I'm of the belief that "where's smoke, there's fire".Societe...

I'm of the belief that "where's smoke, there's fire".

Societe Generale has been fighting a losing battle for weeks now about its solvency and liquidity issues.

The French regulators are TERRIFIED that such a big name might fail. If the share price dips below 10 Euros, you can expect a run on its branches. That will be the death knell for sure.

And I'm not entirely certain all its problems are caused purely by Greece debt. I'm hearing whispers of a Kerviel redux, and some complicated CDS swap that matures this year, that EVERYONE missed in 08/09.

Its one of those things that are shrouded in complete mystery until it blows up.

Like Bear Sterns CDO book.

Like Merril's 50B (YOU WOT???!!) sale to BoA.

Like the mysterious plunge in DAX futures 3 days running, only to find out SG were busy liquidating 5 billion worth of DAX futures on behalf of Kerviel.

Like the oil price spike in after hours trade in 08, when some drunken trader came into office and keyed in orders enough to buy 3 supertankers of crude.

Like how Lehmann's still could "do business" until it couldn't.

Black Swans? The past decade has been LITTERED with them. Almost 1 per quarter if you average it out over the past 10 years (the bulk coming in 2007-2009 of course).

That being said, markets look good for a strong bounce tonight leading up to G7. I'm finding it hard to resist shorting but I WILL wait till end of business US time to load in if I'm so inclined.