January 29, 2008
Informing Markets about Pending Losses
Funniest thing I’ve read (so far) this morning (emphasis mine):
“… a French lawyer acting for 100 small shareholders said he had sued Société Générale over the way it had unwound Kerviel’s fraudulent share deals last week, Reuters reported.
The lawyer, Frederik-Karel Canoy, said the bank should have informed markets about its pending losses before embarking on a selling spree from Jan. 21 through Jan. 23 to unwind the €50 billion of risk exposure built up by Kerviel.”
Yep, they should have shouted from the rooftops, hey! we’re stuck long $73 billion in the Eurostoxx, DAX, and FTSE; we’re already sitting on $2 billion in losses; do you guys wanna buy some from us? :)
Details on the exposure from this W$J article (emphasis mine):
“As of Jan. 18 — the day Mr. Kerviel’s ruse went astray — Société Générale had €18 billion of exposure to the DAX, €30 billion exposure to the DJ Euro Stoxx 50 and €2 billion to the FTSE 100 Index in London, according to Mr. Mustier. All of these exposures were established this year in a short period of time, he said.”
Presumably after Jerome received his insulting €1500 bonus.
January 29th, 2008 at 2:05 pm
SockJen is launching a new card offering six months interest-free credit on balance transfers of up to €50 billion.
January 29th, 2008 at 3:46 pm
In 1957 the Dupont Corporation was found guilty of violating the Clayton Antitrust Act because it owned 23% of the stock of General Motors and was ordered to immediately sell the stock. Lawyers had strongly argued against this potentially ruinous move: isn’t the price of GM going to drop by 23% or more as a result, damaging all stockholders? Where are we going to find someone willing to buy such a huge block?(…)
http://www.dailyspeculations.com/castaldo/price_elasticity.html
January 29th, 2008 at 4:07 pm
vak: It’s amusing that Niederhoffer would host that article … he could probably relate a thing of two (from experience, not theory!) about being gunned for in the futures markets.
January 29th, 2008 at 7:20 pm
indeed
January 29th, 2008 at 10:24 pm
Actually Chairman, in one of the original articles that broke about Jerome they indicated that he had not yet collected his bonus check….and they didn’t expect him to swing by to get it either…
This was when his whereabouts were still unknown…I imagined management saying to his coworkers, who also still had not received their bonus checks..”Anybody want to go out and find this guy for us? “
January 29th, 2008 at 10:41 pm
Linda: I read that he “received” (not necessarily collected) €1.500 for his 2007 bonus, which was apparently €298.500 lower than he expected. :-) He then proceeded to build a $73 billion one-way trade to get back at the stingy bastards (pure speculation on my part).