Here’s a job listed on Bloomberg for Delta 1 Traders — the exact same position Jérôme Kerviel held at SG.
It was posted in Paris on January 15 — a week before the public disclosure. And, I just verified that this was really on Bloomberg — I had my my trader pull it off of his terminal. Its still there as of 3:30pm 1.25.08.
Was this an advert for a Soc-Gen position? Did they know about the mess earlier than they let on? Were they looking to replace Jérôme Kerviel 10 days ago?
Oh, and one last thing: those of you who may need a new trader, Jérôme Kerviel’s resume is here
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Hat tip: Macroman
There are two central questions in the case of Jérôme Kerviel and Société Générale. What was the precise nature of his position? And does it explain the sharp decline in European equities between January 21 and 23? The best assessment is as follows.
Mr Kerviel’s supposed job was to arbitrage small discrepancies between equity derivatives and cash equity prices. However, starting on January 7, Mr Kerviel made a series of bets that Germany’s Dax index, the French Cac40, and the Euro Stoxx 50 would rise. He bought futures contracts, as normal, but did not hedge against market falls. (Hedging would usually involve selling the underlying shares, or over-the-counter derivative contracts with clients.)
Eleven days later, internal controls finally identified suspicious activity. By then the Euro Stoxx 50 had fallen by a cumulative 7 per cent, and the position had generated, SocGen has indicated, a loss of between €1.5bn and €2bn. This implies Mr Kerviel had taken a notional long exposure of €21-€29bn. The margin payments on this position might have been more than €1bn. This sounds too big to avoid detection, but may have seemed normal given the desk’s legitimate activity of very high volume and low- risk trades.
On Monday, a shaken SocGen began to liquidate the position over three days, bringing its total loss to €4.9bn. Did it move the market? Over the period the total value of trading in index futures and the cash market for the Euro Stoxx 50 was €544bn. That suggests the unwinding of Mr Kerviel’s rogue position accounted for 5 per cent or less of activity. Clearly a determined seller does not go unnoticed by traders in a jittery market. But it seems likely that the main explanation for the market rout in Europe was earlier sharp declines in Asia, general concerns over the US economy and specific worries about the monoline insurance crisis. One man damaged SocGen severely but it seems unlikely that he moved global equity markets significantly.
At the bottom of his resume it mentions that he enjoys sailing. I imagine that he is on his boat somewhere in the Atlantic Ocean, hoping to escape the madness he created.
Thanks Barry!
Well, if I had been on the Delta One desk, I would have started selling or shorting in Asia on Sunday night, before the euro markets opened.
But I’m more of a Delta Nine man myself … as in tetrahydrocannibinol. LOL.
Still kind of amazing how a guy who made $145,000 a year can lose over $7 billion… give him style points though for blowing right past $70 million or $700 million… I’m guessing he would find NBC’s “Deal or No Deal” boring…
It’s amazing, if SG had waited 2 hours after Fed interest rate cut, they’d be in profit.
Another man’s loss is another’s man profit…. where is that profit?
There is more to this than meets the eye.
Updated job listing will ask for strong financial engineering or book cooking experience.
Have a good weekend everyone.
how do we know this was soc gen?
Maybe this was just a way for the bank to hide its sub-prime losses and use the “rogue trader” as a scapegoat.
Hi, question related to traders- I saw the ad for delta 1- how does one actually become a trader? to get into that career what are the best steps..any websites that post jobs for traders? Thanks
The stuff I have read said the trader in question was ‘responsible for hedging the banks warrant book.’
I would quote the source but I read it on Thompson-One and can’t remember the report.
As I’ve been saying there is more to this story. I wont float any more conspiracy theories but I’ve yet to meet or hear of a trader with a credit line of any where close to what this guy was playing with. If we’re talking about $20b thats equal to the credit line of a whole room full of traders on Wall St.!
The stuff I have read said the trader in question was ‘responsible for hedging the banks warrant book.’
I would quote the source but I read it on Thompson-One and can’t remember the report.
As I’ve been saying there is more to this story. I wont float any more conspiracy theories but I’ve yet to meet or hear of a trader with a credit line of any where close to what this guy was playing with. If we’re talking about $20b thats equal to the credit line of a whole room full of traders on Wall St.!
Dear Sir —
I am interested in the job you posted. While my credentials might not be the most stellar you will receive, I would like to be very upfront about the fact that I will work for $70K/year. In addition, I am certain I would lose no more than, say, $1 billion in any given year.
Think about it! A trader who costs less and would have left you six billion less in the hole than you are now. Plus, I am a lot better looking than Jerome Kerviel and if you are going to have someone representing “the face” of Soc Gen on A1 of the WSJ it should be someone who does not look like a squinting trout.
Thanks for your consideration.
I’ve been thinking about getting into trading too. I was fired last week at the seven eleven for something a bit similar – I went short on stacking the big gulp cups, and it made my boss all pissy and everything. But it only cost the store about $1.25 in lost business, unless the boss has another bypass – boy did his face get red. LOL!
So seriously, I’m looking for a new position. I’m totally ace with computer systems? Like, I have so stacked up on the magic wands in Super Mario 3, so I’d be just right for Société Générale. Of course, I’d expect a tryout. Maybe they could give me like 4 billion euros to start with, and if they’d explained what options are, dude, I’d be on it! It sounds like that was their mistake with Kerville dude. He probably thought he was picking up magic wands. LOL! It doesn’t sound too hard, and I really like the easy supervision atmosphere. I hate having some bitch sticking his nose in your business. Sounds like you get a lot of time on your own. I do hope they have a good kitchen, like with a microwave and everything, for break. On the whole, I think I’m like so much the dude these french dudes should be looking for! And it would be awesome owning or whatever 45 billion options or whatever, even if it wasn’t really mine or whatever. My girlfriend would be so psyched!
So I’d love this job, if somebody will call me from Société Générale, if they are reading this.
Ben, I’m counting on that 50 to 75 bps cut next week. Don’t let me down, a new Bentley is all I’m asking for this year!!
Suge aka “Your Boy”
Just to note: some French dame (his lawyer) is saying that Kerviel is NOT on the run.
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Mr. Kerviel’s whereabouts was unknown, with the bank saying he was missing. But a woman identifying herself as his lawyer told French television Thursday night that “he is not on the run” and that Mr. Kerviel was willing to speak to authorities.
SocGen’s Story Raises More Questions Than Answers
Oh yeah, and the Bear market is now dead. Cover those shorts people…
Rutters headline of the day.
Mystery French Trader Turns Out To Be Missing Patriots Quarterback Tom Brady
Then there is the one about the dyslexic French trader who thought the message said: Guy Bold.
January 15th? Is it possible he got wind of his being canned, and decided to stick it to his soon to be former employer as a flip of the bird out the door?
How long would it take to have set up all these bad trades?
January 15th? Is it possible he got wind of his being canned, and decided to stick it to his soon to be former employer as a flip of the bird out the door?
How long would it take to have set up all these bad trades?
You know, when everybody is a liar, you have a henhouse with no chickens which is full of foxes. Caos breeds more caos until prosperity and capital are destroyed leaving abject poverty and stable starvation.
It seems humanity just can’t rid itself of this cycle.
It is a riddle, wrapped in a mystery, inside an enigma.
Suge..I’ll hook you up with some more of that sweet sweet action next week, brother.
Maybe one of the 2000 laid-off Goldman employees will get a new job….
What kind of engineering education offers what they are looking for? Engineering $7 billion losses…engineering worldwide selloffs…engineering the disgrace of the Fed…
I don’t think they offered any of that at Virginia Tech. Or maybe I was too busy taking Intro to Film and Wines & Vines.
an 24, 2008 (A. M. Best via COMTEX) — MBI | news | PowerRating | PR Charts — Massachusetts Secretary of the Commonwealth William F. Galvin issued subpoenas to municipal-bond insurers MBIA Inc. and Ambac Financial Group Inc., seeking documentation of whether they properly informed communities and investors in the state of their exposure to collateralized debt obligations and other vulnerable securities.
Galvin requested a list of all Massachusetts public issuer bonds issued since January 2006 for which the companies have insured repayment of principal or interest, and all documentation and disclosure associated with those bonds, by Feb. 1,
Massachusetts Secretary of the Commonwealth William F. Galvin issued subpoenas to municipal-bond insurers MBIA Inc. and Ambac Financial Group Inc., seeking documentation of whether they properly informed communities and investors in the state of their exposure to collateralized debt obligations and other vulnerable securities.
Next thing you know, he’ll be defending gay marriage …
Bernanke, your boy Suge here once again. I’m counting on that 50 to 75 bps cut, don’t let me down. I hope today’s market action is a bear trap and is all part of the plan to bring the Dow to 15,000 this summer, Nasdaq 3,000 would be nice also. Your boy Suge needs a new Bentley!!
Suge aka “Your boy”
joke going around
Subject: Sócíété Générálé TRADER WAS FORCED TO WORK 30 HOURS A WEEK
FRIENDS of rogue trader Jerome Kerviel last night blamed his $7 billion losses on unbearable levels of stress brought on by a punishing 30 hour week.
Kerviel was known to start work as early as nine in the morning and still be at his desk at five or even five-thirty, often with just an hour and a half for lunch.
One colleague said: “He was, how you say, une workaholique. I have a family and a mistress so I would leave the office at around 2pm at the latest, if I wasn’t on strike.
“But Jerome was tied to that desk. One day I came back to the office at 3pm because I had forgotten my stupid little hat and there he was, fast asleep on the photocopier.
“I remembered he had been working for almost six hours.”
As the losses mounted, Kerviel tried to conceal his bad trades by covering them with an intense red wine sauce, later switching to delicate pastry horns.
At one point he managed to dispose of dozens of transactions by hiding them inside vol-au-vent cases and staging a fake reception.
Last night a spokesman for Sócíété Générálé denied that Kerviel was over worked, insisting he lost the money after betting that the French were about to stop being rude, lazy, arrogant
I’ve got to get Visual Basic
I had no idea it is so powerful a learning tool / operating system
Can anyone please explain me, what is Delta one? thank you