Excuse me for posting a crow with that nasty eye. I just couldn’t find a more appropriate image for that occasion.
The photo of the crow was taken by my son while strolling through Montsouris Park in Paris.
Being a regular reader of Jon Taplin’s blog I reread once more the article from October 18, 2008 “Farewell, F**k Off and Pass the Bong” in the light of an event announced in today’s (October 20) on BBC and French TV 2 information media: “Troubled French bank boss resigns”.
In his blog, Jon Taplin cited an article from The Financial Times “Letter: Andrew Lahde, Lahde Capital Management” so I went to the source to check on it.
In his letter Andrew Lahde, the hedge fund manager says:
“I was in this game for the money. The low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of this behaviour supporting the Aristocracy only ended up making it easier for me to find people stupid enough to take the other side of my trades.”
The game is the stock exchange and, as it happens in every casino game, where there is a loser there must be a winner.
Our monetary system is collapsing and with it it’s dragging our economy towards a recession. As we hear only about the losers, ourselves included, it’s nice to hear that Andrew Lahde is one of some chosen winners that nobody wants to talk about. In this poker game he bet the opposite to AIG, Bear Stearns and Lehman Brothers.
I would suggest adding to the losers’ list at least two French Banks that lost in the game in a very transparent and neck breaking way. I wouldn’t dare to propose that if not of the grey mice from Montsouris Park in Paris that wished I did it for them.
The first candidate is a French bank la Société Générale (SocGen) with a loss of 5 billions Euros betting 50 billions Euros (more than the total value of the bank) and losing through the gamble just 10 percent: 5 billions Euros. Just to remind you that a trader Jérôme Kerviel was supposed to be behind that losing gamble.
The second candidate is a French mutual bank, Banque Populaire whose chairman Charles Milhaud accepted a full responsibility for the lost cash of 600 millions Euros through a "trading incident" (from BBC).
As no trader’s name (casino gambler) has been mentioned a bulk of responsibility was pushed towards “the exceptional volatility of the markets”. A nice trick for the street people, isn’t it?
For those who do not gamble on stock exchange a tiny note of explanation is necessary.
Volatility means an important and frequent change in the price of a banana juice.
What media do not say is that without that volatility the stock exchange would lose its “raison d’être”. With no risk at stake gamblers would never bet and go for another planet.
So, the argument of a “volatility” is no more an argument but a blurring of a financial chaos.
If I presume that the loss of 600 millions Euros is just a 10 per cent of the total value gambled, it gives 6 billions put on the table.
It must be close to the total value of the bank. Excuse if I’m slightly wrong. Just to give an idea.
Gambling the total value of a bank resembles an epidemic disease on the French soil.
By the way, with all my imagination at stake I can’t see how the boss of Banque Populaire, Charles Milhaud, could be responsible in the way described by his communiqué.
A more viable justification came to my mind while cleaning my kitchen’s oven when a cake got totally burnt inside of it. The attention of my wife was deviated by a TV show, and she was of right to forget about that damned cake. The TV set was not in the kitchen.
Let’s come back to the boss of Banque Populaire now. I suppose the chieftain was simply not where he was expected to be.
By the way, didn’t you see him over there?