Category: Subprime

  • VUB, Stewardship of Finance, 1st lecture, The background: The stewardship of finance and the subprime crisis, September 30, 2013

    I’m reminding you that access is free : QB lecture room, every Monday from 4 to 6 P.M., Pleinlaan, 1050 Brussels.

    Full information here.… Read the rest

  • TAVAKOLI vs. JORION. The Subprime Crisis: an orchestrated or spontaneous Ponzi Process?

    A translation by Bénédicte of my post of September 3rd: TAVAKOLI vs. JORION. LA CRISE DES SUBPRIMES : PYRAMIDE ORCHESTRÉE OU SPONTANÉE ?

    You will find in my “La crise du capitalisme américain” (The Crisis of American Capitalism) (La Découverte 2007; Le Croquant 2009), written between November 2004 and October 2005, a chapter describing the dynamics of the crisis which was then underway. This chapter is entitled: “The price of shares and houses: financial bubbles” (pages 195 to 220) and it contains a section entitled: “The financial bubble as a ‘naturally occurring Ponzi process’”. … Read the rest

  • One-Day Conference : Anthropology of the Crisis of Contemporary Capitalism, Paris, May 3d 2011

    International Study Day

    Anthropology of the Crisis of Contemporary Capitalism

    3 mai 2011, 10h-17h, musée du quai Branly, 37 Quai Branly, 75007 Paris, Cinema Theater

    Convened by Jonathan Friedman (IRIS/EHESS) & Laurent Berger (LAS/MQB)


    10h-10h15 Jonathan Friedman (IRIS-EHESS) & Laurent Berger (LAS-MQB) « Introduction: Towards an anthropology of the crisis in capitalism »

    10h15-11h Paul Jorion                                                                                                                        « How to become the anthropologist of the crisis »

    11h-11h30 Discussion

    11h30-12h15 Don Kalb (Central European University, Budapest and Utrecht University)

    « Financialization and Neo-nationalism in the New Old Europe »

    12h15-12h45 Discussion


    14h30-15h15 Keith Hart (Goldsmiths University of London)                                                          … Read the rest

  • Update on where we stand

  • Why we need to find something else

    A reader of my French blog has taken the trouble of translating my most recent Friday video in English. Many thanks to him!

    NEWS is conveyed by letter, word or mouth
    and comes to us from North, East, West and South” (Witt’s Recreations)

    . . . but mostly from the Paul Jorion blog now that we have the Internet.

    I want to talk to you about the stock market, because the stock market has been rising in France and in the United States. I am obliged to reflect upon this, because, as I have mentioned to you, I have agreed … Read the rest

  • Santa Crisis

    A blog gives you visibility, allowing people from all over with views akin to yours getting in touch. That’s what happened a couple of months ago with conceptual artist, Little Shiva asking: “What about a common project?” I told her of a possible allegory for the crisis, a symbol that you could copy here and there, whose name would be Santa Crisis.

    After some going back and forth, here he is: a jolly old elf!

    Make him known: that’s the idea. Just inform where he was born: here and there.

    Click to enhance.… Read the rest

  • Report and Recommendations Pursuant to Section 133 of the Emergency Economic Stabilization Act of 2008: Study on Mark-To-Market Accounting

    The SEC (Securities & Exchange Commission) along with the OCC (Office of the Comptroller of the Currency) have just released their report on the valuation of financial products (Fair Value).

    The subject is what I discussed in « Juste prix » et « juste valeur » and in L’implosion. La finance contre l’économie: ce que révèle et annonce la “crise des subprimes” (Fayard 2008: 188-202). The issue is the following: firms have requested that Marked-To-Market accounting is suspended for the time being as they regard current circumstances as exceptional and prices “unrealistically” depressed, too far removed in … Read the rest

  • Le Monde, October 12th

    Here an account of my column in Le Monde on the concept of a new Bretton Woods.

    Bretton Woods 2.0 – Paul Jorion on The Financial Crisis

    Paul Jorion wrote a column in Le Monde a few days ago concerning the prospects of a new Bretton Woods (never mind that the original died at Richard Nixon’s hand in 1973). Starting from the fact that the crisis is extremely serious and half-measures won’t do anything, Jorion offers some suggestions:
    A radical reconsideration of the role of Central Banks is in order. Within a capitalist framework, Jorion states, the capitalist provides capital

    Read the rest

  • Friday Market Monitor (AM 580 CFRA), on October 17 at 2 PM (EST)

    I was Walter Traversy’s guest on CFRA a news only radio station in Toronto, between 2 and 2:30 PM.

    The podcast is here. I’m talking in the second part of the program … just after the weather report. But hear Walter introduce me in the nicest way at the very beginning.

    I’m a bit blasé about talking on French-speaking radios by now but this is a first: the first time ever I was part of an English-speaking broadcast and I’m very pleased!… Read the rest

  • What have anthropologists to tell about the subprime crisis that no one else has said before?

    Finance is in shambles. It has remained until now under the close supervision of economic and financial theory. In recent years, due to the overbearing dominance of views developed under the umbrella of the “Chicago School” of economics, finance has been regarded as explainable through the combination of a very simplified version of psychology: that of the “homo oeconomicus“, and of physics. The physics in question is supposed to have risen all-armoured Minerva-like out of the embarrassingly simplified psychology hitherto mentioned. This is the tenet of methodological individualism presiding nowadays over mainstream economics and financial theory.

    Human nature, … Read the rest

  • The willing catalyst

    On September 5th, I wrote on my French blog : “D’ici à la fin du mois il semble donc bien que les conditions d’un krach soient réunies”, meaning in proper English:

    It seems therefore that from now until the end of the month the conditions for a crash are being met.

    The risk of my being right diminishes of course by the day. What is intriguing however within the current setup is that – should it happen – a culprit would be close at hand. We’ve learned indeed from the press that the discussions yesterday in Washington were about to … Read the rest

  • Where this blog stands

    Various commitments on papers commissioned in French have kept me away from this blog. Reward is another factor: with an average of around 30 daily hits on the English blog and 2500 on the French one, vanity has been a powerful drive for concentrating on the French one. Dialogue is another one. If you’ve had the opportunity of looking at the French blog you will have noticed that commentators often engage in lively conversations, with me resting comfortably in the meantime in the bleachers.

    Why is that so? I believe that my reputation as a writer in English is not … Read the rest

  • Foresight and Despair

    A review of my just published book L’implosion. La finance contre l’économie: ce que révèle et annonce “la crise des subprimes” by Adrien de Tricornot in Le Monde, dated June 16th (translation by Jiro Tanaka – many thanks Jiro!)

    Foresight and Despair (“Oracle, ô désespoir !”, pun on a famous line from Corneille’s play “Le Cid” – 1636).

    The author of this work, a Frenchman [truly, a Belgian] in America, has analyzed the financial crisis from a unique cultural perspective, and with a multidisciplinary approach. He is an anthropologist, a specialist in artificial intelligence, a research affiliate at UCLA,

    Read the rest

  • A population dynamics approach to the subprime crisis

    One way of looking at the subprime crisis – and by this I mean only the properly real estate–based part of the unfolding drama – is in terms of population dynamics, in terms of three populations of borrowers who first entered the market and then left it in reverse order as the last to come in were also the first to leave.

    In order to characterize these populations I’m resorting to a classification that was introduced – although used for a different purpose – by Hyman Minsky, an American Keynesian economist who was born in 1919 and died in 1996. … Read the rest

  • The Implosion, Finance vs. the Economy

    My new book called “The Implosion, Finance vs. the Economy – What the subprime crisis reveals and foretells” (L’Implosion, La finance contre l’économie – Ce que révèle et annonce la crise des subprimes) will be published on May 4th. The publisher is Arthème Fayard, one of the top French publishers who will realize here a prowess in terms of speed between the reception of a finalized version of a manuscript and the printed book hitting bookstores.

    I’m honored that Mr. Claude Durand, head of Fayard, read in no time two versions of my manuscript. When at Editions du … Read the rest

  • The end of trust in the subprime crisis and how to model it

    The subprime crisis is often explained in terms of trust: one day trust between financial counterparties vanished and here was a crisis. Explanations in terms of “market confidence” refer in fact to two distinct phenomena, one being indeed trust and the other one being more plainly straightforward profitability. Let me start with profitability. Subprime loans had been repackaged in their thousands so as to mimic a straightforward obligation, be these Asset-Backed Securities (ABS) or – in a second step – collateralized Debt Obligations (CDO) comprising ABSs. When the risk-based premium embedded within the interest rate charged on a subprime mortgage … Read the rest

  • The subprime crisis at UCLA

    I’m happy with the way things worked out yesterday, March 8th, at the UCLA Complexity Science Conference with my paper: The Subprime Crisis: A Human Complex Systems Phenomenon.

    Of course, trying to squeeze the whole crisis into an hour (1 ¼ with John Bragin’s express permission), it turned out I had much too much material. I don’t think personally that slide shows have enough meat to show that they can get circulated without their author fleshing them up. This is why I’m not communicating as of yet what I had to say but I’ll be working in the coming … Read the rest

  • Pricing models: why the good ones are useless and the true ones, priceless

    I’ve mentioned already in Agents using financial models and the “human cognitive cocktail” a number of pitfalls linked to the task of modeling the subprime crisis in a Human Complex Systems perspective, especially those related to agents’ partial understanding of the models they’re using or in errors they’re making when using them. I’ve also hinted at some models making unwarranted claims about their ability at forecasting. I should also mention – as I was recently reminded – inflated assumptions about the virtues of diversification or, I should rather say, at the capacity of the markets to remain optimally diversified.

    I … Read the rest

  • The subprime crisis: a human complex system phenomenon

    I’ll be speaking at UCLA on Saturday March 8th, 2008 at the
    Human Complex Systems – UCLA Four Campus Complexity Conference,
    UCLA Haines Hall 352. The conference starts at 9 AM, my own talk is at 2:30 PM.

    If it looks like proposing an entirely new paradigm for financial studies, that’s because that’s precisely what it is. Hope you can join!

    The subprime crisis: a human complex system phenomenon

    Explanations of the subprime crisis typically combine partial explanations, illustrations, “speaking” analogies, etc. treading at different levels: from the “elementary particle” level where the consumer and the financial trader are

    Read the rest

  • The subprime crisis in 2007

    I’m aware I’ve neglected my English blog but there were two good justifications for that: I was finishing writing up a new book called “La crise des subprimes en 2007” (untranslatable) and I was promoting that coming book in Paris by speaking at the Ecole Normale Supérieure, talking on the radio and giving several interviews to dailies and weeklies.

    My book that was published just a year ago, “Vers la crise du capitalisme américain?” made it to the top ten list of the (French) “Readers of economy books’ prize” – which was a nice surprise as I was not aware … Read the rest