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How To Lose $7.2B With Just a Few Basic Skills
Cityslacker recommends a Register piece speculating on how a lowly trader at the French bank SocGen was able to lose billions using only Excel VB. The author freely admits that his story is not based on hard sources, but his experience in the banking industry lends plausibility.
Tech Report seems to think it was the WSJ that said it:
http://techreport.com/discussions.x/14047
whereas Ars doesn't name a source;
http://arstechnica.com/news.ars/post/20080201-microsoft-adds-yahoo-to-shopping-cart.html
Moderation Total: -1 Troll, +3 Goat
It still works.
I am afraid after M$ gets through with it, it won't.
I fear it will require registrations and use some copyrighted protocol - guaranteed non-interoperable by copyright and patent law. Only the latest MS product will talk to it.
I will always wonder if my financial queries are being tracked and stored in their database. I have no idea what kind of information may be exchanging behind my back.
It will be yet another goad to force one to upgrade when M$ decides they want to sell another round of OS.
Hopefully, Google will pick up the pieces.
"Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]
Hundreds of billions of losses, because Wall Street figured out how to "package" "insured" mortgages on "inherently safe" homes, where the under-girding asset is solid ground that is "always" appreciating on average.
If nothing else, the article on the $7B loss in France ought to serve as another wake up call to "managed risk systems".
The PHDs, the MBAs, the CFOs & the Risk Analysis people with their algorithms all pronounced it a sound "system".
What they didn't look at was what happens when mortgage companies and individual salesmen and appraiser's collude to scam property values and borrower's financial condition (along with pressure from Jesse Jackson & Villagarosa types to not discriminate "against race").
The top level control system was probably figured out tightly.
Monitoring the entry level data risk was and is a disaster. Hundreds of billions at the very least are lost (transferred if you will) as a result.
How come I don't hear of any call for heads to be lopped off in the mortgage bundling business? Maybe money, power & influence in Washington anyone?
You can bet there are some very highly placed traders in these securities whose customers would like to do that.
First of all the selling occurred on MLK Day, when US equities markets were closed and futures trading was extremely light. So a smaller amount of money can have a disproportionate impact.
Second, many traders attempt to play a sort of "follow the leader" game where they look for indications that a big player is in the process of performing some big transaction and attempt to make a profit by essentially charging that big player a premium (if they are buying) or getting a discount (if they are selling). That can easily result in disproportionate activity in the market (which is a bit part of why markets fluctuate so much in the short-term anyway).
I have seen the future, and it is inconvenient.