Thursday, January 24, 2008

3 1/2 billion quid?????????????????

I once had a situation at work where I forward billed £350,000 into the last month of a year and reported 60% profit against it, fudged a bunch of WIP for the auditors and then feverishly spent the next 4 months of the next financial year trying to get jobs passed that would deliver that £175,000. The company was a nightmare to work for and stressed me beyond belief. Incidentally I sat on the board of that company with Michael Howard and Steven Norris (oops proabably shouldn't have said that should I). Now if you're Paul you can stop shaking your head now.

However, if you're Jean-Pierre Mustier of Societe Generale it's the kind of money you find down the back of a sofa when you're looking to pay the pools man.

3 and a half billion quid.

Just to put that into perspective that's 4 Wembley's... sorry bad example. How about 80% of the channel tunnel rail link errr. Oh I don't know how about if you put all of that in fivers end to end it would go to Mars and back. Errrr... it's a fuck of a lot of money isn't it.

Now by all accounts this bloke pulled a salary of less than £50K. In bank terms that's one above cleaner. So how did he get away with it? Well apparently it was a complex administrative fudge. But come on, surely someone must have twigged. When Nick Leeson blew just a quarter of that sum... i.e. one Wembley stadium, sorry I'll stop the silly analogies now... he was basically a lone man sat in a back office in Singapore. This guy did it in the Paris office of France's biggest bank.

Either Jean-Pierre is the worst scapegoat in history and tomorrow we'll find out that it was a systematic plot from board down or, the entire process at Societe Generale needs tearing to shreds and rebuilding from scratch, starting with a clear out of most of the back room staff.

It's a quite extraordinary tale of city excess and just seems so apt as we head towards recession, which in the weeks leading up to Christmas, just a month ago was denied by every financial bod I heard doing a review of 2008.

'Oh no, no, no we'll certainly see a slow down, but confidence is high and we'll bounce after Christmas' confidence is high my arse.

I only have one city friend who admits to needing the attention of Gamblers Anonymous. If a few more owned up and stopped pretending it wasn't a glorified bookies, we'd be better off.

7 comments:

Paul said...

Well said Six, my old boss used to say that in another era the people working in the City would have been bookies runners.

I love the opening paragraph btw, you sound exactly like a client of mine who I shall be seeing in a fortnight to discuss his work in progress. By the time the audit is signed off it's usually down to a realistic figure.

One of my sister in-laws has a cousin who works in futures, one Christmas he went round to her house saying he was feeling dreadful and that he was going to have a crap new year. When she asked why he said it was because he couldn't afford a Ferrari with his reduced bonus it would have to be a Porsche.

Span said...

hehehe...and how we laughed! I too have a cousin in NYC finance (right there on 9/11) and doesn't live too far away either...I'm not sure I'd know whether to trust him or not though! Yep that sure is a lot of money, I suspect we'll find that's a bit more too this story...rogue trader? They're all rogues!

Six Years Late said...

Thankfully, I'm not like that client of yours Paul, I was under immense pressure to deliver those numbers, I hated it. It happened at the end of every year and of course just got worse and worse because every time we did it, it put us back for the next year and compounded. The pressure was what pushed me to do my own thing in the end and run it all above board.

Span you're right they are all rogues, i'm not sure they all start out that way though, the system just turns them into rogues.

Lucy said...

My city aquaintance is selling his London buy to lets...
Well I have been predicting a property crash since 2000 so I had to be right one day, thing is I have actually changed my mind now. Bizzare I know, I just don't think it will crash. Maybe 7 years of being wrong has warped my judgement?
I've a hunch this guy is a scapegoat too.
Lucy

Les Paul Junior said...

Different sections of the population appear to live on different planets. Politicians, city traders, Newcastle fans, they all have their own versions of reality and, once in a while, the rest of us get a glimpse inside their little worlds. I usually end up shaking my head in bewildered pity, especially with the Newcastle fans.

lucy said...

January 25./
well I guess things have turned out 'pearshaped' in the fiancial world...
I wonder how long it will go on for.
Hows the job search btw?

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