“Rogue Trader” Takes Down UBS for $2 Billion

Talk about a major screw up! How is that if you are $.25 overdrawn the bank jumps all over your case…

And a 31 Year Old Trader with less than 5 years experience gets to play with billions of dollars unchecked?

It doesn’t appear (at least in what has been announced publicly so far) that this guy stole money – it may well be that he got nailed chasing a bad investment loss with increasingly risky (and thus higher paying) investments which didn’t work.

Rogue trades cost UBS $2bn

kweku adoboli

Kweku Adoboli

LONDON police have arrested Kweku Adoboli over alleged rogue trading that has cost Swiss banking giant UBS an estimated $US2 billion ($A1.95 billion).

Mr Adoboli, 31, worked in the bank’s exchange-traded funds business and was arrested yesterday.

Police, who declined to confirm the trader’s identity, said: ”A 31-year-old man was arrested at 3.30am in central London on suspicion of fraud by abuse of position. He remains in custody.”

Records from the City regulator suggest Mr Adoboli joined UBS as a trainee in March 2006. He was hired after studying at the University of Nottingham.

The Zurich-based bank suffered a near-10 per cent share-price fall after it revealed the loss could push it into the red this quarter. UBS, which dominates the Australian investment banking market, announced the loss just before the Swiss stock exchange opened.

UBS said it was still trying to get to the bottom of the matter, which was announced on the third anniversary of the collapse of Lehman Brothers.

It refused to elaborate but in an internal memo to staff, the executive committee of UBS revealed it only uncovered the incident on Wednesday.

”The matter is still being investigated, but UBS’s current estimate of the loss on the trades is in the range of $US2 billion,” UBS said.

”It is possible that this could lead UBS to report a loss for the third quarter of 2011.”

 

US Debt Rating Downgraded… Thanks, Tea Baggers!

Well – the Tea Baggers were successful in screwing the country after all. Look for your interest rates to rise on everything from your mortgage to the cost of a new car.

Tea Baggers Succeed in Sinking the Country

S&P Downgrades U.S. Debt Rating — Press Release

Standard & Poor’s took the unprecedented step of downgrading the U.S. government’s “AAA” sovereign credit rating Friday in a move that could send shock waves through global. The following is a press release from Standard & Poor’s:

– We have lowered our long-term sovereign credit rating on the United States of America to ‘AA+’ from ‘AAA’ and affirmed the ‘A-1+’ short-term rating.

– We have also removed both the short- and long-term ratings from CreditWatch negative.

– The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.

More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.

Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government’s debt dynamics any time soon.

– The outlook on the long-term rating is negative. We could lower the long-term rating to ‘AA’ within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.

What if the DOW Crashed… And Nobody Cared?

The DOW hasn’t been connected to any real economy in quite a while. Ergo, DOW up or DOW down, doesn’t have any impact on unemployment, jobs, or any of the day to day livelihood of the American people.

Perhaps it’s time to just let it go… poof.

Then perhaps whatever rises from the ashes will reconnect with the real economy.

Dow Plunges 280+ Points
US stocks plunged today—with the Dow Jones at times down more than 280 points—ahead of tomorrow’s monthly jobs report, after the government announced only limited improvement. Unemployment benefits claims fell by just 1,000 last week,MarketWatch reports. The Standard & Poor’s 500 index plunged 2.6%, bringing it 10%—the level considered to signal a market correction, notes the AP—below its April 29 high of 1,363.

The Dow has now dropped more than 1,000 points since July 21.”You’ve got a weak economy, the aversion of a debt crisis but not a solution, and you’ve got the rest of the globe starting to implode in a lot of areas, especially Europe,” one expert tells the Wall Street Journal. “It’s natural that people would react with fear.”

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