There’s a couple of ways to look at this whole Societe Generale mess. One of course is to look at the cumulative effect of the “rogue trader” combined with the bank’s aggressive position in sub-prime mortgages gone south. One week they announce a $7 billion hit and then a week and a half later they come clean with an additional $2 billion hit. Believe it or not, and it’s hard to, this is real money. Somewhere north of $9 billion. Whose money is it anyhow? Where did it go? Who has it now? $9 billion gone. It had to go somewhere. Someone is richer for it. Wouldn’t you just love to see a flow chart of where the money went? I’m sure the people of France would. Could their be a government bailout far off?

Here is another way to look at this. Rogue trader, also referred to by the bank’s chairman as a “terrorist,” is a diversion of convenience. They knew all along what this kid (and he is a kid) was doing. In fact, they were party to the cover-up. So, bank decides to clear $7 billion dollars worth of bogus trades just days before it plans to announce the biggest sub-prime losses in all of Europe. Coincidence? Sure smells like skunk to me. Read this story in the NY Times. It will give you a little better perspective on the plot line.

This is all fun to follow. The intrigue. Right up to the point where you remind yourself - $9 billion of real money.

This entry was posted on Tuesday, February 5th, 2008 at 11:39 pm and is filed under Interesting Stuff, Left Field, Stupid Stuff. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.