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24/09/18

Jean-Pierre Petit : « A new Lehman Brothers is not planned on the agenda »

In partnership with the Ascoma Group, Monaco Economic Board hosted Jean-Pierre Petit, President of Cahiers Verts de l’Économie on 19 September for a talk. The theme was “10 years after Lehman, where is the world headed?”, a hot topic that attracted more than 80 people from across the economic spectrum.

From the start, Jean-Pierre Petit sought to reassure: “Another Lehman Brothers collapse is not on the agenda”, he said. To support his argument, the economist analysed each element that led to the systemic collapse, the effects of which are still being felt today: a real estate bubble, leading to a real estate crisis, made vulnerable by a raft of poorly-conceived credit products, underpinning a financial crisis that eventually swept through global markets. Given the United States represents 4% of the world’s population but 29% of consumption, the spread to the rest of the world was inevitable. The consequences were many and far-reaching: an explosion of debt, a drop in growth rates, banking restructures, a weakened Europe, the rise of populism, etc.

Jean-Pierre Petit then went on to put it into context by looking back even further; compared to the 1929 crisis when a third of American banks filed for bankruptcy, 2008 seems tame. And while some may be alarmed by the negative trends of certain indicators, this economist sees no truly alarming signs, at the same time criticising supporters of “absurd” budgetary rigour.

In his view, the fact that deficits are being reabsorbed by more deficits is not such a scary scenario insofar as key rates are structurally low. Other positive points are that market regulations have been ramped up following the crisis, the banking sector is stronger and in the three major global economic zones there are no bubbles in two key asset classes (shares and real estate).  However, the President of Cahiers Vertes did highlight some risks, such as the markets’ “short-termism”, Europe’s inertia and the political irrationality that prevails in a number of major countries.

Jean-Pierre Petit delighted the audience with his knowledge and idiosyncratic style as he walked between tables, microphone in hand, asking questions and alternating jokes and asides with cutting analysis. For those present, his interpretation, putting the crisis into perspective with the current situation was a valuable tool to appreciate the complexity of today’s economic context.

As the talk was such a success, MEB Chairman Michel Dotta and Ascoma Group Chairman Hervé Husson may decide to repeat it.

Click HERE to see the gallery
Click HERE to see the video of the event

 

 

Hervé Husson, Président Délégué du Groupe ASCOMA ; Jean-Pierre PETIT, Président des Cahiers Verts de l’Économie ; Patricia Husson, Présidente d’Honneur du Groupe ASCOMA ; Michel Dotta, Président du Monaco Economic Board.