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Mory Doré’s column

Highlights

September 2012

Note The true nature of the derivative contract on French debt

The multiplication of misinterpretations related to the launch of the derivative contract on French debt leads to an apolitical analysis produced by a market professional to avoid amalgam and populism: This is a simple and useful contract, which was traded in the past in (...)

Opinion

Financial correlations and loss of common sense

Note

Financial markets: Local shock but global crisis

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August 2011

Opinion Equity markets: two mistakes to avoid.

The negative news flow coming from financial markets does not mean we should give up. This article provides two small pieces of advice or rather two mistakes that must be avoided or that must never be repeated.

August 2011

Strategy Investing during market turmoil

The idea that considers equity investing as long term has simply become absurd nowadays and has been so during the last 10 years. Let us be reassured. Opportunities will still be around. The only real question nowadays is how to allocate between real assets and financial (...)

August 2011

Opinion Greece rescue - Behind the scenes

Debt rescheduling, monetary policies questioning and EFSF bond purchases in the secondary market. These are the key steps of a plan that should not significantly affect banks’ net income but rather spread economic losses over (...)

July 2011

Note Financial markets and self-fulfilling prophecies

This phenomenon is equivalent to the change from a brutal economic and financial equilibrium to another, not because the fundamentals of the macroeconomic environment would justify it, but because there was a change for good or bad reasons of market (...)

July 2011

Opinion Reviewing the bank stress tests – July 2011

As was seen during the stress tests carried out in July 2010, the latest ones published by the European Banking Authority on the 15th of July 2011 do not include a proper measure of market systemic risk. This hinders their (...)

July 2011

Note Euro zone bailout plans: origin and utilization

Back on bailout plans granted to countries in the Euro zone encountering severe fiscal deficits since May 2010. How are tens of billions Euros raised, what are they for, and mainly, are those amounts enough to re-establish the public finances and stabilize those countries (...)

July 2011

Opinion Euro-dollar outlook

So many reasons to sell the Euro against the dollar. Nevertheless we can expect a fall of the euro in the second half of 2011. The dollar should continue to remain for now a safe haven despite the monstrous imbalances in the US economy and because of the real risk of (...)

June 2011

Opinion Complex and useless finance is still there

While complex finance should be preferred to improve risk modeling, it continues, in times of market stress, to help designing unmanageable and useless complex structured products

June 2011

Note 10 proposals to rebuild finance and monetary macroeconomics

Rethink monetary policy and its objectives, reform our accounting and prudential environment, review the return on equity standards, regulate the prices of certain assets...

May 2011

Opinion Mathematical models in finance and embedded risk underestimation

The statistical assumption of normal (log-normal) distribution of stock returns (prices) is not that strong and tail events’ occurrence is largely undervalued. Nevertheless, this modeling framework has been widely used for strong (...)

March 2011

Strategy Financial markets: hedging against new structural risks and stagflation

There are at least four new structural risks to consider: regulation, Middle East, euro zone’s crisis, and again the idea of a change in growth model of emerging countries.

March 2011

Regulation Basel III: regulators seem to ignore market failures

The changes in our regulatory framework (BASEL 3) and the widespread use of inappropriate IFRS rules will not solve the imbalances of the international financial and economic system

February 2011

Regulation Reconciling bank processing and prudential regulation

The introduction of new liquidity ratios could undermine banking core business

January 2011

Note The frantic flight to liquidity and solvency

Some markets have been exhibiting dysfunctions for nearly 4 years. The flight to liquidity and compliance with solvency requirements of banks and states with financial issues, have been - and still is - only ensured by non-conventional financing provisions and emergency (...)

January 2011

Opinion Long-term rates rise....but it is not yet a bond crash

The recent sharp rise in long-term rates in Europe relies on a risk pooling across peripheral countries and the entire euro zone. But we cannot yet talk about bond crash.

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Opinion The Euro will survive, but not the current Euro zone !

If the existence of the euro is not challenged, it is the case of the euro zone in its current configuration. In the same way that cohabitation between countries with maintaining parity exchange had become impossible in the EMS, cohabitation has become impossible within (...)

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Note Financial crisis indicators and safe haven assets

How to measure the intensity of the current financial and economic crisis? Regular monitoring of a number of economic and financial indicators helps answering this question and better understanding the materialization of panic behavior and portfolio reallocations in the (...)

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Opinion Central Banks : the global financial system trashcans ?

Institutionalized monetization condemns central banks to become the international financial system trashcans and, despite German opposition, it is likely to be the same for the ECB.

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Note Euro zone bailout plans: origin and utilization

Back on bailout plans granted to countries in the Euro zone encountering severe fiscal deficits since May 2010. How are tens of billions Euros raised, what are they for, and mainly, are those amounts enough to re-establish the public finances and stabilize those countries (...)

Logo

Opinion Mathematical models in finance and embedded risk underestimation

The statistical assumption of normal (log-normal) distribution of stock returns (prices) is not that strong and tail events’ occurrence is largely undervalued. Nevertheless, this modeling framework has been widely used for strong (...)

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Opinion Robots have taken power in finance

Describe the real world with numbers is a trend that seems to be accelerating. Thus, digital technology is associated with financial models to show that we (human) interact with our environment using mathematical (...)

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Opinion Reviewing the bank stress tests – July 2011

As was seen during the stress tests carried out in July 2010, the latest ones published by the European Banking Authority on the 15th of July 2011 do not include a proper measure of market systemic risk. This hinders their (...)

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Mory Doré’s column Politics and financial markets: misunderstandings that are not new

Small point into the complex and tumultuous relations, misunderstood, between financial markets and politics. In these troubled times where the markets are supposedly expecting clear answers from politics and where at the same time, the same markets are accused of (...)

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Note Usefulness and competence of rating agencies

This is not electoral populism to only criticize rating agencies, rather than question their economic utility and try to ask questions about their actual skills, in other words their ability to analyze the creditworthiness of issuers they (...)

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Opinion Bond bubble today and tomorrow ... Bond crash the day after tomorrow

Long-term rates that can not rise on short term, despite the abysmal public deficits ...

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Opinion Complex and useless finance is still there

While complex finance should be preferred to improve risk modeling, it continues, in times of market stress, to help designing unmanageable and useless complex structured products

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Opinion Euro-dollar outlook

So many reasons to sell the Euro against the dollar. Nevertheless we can expect a fall of the euro in the second half of 2011. The dollar should continue to remain for now a safe haven despite the monstrous imbalances in the US economy and because of the real risk of (...)

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Opinion The Euro will survive In fine !

We do not believe or at least most of the implosion scenarios of the euro zone regardless of the terms. -Not because we would be trying to find one or several sustainable solutions to the crisis of sovereign debt, but because such a process would cost too much to everybody (...)

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Note 10 proposals to rebuild finance and monetary macroeconomics

Rethink monetary policy and its objectives, reform our accounting and prudential environment, review the return on equity standards, regulate the prices of certain assets...

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Note Strategic tasks of central banks: focus on the ECB

Beyond the traditional measures and in a context of systemic risk, we wonder about what specifically should be the strategic tasks of a central bank

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Mory Doré’s column About the author

Financial market professional active on various fields for more than 20 years, Mory Doré is a key advisor of his company on portfolio and risk management for various financial institutions. In addition, he is also a trainer, teacher and (...)

Focus

Monetary policy

Analysis and comments on central banks monetary policies and marcoeconomic situation

Asset allocation

role of fundamentals, investor behavior, regulatory and prudential changes

Financial crisis

Understanding the source of financial crisis and the mechanisms behind

Bank Financial Management

Constraints and objectives of financial management of banking institution

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