000 daily barrels in November either 645This represents nearly 190000 young each yearThe unsuccessful will be many including in the ranks of the French banksA calendar of ambitious if not unrealisticThese software can be divided into two categoriesBush is still the tenant of the White HouseAnd the crisis could last about two yearsThe leverage of debt reduction process will take years5 and 7 this year a sharp drop after the 9The first the prior notice of at least two months vWe repeat forever, the current crisis is the result of a financial capitalism without faith or law. This is who would sign the bankruptcy of liberalism and justify finally resumed control of Economic Affairs by the State. This indictment distorts reality. Reconstruction of facts said us anything else.
"Sub-prime" are really a creation of financial capitalism. They were designed by the American administration to circumvent the rules of base of capitalism which excluded the poor and minorities in the American dream of home ownership. To escape the basic rules of solvency, an arsenal of legislation, the Community Reinvestment Act, was first deployed to force banks to lend. Was also primarily used two para-statal entities, Fanny Mae and Freddie Mac, to guarantee loans granted. This system of loans is massively developed under constant pressure from these two agencies. The official authorities, be they Republican or Democrat, nuns them of the rules of accounting transparency
It is true that everything seemed to go for the best in a world where the value of the homes ceased to rise, boosted by a monetary policy of cheap money. The day where the real estate market turned, resulting in a rise in the rate of failure of the "sub-prime" loans
The crisis is also explained by the fact that these toxic mortgages with the label of the State have been through financial innovations incorporated into complex and dispersed products on a broad scale.
But there is nothing more stupid than to bring to these financial innovations, designed to divide and reduce the risk, responsibility for the crisis. It would be just as stupid to condemn the aircraft on the ground that they can contribute to spread an epidemic. The economy needs a high added value innovative finance and finance. It is this last that made cheaper and more liquid capital. It resulted in an exceptional global growth of the order of 7 per year in feeding the technological progress and allowing the emergence of new countries.
However, it is legitimate to question the users of these new financial tools. It is clear that "hedge funds" which are the players less regulated finance are for nothing in the current crisis.
The carelessness and failures are in the more regulated actors:
investment banks, commercial banks, rating agencies;
agencies rating which constitute an oligopoly protected by American Constable of the stock market, the SEC;
investment banks. Monitored by the SEC, they were allowed to hire their own funds up to 30 or 40 times!
commercial banks which were circumvented in view and the knowledge of their authorities the banking rules to create special investment vehicles housed off-balance sheet.
Certainly, the supervisory authorities have their share of responsibility. Financial regulation deserves just as much a mis en cause. Poorly thought regulation, adopted after the Enron scandal, led to promulgation of new accounting standards requiring banks and corporations to give in their balance sheet value their assets that corresponds to each moment at the price at which they could sell it if they were to do so. These rules of "fair value" lose their meaning when the disoriented market, confidence down, collapses. The ultra-cheap price becomes the reference price.
For their part, the prudential rules that apply to banks forced these to a minimum of 8 of own funds against their commitments. Combined with the "mark to market", this rule plays an accelerator role in times of crisis. An accounting write-down of assets must be offset by the sale of other assets, a recapitalization or otherwise accounting provisions.
The reaction chain contraction of credit led to the great American economist Irving Fisher, has theorized under the name "deflation-depression by debt". It is the evil that threatens us since the beginning of this crisis the most serious. This is why I had soon raised the risk of "deflation by the standard" to highlight the responsibility of accounting standards.
What can I say finally to the role of financial and political authorities
It took contact with the chasm that is finally committed a coordinated response to the scale of the crisis.
Instead of speaking about the bankruptcy of financial capitalism, better would be to look in the face, before therefore to the trial, examination of the faults of the regulation that the faults and errors of regulators and the public authorities.
