You already know that the rogue trader at Societe Generale, the second largest bank in France, cost the bank $7.2 billion in losses.
What the Wall Street Journal just reported:
The combined trading positions [the rogue trader] built up over recent months, say people close to the situation, totaled some €50 billion, or $73 billion.
By “people close to the situation”, they mean “bankers and lawyers currently wandering disheveled and shirtless down the Fifth Arrondissement, rendered mute by systemic emotional shock”.
The fun continues:
In addition to the billions, Société Générale appeared for a time to have lost Mr. Kerviel as well. Executives at the bank, still stunned at the magnitude of the scandal, told reporters yesterday they hadn’t kept track of his whereabouts since questioning him on Saturday.
“He was mentally weak,” said the bank’s co-chief executive, Philippe Citerne.
Toward the end of 2007, Mr. Citerne said, Mr. Kerviel’s trades were winning.
OK. So, how exactly much was he in the money “toward the end of 2007” with his$73 billion of combined trading positions, do you think?
Société Générale Chairman Daniel Bouton declined to provide details about the positions the trader built up over the past months. But he warned: “Had we not acted swiftly, the loss could have been 10 times worse.”
Color me reassured.
And, to close, here’s your big chance:
[T]he [bank’s new funding] plan is to raise €5.5 billion in a rights issue, an arrangement in which new shares are sold, typically at a discount… J.P. Morgan and Morgan Stanley are underwriting it… The capital raising is expected to kick off after Société Générale reports its 2007 results on Feb. 21.
The line forms to the right!