Feb 8, 2008

Friday, February 8, 2008

YouTube - Rogue Traders Moussa Bakir & Jerome Kerviel SocGen

YouTube - Rogue Traders Moussa Bakir & Jerome Kerviel SocGen

Fraud investigators were last night questioning a second French trader, suspected of helping, or at least covering up, the activities of , Jérôme Kerviel, the alleged €5bn (£3.7bn) man. The unexpected development influenced a decision by the Paris appeal court last night to reverse a previous ruling and to place M. Kerviel in custody for a second time.

The new arrest follows the discovery of an electronic message, sent last November, in which a fellow trader assured M. Kerviel that he had "done nothing illegal, as far as the law is concerned". The man who sent the message, Moussa Bakir, 32, worked for a brokerage company called Fimat, which was a subsidiary at that time of M. Kerviel's employer, Société Gé*érale. This company acted as the middleman in part of the €50bn tangle of unauthorised trades on European shares futures undertaken by M. Kerviel, 31, over the past 18 months.

Until now both SocGen and M. Kerviel have insisted that he acted alone in the immense gambles which lost the bank €4.82bn, the highest-ever losses by an unauthorised single trader. The arrest of M. Bakir on Thursday followed the disclosure to fraud investigators by SocGen of transcripts of internal, instant electronic messages, or "chat", including conversations between the two men.

A lawyer representing M. Bakir said last night that he was "entirely serene" about his client's role in the affair. He suggested the arrest had been timed to influence an appeal court hearing in Paris yesterday in which prosecutors attempted to reverse a decision by investigating magistrates to free M. Kerviel.

Prosecutors asked for M. Kerviel to be returned to custody for several reasons, including the risk that he might contact possible accomplices. The appeal court ruled last night in their favour after a hearing behind closed doors.

Jean-David Scemama, the lawyer representing M. Bakir, said: "I am entirely serene about his prospects. My serenity is based on the facts, as reported to me." M. Scemama said, however, that he was "astonished" by the "coincidence" between the arrest and yesterday's appeal court hearing.

M. Bakir works for Fimat, a brokerage company, which was a subsidiary of SocGen until last month. It has now merged with another company, belonging to another French bank and changed its name to Newedge.

Internal instant emails between the two traders, traced by SocGen, include a message on 30 November last year in which M. Bakir reassured M. Kerviel: "Tu *'as rien fait d'illégal au sens de la loi." (You have done nothing illegal, as far as the law is concerned.)

This implies -- but does not prove -- that he was aware that M. Kerviel was making unauthorised trades. It does not necessarily suggest that he was helping, or benefiting from, his activities.

Market experts have questioned from the beginning whether it would have been possible for M. Kerviel to make such huge, unauthorised trades without the help of an internal, or external, accomplice.

SocGen is said to have discovered the electronic messages on Wednesday and handed transcripts to investigators. Police arrested M. Bakir on Thursday and then searched the Fimat office in the centre of Paris for many hours. M. Bakir's arrest warrant was extended for a second day at lunchtime yesterday.

M. Kerviel arrived for yesterday's appeal court hearing in his lawyer's car and entered the Palais de Justice on the Ile de Cité in central Paris without talking to the press. It was his first public appearance since the scandal broke two weeks ago, apart from an interview with the Agence France-Presse news agency on Tuesday.

In the interview, M. Kerviel admitted that he had "lost touch with reality" and lost track of the huge sums involved in his unauthorised trades. He added, however, that he would not let SocGen make him the sole "scapegoat" for the scandal. He had earlier told investigators that the bank knew that unauthorised trading was widespread but turned a "blind eye" as long as profits were being made.

M. Kerviel is under formal investigation for abuse of trust, forgery and computer hacking.

Moussa Bakir

Moussa Bakir

Moussa Bakir - Rogue Trader SocGen

Citing unnamed sources at SocGen, the newspaper said the bank discovered "chat" messages between Kerviel and Bakir in its computer system, including one last Nov. 30 in which Bakir told Kerviel, "You haven't done anything illegal in terms of the law."

SocGen also turned over records of calls made on Kerviel's company-issued mobile phone, Le Monde reported. It said investigators were suspicious because Kerviel's monthly bill was nearly $1,500.

Fimat was established by SocGen in 1986 and grew rapidly to become the global No. 1 futures broker. In January of this year, the company changed its name to Newedge after Crédit Agricole's Calyon unit took a 50% stake in the venture. The brokerage's clients are mainly large institutional investors and hedge funds.

FT.com / Mergermarket - Kerviel held as police detain second trader

Rogue Trader - Kerviel detained w/second trader

The trader, Moussa Bakir, is an employee of Newedge, a broking firm partly owned by SocGen. Police on Thursday raided the firm’s Champs Elysées offices and confiscated Mr Bakir’s computer and hard drive.

Also Friday Jérôme Kerviel, the man accused of building up unauthorised positions on three European markets totalling €50bn, was taken into custody when a judge ruled he should be held in prison while the investigation continues.

Liars Loans: Financial Crisis: Asset Securitization-- The Last Tango

Financial Crisis: Asset Securitization-- The Last Tango

"Liars Loans"

The entire securitization revolution allowed banks to move assets off their books into unregulated opaque vehicles. They sold the mortgages at a discount to underwriters such as Merrill Lynch, Bear Stearns, Citigroup, and similar financial securitizers. They then in turn sold the mortgage collateral to their own separate Special Investment Vehicle or SIV as they were known. The attraction of a stand-alone SIV was that they and their potential losses were theoretically at least, isolated from the main underwriting bank. Should things ever, God forbid, run amok with the various Asset Backed Securities held by the SIV, only the SIV would suffer, not Citigroup or Merrill Lynch.

The dubious revenue streams from sub-prime mortgages and similar low quality loans, once bundled into the new Collateralized Mortgage Obligations or similar securities, then often got an injection of Monoline insurance, a kind of financial Viagra for junk quality mortgages such as the NINA (No Income, No Assets) or "Liars’ Loans," or so-called stated-income loans, that were commonplace during the colossal Greenspan Real Estate economy up until July 2007.

According to the Mortgage Brokers’ Association for Responsible Lending, a consumer protection group, by 2006 Liars’ Loans were a staggering 62% of all USA mortgage originations. In one independent sampling audit of stated-income mortgage loans in Virginia in 2006, the auditors found, based on IRS records that almost 60% of the stated-income loans were exaggerated by more than 50%. Those stated-income chickens are now coming home to roost or far worse. The default rates on those Liars’ Loans, which is now sweeping across the entire US real estate market, makes the waste problems of Tyson Foods factory chicken farms look like a wonderland.

- 1 lie becomes another and another....................
-st0ckman

Childhood Vaccinations Hoax - Not Effective and at Worst, Harmful

Childhood Vaccinations Hoax - Not Effective and at Worst, Harmful

It's gone so far now that, as has been so well documented on NaturalNews, parents are threatened with prison, and their children are forced to get vaccinations at gunpoint (http://www.NaturalNews.com/021572.html) . Medical tyranny in Texas turns teenage girls into HPV vaccination profit centers.

The reality, as documented by the American Medical Association's own journal (JAMA) in the January 1999 issue, is that there is no connection between death from infectious diseases and vaccinations; that's right, "none".

YouTube - Big Pharmaceuticals Funding Democrat & Republican Parties

More Mortgage Fraud From Economic Stimulus Plan

More Mortgage Fraud From Economic Stimulus Plan

"Increasing Fannie's limit is like going on a spending spree with your credit cards because you know you are going to file for bankruptcy in a few months. Only here the taxpayer is left holding the bag. Our children will pay interest on this debt in perpetuity. It is our debt. It is inescapable. In the coming months, Fannie and Freddie will buy up mortgages based on old, fraudulent appraisals. Many of these loans will still default. Brace yourself for another wave of faxes, phone calls and junk mail urging you to refinance at only 1 percent. With zero new regulation, the same bad actors that caused this crisis can once again ... begin a new cycle of fraud." -- San Francisco Chronicle, 2/3/08

As part of the bill, Congress is set to rush through an increase in the mortgage loan limits for Fannie Mae and Freddie Mac (and Federal Housing Administration insurance, too) - from $417,000 to $729,750 - the first step toward a massive financial disaster in which taxpayers will end up paying through the nose.

Now, thanks to Congress, junk bond investors will be able to pawn off their bad debt to Fannie and Freddie, instead of suing the big investment houses for ripping them off. This shift will certainly doom Fannie Mae and Freddie Mac, so don't be surprised if we, the taxpayers, have to bail out poor Fannie and Freddie - to the tune of more than $1 trillion.

Expansion of Fannie and Freddie's reckless lending is exactly what Congress wants because it's plausibly deniable. Teary-eyed lawmakers can take to the airwaves a year from now and declare: "We had no idea Fannie could go under, but we can't cut and run now

This shortsighted plan poses a terrible risk to every American taxpayer, especially retirees, because Social Security money will be needed to bail out Fannie and Freddie.

Several months ago, economist Nouriel Roubini of New York University's Stern School of Business suggested that the housing market has been effectively nationalized. At first it seemed crazy, but now it's fairly obvious. In August alone, Fannie and Freddie increased their loan portfolios by $62 billion, and the Federal Home Loan Bank by $110 billion. That total of $172 billion would come to just over $2 trillion annually - not much less than the entire federal budget.

-may God help us all! -st0ckman