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How To Lose $7.2B With Just a Few Basic Skills
Cityslacker recommends a Register piece speculating on how a lowly trader at the French bank SocGen was able to lose billions using only Excel VB. The author freely admits that his story is not based on hard sources, but his experience in the banking industry lends plausibility.
As someone who has spent too many years in financial services... while some traders are famous for thier bubble-gum and duct-tape approaches to things, this article is this biggest pile of BS I've ever read.
You mean Bush.
Vescere bracis meis.
So now Slashdot is carrying articles that are mere speculation. I realize that "serious programmers" love to trash VB everywhere, but can't we at least have facts on our side first?
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
is that anybody with some VBA knowledge will sooner or later get access to other peoples Excel sheets in order to fix problems. This is just a form of social engineering. Once you sit in front of the PC, logged in as another user and telling that gratefull person you get nervous when other people look you on the fingers while you try to solve a complex problem...
Another interesting point is "Rights-creep". Often people are given acces rights as they move between functions, but these rights are never revoked when moving on to the next...
10 ?"Hello World" life was simple then
I have seen several instances where someone that did a little digging on the back end could easily make the system do what ever they wanted. They become more valuable because they can fix the system when it hiccups. "Customer Joe has a weird charge on it. The system won't let us fix it. What are we going to do?" The guy that knows the backend then goes in and changes it right on the database and is a hero. But if he can fix things then he can also break things and cover it up. It goes back to managements desire to wear blinders. They want to put super locks on the physical doors but give the keys to kingdom on the system to anyone that is willing to help.
Is he strong? Listen bud, He's got radioactive blood.
Generally, the economy works better when money circulates...When it has "velocity", which is another one of those words like "multiplier" which I'm going to assume you understand. By dumping surplus money into commodities rather than banks, you're effectively hiding your money under your bed, and dampening the flow of money through the economy. People did this for a long time until a smart guy named Adam Smith pointed out that hoarding gold didn't make anyone especially wealthy; it was trade that built wealth, and that meant the movement of money and goods.
So that's why banks exist, and why we allow things like the multiplier effect to run our economy. The granddaddy of all multipliers (the Fed) has been active for the past few weeks, trying to pump some money into the economy. Bush is hedging his bets, and backing Keynes at the same time with a stimulus package. Historically, these actions have added velocity to currency, and fast currency tends to stimulate the economy.
The reason for the FDIC, and SEC, and Social Security and Welfare, and every other similar system is to basically keep the money in people's pockets. This is important for the reasons above; cash circulating through the economy creates jobs and stimulates the economy. A bunch of people losing all their money (for example, when a bank fails) means you have a bunch of people who suddenly can't buy groceries. Grocery stores start laying people off, because they have to cut costs, which means MORE people can't afford groceries, and so forth. People like you pull their money in and convert it to commodities, instead of putting it into banks, which means banks can't make loans to support people who are trying to start businesses or buy houses, which, again, slows the economy and costs people their jobs.
Basically your thoughts on this stuff fly in the face of all mainstream economic thought for the last several hundred years. I'm assuming you're a Ron Paul guy, because echoing his "economic" beliefs, and Gosh, we'd sure like to move back to the gold standard. I'd almost like to see him get elected, just out of academic interest in the economic chaos that would ensue.
Anyway.
ad logicam Claiming a proposition is false because it was presented as the conclusion of a fallacious argument.
I hate to say it, but the Reg might be right. Assuming the linked CV is the real thing, he only claims to have experience with Excel macros and a smattering of VB.
The real part of his hack is probably social engineering and stumbling upon oversights in the trading system. How many IT folks, even the dumb ones, can say "I could take this whole system down if I wanted!" - this guy actually did.
Goes to show that there's a difference between checking off boxes for auditors and actual security. Auditors can make sure the proper safeguards are in place; auditors can't tell if everyone in the department uses the same password.
First the numbers must be forgotten because they are not yet determined. Furthermore it is normal for traders to manipulate very large amount of money, especially on his market (arbitrage). Due to the ROI of this sector, banks use large amounts to generate more money.
Second first elements in the investigation indicates that he was doing it successfully since 2005... he has won a lot of money that way, for who ? the bank. Now he is losing since beginning 2008, and guess what
I just want you to let the justice determine the responsible, before commenting and blaming someone.
I have worked precisely with these people in this bank, I still have a lot of friends there.
That's why I am not so sure the trader is the guy to blame.
He has probably made mistakes, but I am pretty sure its action have been endorsed by its hierarchy.
He is not that genius described by the media.
Unfortunately for him, there will be few people to help him as no one wants to take any risk for his career.
But I am sure a lot of people have already some doubts about the bank story.
This will help make sure the investigation is carefully conducted.
Well, can't argue with a zealot, so I won't try.
I suggest however, that increases in our relative standard of living and the fact that our purchasing power has remained reasonably constant over the past three decades would suggest that we're not actually all secretly bankrupt, or, if we are, then the whole world is secretly bankrupt with us.
ad logicam Claiming a proposition is false because it was presented as the conclusion of a fallacious argument.
Of course I'm passionate about my hatred of fraudulent policies. A man steals from you, he's a thief. I don't care what anyone calls it, taking from someone against their will is theft.
That being said, we are all bankrupt. What is the average person's net value in the United States? No, don't just count your property and 401Ks, also add in the government's debt (local, state, and federal). Now you're bankrupt, unless you're worth at least $800,000 or so above and beyond your debt.
Our buying power might be more, but that's merely a figment of the imagination, as the quality of what we can buy is surely less. Plus, we're indentured to that debt for many more years than previous generations, and it is hard to say if we are living better because such a subjective comparison is impossible to make without having lived in previous times. Medical opportunity is better, and the chance to eat a healthier diet is also better, so I think we've gained something, but that's notwithstanding the corruption of those who try to prevent such gains in living ability.
Not to get into the rest of your debate, but yes, most people are secretly bankrupt. The current housing crash is a ready sign. If most people sold everything they owned, and tried to pay their debts, they would come out in the negatives. Now, given that the government and media are not going to start reporting that the country is bankrupt, the only reliable data I can use is what I personally have observed.
Coming from a perspective of someone just entering the upper middle class, a good 90% of the people I have talked to about money are worth less than $0. This includes the people "wealthier" and "poorer" than me whom I have had discussions with. I have a very hard time believing that any significant portion of the economically lower class have greater financial worth than the middle class. So, while I cannot speak of the very wealthy, the middle class and poor are as a group bankrupt. That does not include, as your advisory points out, the debt that is held in trust by our government.
So. apart from a better standard of living, better health, longer life, better nutrition, more leisure time and the ability to experience more of the world than previous generations, we are all worse off. Got it.
Scary part is people think you are being funny.
Honestly it's easier to get rich playing Texas Hold-em at a casino than on stocks. at least at the casino you can get tanked and oogle the scantily clad waitresses.
Do not look at laser with remaining good eye.