A lot of people are acting all shocked and dismayed over the little slip-up that happened at Credit Suisse. Saying they can believe something like this would happen over at Bear, where Jimmy Cayne spends all the money on chips and forgets to leave an IOU, and UBS, where God retroactively punishes, and Citi, where you've got eight people sharing one chair and nobody can even hear themselves think, but not at CS. Bad things don't happen to good people and bad things like multi-billion dollar mistakes certainly don't happen to good people who live within 200 feet of the Shake Shack. I've got news for those of you failing to "get" how Credit Suisse could suddenly come up with this gigantic fuck-up, worthy of even Citigroup's praise, when just last week Brady Dougan told reporters everything was cool-- there never was any "error." Well, never any error that D-gan didn't orchestrate himself.
And no, I'm not talking about fraud. Let's leave that up to Goldman, the professionals. Listen to D-gan's wording from yesterday's call: he defends the bank's controls, saying it was a "very good sign" the "errors" were caught "rapidly, and...by our internal processes.'' You can almost see him cocking his eyebrow slightly, just ever so slightly, too, can't you? That's because he's got a secret-- this whole thing was a drill. Not a joke, a drill. Dougan wanted to test the controls in real-time; make sure everything was up to code. Two something billion dollars was sacrificed now so that twenty something billion dollars doesn't have to be sacrificed later. Don't believe us? That's fine, you're entitled to your own (woefully misguided) opinion, and we know you'll come around eventually. Get into my head and it'll make sense. In the meantime, I challenge you all to come up with a more plausible explanation for what happened. It's an impossible task but nonetheless, the best answer wins lunch at the SS, on Carney.
Credit Suisse Suspends Traders After Mispricings [DealBook]
Dougan's Assurance of Shareholder `Comfort' Proves Immaterial [Bloomberg]
Posted by EE, Feb 20, 2008 10:39AM
someone forgot to carry the 1