| Financial Blogs Bear Witness to Misery
While most U.S. investors enjoyed a day off for Martin Luther King Day on Jan. 21, financial bloggers watched the markets tank in Asia and Europe, and braced for big damage when the U.S. stock market reopened for business the next day. Bespoke Investment Group's Think B.I.G. listed the drops in each of the 30 Dow stocks in pre-market trading on Jan. 22—and it wasn't pretty. To illustrate how bad it is for traders, Trader Mike posted a video of a young distraught fellow losing gobs of money. (Warning: The video contains abundant profanity.) Long or Short Capital's tips for "how to end it" might cheer him up—or maybe not. Over at 24/7 Wall St., Jon Ogg asserted that the Federal Reserve is "far behind the curve," and asked if the Fed would attempt to limit the damage by cutting rates before its scheduled meeting on Jan.
Five things about rogue traders
One of the world's major banks, Societe Generale, said Thursday that an employee lost more than $7 billion in a year of secret trading. The trader, Jerome Kerviel, had to circumvent at least five layers of risk-control systems as he matched each of his investments of the bank's money in European stock futures with fictitious ones, according to the Toronto Star. .
A retail fund's brutal new year
This bad: One hedge fund specializing in retail stocks booked an eye-popping 16 percent loss after the first three days of trading of 2008. The loss, at a Jefferies & Company (JEF) hedge fund, is proof that market woes go far beyond the well-known problems with mortgages and credit instruments. The fund, Jefferies Asset Management's Jefferies RTS Cayman Ltd., posted the 15.97 percent loss as of January 4, according to a hedge fund database published by Swiss Bank Syz & Co. The fund's relatively modest size - it manages $30 million, down from $50 million earlier last year, according to a former Jefferies trader - and narrow focus on retail equities probably worked against it, when the sector was walloped after holiday sales capped off a weak year in the retail sector.
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