French rogue trader recalls 'banking orgy' in tell-all book

PARIS (AFP) - – One month before he goes on trial, former French trader Jerome Kerviel is making his case in a tell-all book that likens trading to prostitution and hits out at the "big banking orgy."

Now an employee at a computer firm outside Paris, Kerviel depicts himself as a scapegoat of an out-of-control banking world in "L'Engrenage: Memoires d'un trader" (The Spiral: Memoirs of a Trader) that hits bookshops on Wednesday.

The 33-year-old ex-trader at Societe Generale bank describes the money-crazed atmosphere of trading rooms where managers congratulate top earners at the end of the day by comparing them to prostitutes.

"Bravo, you have been a good hooker today," is what bank managers would tell Kerviel on most nights, the ex-trader wrote in the book, excerpts of which have been released in the French press.

"In this big banking orgy, traders have the right to the same consideration afforded to any low-level prostitute: a quick recognition that the day's earnings were good."

Kerviel goes on trial on June 8, accused of gambling away billions of euros of SocGen's money in risky dealings that ended up costing the French bank 4.9 billion euros (6.5 billion dollars) in losses.

The former trader faces a maximum sentence of five years in prison and a fine of 375,000 euros if convicted on charges of breach of trust, falsifying and using fake documents and tampering with computer information.

One of France's three biggest banks, Societe Generale shocked the financial world when it revealed in January 2008 that it had been forced to unwind more than 50 billion euros of unauthorised deals Kerviel is said to have made.

The former trader has long maintained that his bank managers knew of his dealings and turned a blind eye as long as he was making a profit.

"I am just a man who made mistakes as an employee of a bank that for a long time allowed such errors, because they yielded a profit," he wrote.

In a series of interviews to promote his book, Kerviel has pointed to the global financial crisis as vindication, arguing that it shows how banks encourage traders to take reckless risks.

"I am struck by the fact that nothing has been done during the past two years of the financial crisis so that the causes of the crisis are addressed and a situation like mine does not happen again," he told Le Journal du Dimanche weekly.

"Banks work in a virtual world. There are financial products that are so complex that only one or two people understand how they work. Who controls these people?" he asked.

Since the Kerviel affair, attention has turned to another French trader, 31-year-old Fabrice Tourre from Goldman Sachs, dubbed "Fabulous Fab", who has been charged with fraud by the US Securities and Exchange Commission.

Tourre is accused of concocting some of the "Frankenstein products" that led to the 2008-2009 financial meltdown.

Following his arrest, Kerviel was released from jail pending trial and has sought to build a life far removed from the high-rollers of finance and the media.

He found a job in a computer firm, earns 2,300 euros a month, lives in a small flat and claims he never goes on holidays.

"I thought I was invulnerable," Kerviel wrote of his time at the SocGen trading desk. "The truth about how I made my earnings was an open secret."

Kerviel's trial winds up on June 23 and a verdict is expected soon after.

The Greeks' debts a lesson on corruption

By Kathy Fong, The Edge

IF someone wants to get a driving licence or a building permit, all that he or she needs to do is to fill a little envelope with some money and give it to an officer to smoothen the process.

A filled envelope can work wonders: businessmen could win bids for public contracts or hire lowly paid illegal workers.

Does this sound familiar? However, this isn't what goes on anywhere near home.

This is about the day-to-day life in Greece, which has slipped to the brink of bankruptcy and is now getting aid from the big brothers in the euro zone. The reason Greece has sunk so deeply into a whopping debt problem is because of its ballooning budget deficit, which is equivalent to 13.6% of its gross domestic product (GDP), although the actual ratio could be higher, according to Eurostat.

Economics textbooks tell us that a country's budget deficit will start yawning when the government spends more than it earns, that is what it collects in tax revenue.

But in Greece, even the man in the street who has never studied economics knows the root cause of the debt crisis, which is roiling their country, is corruption plus cronyism.

According to the Wall Street Journal, a Transparency survey shows that last year, 13.5% of Greek households paid bribes of €1,355 (RM6,775) based on last year's exchange rate on average.

In an article titled Tragic Flaw: Graft Feeds Greek Crisis, the newspaper said ordinary citizens handed out cash-filled envelopes to get driver's licences, doctor's appointments and building permits, or to reduce their tax bills.

In the past three years, senior politicians had resigned or been investigated over allegations that included taking bribes for awarding contracts, employing illegal workers and selling overpriced bonds to public pension funds, the report noted.

Cheating the government, especially on taxes, is widespread in Greece. Government procurement bribery and political patronage have bloated the Greek government's spending, and pervasive petty bribery eroded its authority over taxpayers, the newspaper wrote.

“The core of the problem is that we don't have a culture of civic society,” Stavros Katsios, a professor at Greece's Ionian University who specialises in economic crime, was quoted by the journal as saying. “In Greece, complying with the rules is a matter of dishonour. They call you stupid if you follow the rules,” he added.

In 2007, the government was found to have sold billions of euros of overpriced complex securities to public pension funds, resulting in large loss es at the funds. The shortfalls have to be covered by the government, and that widened the budget deficit further.

Economists estimate one quarter of all taxes owed are not paid in Greece.

The newspaper quoted a senior government official as saying that if an individual or company owes €10,000 in taxes, they slip €4,000 to the inspector, keep €4,000 and pay €2,000 to the Inland Revenue.

Clearly, it is a classic example of plundering the public coffers. Back home, there is mounting concern about Malaysia's budget deficit after the two stimulus packages to revive the economy.

Compared to Greece, Malaysians could probably breathe a sigh of relief that the country is still a long way from where the Greeks are now.

The country's budget deficit swelled to 7.7% of last year's GDP but the ratio is expected to drop to around 5.6%. Malaysia isn't in that alarming stage at all.

That said, the debt crisis in Greece should raise alarm bells about the ugly fact that there are some similarities between the situation facing the Greeks and us.

One of the differences is that Malaysians are lucky enough to have oil money to replenish almost half of the country's coffers. Imagine if we were without the oil money, would the country's deficit still be so manageable? Could the government continue running the country the way it is doing today?

At a conference organised by the Associated Chinese Chambers of Commerce and Industry of Malaysia, YTL Corp Bhd's Tan Sri Francis Yeoh told the audience that he didn't need to know the former British Prime Minister Tony Blair to win the bid for Wessex Water.

What about his experience at home? Did it contain a hint which he didn't share with the audience?

Malaysia could be Greek tragedy if no action taken, says don

KUALA LUMPUR, May 1 — Malaysia could find itself in the same fiscal mess currently facing several European countries such as Greece if planned economic reforms are not undertaken, says London School of Economics Professor Danny Quah.

Portugal, Ireland, Greece and Spain, the so-called PIGS, are under international scrutiny and have roiled global markets due to their level of national debt. Greece, whose government bonds were downgraded to junk status this week, has a debt to Gross Domestic Product (GDP) ratio of about 115 per cent which could hit 150 per cent by 2012.

Quah, who is also a member of the National Economic Advisory Council (NEAC), said that while Malaysia’s debt to GDP ratio is below that of the PIGS, it isn’t far off either.

“It won’t be too long before we push into PIGS type territory,” said Quah at a dinner lecture organised by LSE alumni last night where he spoke in his capacity as an LSE economist.

He said that Malaysia needs to take out its stimulus spending, implement the New Economic Model (NEM) reforms and ensure that growth takes place in order to stabilise the nation’s debt to GDP ratio.

Quah also cautioned that Malaysia is expected to become a net oil importer by 2014 and that the country is one of the most sensitive to oil price volatility.

He added however that “it is not all doom and gloom” as Malaysia’s financial sector is relatively robust and Malaysia’s debt consists largely of medium and long term instruments.

He said the NEAC, which drafted the NEM, is studying the possibility of reducing corporate and income tax by one per cent per year for several years in tandem with tightening public finances via measures such as the goods and services tax (GST).

The council is also studying a proposal of a “1 Malaysia Supply Chain” to make business promotion efforts more integrated and streamlined.

Asked by the audience if he thinks the government has the political will to see through economic reforms, Quah replied that while he acknowledged widespread scepticism, his reading of the situation is that the government is serious as it has continued to stress the importance of change.

“I have been impressed over and over again that the leadership doesn’t want to take the easy way out,” said Quah. “I feel even more optimistic, energised and enthusiastic and that we (the NEAC) are not wasting our time. We’re not paid anything at all. Some of us fly halfway around the world.”

Governments Will 'Bankrupt Us': Marc Faber

Current economic policies are not sustainable and the world faces doom because "the governments are taking over", said Marc Faber, editor & publisher of The Gloom, Boom & Doom Report.

"They will all bankrupt us and expropriate us, but it may not happen tomorrow. They'll give us something to play with, until the whole system breaks down...they'll just print money and print more money," he said on CNBC Thursday.

"What I object to the current government intervention in so-called 'solving the crisis', (is that) they haven't solved anything. They've just postponed it."

Faber warned that the "ultimate armageddon" would be much worse the next time around, as "governments will go bust", which would lead them to print more money.

He also warned that China's growth was "completely unsustainable in the long run," highlighting the red-hot property sector.

Goldman Sachs an 'Honest Firm'

"I think Goldman Sachs is a very honest firm. They have a very strict compliance department compared to the others — they're like an angel. But they targeted Goldman as it stands as a symbol of Wall Street," Faber said.

With U.S. President Obama's ratings sliding due to the health care reforms, the government was going after the investment bank to distract the attention of the people, he claimed.

"Maybe the intention is not to hurt Goldman Sachs, but just to gain popularity with the middle class and the lower class of America, so they will perceive Mr. Obama to have done something against the evil of Wall Street."

Goldman Could Trigger Market Correction: Jim Rogers

Some expert investors have described the market's reaction to the SEC's accusations against Goldman Sachs as a 'storm in a teacup.' They believe the fallout would be short-lived, and eventually present buying opportunities.

However, billionaire investor Jim Rogers, Chairman of Rogers Holdings, feels slightly differently.

"Markets are overdue for a correction," Rogers told CNBC in a telephone interview Saturday. "Any market that goes up this much, this fast, this steadily without correction - it's not normal. When that sort of things happens, the market could be setting itself up for a 15 - 20% correction."

Rogers does not think the Goldman [GS 160.70 -23.57 (-12.79%) ] issue itself would cause a correction - it would be more of a catalyst.

"When the markets are ready for a correction, something will come along... the straw that breaks the camel's back."

The investment guru did not seem all that surprised by the SEC's actions, noting that these kind of investigations usually take place after major financial meltdowns (like dotcom).

Borrowing a quote from Warren Buffett, Rogers said "when the tide goes out, you see who's swimming naked. I'm sure there will be many many more skeletons to come."

Thoughts of more high profile lawsuits on Wall Street and a pending market correction may send some into a panic, but Rogers said it is important to stay calm.

"What I am doing is watching. If this is going to be the beginning of a correction. we will know how the markets does next week, by Thursday, I suspect. It's not time to sell in any significant way."


Rogers also said investors should start thinking about adding shorts to their portfolio, and suggested shorting indexes. Select bank stocks are also in his sights - the legendary investor is waiting for the right time to build short positions in them.

And then, there's always gold.

If the SEC's crusade against fraud on Wall Street gathers pace, Rogers said, one should watch out for opportunities to buy into the yellow metal. "Go back to 2008, you have AIG go broke, Lehman go broke. There was a gigantic forced liquidation in commodities - not because of fundamentals, but because people were forced to sell... it would be an opportunity."

Setiap hari rakyat Malaysia kahwin wanita Indonesia di Sumatera

MEDAN, 15 April —Secara purata seorang rakyat Malaysia mengahwini wanita Indonesia dari Sumatera setiap hari dalam tempoh lima bulan lepas dan 80 peratus daripada mereka mengambil isteri kedua.

Trend ini dilihat daripada rekod di Pejabat Konsulat Jeneral Malaysia di sini yang menunjukkan bahawa dalam tempoh lima bulan itu, 30 lelaki Malaysia berkahwin wanita Indonesia dari Sumatera setiap bulan.

Konsul Muda Bahagian Konsular dan Imigresen di pejabat itu, Ismail Ali, memberitahu Bernama bahawa pada Januari, terdapat 31 pasangan yang berkahwin, Februari 29 pasangan dan Mac 32 pasangan.

“Hampir kesemua mereka beragama Islam,” katanya.

Terdapat juga rakyat Malaysia yang mengahwini wanita Sumatera tetapi dipercayai tidak mendaftar di bahagian itu kerana mereka gagal mendapat izin untuk berpoligami atau izin berkahwin di luar negara dari mahkamah syariah dan jabatan agama Islam negeri asal masing-masing, kata Ismail.

Rakyat Malaysia perlu mendapat surat pengesahan warga negara dari Bahagian Konsular di sini sebelum mereka dibenarkan menikahi wanita Indonesia di Sumatera.

Sebelum datang ke Sumatera, seseorang lelaki harus mendapat surat izin berkahwin di luar negara, sijil kursus perkahwinan, surat status bujang, berkahwin atau duda dan janda serta surat izin berpoligami bagi yang masih beristeri, daripada pihak berkuasa agama Islam di negeri asal mereka.

Ismail berkata pasangan yang berkahwin itu bertemu jodoh di Malaysia dan wanita Indonesia pilihan lelaki Malaysia biasanya bekerja sebagai pembantu

rumah atau di sektor perkilangan dan sektor perkhidmatan seperti pencuci.

“Ramai calon isteri mereka merupakan janda yang sudah beranak dan wanita-wanita ini berkahwin kerana faktor jaminan hidup di Malaysia,” katanya.

Majlis perkahwinan mereka diadakan di Sumatera atas permintaan pengantin perempuan untuk restu daripada wali, dan selepas berkahwin, isteri mereka dibawa pulang ke Malaysia.

Mengikut Peraturan-peraturan Imigresen 1959/63 di bawah kemudahan Pas Lawatan Sosial Jangka Panjang, isteri warga negara asing kepada suami warga negara Malaysia layak tinggal di Malaysia untuk tempoh enam bulan pertama dan selepas itu boleh disambung untuk tempoh 12 bulan setiap tahun sehingga lima tahun.

Selepas lima tahun, isteri berkenaan layak memohon menjadi penduduk tetap Malaysia manakala anak-anak pasangan itu automatik menjadi warga Negara Malaysia.

Apa yang menyedihkan, kata Ismail, ialah ada rakyat Malaysia sanggup menceraikan isteri warga negara Malaysia mereka untuk menikahi isteri warga negara asing.

“Ada juga lelaki Malaysia berkahwin kali kedua kerana telah kematian isteri pertama,” katanya.

Perkahwinan rakyat Malaysia bukan Islam dengan wanita Indonesia di Sumatera sangat kurang.

Sebagai contoh, pada Mac, hanya ada dua pasangan bukan Islam berkahwin.

Bagi bukan Islam, mereka perlu mendapat surat kebenaran daripada Jabatan Pendaftaran Negara untuk berkahwin di luar negara. — Bernama

World Bank gives $3.75 billion loan to Eskom

FRANKFURT (MarketWatch) -- The rand rose against the U.S. dollar on Friday, buoyed by the World Bank's approval of a $3.75 billion loan for South African power utility Eskom that aims to ease the nation's severe electricity shortages.

The loan is the World Bank's first major lending engagement with South Africa since the fall of apartheid 16 years ago. It was approved late Thursday and has a maturity of 28-and-a-half years.

In the currency markets, the greenback /quotes/comstock/21o!x:susdzar (CUR_USDZAR 7.2420, +0.0067, +0.0926%) fell 0.5% to 7.2310 rand, after trading at 7.27 rand late Thursday. The dollar hit an intraday low of 7.2052 rand.

"Sentiment is a little bit better than it was yesterday," said Nigel Rendell, senior emerging markets analyst at RBC Capital Markets, commenting on the strength of the rand.

"The other thing is that there has been a loan agreed with the World Bank to lend to Eskom," Rendell said. "It's a long-term loan and it allows them to spend money on infrastructure to prevent many of the power cuts we've had in the past. This eases the tensions, at least the near-term problem."

Of the total loan, $3.05 billion will be used to complete the 4,800-megawatt Medupi coal-fired power station. One wind and one solar-power project will be financed with $260 million, while $485 million will go toward low-carbon energy efficiency components.

"Without an increased energy supply, South Africans will face hardship for the poor and limited economic growth," said Obiageli K. Ezekwesili, vice president for the Africa region at the World Bank, in a statement.

The loan combines much-needed investments to boost generation capacity with creating jobs, Ezekwesili said.

South Africa's energy crisis of 2007 and early 2008, together with the global financial crisis, prompted the World Bank to give the loan.

State-owned Eskom generates 95% of the electricity used in South Africa and 45% of the electricity used in Africa, according to the firm's Web site.

South Africa, a major global producer of metals such as gold and platinum, has been plagued by electricity shortages for several years, constraining economic growth and investment in key industries.

Earlier this week, the chief executive of Xstrata PLC /quotes/comstock/23s!a:xta (UK:XTA 1,279, -21.00, -1.62%) /quotes/comstock/22a!xtan (CH:XTAN 20.90, -0.35, -1.65%) said the mining firm has put on hold a 5 billion rand ($690 million) investment in the expansion of its ferrochrome business because of South Africa's energy problems.

"Security of energy supply is crucial," said Mick Davis, CEO of Xstrata, in a speech to the Wits Business School in Johannesburg.

"A shortage of energy generation capacity has already stalled further investment in mining and beneficiation capacity, losing with it the potential for thousands of jobs and the associated revenue and foreign exchange this production would earn for the country."