Le site Bellaciao: coloré, multiple, ou le meilleur cotoie fort heureusement le pire, mélangé, bizarre, picabien et dadaîste, explorant toutes sortes de registres et de régimes rhétoriques, drole et polémiqueur, surréaliste: rencontre d'un parapluie et d'une machine à coudre sur une table de dissection, têtes de Lénine sur le clavier d'un piano Steinway ou Bosendorfer...
FR
ES
Senal en Vivo
VIDEO
RADIO
FRIENDS SITES
with Bellaciao
Bellaciao hosted by
To rebel is right, to disobey is a duty, to act is necessary !
Bellaciao  mobile version   |   Home  |   About us   |   Donation  |   Links  |   Contact  |   Search
Europe’s Enron moment has arrived

by : TRADING SCANDAL
Wednesday January 30, 2008 - 16:15

SOCIÉTÉ GÉNÉRALE’S TRADING SCANDAL
by DOUG SAUNDERS

LONDON — As Nicolas Sarkozy and Gordon Brown met for dinner in London last night, there was a distinct sense that both leaders were having an Enron moment: The sudden realization that the country’s most-respected industries are going to need more government oversight.

Both the French President and the British Prime Minister, who met to discuss the rattling economy and banking crises in an emergency summit with other European leaders, have discovered that their governments will need to take an active role - either in regulation or bailouts, or both - after recent disasters that have afflicted some major financial institutions.

It is the sort of nerve-testing moment faced by the United States in 2001, when Enron’s house of cards collapsed and Washington discovered a need to introduce strict regulation of the finance and accounting industries.

Mr. Sarkozy spoke to other Western European leaders of "moralizing capitalism" and attempting to "put order back in a system that sometimes seems out of control," his aides said.

His comments came amid allegations a young trader cost one of France’s venerable banks, Société Générale SA, more than $7-billion.

Mr. Brown might sympathize - to a point.

He, too, is being forced to step into the financial markets, to find a way to bail out failed mortgage lender Northern Rock.

The Labour Prime Minister will certainly agree with Mr. Sarkozy about the need for more regulation, more supervision and a more active role for international agencies in keeping balance sheets clean.

On the face of it, the two countries would at first appear to be headed in very different directions.

France claims to be doing everything it can to prevent a takeover of SocGen, whose loss of more than $7.2-billion in three days of unwinding the unauthorized positions of trader Jérôme Kerviel last week has left it extremely vulnerable to its long-time archrival, BNP Paribas.

"The government will not let Société Générale become the object of hostile raids from other banks," Prime Minister François Fillon told reporters yesterday. "The government is very attentive to any risk of the destabilization of Société Générale [and] will not allow Société Générale to be the target of hostile raids by other banking establishments."

Mr. Sarkozy’s aides have made similar remarks in recent days, and confirmed yesterday that he does not intend to let a takeover occur. The prospect of a large share of state ownership is not beyond consideration. After all, a large number of French banks, including BNP Paribas, were state-owned until quite recently, and the government holds stakes in many companies.

But his dining companion is facing the opposite direction. For weeks, Mr. Brown and his bank governor have been doing everything they can to arrange a takeover of Northern Rock, or a foreign or domestic buyout, by either domestic or foreign investors. By Feb. 4, they hope to have a suitor, and favourites include a U.S. private equity consortium, Five Mile Capital Partners.

So far, so typical: Britain is sticking to its hands-off, ask-no-questions approach to industry, allowing mergers to occur as they may and paying no interest in the nationality of a company’s investors. That hands-off approach, in contrast with the American post-Enron mood of regulation, has helped make London the world’s main financial centre. And France appears to be pursuing a state-heavy, managed approach based on economic nationalism and expensive protection of venerable national institutions, a tactic that has kept its large companies in French hands.

But beneath the surface, seismic shifts are visible in the approaches taken by both countries. The financial meltdown of 2008 may well be remembered as the turning point for Britain and France, when both countries began to switch places.

The change in France was visible this week on the streets. The French public and their media, watching a much-loved bank that employs 120,000 people fall victim to the ill-considered actions of an unsupervised futures trader, have taken a decisive position: They are siding with Jérôme Kerviel, the trader, and turned against the bank.

Mr. Kerviel is now regularly likened to Alfred Dreyfus or Che Guevera. After losing all his Facebook "friends" on the day the crisis broke, he now has thousands of new ones, on groups with names like "Jérôme Kerviel should be awarded the Nobel Prize in Economics"

This public mood makes a full government bailout of SocGen seem increasingly unlikely. As finance minister in 2003, Mr. Sarkozy saved the engineering firm Alstom from bankruptcy with a partial government takeover. Last year he oversaw the merger of France’s three largest energy companies into a partly state-owned energy giant that angered European competition regulators.

Given the new mood in France, the fiscal and political stakes of an expensive state bailout may be too high. Mr. Sarkozy’s pragmatic approach and his rhetoric of economic reform may have landed him in the very un-French position of leaving a giant to its fate. It seems very unlikely, according to Paris business media, that SocGen’s senior management will escape with their jobs.

Mr. Brown is in almost the opposite position. Despite his athletic effort to find a suitor for Northern Rock, Mr. Brown is essentially giving a competitive face to something that bears a strong resemblance to a government buyout. When the British government decides on a buyer for Northern Rock shortly after Feb. 4, its $52-billion in emergency loans will be converted into triple-A-rated bonds that will likely be tied to a government equity stake in the bank - a very French-sounding solution.

"What the events of last autumn have shown and what the beginning of this year have shown," Mr. Brown’s Chancellor of the Exchequer, Alistair Darling, said last night after the dinner meeting, "is that governments do need to take the appropriate action to support the economy - whether it is the world economy or their own economy."

But the meaning of "appropriate action" seems to be changing as these crises unfold. In Britain, there’s been a lot less interest in the old French phrase laissez-faire; across the Channel in France, there’s a sudden interest in the Anglo-Saxon concept of "creative destruction."

***

TRADING SCANDALS: A HISTORY

The Société Générale trading scandal marks France’s coming of age in the world of market scandals. A look at other watershed events:

U.S. Enron Corp. (2001)

Energy trader Enron Corp.’s demise claimed thousands of jobs and more than $60-billion (U.S.) in market value amid inflated profits and hidden losses.

In an attempt to restore investor confidence in the markets, U.S. lawmakers enacted Sarbanes-Oxley in 2002, which imposed sweeping standards on how public companies are run and audited.

U.K. Barings Bank (1995)

Singapore-based futures trader Nick Leeson, then 28, amassed $1.4-billion (U.S.) in losses.

Barings, one of Britain’s oldest banks, was crushed by the losses, and was bought by ING for £1. Mr. Leeson was sentenced to 6? years in jail. The Bank of England came under new scrutiny and a new focus was placed on how trading floors are supervised.

CANADA Bre-X (1997)

Calgary-based Bre-X soared from a penny stock to a $6-billion (Canadian) company, only to collapse when it was discovered its stated Indonesian gold reserves were a fraud.

Bre-X will go down as the world’s largest mining scandal, notable for its almost complete lack of accountability by anyone involved.

JAPAN Sumitomo Corp. (1996)

Sumitomo in 1996 reported losses of $2.6-billion (U.S.), run up in 10 years of unauthorized trading carried out by its former head trader, Yasuo Hamanaka, who was trying to corner the copper market.

The scandal triggered investigations into trading practices worldwide, particularly at the London Metal Exchange, where 95 per cent of all copper trading is conducted.

***

THE ROGUE ON THE RECORD

Excerpts of testimony from alleged rogue trader Jérôme Kerviel to investigators

probing massive losses at Société Générale SA, published by Le Monde daily

and confirmed by the Paris prosecutor’s office

***

The bombs

My first experience in this direction dates back to 2005 ... I then took a position on Allianz, betting the markets would fall. It just so happened that a little while later, the market fell after the London bombings and it’s the jackpot: €500,000.

The buzz

I then got the idea of a deal to cover my position. I have mixed feelings because I’m proud of the result and surprised at the same time. It makes you want to continue, there’s a snowball effect.

The motivation

Above all, I have earning money for my bank in mind. That’s my No. 1 motivation, and in no way is it to enrich myself personally.

The blind eyes

I can’t believe that my superiors were not aware of the amounts I was committing, it’s impossible to generate such profits with small positions, which leads me to say that when I’m in the black, my superiors close their eyes about the methods and volumes committed.

 http://www.theglobeandmail.com/serv...



Leave a comment
Print this article





Public Apology to Women of the World from The American Republic (Hypatia of Alex
Monday 31 - 15:21
by Willam Morgan
YES, THERE WILL BE ELECTION FRAUD, AND ON A GRAND SCALE
Sunday 23 - 18:32
by JOHN CHUCKMAN
Hillary Clinton will be first female President 2017
Monday 10 - 17:21
by Willam Morgan
Police Shootings: Law, Policy, and Accountability
Thursday 6 - 14:22
by William John Cox
AMERICA DESERVES BETTER, BUT EVEN MORE IMPORTANTLY, THE WORLD DESERVES BETTER
Thursday 29 - 18:02
by JOHN CHUCKMAN
Back to School for Fascist Dupont-Aignan
Thursday 15 - 11:32
by Nouveau Comité de Vigilance des Intellectuels Antifascistes
The Presidency: Character Matters
Friday 9 - 15:06
by William John Cox
WHY HILLARY IS THE PERFECT PERSON TO SECURE OBAMA’S LEGACY
Tuesday 30 - 18:08
by JOHN CHUCKMAN
Remake of Ben Hur in 2020 planned by new motion picture studio
Friday 26 - 15:50
by Wallace
THE CASE FOR DONALD TRUMP
Monday 22 - 19:32
by JOHN CHUCKMAN
THE CONSTITUTION OF THE UNITED STATES IS DEAD
Thursday 11 - 06:42
by David R. Hoffman, Legal Editor of Pravda.Ru
DONALD TRUMP AND THE GENIUS OF IDIOCY
Friday 5 - 00:47
by David R. Hoffman, Legal Editor of Pravda.Ru
FOOLING MOST OF THE PEOPLE MOST OF THE TIME IS WHAT AMERICAN POLITICS ARE ABOUT,
Friday 29 - 18:13
by JOHN CHUCKMAN
A message of your fellow striking workers from France
Tuesday 12 - 20:49
by Info’Com-CGT
The Right to Vote, Effectively
Friday 8 - 22:20
by William John Cox
Fourth of July Lies
Sunday 3 - 19:41
by June C. Terpstra
Who Should Make Political Policy, the People or the Politicians?
Friday 24 - 15:14
by William John Cox
Hollow Women of the Hegemon Part II: Atrocity Enabling Harpies
Tuesday 21 - 18:49
by Dr. June Terpstra
The American Republic Manifestum book is being made into a Movie
Saturday 11 - 15:54
by William Morgan
Write-in Voting and Political Protest
Wednesday 1 - 15:05
by William John Cox
Yves Bouvier art battle plays out in online and social media arena
Tuesday 31 - 21:12
by Dean Bagley
Damaged Candidate Clinton Can’t Call Out Trump
Friday 27 - 13:53
by Daniel Patrick Welch
PLEDGE OF THE NEW REPUBLICAN PARTY
Tuesday 24 - 21:53
by David R. Hoffman, Legal Editor of Pravda.Ru
LET TEXAS SECEDE
Thursday 19 - 00:53
by David R. Hoffman, Legal Editor of Pravda.Ru
LAS TRES ERRES A LA ENÉSIMA POTENCIA.-
Monday 16 - 15:35
by FREDDY SUBDIAGA
DEMAGOGIA POPULISTA...
Monday 16 - 15:26
by FREDDY SUBDIAGA
Oligarchs Won’t Let You Vote Their Wars Away
Wednesday 11 - 20:24
by Daniel Patrick Welch
AN AMERICAN ORIGINAL: JOHN KERRY - FROM HIS REMARKABLE RECENT COMMENCEMENT ADDR
Monday 9 - 20:40
by JOHN CHUCKMAN
Donald Trump and Hillary Clinton support the American Republic Manifestum
Monday 9 - 16:37
by William Morgan
Transformation: A Student-Led Mass Political Movement
Monday 25 - 19:28
by William John Cox
Algerian Feminists react to ’Hijab Day’ in Paris 2016
Monday 25 - 01:13
THE ILLUSION OF RIGHTS
Friday 22 - 18:45
by JOHN CHUCKMAN
US is real superpredator pretending to be victim
Monday 18 - 22:23
by Daniel Patrick Welch
Gaiacomm International has accidently created a fusion reaction/ignition.
Sunday 17 - 17:01
by William Morgan
Clinton’s Campaign Continues to Highlight Horrible Hillary
Saturday 9 - 00:57
by Daniel Patrick Welch
Armoiries racistes à Harvard : Plaidoyer pour la réflexion socio-historique
Thursday 7 - 18:56
by Samuel Beaudoin Guzzo
THANK YOU MISSISSIPPI FOR YOUR HATE
Wednesday 6 - 02:02
by David R. Hoffman, Legal Editor of Pravda.Ru
The PKK in Iraq: “We are ready to fight ISIS everywhere in the world”
Monday 4 - 14:33
by InfoAut
Clinton Crashes and Burns, Sanders Will Win (But hold off on the applause)
Friday 1 - 22:33
by Daniel Patrick Welch
Confirming Supreme Court Justices and Electing Presidents
Friday 1 - 20:59
by William John Cox

home | webmaster



Follow-up of the site's activity
RSS Bellaciao En


rss FR / rss IT / rss ES



Bellaciao hosted by DRI

It is the responsibility of the intellectual to speak the truth and to expose lies. Noam Chomsky
Facebook Twitter Google+
DAZIBAO
I, European citizen, won’t let refugees be rejected in my name
Thursday 10 March
©Olivier Jobard/Myop I, European citizen, won’t let refugees be rejected in my name THE RIGHT TO ASYLUM IS A RIGHT In the phrase « right to asylum », every word matters. Under the law, every person who is persecuted because of his or her political opinions or because of his or her identity, every person that is endangered by violence, war or misery has a RIGHT to seek asylum in another country The aim of this petition is to collect (...)
read more...
Neo-Nazis and far-right protesters in Ukraine 3 live-stream
Friday 24 January
2 comments
The far-right in Ukraine are acting as the vanguard of a protest movement that is being reported as pro-democracy. The situation on the ground is not as simple as pro-EU and trade versus pro-Putin and Russian hegemony in the region. When US Senator John McCain dined with Ukraine’s opposition leaders in December, he shared a table and later a stage with the leader of the extreme far-right Svoboda party Oleh Tyahnybok. This is Oleh Tyahnybok, he has claimed a "Moscow-Jewish mafia" (...)
read more...
Hugo Chavez is dead (video live)
Wednesday 6 March
by : Collective BELLACIAO
1 comment
President Hugo Chavez companeros venezueliano died after a long battle with cancer.
read more...
International initiative to stop the war in Syria Yes to democracy, no to foreign intervention!
Thursday 13 December
Your support here: http://www.peaceinsyria.org/support.php We, the undersigned, who are part of an international civil society increasingly worried about the awful bloodshed of the Syrian people, are supporting a political initiative based on the results of a fact-finding mission which some of our colleagues undertook to Beirut and Damascus in September 2012. This initiative consists in calling for a delegation of highranking personalities and public figures to go to Syria in order to (...)
read more...
THE KU KLUX KLAN ONCE AGAIN CONTROLS INDIANA
Monday 12 November
by : David R. Hoffman, Legal Editor of Pravda.Ru
7 comments
At first glance, the results of America’s 2012 election appear to be a triumph for social, racial, and economic justice and progress in the United States: California voters passed a proposition requiring the rich to shoulder their fair share of the tax burden; Two states, Colorado and Washington, legalized the recreational use of marijuana, while Massachusetts approved the use of marijuana for medical purposes; Washington and two other states, Maine and Maryland, legalized same-sex (...)
read more...
I’VE DECIDED TO "WASTE" MY VOTE
Sunday 28 October
by : David R. Hoffman, Legal Editor of Pravda.Ru
In a 2004 episode of Comedy Central’s animated series South Park, an election was held to determine whether the new mascot for the town’s elementary school would be a “giant douche” or a “turd sandwich.” Confronted with these two equally unpalatable choices, one child, Stan Marsh, refused to vote at all, which resulted in his ostracization and subsequent banishment from the town. Although this satirical vulgarity was intended as a commentary on the two (...)
read more...
HIGHER EDUCATION IN AMERICA: DREAM OR NIGHTMARE? PART IV
Friday 28 September
by : David R. Hoffman, Legal Editor of Pravda.Ru
PART I PART II PART III If there is one major inconsistency in life, it is that young people who know little more than family, friends and school are suddenly, at the age of eighteen, supposed to decide what they want to do for the rest of their lives. Unfortunately, because of their limited life experiences, the illusions they have about certain occupations do not always comport to the realities. I discovered this the first time I went to college. About a year into my studies, I (...)
read more...
HIGHER EDUCATION IN AMERICA: DREAM OR NIGHTMARE? PART III
Friday 28 September
by : David R. Hoffman, Legal Editor of Pravda.Ru
PART I PART II PART IV Disillusioned with the machinations of so-called “traditional” colleges, I became an adjunct instructor at several “for-profit” colleges. Thanks largely to the power and pervasiveness of the Internet, “for-profit” colleges (hereinafter for-profits) have become a growing phenomenon in America. They have also been the subject of much political debate and the focus of a Frontline special entitled College Inc. Unlike traditional (...)
read more...
HIGHER EDUCATION IN AMERICA: DREAM OR NIGHTMARE? PART II
Friday 28 September
by : David R. Hoffman, Legal Editor of Pravda.Ru
PART I PART III PART IV Several years ago, a young lady came into the college where I was teaching to inquire about a full-time instructor’s position in the sociology department. She was advised that only adjunct positions were available. Her response was, “No thanks. Once an adjunct, always an adjunct.” Her words still echo in my mind. Even as colleges and universities raise their tuition costs, they are relying more and more on adjunct instructors. Adjuncts are (...)
read more...
HIGHER EDUCATION IN AMERICA: DREAM OR NIGHTMARE? PART I
Friday 28 September
by : David R. Hoffman, Legal Editor of Pravda.Ru
PART II PART III PART IV When The Bill of Rights was added to the United States Constitution over two hundred years ago, Americans were blessed with many rights considered to be “fundamental.” One conspicuously missing, however, was the right to an education. This was not surprising given the tenor of the times. America was primarily an agrarian culture, and education, especially higher education, was viewed as a privilege reserved for the children of the rich and (...)
read more...
ONE SOLITARY LIFE, PART TWO
Monday 30 July
by : David R. Hoffman, Legal Editor of Pravda.Ru
3 comments
If there is one universal question that haunts all human beings at some point in their lives, it is, “Why do we die?” Death, after all, is the great illogic. It ultimately claims all, the rich and the poor, the mighty and the small, the good and the evil. Death also has the capability to make most human pursuits—such as the quest for wealth, fame and power—vacuous and fleeting. Given this reality, I have often wondered why so many people are still willing to (...)
read more...
HOW MUCH CORRUPTION CAN DEMOCRACY ENDURE?
Thursday 28 June
by : David R. Hoffman, Legal Editor of Pravda.Ru
6 comments
How much corruption can a “democracy” endure before it ceases to be a democracy? If five venal, mendacious, duplicitous, amoral, biased and (dare I say it) satanic Supreme Court “justices”—John Roberts, Samuel Alito, Antonin Scalia, Clarence Thomas and Anthony Kennedy—have their way, America will soon find out. In several previous articles for Pravda.Ru, I have consistently warned how the Supreme Court’s 2010 Citizens United decision is one of the (...)
read more...
DEMOCRACY IN THE HANDS OF IDIOTS, PART TWO
Tuesday 12 June
by : David R. Hoffman, Legal Editor of Pravda.Ru
1 comment
Imagine, if you will, that the United States government passes a law banning advertisers from sponsoring commercials on Rush Limbaugh’s radio show or Rupert Murdoch’s Fox (Faux) “News” Network. On one hand, there would be two decided advantages to this ban: The National IQ would undoubtedly increase several percentage points, and manipulative pseudo-journalists would no longer be able to appeal to the basest instincts in human nature for ratings and profit while (...)
read more...
DEMOCRACY IN THE HANDS OF IDIOTS
Thursday 7 June
by : David R. Hoffman, Pravda.Ru Legal Editor
4 comments
LIVE, from the State that brought you Senator Joseph McCarthy, Wisconsin voters now proudly present, fresh from his recall election victory, Governor Scott Walker! At first glance, it is almost unfathomable that anyone with a modicum of intelligence would have voted to retain Scott Walker as Wisconsin’s governor. This, after all, is a man who openly declared he is trying to destroy the rights of workers through a “divide and conquer” strategy; who received 61% of the (...)
read more...
PEOPLE WITHOUT SOULS
Tuesday 13 March
by : David R. Hoffman, Legal Editor of Pravda.Ru
2 comments
A question I’ve frequently been asked since I began writing for Pravda.Ru in 2003 is, “Why did you become disillusioned with the practice of law?” This question is understandable, particularly since, in most people’s minds, being an attorney is synonymous with wealth and political power. I’ve always been reluctant to answer this question for fear it will discourage conscientious and ethical people from pursuing careers in the legal profession—a (...)
read more...