Is the Cockroach Theory at work yet?

wuzge, Donnerstag, 24.01.2008, 09:01 (vor 6580 Tagen) @ Burning_Heart

Turning our attention to Europe for a moment, we have
read the reports out of France this morning that Societe
Generale has discovered a fraud by one of its traders
which will shall cost the bank 4.9 billion EURs ($7.16
billion). The trader in question lost the money in mortgage
backed securities in unauthorised trades. For SocGen,
this is an example of "a billion here and a billion there," for
earlier this week the Bank had to announce
mark-to-market losses on its mortgage backed portfolio,
and this "rogue trader" loss is in addition to what had
been previously reported.
Our concern is this: Is the Cockroach Theory at work yet
again? That is, if SocGen had a rogue mortgage backed
trader, were there others either there or at other banks
that shall now come to the fore? SocGen is a long
standing and prized client of TGL, but we fear that the
Bank's recently announced intention to raise EUR 5.5
billion in new capital via stock or debt issuance shall not
be somewhat more problematic than it was. Investors
clearly shall be more suspect of SocGen's intentions and
its honesty. Given that all investment is a matter of
people's propensities to act, we have to believe that the
collective propensity to buy into SocGen's capital shall be
somewhat reduced in light of this shockingly large loss by
a rogue trader.

http://www.cfsfutures.com/images/E0067301/012408.pdf