Jan. 24 (Bloomberg) -- Societe Generale SA said unauthorized bets on stock index futures by an unidentified employee caused a 4.9 billion-euro ($7.2 billion) trading loss, the largest in banking history.
France's second-largest bank by market value plans to raise 5.5 billion euros from investors after the trading loss and subprime-related writedowns depleted capital, the Paris-based company said today. The Bank of France, the country's banking regulator, said it's investigating the situation.
Hmmm. What if some of the turmoil in European markets on Monday was caused by BNP unwinding this rogue traders bets? Did Bernanke panic and cut rates because one rogue trader made some bad bets in the market? What if those jobless claims numbers mean the economy is fine? Bernanke may have to take back those cuts sooner than anyone expects.