The Week Unpeeled
The week’s business headlines were dominated by a rogue trader and Euro bank news, with UBS announcing that London employee Kweku Adoboli allegedly lost $2 billion of its money from its Delta One desk, the same type of operation from where Jerome Kerviel of Societe Generale lost $6.8 billion in 2008. The news immediately raised concerns from investors and regulators about the safety and risk management of the Swiss Bank and whether the only delta that should take place is in the processes in overseeing these operations. No doubt many headlines to come, especially since the trading took place among the fast-growing world of exchange traded funds. Elsewhere:
- Central banks from the US, Japan, Switzerland and Europe said they would coordinate efforts to provide dollars to Euro banks to fund operations through the end of the year;
- John Mack said he would step down from as chairman of the Morgan Stanley board by the end of the year;
- Bank of America announced plans to cut 30,000 jobs as part of a $5-billion cost-reduction plan;
- Tech Crunch’s Michael Arrington and AOL defriended and delinked amid controversy that Arrington had started CrunchFund, which was launched to invest in tech startups similar to the ones covered by the blog;
- Scientists discovered a planet that circles two stars and another 74 exoplanets, a supposed big deal among astronomers; and
- Stocks rose five days in a row last week to end their second best week of the year, with the Dow up nearly 5% to close at 11,509.