Soc-ked In

Wow. Societe Generale just lost 4.9B euro in what looks like a fraudulent job by a junior trader. In today's hyper-automated trading desks, VaR, and layers upon layers of compliance measures, I thought maybe you could get away with a couple of hundred million, at most, before you (a) get caught, (b) reach a safe haven island, or (c) kill yourself.

Crap job by SocGen. All those millions of euros spent on risk management and compliance, and you couldn't stop a noob trader trading some vanilla futures. You might as well just have given him a nice big vault full of cash, you would have lost less money.

And while it is very very wrong and illegal and should not be done by anyone under any circumstances, kudos to the junior trader. (Hey, it's Biblical so it's OK.) You give hope to many subpar traders the world over that if they dream it, it will happen. May you receive a lucrative book/movie deal out of this. Might be the next Liar's Poker. Or not.

Where's an open window when you need one?

So today, all eyes were on the bloodbath in the market, with the S&P ASX 200 shedding 7% today, officially entering "bear market" territory (thank you, Mr/Ms Hedge Fund Manager) and essentially wiping out all the gains of the past 12 months.

Neeeeeeaaat. And to have it happen during my lifetime... what a story to tell the kids. I look forward to the day when people will be writing about the current crop of wheelers and dealers, and how it was such an extravagant lifestyle fueled by debt and ego, etc etc. The 80's baby... when it comes back, it comes roaring back!

Sure, he started it, but he didn't love the 80s like I do.

Now my 99% cash allocation doesn't look so stupid anymore, and who knows, I might even go on a bit of a bargain hunt.

I like this article, dedicated to a mostly illiterate audience, just in case they've been holidaying in the Pacific for six months using the money found after they mortgaged their house and retirement savings. I especially like this section: "What is the sub-prime market?" It's you and your kind, you bogan (and valued reader).

UPDATE: The Fed has made an emergency cut of 75 bp to its target rate. George Bush also announces new expansionary policy to stimulate the economy, to be funded by a (larger-than-ever) budget deficit, and proceeds from sales of a half-share in the USA to a consortium led by the Carlyle Group and Saudi sovereign funds.

Adios 2007, and haroo 2008

Well after the flurry of blogging leading up to the final month of the year, Rockett Fuel falters, tripped up by the many Christmas functions to attend. And a deal or three in between. So a belated Merry Christmas, Happy New Year, and so on.

Now my normal blogus modus operandi is to get one of those question lists you get from your spamming friends, and answer them here. Unfortunately I am yet to receive such spam (perhaps because I have alienated many friends in the past 12 months), so this is a placeholder entry until I find such a list.

In other news:

Oil touches USD 100/barrel.
Latest megarich toy: a brand-name US or European bank.
Rockett Fuel: go-to guy for jumpstarting failed syndications. (Well, can't link to them, obviously. Who wants to announce failed syndications?)