The current financial situation

RP · January 24, 2008

French Bank Soc Gen made huge losses (approx EUR 5 billion) in equity derivatives, it was discovered at the end of last week and investigated over the weekend. They liquidated the rogue positions as soon as possible, i.e. on Monday. (Looks like fraud - a Trader "doing a bit of a Leeson".)

This was a major cause of the huge sell-off in European markets on Monday.

On the same day, a US Holiday, the Fed reacted to equity market turbulence in what some think was a panic-move and cut the Fed Funds rate by 75 basis points.

Maybe things aren't/weren't actually as bad as they at first appeared????

Maybe interest rates won't be reduced as quickly/aggressively in Europe and the UK as may have been expected after the Fed's actions on Monday???

Huge fraud at Soc Gen

vish · January 24, 2008

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