This publication is first and foremost an observation, conducted during ten weeks of lockdown in France, which started on 13 March 2020. As such, it is a logbook, completed as the days and weeks passed.
It is also a theoretical endeavour to interpret, explain or recount the eruption of the crisis – it is these very first weeks which are of interest, as they contain the maximum intensity of the real, financial and psychological shock, in the form of a DNA for what follows.
This theoretical endeavour makes it possible to test, against the reality of the crisis, a certain number of hypotheses made in earlier works and to consolidate and refine our tool box.
The COVID-19 crisis offers a unique case-study for a theory which is concerned with the analogy between the circulation of viruses and that of money, images and narratives.
This period also reveals a notable gap, which is rapidly described as irrational, between the traditional, accepted view of fundamentals and the prices observed on the financial markets.
The term «irrational» is used to denote a difficulty or failure to understand a certain idea of posited rationality, especially when defined ex ante. This may be due to an imperfect or incorrect interpretation of a relevant subject. Or, on the contrary, it may indicate that the matter under consideration is not relevant. It is, therefore, necessary to reformulate the fundamentals, as a function of subjective value and narration.
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With a dual background as both an academic and practitioner, Pascal Blanqué is the author of Money, Memory and Asset Prices, Essays in Positive Investment Management, Philosophy in Economics, The Economic and Financial Order, Value, Time and Capital and Pure Theory of Economic Time. He was awarded European CIO of the Year in 2013 and 2018 by Funds Magazine and has received the Institutional Investor’s European Manager Lifetime Achievement Award (2016). He is a member of the 300 Club and of the Bretton Woods Committee. Pascal Blanqué is currently Chief Investment Officer for a major international asset management company.