The second issue of the (open access) Journal of Writing Research came out today and includes a book review by yours truly. Superlative book reviews are strenuous, but Graham Smart’s Writing the economy deserves one. In brief, Smart provides an eye-opening, behind-the-scenes look into a central bank’s attempts at keeping a nation’s economy afloat.
Basic monetary theory in 47 minutes (via Paul Huybrechts). Loans do not come out of deposits and other lil’ nuggets of monetary insight, as animated by Paul Grignon. I’m bringing sexy back, alright.
Ethnography is a matter of substance and style. The book under review here has both. Drawing on twenty years of all-access fieldwork at the Bank of Canada, Graham Smart’s Writing the Economy: Activity, Genre and Technology in the World of Banking is a carefully crafted ethnography of central bankers’ intellectual work. It is a compelling, smooth and topical read about the discursive means with which economists at a financial institution negotiate, inscribe and disseminate knowledge about Canada’s monetary policy. 
Read the rest of my review here (.doc).
Should you be interested in ethnography, discourse analysis, organizational discourse, or if you would like to know how Canada’s central bank tries to keep their economy afloat by building and communicating knowledge about monetary policy, I wholeheartedly recommend this book. It’s a pageturner. Rave reviews are the exception in academia, but this book deserves one.
After a weeklong suspension and the release of “non-audited pro-forma figures“, Fortis trading resumed on Tuesday, sparking a massacre: Fortis Euronext shares fell a whopping 77% to €1.2 euro. At the investment club conference last week – after the BeNeLux nationalization but before the BNP Paribas takeover – Fortis shares were estimated at a value between €3 to €4. In its “new constellation”, Fortis plans to focus on global insurance.
Fortis also announced that it was planning to call a shareholder meeting in eight weeks. I would give good money to attend this meeting because investors are outraged over what they see as “mismanagement” and “misinformation”. Lobbygroup Fortisaction.com argues that shareholders are left with:
- a marginalised company with a 66% stake in a structured products portfolio (worth 6,8 billion euro)
- a small insurance business that could not be sold directly (Insurance International) worth between 1,5 and 2,0 billion euro.
- no dividend
- a 90 percent decline in the shareprice.
**UPDATE (22:30): BNP Parisbas to acquire Fortis (DT)**
According to a report in business newspaper De Tijd, French bank BNP Paribas has come to terms with Belgian and Luxembourgian authorities regarding the takeover of Fortis. The French takeover is reported to consist of two operations: the Belgian government would first complete the nationalization of Fortis (purchasing the additional 51% for 5 billion euros) and then sell a 75% majority share in Fortis Bank Belgium to BNP Paribas. Instantly, the French bank becomes a major (and new) player in Belgium, while the Belgian government becomes the largest minority shareholder (25%) in BNP Paribas.
**UPDATE (21:15): (unofficial) BNP Parisbas nets majority
share in Fortis Bank Belgium and Luxemburg (DS, DT)**
First Belgium, now Iceland, the UK and Germany are scrambling to save their economies from collapsing. What’s next, OJ Simpson behind bars? Oh wait.
**UPDATE (11:53): Fortis issues press release,
shares continue slump, Dexia shares plummet**
De Tijd and The Standaard are reporting that the national governments of Belgium, The Netherlands and Luxemburg are set to become 49% minority owners of Fortis banking divisions in the BeNeLux region. The rescue operation will cost the taxpayer 11.2 billion euros. Fortis will sell off ABN AMRO shares to the highest bidder.
**UPDATE (11:30pm): Belgium, Luxemburg and
The Netherlands to nationalize Fortis (De Tijd)**
In a story that’s getting juicier by the minute, this picture was taken as newly appointed Fortis CEO Filip Dierckx entered the Wetstraat 16 – the Flemish equivalent of 10 Downing Street – for emergency talks about the future of troubled Belgian-Dutch banking and insurance group Fortis. The picture outlines the emergency scenarios currently on the table. An official announcement is expected to be made later tonight.
According to the document, Fortis will sell its nail-in-the-coffin ABN Amro assets, which it had acquired for 24 billion euros, to ING for 10 billion euros. In addition, Belgian and Luxemburgian authorities are to invest 7 billion euros in Fortis. Dutch authorities may also invest. And last but not least, Maurice Lippens is to resign from the Fortis Board of Directors.
Sources used in this blog post: De Standaard, De Tijd
**UPDATE (5:20pm): Nationalization a likely option
for Fortis (De Tijd, De Standaard)**
**UPDATE (4:29pm): Future of fortis
to be decided by Sunday 10pm (De Tijd)**
Breaking news: according to a report in De Standaard (in Dutch), Fortis, the Belgian-Dutch banking and insurance group, will be taken over by either BNP Paribas or ING. Negotiations are expected to resume Sunday morning. Fortis is the brainchild of Count Maurice Lippens, the éminence grise of Belgian industry, and the most prominent member of the BEL-20 index. Whatever agreement is reached by Monday morning will send shock waves through the markets. A Fortis bank run is the last thing the Belgian government needs right now. And I’m going out on a limb here, but Fortis may want to shelve its latest advertising campaign.
In response to continuing market rumors about its solvency, Belgian bank Fortis has issued a remarkable – and poorly written – press release (.pdf, reprinted verbatim in De Tijd) underlining “the solid position of the bank” and confirming speculation that the bank is preparing to put a “wider range of activities of assets” up for sale.
**UPDATE: Fortis nominates new CEO**
The tone of the press release is remarkably affirmative and confident. Usually, economic press releases make a sport out of hedging truth claims (see McLaren-Hankin 2008, Smart 2006) in an attempt to limit company liability if the unexpected happens (i.e. if the company’s expectations do not materialize). Not here though: phrases like “customer moves have remained limited”, “concrete interest of potential buyers is indicated” and “Preparations are made to fully integrate the ABN AMRO Private Banking activities” are clearly targeted at “boost[ing] predictions in the face of apparent contradiction or doubt on the part of others” (Donohue 2006: 204).
Alas, investors were not convinced: Fortis again bled red ink as shares prices continued to fall. Here’s my prediction: this storm will not be weathered anytime soon. Expect more Fortis drama.
doi:10.1016/j.esp.2005.02.009
Tom Van Hout 