posted on Aug, 10 2010 @ 03:40 AM
Interesting interview in a danish newspaper with the man who foresaw the latest crisis:
Google translation part one:
The crisis is getting worse and worse
In 2004, predicted he cracked on the U.S. housing market, which has drawn deep into the global economy. And now predicts Paul Jorion, french
investment expert and anthropologist, to the financial crisis is far from being driven over. He believes we should adopt an international financial
constitution. As long as you let banks and investment firms regulate themselves, the scams of the day working in the financial sector.
Tip of the iceberg Central Bank directors and financial advisors in the Western world are currently busy reassuring the public. They preach at regular
intervals to the bottom now reached crisis by turning and that we will soon go better days to come.
"The figures confirm not the prevailing pessimism," it sounded so recently the Director of the European Central Bank, Jean-Claude Trichet.
But in reality, there is silence before the storm - or rather before the hurricane. How it sounds extremely bleak prognosis from Paul Jorion,
anthropologist and sociologist specializing in economics, who for years has worked as an investment bank man in the U.S..
"There is no recovery time being. It might be, it looks as if the banks and stock markets are feeling better. But it will not last, "he said.
And when Paul Jorion speaking, there is reason to listen.
For he is one of the few financial analysts who predicted the so-called subprime crisis on the U.S. housing market. Already in 2004 described Paul
Jorion in the book 'La crises you capital Semitism américain' so step by step how the U.S. and then the global economy would be shaken to its
foundations when risky hypotekboliglån - so-called subprime loans - began to cave in. And that happened in 2007 when housing prices in the U.S. fell,
while interest rates rose. This led to a dramatic growth in the number of foreclosures and big losses for investors.
Massacre in wait
According to Paul Jorion is delayed two bombs, which most overlook when they looks ahead:
Firstly States own debt, which they must borrow endless money to cover the action. This year alone the United States from 1700 to borrow billions of
dollars, but also France, Spain and Japan and Britain to borrow huge sums.
"There is not enough money in the loan market because of the crisis and therefore it would be the weakest states must pay the highest interest rate,
which would weaken them further and make the world economy even more fragile," says Paul Jorions assessment.
Secondly, it seems - on top of the international credit problems - the bleak outlook for the commercial part of the U.S. housing market: offices and
hotels. Everything is built on credit loan and a great many of these loans to be renewed in 2012.
'But who will borrow to finance these buildings whose value has collapsed because of the crisis? It will be a pure massacre, "said Paul Jorion.
A massacre whose repercussions will spread like ripples across the globe - not least a massacre, according to Jorion will not be back for subprime
"Our economies are based on credit, and as the credit system develops, they become more and more fragile. Why? Because a owe money to b, who owe
money to c, which in turn owes to d. Completely banal. The more complex debt network becomes, the more interdependent it becomes. And if one suddenly
plunges into the abyss, it can pull all the others were in decline because they are suddenly not able to repay their debts and bonds, "explains Paul
[edit on 10-8-2010 by laffoe]