Sneaky Business

Is broadband going down the tubes?

Broadband services are set to take another giant leap forwards in the UK. Perhaps to boldly go where no man has gone, or has wanted to go, before. According to the BBC, fiber firm H20 will soon establish the UK's first "fiber town", delivering super-fast download speed of 100MBps – via the sewer system.

Anthony Walker, head of the UK's Broadband Stakeholder's Group cautioned that the H20 scheme would not create a fibered Britain alone. ""There are clearly benefits to using the sewers and this fibre deployment is good news but it is only a small piece of the jigsaw," he said."

How fast can money burn?

Jerome Kerviel's recently announced trading losses for Societe Generale are astronomical by any stretch of the imagination. Over a period of roughly nine months he managed to rack up losses of $7.2B for his employer through a series of huge, unauthorized trades.

Sneaky Business was impressed by the sheer audacity of this illicit activity, but it got the team wondering just how quickly losses can be generated. Is there a natural limit to the rate that value can be destroyed? Or at some point will the God's of finance step in to smooth out the wrinkles in the space / time value of money continuum?

An analysis of recent catastrophic losses reveals some interesting statistics. Kerviel's loss of $7.2B amounts to a burn rate of $18,500 per minute. Pretty impressive considering the best Nick Leeson managed back in 1995 was a mere $5,400 per minute.

However, at an individual level, this is eclipsed by the infamous antics of the K Foundation - the successful UK pop group of the early 1990's. The group's decision to incinerate one million pounds in cash on the Scottish Island of Jura in 1994 has never been fully explained. In November 1995 the duo pledged to dissolve the K foundation and refrain from discussing the burning for 23 years. What is certain is that the event, which lasted approximately 67 minutes, represents a burn rate of almost $30,000 per minute. This makes it the fastest self-imposed destruction of personal wealth in history (representing, as it did, the vast majority of the group's profits).

Of course all of this pales into insignificance compared to the largest corporate losses of all time. While GM did pretty well last year (losing around $75,000 per minute), the clear "winner" remains AOL Time Warner - whose tear jerking loss of $98.7B in 2002 amounted to a staggering rate of $190,000 per minute. Even Jimmy Cauty of the K Foundation would be hard pressed to keep up with that pace.

Doing A Kerviel

News today of a catastrophic display of "rogue trading" that threatens to land Société Générale with the mother of all write-downs.

According to the Journal, Mr. Kerviel stitched together an "elaborate string of fictitious transactions" that could result to a $7.2B loss for the bank. If that's not bad enough, the 31-year old trader now seems to have gone missing. Société Générale Chairman and Chief Executive Daniel Bouton said Thursday that the bank didn't know Mr. Kerviel's whereabouts, though it was still trying to mop up the path of destruction he had left behind.

No doubt about it – this is a huge loss; and one that dwarfs the sneaky dealings of the infamous Barings trader Nick Leeson in 1995. His escapade led to the phrase "doing a Leeson" entering into the English vernacular. It's unclear whether "doing a Kerviel" will go the same way. Or for that matter, whether Kerviel will see a made for TV movie sometime in the near future along the lines of Rogue Trader.

Joining The Chase

Looking to cash in from a personal injury? Want to make a fast buck from that dodgy chicken vindaloo?

Help may be at hand, thanks to a new site from SueEasy.com.

According to TechCrunch:

The site is kind of a reverse directory for lawyers that's sure to be a haven for personal injury lawsuits. It's similar in concept to what ThemBid is doing with auctions for local services. Instead of searching for a lawyer, you list your case and lawyers find you. The site handles two major kinds of cases, class action and individual. Each of those sections is then divided into sub-categories such as DUI/DWI, bankruptcy, or asbestos settlements. Plaintiffs list their grievances in these categories and attach any relevant documentation.