SocGen Trading Fraud -- 1/25/2008

Stock Picks

How much of Monday's crash was due to the unwinding of SocGen's fraudulent trades?  Many analysts believe that it contributed to the decline.  $7.2 billion in equity sells could potentially drive down the markets if it is concentrated in the right stocks.  We are not sure what global exchange these trades were made on, but here is an example of how it could work domestically.  The Dow is made up of only 30 components , and one could tank that index if sells are dumped without 'working the trades'.  The other indexes would follow as panic builds momentum.  We are watching this one closely.

Our stock picks are rocketing over the past three days, along with a new stock pick today.  Since we believe this is a short term bounce we may be taking some of these profits off the table if we see signs of another collapse.

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