26-yr old credit derivatives trader posts 350MM+ loss

Mr. Now · #1 10-10-2007, 04:12 PM

...or so the employer (fund) claims.

This story is interesting across several fronts:

1. Same age range as typical reader of this forum
2. Is blamed for 350MM+ loss
3. Occurs at a time when the whole credit-derivative CDO thing is being swept under the rug in the press
4. Interesting tidbits on his life story

The Story:
Calyon Trader Fired for Losses Says He's No Rogue
http://bloomberg.com/apps/news?pid=2...amp;refer=home

housenuts · #2 10-10-2007, 07:12 PM

i'm going to read this because i'm 26 and interested in getting into trading.

#3 10-10-2007, 09:45 PM

gonebroke2 · #4 10-10-2007, 10:28 PM

[ QUOTE ]

3. Occurs at a time when the whole credit-derivative CDO thing is being swept under the rug in the press

[/ QUOTE ]

Excellent point. Everyone thinks that the derivate problem has been solved. The losses, IMHO, are going to be in the trillions. Add this 350M loss to the total.

ArturiusX · #5 10-10-2007, 10:33 PM

I really can't see how this can happen. Risk management is so tight in these large firms.

dazraf69 · #6 10-10-2007, 10:57 PM

[ QUOTE ]
Sounds like the bank lost a lot of money like nearly every other large financial institution, and used this poor kid as the skapegoat.

[/ QUOTE ]

He is an easy target. Unfortunate for him, his past is easily used here to discredit him.

pig4bill · #7 10-10-2007, 11:17 PM

Heh, Morgan Stanley lost $390 million in one day!

http://www.bloomberg.com/apps/news?p...d=aY4.Y24hPlxQ

eastbay · #8 10-11-2007, 12:21 AM

What's that, a half a percent of market cap? Is that significant?

eastbay

Phone Booth · #9 10-11-2007, 10:20 AM

[ QUOTE ]

What's that, a half a percent of market cap? Is that significant?

eastbay

[/ QUOTE ]

Consider that most financials are trading at 2+ times their book value. Half a percent of their market cap is likely more than 1 percent of their book value. And losing one percent of book value is indeed extremely significant.