliament have not been the object of a memorandum jointly signed with those providing the funds,…

  • TIME WILL TELL… AND MAYBE IT ALREADY HAS , by François Leclerc

    Guest post. Translated from the French by Tim Gupwell In the hope of solving the problems once and for all, Mariano Rajoy has decided to take drastic measures in Spain. Taken as a whole, he asserts that the measures that he is going to have adopted by the Cortes (the Spanish Parliament) represent some 65…

  • THE NEW “STEWARDSHIP OF FINANCE” CHAIR AT THE VRIJE UNIVERSITEIT BRUSSEL

    In September of last year, Paul De Knop, rector of Vrije Universiteit Brussel (VUB), set up a project for a teaching and research chair on the subject of finance seen from an ethical perspective. He put together a multidisciplinary team presided over by Michel Flamée, professor of law at the VUB, and including representatives from…

  • WHEN WE’RE NOT MOVING FORWARDS WE’RE GOING BACKWARDS…, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell The European Finance Ministers managed during the course of the night to finalize a minimal agreement, which needs, as usual, to be examined in detail due to its grey areas. They put together a set of nominations to the ECB and the ESM based upon the…

  • THE HEARING OF PAUL TUCKER, DEPUTY-GOVERNOR OF THE BANK OF ENGLAND, BEFORE THE BRITISH TREASURY SELECT COMMITTEE

    Translated from the French by Tim Gupwell Paul Tucker, Deputy Governor of the Bank of England, made a statement this afternoon before a British Treasury Select Committee. The reason for his presence today was that on the 4th July, before this same committee, Bob Diamond (who was the Chief Executive of Barclays until a few…

  • LIBOR: WE AIN’T SEEN NOTHING YET

    Translated from the French by Tim Gupwell From the Financial Services Authority’s Final Notice of their decision, dated the 27th June, to impose an 85 million Pound fine on Barclays Bank (less a reduction of 30% for exemplary co-operation with the enquiry) due to their manipulation of the LIBOR interbank rates, two separate periods need…

  • THOSE RESPONSIBLE FOR THE CRISIS WHO ARE RARELY TALKED ABOUT

    Translated from the French by Tim Gupwell The question of whether a debt contract can be considered as money is central to my book L’argent mode d’emploi (2009). I expose the violence exerted by Joseph Schumpeter (1883-1950), when he imposed the idea that such was the case, and I demonstrated the inanity of the pseudo-arguments…

  • GUILTY PARTIES WANTED !, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell In accordance with the predictable script, the bond market is under pressure again. The cost of servicing Spanish and Italian debt has continued to increase as their financing plans move forward in little measured steps. The effect of all this is to place an additional burden…

  • LIBOR: DELAYED INDIGNATION

    Translated from the French by Tim Gupwell The paradox of the 2008 ‘LIBOR scandal’ – in addition to its familiar ring in 2012 – is that, as I alluded to at the time and as I recalled a few days ago, the fraud was well-intentioned for once: the ‘philia’ of Aristotle, the good will exercised…

  • BARCLAYS BEFORE A BRITISH PARLIAMENTARY SELECT COMMITTEE

    Translated from the French by Tim Gupwell I watched the hearing of Bob Diamond live, who had resigned the day before from his post as Chief Executive of the British bank Barclays. Diamond was extremely polite but his tactics in response to the questions posed him were very skilful: the more brutally a British parliamentarian…

  • THE MANIPULATION OF THE LIBOR

    Translated from the French by Tim Gupwell In my Friday morning video (in French), I said that when a pirate (Rupert Murdoch) does business with a ship wrecker (the City of London), it tends to weaken the entire system, and I went on to add that this is particularly the case when the population, which…

  • THIS SYSTEM IS ITS OWN WORST ENEMY, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell In the little game of who won and who lost, what conclusions can be drawn from the recent European council? Interpretations differ widely: some highlight the German Government’s about-turn, who themselves retort that the essence of their position has been preserved intact; others congratulate Mario Monti…

  • AFTER THE WORDS, THE MAGIC FORMULA…, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell What can you say when you are in total disagreement? You can always assert, with one voice, the need for a union! This is this perspective that the quartet composed of José Manuel Barroso, Mario Draghi, Jean-Claude Juncker and Herman Van Rompuy (in alphabetical order) continues…

  • STICKING TO ONE’S PRINCIPLES…, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell What was the plan being drawn up last week in Rome which Merkel refused to sign up to? The other three participants, Mario Monti, Mariano Rajoy and François Hollande advocated using the EFSF, and in the near future the ESM, directly, to bail-out the banks without…

  • TREASURE HUNT, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell Following the clues for the next bail-out of the Spanish banks is proving to be a veritable treasure hunt. To participate, follow the guide! Initially, the EFSF (European Financial Stability Facility) is going to borrow funds on the markets, using the member states guarantees, in order…

  • SPAIN: BOND MARKET THIS THURSDAY 21St JUNE

    Spain managed to borrow 2.22 billion Euros this morning. It was hoping to raise 7.7 billion. The Wall Street Journal pointed out that this was “thanks to demand seen overwhelmingly coming from domestic banks”. The coupon obtained by lenders for 2 years was 4.706% (compared with 2.069% on the 1st March); over 3 years it was…

  • 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…

  • 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…

  • 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…