Daytrading to earn a living: Calyon unauthorised trading losses..

Calyon, the investment banking unit of Paris-based Credit Agricole SA, France's second-largest bank, said on Sept. 18 that it had an ``unusually large market position'' that was ``above the authorized limit'' and would cause third-quarter profit to fall ``sharply.'' Calyon didn't identify the people involved
The losses would be the biggest from unauthorized trading since John Rusnak's currency bets cost Dublin-based Allied Irish Banks Plc $691 million in 2002. Management failures to oversee der

ivatives traders allowed Nick Leeson to bankrupt Barings Plc and Yasuo Hamanaka to hide $2.6 billion of losses from copper futures at Tokyo-based Sumitomo Corp. while their employers remained ignorant.
`Isolated Incident'
``The bank maintains that this is an isolated incident and the work of an individual trader who did not respect our risk procedures and who breached our trading limits,'' Anne Robert said in ``The losses were the result of the cost to unwind these unauthorized positions.''
Credit-Default Swaps
It is the Investment in indexes linked to credit- default swaps that would profit if the Federal Reserve cut interest rates, causing investor perception of credit quality to improve. Credit-default swaps are derivatives, financial instruments derived from stocks, bonds, loans, currencies and commodities, or linked to specific events like changes in the weather or interest rates. Traders use the contracts to speculate on the ability of companies to repay debt. The contracts pay the buyer face value of a bond or loan in exchange for the underlying securities should the company default.
On Aug. 17, the Fed lowered the so-called discount interest rate that it charges banks by 0.5 percentage point, to 5.75 percent.
The move reduced the cost of credit-default swaps included in the CDX North America Investment Grade Index to 60.51 basis points on Aug. 24 from 78.33 on Aug. 16, showing that investor perception of risk had diminished.
Credit Agricole
Credit Agricole said at the end of the month that a decline in the value of fixed-income securities sparked by record U.S. subprime mortgage foreclosures was having a ``limited impact'' on its business.
The index then switched direction and rose to 67.525 basis points on Sept. 4, the day that Calyo

n said it discovered the trade, according to prices from CMA Datavision in London. A new version of the index is now at 45.5.
Calyon, created when Credit Agricole bought Paris-based Credit Lyonnais in 2003, said the position was mainly built during the ``last days of August, above the authorized limit and without the authority to engage the bank at the level of this trade.'' France's largest bank by assets is Paris-based BNP Paribas SA.
`Doubled Down'
Derivatives can be harder to monitor than other financial assets, such as stocks or currencies, because they trade privately, said Frank Partnoy, a former debt trader who is now a law professor at the University of San Diego.
``Typically, these losses involve a trader who has lost more money than he should and then doubled down,'' Coffee said. ``It's predictable. Like someone going to the race track, losing all day and then betting the rent money in the final race to make back losses.''
Leeson, whose currency derivatives caused Barings to collapse in 1995, said continued losses show that banks don't want to spend the money needed to prevent rogue trades.
``Over the last 10 years there have been several large financial scandals that have lost billions of dollars and yet people don't really have the systems and controls in place,'' ``You have to ask yourself why.''

Tracking the Dow movement on Wednesday 10/10/07

It's a profit taking day.The three-advancing-soldiers from the overnight last few minutes near closing movement are weak and needs to return to their barracks to get their logistic support and weaponary.Again near last minute closing,a bullish harami is noticed aiming to the resistance (MAV).A sure good sign of another happy day.A star is born!!!