SocGen's Kerviel Charged With Attempted Fraud (Bloomberg)
Jerome Kerviel didn't flee. He's in custody and now they've formerly slapped him with charges, the most serious of which, abuse of trust, could carry a seven year jail term and 750,000 eur fine. But although he didn't book it to Tahiti, Kerviel isn't taking the charges lying down. It sounds like his lawyers plan to make a vigorous defense, which is cool. His lawyer claim that the whole thing is a charade, designed to conceal losses elsewhere. Until he's proven guilty, we'll presume him innocent and we can only hope for a long, dramatic trial which gives us deeper insight into the bank and the world of a rogue trader, if indeed he is one.
Countrywide's Mozilo Forgoing $37.5M (AP)
There's a reason they call him "Honest" Angelo Mozilo. The Countrywide CEO has agreed to give up $37.5 million in severance pay, considering the troubles that this company is going through. And you thought it was because he looked like a used car salesman. Hogwash. Among the perks he's giving up is access to the company's private plane. Some day he'll be waiting on a tarmac for five hours and start regretting that one.
Sears Holdings Names W. Bruce Johnson Interim CEO
Sears says its CEO Aylwin B. Lewis is stepping down immediately and will be replaced on an interim basis by W. Bruce Johnson, who joined K-Mart in 2003. Interestingly enough, Johnson actually has a real retail background, which is a sign of the company's acknowledgment that Sears, sadly, remains first and foremost a store where people buy stuff. Of course he's just the interim, so we'll see where they go with the position.
Shares End Sharply Lower; Nippon Steel Weighs on Tokyo (WSJ)
Another ugly day internationally, as stocks across Asia fell sharply while you were sleeping. Shanghai was down 7.2 percent, while Japan fell by nearly 4 percent. Hong Kong also lost over 4 percent. The big loser in Japan was Nippon Steel, which warned of weak US demand in its latest quarter.
Hitch Your Wagon to a Rate Cut? (WSJ)
Why, just maybe, rate cuts won't save us this time.
Paulson’s Deal-Making Revives Treasury’s Relevance (NYT)
So it's times like these, apparently, when the Treasury actually serves a purpose. Most of the time, they don't do anything but talk and advise and jawbone and jibber-jabber and sometimes make comments about the (mis)-direction of the Dollar. But when the world begins to crater, they rise into action, like Superman emerging from a phonebooth. They get corporate leaders sitting around a table or they get Republicans and Democrats to agree to spit out some cash -- must be tough to get politicians to part with cash that isn't theirs of course. So while we sometimes forget why this position exists, now we're reminded.
In January, Record Number of I.P.O.’s Are Pulled (Bloomberg via Dealbook)
Sometimes the "Market Conditions excuse has some validity to it. January, a rough month for stocks, proved to be quite the rough month for IPOs as well, as a record number were pulled. Among the casualties: clothier Tommy Hilfiger, currently owned by PE firm Apax.
French police hold SocGen trader (FT via Felix Salmon)
Felix through out the suggestion the other day that Kerviel may have only lost 1.5 billion eur and that it was SocGen, who, in their panic, lost the other two thirds, in part because they had the misfortune of selling on such a horrible day and partly because they panicked. Apparently some others believe the same thing, including an unknown rival banking executive, who also pegged Kerviel's own loss at 1.5 billion eur. Hard to say what all this means, so hopefully more details will come out at trial.