Wednesday, March 10, 2010

Cygne Noir

I've always been interested in the performance and basic functioning of financial markets during times of extreme systemic stress: man-made or natural disasters, hyperinflation, revolution, and war. Lately I've been reading about what happened to France's stock market during the Nazi occupation. Here's a good paper on this. It explores the conflict between Nazi hatred of financial speculation and the pragmatic need to finance the war. It also shows how the Paris bourse and its employees were subject to aryanization. And it explains why stock prices didn't react to the occupation in the way one might expect. Excerpts:

[F]or Nazis, trading securities was basically not acceptable. Indeed, the international connections created by the trade and the notion of speculation attached to stock exchanges were despised by the Nazi officials. As such the stock exchanges had been an important target of Nazi propaganda before 1933. However, and despite this animosity, when the Nazis came to power they did not suppress all the stock exchanges even though they did reduce their number from 21 to 9.

In occupied countries, the contradictory feelings towards stock exchange were also observed. The reopening of the stock exchanges quickly led to vivid debates and, depending on the country, would occur with quite large time differences. In fact, and even though a large fraction of the Nazis loathed them, stock exchanges provided a useful and powerful tool to plunder the occupied nations.

Eventually, the Paris bourse was allowed to resume its activity on October 14, 1940 albeit under very strict rules. Opening hours were limited and access to the bourse became heavily restricted. Out of the 6000 persons who were working there before the war, only 900 regained access. Jews were explicitly forbidden to enter the stock exchange whereas a report issued by the French Ministry of Finance described the measures set into place to aryanize the bourse.

For those interested in this area, the full paper is here.


Anonymous KAIMU said...


Prior to the occupation of France in April 1921 after the collapse of Germany when they lost WW1 and went into the Weimar Republic era Hitler gave this speech which included his dislike of stock exchanges.

And if we ask who was responsible for our misfortune, then we must inquire who profited by our collapse. And the answer to that question is the "Banks and Stock Exchanges are more flourishing than ever before." We were told that capitalism would be destroyed, and when we ventured to remind one or other of these "famous statesmen" and said "Don't forget that Jews too have capital," then the answer will now be destroyed, the whole people will now be free. We are not fighting Jewish or Christian capitalism, we are fighting every capitalism: we are making the people completely free."

"Christian capitalism" is already as good as destroyed, the international Jewish Stock Exchange capital gains in proportion as the other loses ground. It is only the international Stock Exchange and loan-capital, the so-called "supra-state capital," which has profited from the collapse of our economic life, "the capital which receives its character from the single supra-state nation which is itself national to the core, which fancies itself to be above all other nations, which places itself above other nations and which already rules over them.

"The international Stock Exchange capital would be unthinkable, it would never have come, without its founders the supra-national, because intensely national, Jews...."


What banks are flourishing in the current demise? America is on a slippery slope, however I believe America has one advantage over Germany and its demise which is the US Constitution and its role in the rule of law. Germany had oligarchs and pretty much all of Europe was ruled by royalists, so there never was any common ground from which the common man could stand and address government eye-to-eye. Still the flaws are tempting and many have literally given over their vote to the idea of a free lunch and a cosmetic utopia.

3/10/2010 12:59 AM  
Anonymous Goldhorder said...

The constitution kaimu? You have got to be kidding me. That old rag is a dead letter. I think social mobility is ending in the US and we will see rule by oligarchs in the future.

3/10/2010 9:59 AM  
Anonymous goldhorder said...

OMG... Obama actually makes since for the first time since the election! Of course what is he talking about though. Haven't we always heard that manufacturing is a thing of the past? That those jobs are never coming back? That we had to get into the new "service economy" or sell and build houses...or trade stocks...or work in the financial industry...or don a state issued costume and run around the globe blowing brown skinned people apart. What is this nonsense about manufacturing? LOL. Just look at how much poorer and weaker China, India, and Brazil are than they were 20 years ago. Now that they are manufacturing the things the world wants to buy they can barely feed themselves.

3/11/2010 6:47 PM  
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3/27/2010 9:36 PM  

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