Indy Telecom & Industrial Media

Last week, it was revealed that a “rogue trader” named Jérôme Kerviel working at the French bank Société Générale managed to supposedly cause a loss of $7.2 billion (€4.9 billion) for the bank.

Now, while it is quite possible that Kerviel was far from innocent, it is not easy to believe that a single trader, who apparently had very limited authority and handled back and middle-office work could have lasted this long unnoticed while playing with billions.

If he’s caused a loss of ~€5 billion on the futures market, it is quite likely that the exposure of his positions were quite possibly ten times that amount — i.e €50 billion — or more. That’s half the total capitalization of the bank. It is disturbing to hear that a small trader who is a nobody could gamble with such large sums and go unnoticed.

Even worse is SG’s claim that Kerviel did this with no person gain for himself. It could be that like all rogue traders, all Kerviel wanted to do was to hide his losses, and if he had recovered from them, nobody would have heard of him. And it is quite possible that since Kerviel does do back-office work, he could have taken positions and verified them himself, for his own orders. That is believable if Kerviel were known to be either a financial or a computing whizkid, neither of which seems to fit his profile. So, it is very likely that he had at least one accomplice to help him along — which contradicts SG’s claim that he was supposedly working all alone.

Now, I’ve read another theory which seems a lot more interesting. SG probably has more losses than it lets up, and what better way to get it all written up than to find a fall guy and blame it on him? Once you do this, you can simply ask for an increase in capital and you are suddenly a very attractive buy-out/merger target.

Besides, who cares about accountability when you can have other banks pull you out in the spirit of camaraderie, right?

To quote the poster Rocket –

Sink the damn bank. We’ll find a fall guy and then call for a capital increase and now the bank becomes even more attractive to French banks because of it’s low price. Thus you create a monster like BNP-SOCGEN and France conquers the banking world with another giant.

SOCGEN didn’t need to increase their capital. They could have absorbed the loss in 2 years with the profits they make, so something is rotten in Paris. This is unheard of a company increasing their capital 5 minutes after they discover a “fraud”

This way. French banks keep one of their own and another French giant is artificially created “de toute piece”

In the past France manipulated the free market and competition through subsidies and Monopolies today it is through stinking financial “montages” “Liberation de la croissance” will be reduced to increasing the number of taxis. It sounds so phony. The good ol’ boys are all in it together.

I now understand why the French are nostalgic for Marxism with the kind of gutter capitalism they practice.

These guys make Nick Leeson look like an amateur.

Turns out that fears of a possible recession in the US has wreaked havoc to Asian stocks, India and China in particular.

The worst hit was the Indian BSE, which fell by 1408.35 points — a fall of 7.41%. This resulted in trading being halted amid some disastrous speculations (which, of course, begs the question on BSE’s ability to run a stock exchange after such a drama).

This leads us to question the fundamentals of the Indian economy — while China has reasonably good infrastructure and manufacturing to back up its economy, the Indian economy seems to be increasingly modelled after Western styled economies, without the basic infrastructure and economic  fundamentals to back it up.

It would certainly be interesting to see how the next few days play out.

So, my friend Beck is at it again. Next week, on Jan 25th, Rebecca will be fighting her second Mixed Martial Arts amateur fight in Atlanta, GA.

Here are some interesting links from this week. Expect more Friday/weekend link-fests in the days to come.

• What does Goldman know that we don’t? — An interesting take on how Goldman Sachs escaped the subprime crunch that’s affected just about every other Wall Street major firm out there. (via Paul Kedrosky)

• CEO of the Princeton Economics Department? Goldman Sachs? It’s all the same to me! — Democrat Budget Committee Member Doesn’t Know the Difference between Treasury Secretary and Federal Reserve Chairman.

• You know you’re in a recession when they tell you to just take the clothes — Funny clip of Erin Burnett on Conan O’Brien’s show. (via DealBreaker)

Sir Edmund Hillary
July 20, 1919 – January 11, 2008

Last week, one of the greatest explorers and adventurers of our time, Sir Edmund Hillary passed away.

In an age without goretex and spring-loaded cams, he and Tenzing Norgay managed to climb Everest against all odds.

As a mountaineer, I am still in awe of the climbs that they accomplished during a time when things must have seen a lot harder, and Everest a lot taller than it is today. In fact, for the longest time, I had a poster of the Hillary Step in my room that reminded me every day of perseverance and the motto “Carpe Diem” — seize the day, while you still can.

More importantly, Sir Hillary embodied a sheer force of will, respect for the outdoors and for other climbers — something that is sorely missing in a lot of today’s adventurers.

So here’s to Sir Edmund Hillary. Way to climb, just for the hell of it.

Alienware recently came up with an extremely cool (and alien looking) curved monitor that’s about 3 feet long. And of course, curved.

It uses some really cool Digital Light Processing (DLP) technology and has a resolution of 2880×900. It’s back-lit by LEDs, and you can see the seams between the four monitors making up the monitor. Apparently, those will go away in the final version. Even more interestingly, this monitor supposedly has amazing response times (supposedly 0.02ms, according to Gizmodo).

Can you hear me say w00t!?