Feb 22 2008
Spreadsheet
Spreadsheet is a great tool in many things, but I found it sucks when you use it to total up, say trades or the like. Because it provides opportunity for massage the data. SocGen rattled the Wall Street, so the auditors are in full swing, demanding report here and there. Many fancy derivatives are so new, there aren’t any ‘measurements’, so the bosses order the spreadsheet reports. Would the clerks key in the data making mistake? Of course. Will someone massage the data? Of course. Here you have it. Small parts of WS are still very primitive - almost never moved out of the curb trading - the new thing. Two bankers wrote something on the back of the cocktail napkin or an envelope, with a firm hand shake, the deal is done. The new derivative is born. When more firms/people start using it, then there will be a system/program/measure .. forever chasing. The law makers are asking the private sector to come with monitoring system. How desperate. Sitting down to read the numbers every day is not high on every boss’s agenda. They’re fire fighters putting out fire on daily basis. SocGen’s bosses are the same. And if the reports are not generated by the system, rather keyed in by a human, then they are dumped. On a different note, if the SocGen trader’s bet gone right, he and his bosses would have looked like super duper heroes and genius, knows a thing or two.