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The hot story is yet another banking scandal. This time it isn't a sin of commission--greed--that has sucked $7.1 billion out of French mega bank Societie Generale's coffers; it's the sin of omission--a complete breakdown of oversight on its trading desk.
The unnamed trader is like Nick Leeson (of Barings infamy) on steroids, the Barry Bonds of rogue trading. He/she lost $7.1 billion. And the bank just figured it out.
I think if I was short say a few hundred million, I'd start asking questions. I might even put in firewalls so I might be alerted before my losses hit the big B word. Apparently not SocGen.
The whole mortgage debacle in the US credit markets is bad but ultimately the system can't collapse. Even the US government has stepped in to help these poster children for free markets and unfettered capitalism. Odd how that happens isn't it? The louder you champion capitalism, the more you seem to get in government help. It's like a spoiled kid who keeps trashing all the new cars you give him and never appreciates the fact that he needs to change his ways.
Anyway, an interest rate cut helps stop all those ARMs from advancing and may help slow down defaults. Then we all get a check for $600. Be still my heart. In the meantime, no one has mentioned to the banks that maybe they could lower their predatory lending interest rates and perhaps more people would pay back their maxxed out credit cards and the banks could use the cash.
Instead the financial institutions continue to sink their talons into consumers and expect them to thrive.
This kind of idiocy will be one of the key reasons these Old School masters of Wall Street will transform this country into a lesser power in the next five to ten years. The EU, India, China and even Russia are going to be the fulcrums of the global economy and the US will be more a big, spoiled child that everyone else will get tired of catering to. If we can't get some fresh thinkers running the game on Wall Street, we're in for some interesting times ahead.
That said, on the other side of the Atlantic you have these stunning sins of omission. I mean $7 billion. Can you imagine the kind of healthcare and educational systems that kind of money could have purchased for the US, to say nothing of France? And it's gone. Poof. Merde.
This kind of thing disturbs me even more than greedy finance guys wheeling and dealing in the mortgage market because it happened and no one knew. Everyone knew there would be a reckoning for the housing boom.
The whole world swooned when Countrywide teetered on a few billion in losses. There's nary a blink when one guy loses $7 billion. Odd don't you think?
posted by GS Early
The unnamed trader is like Nick Leeson (of Barings infamy) on steroids, the Barry Bonds of rogue trading. He/she lost $7.1 billion. And the bank just figured it out.
I think if I was short say a few hundred million, I'd start asking questions. I might even put in firewalls so I might be alerted before my losses hit the big B word. Apparently not SocGen.
The whole mortgage debacle in the US credit markets is bad but ultimately the system can't collapse. Even the US government has stepped in to help these poster children for free markets and unfettered capitalism. Odd how that happens isn't it? The louder you champion capitalism, the more you seem to get in government help. It's like a spoiled kid who keeps trashing all the new cars you give him and never appreciates the fact that he needs to change his ways.
Anyway, an interest rate cut helps stop all those ARMs from advancing and may help slow down defaults. Then we all get a check for $600. Be still my heart. In the meantime, no one has mentioned to the banks that maybe they could lower their predatory lending interest rates and perhaps more people would pay back their maxxed out credit cards and the banks could use the cash.
Instead the financial institutions continue to sink their talons into consumers and expect them to thrive.
This kind of idiocy will be one of the key reasons these Old School masters of Wall Street will transform this country into a lesser power in the next five to ten years. The EU, India, China and even Russia are going to be the fulcrums of the global economy and the US will be more a big, spoiled child that everyone else will get tired of catering to. If we can't get some fresh thinkers running the game on Wall Street, we're in for some interesting times ahead.
That said, on the other side of the Atlantic you have these stunning sins of omission. I mean $7 billion. Can you imagine the kind of healthcare and educational systems that kind of money could have purchased for the US, to say nothing of France? And it's gone. Poof. Merde.
This kind of thing disturbs me even more than greedy finance guys wheeling and dealing in the mortgage market because it happened and no one knew. Everyone knew there would be a reckoning for the housing boom.
The whole world swooned when Countrywide teetered on a few billion in losses. There's nary a blink when one guy loses $7 billion. Odd don't you think?
posted by GS Early