Why Lose Millions When We Can Lose Billions?

So some trader at Societe General loses a cool $7 billion. The big question is why, I mean he was apparently in some salaried position.

Trying to impress his boss? Trying to impress our favorite French anchorwoman? Guess we'll never know.

Sight unseen, these "rogue" losses are always the same. Trader makes bet, bet goes bad, trader fakes trades and doubles and doubles in order to make back the loss. Overseas blogger uses whole mess as excuse to post Melissa picture.

Finally it gets too big and the firm is forced to cover and come clean and produce some sort of bogus internal investigation to satisfy the authorities that it will never happen again.

It also makes you wonder how many times a trader goes through this cycle and is able to hold off long enough until the market moves in his direction and bails him out. Probably hundreds/thousands/millions of times for every one that comes to light.

But here's an amazing byproduct of this particular one, courtesy of Barry (hat tip to Roger)

...it took only 2 days to learn just how ill-considered the Fed's emergency market rescue plan was: To wit, a fraudulent series of losses led to a major European bank unwinding a huge trade: Societe Generale Reports EU4.9 Billion Trading Loss.
SG's $7.1Billion dollar unwinding led to panicked futures selling on Monday and Tuesday.

Hence, we quickly learn what sheer folly and utter irresponsibility it is for the Fed to use its limited ammunition to intervene in equity prices. Their panicky rate cute were not to insure the smooth functioning of the markets, but rather, to guarantee prices.

Yes ladies and gentlemen, your 2008 Fed. Instead of supplying them with all sorts of studies and economic reports and predictive models, why don't we just provide them with a stock futures feed?