Sometimes a vacation at the right time can save a career. Going on holiday just before 21st of January, I narrowly escaped the unwinding of Jerome Kerviel’s $73bn position, squaring off my positions just before 2008 became even more miserable for most traders.
Of all the people who got fooled by Kerviel, the silliest seems to be Ben Bernanke, who took a rogue trader’s position unwinding to be the final reckoning, and responded with a between-FOMC-meetings 75bp cut. He tried to brazen it out with another 50bp cut the next week, but he will now go down along with Arthur Burns as one of the stupidest Fed Chairmen ever. McCain or Clinton or Obama, please transfer this man to Guantanamo and water-board him. He has even made YV Reddy look bright in comparison.