The European markets are rocking, but it takes a $7.3 billion dollar loss by a single SocGen trader in European stock futures to help them along. The idea is now that smug Trichet of the ECB will have to backpedal on his decision not to cut rates.
Lost in this news, was the exposure by SocGen of $525 million to both AmBac and MBIA, and $325 million to FGIC in counter party exposure from which they "hedged" their AAA asset wrapped securities.
It also calls into SocGen's risk management procedures. I hardly believe that is was just one rogue trader with a "get a hunch bet a bunch" predisposition, that SocGen wants the world to believe, but that's the party line.
Leeson has now been upstaged!