CES 2021 - Microsoft announces the Surface Pro 7+ 2-in-1 PC and the deployment of its 85 ″ Surface Hub 2S

Microsoft is unveiling the Surface Pro 7+, a 2-in-1 laptop PC for business and education, which benefits from some improvements over version 7. The Surface Hub 2S digital board will ship in February. Rumors are rife that a Surface Pro 8 will be released soon. To be patient and to satisfy professionals, Microsoft unveils its Surface Pro 7+, a revised version of the Surface Pro 7 promised as more efficient.    Among the major evolutions of this new model, we note first of all the passage of the Intel Core processors from the 10th to the 11th generation. Storage will still be capped at 1TB, but a maximum of 32GB of RAM can now be installed, down from just 16GB previously. The SSD will also be removable and a Full HD webcam integrated into the Surface.  4G is now supported with a SIM card slot and eSIM support. Plus, battery life gets a big boost, from 10:30 am to 3:00 pm - on paper anyway - with a fast charge to 80% in an hour. The Surface 7 Pro +

“Let's stop criticizing our banks!”

More than ten years after the subprime mortgage crisis, all the light has not been shed, and yet the idea of ​​the guilt of the banks has taken hold firmly in people's minds. They are even blamed for the double fault, since after playing with fire and triggering the crisis, they allegedly asked for help from the States. This unanimous condemnation, the result of incomplete analyzes, is a heavy component of the bank bashing that has raged since then and unfortunately works against our interests. We are indeed at a critical moment when Europe, faced with the domination of American finance and the dollar, must develop its own financial capacities. The development of a strong pan-European financial sector is therefore essential if we particularly want to foster the emergence of future European gafas. 

“Let's stop criticizing our banks!”

If it is vain to hope for the complete disappearance of this bank bashing and, one might say, of the bashing market whose roots plunge both in history and in ignorance of the role of finance, it is nevertheless It is urgent that a work of truth be initiated in this regard, a work of salvation. The public bank bailout was arguably the most shocking thing to public opinion. The truth is, however, that the intervention of the French state in favor of the banks was not intended to compensate for financial losses, as has been said, but to avoid the overall collapse of the banking system following the brutal blocking of the market. interbank.

Public money was not given to banks

To understand this, we have to imagine the interbank market as the lungs of banks. This system, as discreet as it is vital, is based on trust and allows banks to constantly adjust their cash flow through mutual loans of very short duration. Billions are thus exchanged daily. From the first rumors and lack of knowing which banks could be insolvent, they stopped lending to each other. Immediate state intervention then made it possible to prevent healthy establishments from being bankrupted. We must not confuse, as has been done, mismanagement and drying up of liquidity. Billions of euros have been loaned to banks in this way, not given away. All have been repaid including interest. With the sole exception of a Franco-Belgian bank, no French bank has been bailed out due to losses resulting from investments in subprime bonds.

Banks did not get rid of bad credit

The second no less corrosive accusation concerns securitization, misleadingly presented as a technique used by banks to get rid of bad loans. This seemingly obscure technique has actually been around for over half a century. Simple in principle, it works in two stages, the first being the sale of a set of loans by a bank to a specialized entity. The second step is the issuance of securities by the entity in question for a total amount equal to the amount of the loans. The repayment of the loans by the original borrowers is then returned to the buyers of the securities.

It should be noted that securitization is, for example, encouraged by the European monetary authorities. And for a simple reason, it allows banks to lend more to the economy despite limited capital, and without violating compliance with prudential ratios. To think for a second that the bank could deceive the purchaser about the quality of the credit transferred or that the purchaser is buying with his eyes closed is absurd. The control of transferred credits is meticulous and relies on the professionalism of the parties. In addition, the buyer of credits issues securities whose overall risk, known to the investor, is quantified by a rating agency on the basis of constantly updated statistical models.


The responsibility of the US government

The particular segment of the securitization of subprime loans was introduced by the American authorities in 1977 as part of a little-known social policy to help the housing of disadvantaged households, called subprime borrowers. The scheme relied on a company called Fannie Mae which was responsible for buying mortgage bank loans granted to these borrowers from banks and guaranteeing the securities issued in order to facilitate their acquisition by investors. This public company, created in 1938, was half privatized in 1968 and then renationalized in 2008, at the height of the crisis. To put it simply, this somewhat complicated system functioned like a public bank, thus making the taxpayer bear the unreimbursed credits.

The system worked without problems for a long time, but it changed scale from 1997, due to a law obliging banks to issue certain quotas of subprime loans, under pain of sanctions. Several elements then came together, leading to the outburst of the system until its peak in 2007. This boom was the result of the rush of credit banks to meet their obligations, and at the same time the continued rise in the real estate market. For their part, the investment banks have manufactured securities of securities, mixing the securities issued by Fannie Mae with others in order to offer investors around the world tailor-made products in terms of risk and reward. The volumes involved have been measured in the trillions of dollars. 

The weak point of the system was that the securities issued by Fannie Mae were deemed to be implicitly guaranteed by the US government. The downturn in the real estate market has revealed devastating doubt about the reality of this guarantee, causing the value of all securities constructed from subprime securities to collapse. The responsibility of the United States and in particular of the Department of Housing is clear. Not only the quota constraint for the banks should have been repealed, but especially the activity of Fannie Mae was stopped much too late. This public responsibility will probably never be officially admitted because it involves the two major American parties. We can imagine that only the big investors, the Chinese and Russian sovereign wealth funds, were then compensated directly and discreetly, after the renationalization of Fannie Mae in 2008.

A teaching tool

It has been easy for detractors of banks and markets to convince public opinion of the guilt of these institutions by spreading simplistic accusations. Restoring the truth is naturally more difficult, as this phrase from Tocqueville illustrates: "A false idea, but clear and precise, will always have more power over the world than a true, but complex idea".

Let us hope that the truth about the role of banks in the subprime crisis will be widely disseminated. This is all the more desirable as the peaceful study of what one might call the subprime chain is also of great educational interest. All the tools of modern finance are in fact brought together in a coherent whole and in a micro and macroeconomic approach. This is a complete introduction to the notion of risk, to the complementarity of banks and markets, to the creativity of Wall Street banks and to the ambiguous concept of shadow banking. The educational tool par excellence, therefore, which would justify its presentation in Grandes Ecoles and at the University, and perhaps in the corporate world, as an essential general financial culture.