Wednesday, October 5, 2011


Dexia? What kind of name is that for a bank? Bank names are supposed to connote solidity: Banque Nationale de Paris, Crédit Agricole. Dexia sounds like a laxative. And it seems to be the first European bank to have succumbed to the crisis, although the French and Belgian governments, while assuring depositors and creditors that they will be made whole, isn't actually using the word "bankrupt." Instead, they speak of "breaking up" the bank and selling off the pieces. What they aren't saying quite so loudly is that the pieces are worth far less than the whole, and that one of the pieces will be a "bad bank," filled with Dexia's now worthless investments and owned by the taxpayers of France and Belgium. But there we are.

Strangely, this news isn't even in this morning's Times, which is still on the news of the day before yesterday that Dexia's stock was collapsing, and the US stock market rose sharply yesterday after falling sharply the day before, supposedly because of concerns about European debt. But here is the first major casualty of European debt, and the market is up. Go figure.


DavidinParis said...

You state " is the first major casualty of European debt, and the market is up. Go figure."

Important to realize that Economic Science is NOT a science but more like psychology of mass action. Perhaps chaos theory is more apt?

Julien S said...

"Perhaps chaos theory is more apt?"

Perhaps denial of rampant incompetence is more apt?

I recommended reading

Has Christian Noyer of Banque de France done his job well?

in my blog, and encourage anyone who would like so, to cross post it.

There will be blood.

Julien S.