R. tells me some convoluted and largely incomprehensible (including to himself) theory about what might have happened over at UBS. I asked him what the source was, because invariably, if I know what the source said, either it clears up what R. was attempting to convey, or I can attack the source directly without it turning into a really unpleasant exchange.
In this case, the source was a blogger over at Yahoo's Finance blog (<-- not a good sign), previously on CNBC's Fast Money (<-- at least as bad, possibly worse) whose departure provided fodder for chatter.
This blogger got an options guy (<-- _massive_ understatement) to speculate about what might have happened at UBS, and that guy makes some assertions that sound really quite wildly implausible. I'm not going to quote the actual article (you should be able to find it at this point if you really read this, and I _really_ don't want anyone parachuting in via google), but I'll just say that there _is no investment bank_ that will be counterparty to the kind of deal described, at least not at a price where any client anywhere would ever take the deal. We don't need laws to stop investment banks from doing what J.N. describes; they aren't that stupid.
It's bad enough we've had people speculating about what happened over at UBS: maybe it was the Swiss Franc, blah, blah, blah. We don't know what happened, but what has trickled out so far (back office experience, the trades having gone on over a period of years, etc.) sounds hella like SocGen's rogue. Which means that whatever blew up isn't going to be readily summarizable and didn't just happen over the course of a week.
ETA: Because I try not to be negative all the time (most of the time, okay, but not all of the time), here's something that I think _is_ worth reading.