Graduate!

I am sorry for not keeping this blog very active recently but I had so many things in mind and to do, like packing for example! Anyway, I am very pleased to inform you all that I officially graduated from Linköping University!

"Bachelor of Business Administration - International"

The ceremony was very pleasant as well as the lunch we had right after! I am very proud and I'd like to congratulate once again everybody from the Atlantis Program after everything we have "been through" (even if my atlantis experience was as smooth as possible personnally!).

The first phase of the Programme is now definitely over and on overall it is an incredible experience that I don't regret. It helped me become a lot more mature and I think I got a little bit americanized as well as swedishized (copyright to myself)!! Hanging out with the american a lot was very interesting and I know their culture much better now, which explains a lot of stereotypes we see negatively from our european perspective. On the other side, living in sweden helped me getting routines, and organizing my time! I had a budget to track my expenses, I used to go to the gym regularly, was preparing food for the entire week and had strict planning for the thesis work (and we always were on time so I think it worked pretty well).
Nevertheless, the contact with swedes has not been intense so these are just very simple things. I regret not to have talked much swedish even if I had 6 swede in my corridor, but they speak such a good english that you don't feel forced to speak swedish... I will definitely miss Sweden, especially now that the weather is so nice and everybody so excited about it, but I will participate to the traditional midsommer with some of the atlantis students thanks to Johanna!

Final Seminar

The long-awaited day of the final seminar is now behind me! After weeks of intense studying and stress, I feel very relieved now that it is done! First of all, I would like to congratulate all the Atlantis students for passing the thesis, and thank our teachers for the smooth running of the class. I know some students were very worried about the thesis and absolutely not confident in passing, but in the end everybody passed!!

That was a very interesting day, even if the discussion tended to go off track sometimes, but in a whole the discussion was good and pretty much everybody participated! Linnea and Connor were our opponents (or "discussants", teachers say) and they did a good job by questionning us on things we did not think about and that were very relevant. I'd like to adress special congratulations to Mr. Greenberg, whose thesis we had to review, and had an excellent defense despite some unlucky facts that made his work almost impossible to complete. This kid is brilliant.

Finally, I am very happy that Per and I passed the thesis! Per did a great job, almost keeping me on track and motivating me with some swedish organizational skills, that was a real pleasure to carry this work out with such a good student, and a good friend. We did not only passed but also had an A! That was totally unexpected and I am very proud of our work! The thesis remains a very good experience, even if sometimes it felt very very academical (way different from the way business is taught at ECE), there was a real knowledge creation process.

Westcoast week-end!

As Per and I were done in advance with the thesis, we planned a little road trip on the Westcoast of Sweden, region that is totally new to me. Indeed, Per lives a few kilometers away from Göteborg and invited some of us to his place, in order for us to discover that (important) part of Sweden. Raphael, Mario, Per, Paul and I drove there on Friday 24th.

All in all, this was a great week end! we did so many things in such a little time!! On friday, we met Per's parents who were very nice all along, his house is more on the country side, it was therefore very charming and beautiful! Whereas the Ryd is a sort of microcountry peopled by students, and therefore not really nice, Per's home felt like a peace haven! His parents cooked very good food to us.
Then, on saturday, a crazy day started. Per's family has got a motorboat, and as the weather was really nice, he invited us to sail and go fishing! On the way to the fishing stores, we drove by a field were the national soccer team was training, and we therefore decided to go have a look! I recognized some players I knew, and it was fun to see how many fans went there just to watch their team training!
The fishing-sailing time was great! It was the best way to discover the region and it was very funny (especially when the boat stopped, making a strange noise and that we started to fight for the last food left on board as the engine seemed to be broken). Unfortunately we did not manage to fish anything, but we tried hard!! It wasn't our fault, ahah...
After another great dinner cooked by Per's father, we headed downtown for a rap concert that was pretty cool (the band was called EMC and came from the USA). We then wandered in the streets and finally went back home pretty early. We ended the week end by going to the amusement park and enjoy the good weather!
Göteborg was very fun and nice, that was definitely worth visiting!

21 !

Even if I feel like I am 12, today is the day I officially turn 21! Time flies fast, especially when you are studying abroad or writing a thesis... To cope with that concern I simply decided to celebrate my birthday at the glorious Burger King Restaurant! At least nobody will complain about the price ahahah.

Ain't no good being French sometimes

It is very soon time for the first draft of the thesis work, and most of the Atlantis Students seem very worried about it. Nevertheless, through our constant research of subprime crisis and Basel II, Per and I found an interesting article that was pretty funny, a good way to relax while working! It is written by James McDonald (definitely American) for the Financial Times, read and enjoy:

• How the French invented subprime in 1719

  By James Macdonald, FT.com site
  Published: Mar 06, 2008
  

  Imagine the following: a collection of debts owed by a highly leveraged borrower with a bad credit record is magically transformed into marketable securities with triple-A yields. How is this miracle performed? It is through the power of financial innovation and free capital markets.

  It could be the story of subprime mortgages in the US; but it is not. It is, in fact, the story of government debt in France in the early 18th century. In 1719-20, a financial whirlwind even more dramatic than anything witnessed today swept through France. Shares in the Compagnie des Indes, or the Mississippi Company, rose 1,000 per cent and then fell by 90 per cent in less than two years. The story illuminates current events.

  1. The dodgy debts. The French monarchy had a history of recurrent default. By the end of the War of Spanish Succession in 1714 public debt had risen to over 100 per cent of national income and was subjected to forced reductions of interest and principal. Confidence collapsed and government paper sold for discounts of up to 75 per cent and the economy was in recession.

  2. The financial wizard. Along came one of the most remarkable people in the history of finance: John Law, a Scottish economic theorist who had never held any post related to public finance and who lived by his wits at the gambling table. This charismatic figure seduced the Regent with his blueprint for France: to exchange existing government debt for shares in the Mississippi Company, which held monopoly trading rights to the French colonies. The government would issue a new series of bonds to the company paying only 3 per cent in exchange for its old debts, which paid 4-5 per cent.

  For the government, the cost of servicing the debt would fall sharply and the budgetwould look rosier. The trading rights to the French colonies were largely worthless, for there were no profits at the time and the Mississippi Company had existed for a while without exciting public interest. By the same token there was little or no reason for the debtholders to accept this exchange. Law needed extra incentives.

  3. The power of securitisation. The market for government debts was moribund. Law's aim was to make Mississippi shares as actively traded as possible. This provided an incentive to swap - to get a more liquid security and the prospect of speculative gains. In other words, Law repackaged a collection of "subprime" debts as marketable securities under a different name and thereby increased their investor appeal.

  4. The role of easy money. Law proposed that Mississippi shares would be so actively traded that they would constitute "a new form of money". This striking idea tied into the second part of his scheme: a massive monetary stimulus provided by a newly founded central bank (do I hear Federal Reserve policy 2001-04?). This monetary boost would put some pizzazz into Mississippi shares, and their rise would encourage the public creditors to convert.

  5. Boom. Law's plan worked beautifully. The debt was exchanged and became worth many times its previous value as Mississippi shares continued their dizzying ascent. The economy recovered and everyone was happy - even though the underlying reality was an unsustainable credit-driven boom.

  6. Bust.For all Law's wizardry, the underlying assets of the Mississippi Company were still questionable royal debts that did not provide enough income to pay its promised dividends. Moreover, like many holders of collateraliseds debt obligations nowadays, speculators in Paris relied heavily on borrowed money. The rise in Mississippi shares in 1719 was reversed in 1720 and the bewildered French found themselves holding subprime paper, merely relabelled.

  The lessons seem obvious. Financial innovation can achieve much, but cannot transform sows' ears into silk purses. Moreover, there are risks that innovators do not fully understand their inventions and get carried away. The correct regulatory response to this risk is not to fuel it with easy monetary and credit conditions. The collapse of the Mississippi bubble had ruinous consequences in France. The government concluded that paper money, banks and stock markets were inherently dangerous ("financial weapons of mass destruction"). It took until the 19th century for France to recover its nerve and its rival, Great Britain, leapt ahead in the race for financial supremacy. In the rush to reregulate markets, let us hope western governments do not repeat the French mistake.

  The writer is the author of A Free Nation Deep in Debt: The Financial Roots of Democracy (Princeton University Press, 2006)

Stlm by day

Last week end was the occasion to spend more time in Stockholm, capital of Sweden, a town that I would recommend to anybody! It is one of these big towns - an urban population of around 1,200,000 - that has kept its tradition and charm while being very modern at the same time. No skyscrapers but some very high churches, the architecture is very nice! Nevertheless, I noticed this sort of American side of Sweden, that might just be the consequence of a country that lacks a strong culture in domains like gastronomy or entertainment, in the invasion of so many foreign fast foods downtown, or the fashion of girls that reminds me of New York! These are assumptions as I don't know the country enough, and the restaurant where I ate dinner was a really good quality-price ratio!

Stockholm was also for me the occasion to visit the Vasa Museum and Skansen, two great places! The Vasa Museum is in a sort of island which looks very nice and seems dedicated to entertainment. I was amused by the story of the ship and fascinated by the museum, which was much more interesting that museum I usually visit. Skansen was also amazing with so many different animals and a funny site that is convenient to visit. It has also been a while I didn't see any "exotic" animal! I recommend both of them!

It is hard to be researcher

T-H-E-S-I-S.

One word to rule them all.

One word that summarizes where 90% of my energy goes!

The thesis work is brand new for me, and I wasn't expecting such a workload! Whereas a normal course is much simplified by the teacher's explanations, here you have to build your own knowledge by collecting data in the infinitely vast universe of the web, or the more condensed world of libraries and books. In one of them, it's all about finding the few precious stones among the multitude of rocks; in the other one, it's more about being patient enough to follow the path to the goldmine.

Per and I were very motivated about writing a thesis on the financial field, but I think we might have been to ambitious from the start. Being interested in the subprime crisis led us to try to study the limits of risk management tools in monitoring and coping with the crisis. But then further research of the theoretical field of risk management in the banking system showed us how much it is developed, and therefore how hard it is to break it down. Everytime we think we are on the right tracks, then meeting with Emeric makes us understand that our research questions have purpose or constraints issues. It gets very confusing and we struggle making the trade-off between interesting thesis and manageable thesis.

It is a hard task, but it is very interesting. I really enjoy the researches, the only problem comes from the frustration of having an idea that suits your interest. Anyway it is also funny to see how one's own discipline changes from the early days to the following weeks. The first week was about enjoying more freetime or freedom of scheduling, but then one quickly realizes that in order to be research effectively one need to wake up at 7:30 and starts studying around 8:30 till the end of the evening, while averaging 10 coffees a day. We usually meet at 9 with Per and stay all day long at the university with a confortable lunch break to rest our brains, and the study rooms of the A building are just great. The only problem is that after 9AM there is no room left! In general the A building is a very good place to study, I really enjoy it.

This week end will be about releasing some pressure as I go back to Bordeaux for 3 days in order to pick up my passeport at the townhall and do some administrative tasks. A sligthly warmer weather, some good food and then seeing my family and friends (in this order of satisfaction, ahah just kidding) are the perfect recipe to come back 100% up and about! (I feel kind of sick though... that would really be too bad !!)

Please anyone interested in some french products let me know, I will unload my winter stuff there and bring back some food in my bags !! ;)