I want to divide this topic into two parts where I’m going to talk about who I am and what the four horsemen of the apocalypse did.
As I said at the beginning, I want to talk about important issues that have changed the history of the economy in particular to open people’s eyes. To do this I have to increase the “pedaling cadence” and perhaps not everyone will be able to follow my arguments.
Here are the four horsemen of the apocalypse in order: Jerome Kerviel trader French, Henry Paulson (former) US finance minister, Richard Fuld (formerly) president of Lehman brothers bank and Bernard Madoff a high-level financier (in prison).
The four knights of the apocalypse exist in the Bible, in common they have the fact of embodying evil because when they come to Earth they devastate it, this is a metaphor to underline what happened in 2008 with the explosion of one of the world’s greatest crises.
I start with the first of the four horsemen of the Jerome Kerviel apocalypse. On 24 January 2008, the first bombshell arrived on the financial markets because the bank among the most important in the world Societé Générale claims to have been the victim of a €5 billion scam.
I remember very well that day because I saw a live broadcast when I was in France in particular when Société Générale accused Jerome Kerviel of speculation at the time he was only 32 years old.
First question: how did a single trader do it and I stress only one trader to lose all these billions of euros without anyone seeing anything?
It is impossible for a single trader to trade with huge sums of money without anyone in risk management realizing highly speculative positions in the markets. It’s like I’m hiding the Statue of Liberty from the people of New York without anyone noticing.
I repeat it is impossible for a trader to make transactions of billions of euros in a short time, in the trading rooms for those who do not know there are people who control the sums that traders invest and I assure you that after 30/40 minutes at most anyone in risk management would have noticed these speculations.
Perhaps “someone” was happy until Jerome Kerviel made money when he went into over trading losing billions the film’s ending changed and a culprit had to be found.
Another figure of the four horsemen of the apocalypse is Henry Paulson, the American Finance Minister under President George W. Bush, and I would like to remind you that this gentleman was CEO of Goldman Sachs.
Under his “control” the financial system risked crashing, Henry Paulson for some people was a kind of exterminator because he sacrificed a bank like Lehman Brothers (founded 150 years earlier).
The disaster began in 2007 when the subprime mortgage crisis broke out, at the time Lehman Brothers (like all other banks) invested billions in derivative and securitised instruments, making short speculations and taking ever larger risks that then became uncontrollable.
All the banks were involved in subprime mortgages and were close to bankruptcy, among the first at risk was Bear Stearns (remember Jim Cramer at Mad Money don’t be silly)which was collapsing, not to mention the 200 billion injected into Fannie Mac and Freddie Mae causing financial markets around the world to wobble.
Henry Paulson saved all the banks (with American money “pocket”) not to mention insurance giant Aig, except Lehman Brothers. Because?
I remember at a press conference Henry Paulson was talking about morals and example, like saying taxpayers’ money is precious and then what does he do? A few days later, he rescued Goldman Sachs, which was on the verge of bankruptcy.
What’s the truth Henry, couldn’t stand Richard Fuld? Or maybe because Lehman Brothers was Goldman Sachs’ #1 enemy?
It would be interesting to have answers since some “characters” like you have held important roles, unfortunately you have conditioned the economy around the world without thinking about how many people are poor or in poverty.
Not to mention how the financial markets have changed, today they are completely disconnected from reality, I am thinking, for example, of the intermarket analysis that should be rewritten.
In both 2008 and 2020, central banks continued to inject billions of dollars into financial markets and “little” into the real economy.
In the next chapter I will talk about the last two horsemen of the apocalypse Richard Fuld and Bernard Madoff.