DISGRACED TRADER TELLS TALE OF DOWNFALL
Terrorist bombs hit London, financial markets wobbled, and Jerome Kerviel was hooked. The trader at the center of a massive banking scandal in France told investigators that his spiral of trades that ended in a loss of about $7 billion for Societe Generale began with a 2005 bet that markets would fall -- which proved true after the London bombings that July. Perhaps more damaging for Societe Generale, Kerviel also claimed to investigators that his bosses at France's second-largest bank must have been aware of his massive risk-taking on markets but turned a blind eye as long as he was earning them money. Kerviel was questioned by police from Saturday through Monday and then was presented to judges who pinned him with preliminary charges of breach of trust, forgery and unauthorized computer activity. "I can't believe that my superiors were not aware of the amounts I was committing, it's impossible to generate such profits with small positions, which leads me to say that when I'm in the black, my superiors close their eyes about the methods and volumes committed," Kerviel told investigators.
GM CFO SEES AUTO PRICE INCREASE JUST AHEAD
U.S. automobile prices could rise significantly in the near future because of industry restructuring and rising raw material and regulatory costs, General Motors Corp.'s chief financial officer said Tuesday. Fritz Henderson said the industry has less manufacturing capacity than in the past and therefore less pressure to sell vehicles cheaply just to move inventory. It also faces higher raw materials costs, rising technology costs and increased costs from fuel economy and other government regulations, he said. While the U.S. market still is competitive, he said that could change in the next eight to 10 years.
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MYSPACE TO OPEN ITS PLATFORM TO DEVELOPERS
The online community MySpace is introducing tools for developing games, media-sharing features and other programs that better integrate with the Internet's leading social-networking site. The announcement follows a May decision by its smaller rival, Facebook, to open its platform to developers, a move that has proven to be a boon for music-sharing startup iLike.com, photo-sharing service Slide Inc. and countless other companies. Those applications, in turn, have helped make Facebook even more popular, although it still ranks as the second-most trafficked social network behind News Corp.'s MySpace. MySpace formally will launch the MySpace Developer Platform on Tuesday. Although developers will have all the tools they need to create and test programs, they won't be able to integrate them right away. MySpace has not announced a start date for that. The company said the program should result in innovations in how friends connect and communicate.
AUSSIE DROUGHT TO SEND WINE PRICES RISING
Australian wine prices are set to rise this year as the nation suffers its worst drought in a century, an official said. Government statistics released Tuesday showed that wine production for the fiscal year ending June 30 fell by almost one third from the previous year to 258 million gallons. A drop in production, mainly because of drought, coupled with increasing sales have drained Australia's surplus glut of wine by 15 percent to 480 million gallons last year from 550 million gallons the year before. That excess will dry up this year and an even lower grape harvest is forecast for 2008.
OH, NEIN! BEER SALES DOWN IN GERMANY
Germany and beer go together like Porsches and the autobahn, but health- conscious residents are turning from the country's traditional beverage, sending suds sales down to the lowest levels in 15 years. According to a government report released Tuesday, the amount of beer sold in Germany fell to the lowest sales figure since 1993 -- dropping in 2007 to 22 billion pints, down 612 million pints from 2006. Beer consumption in Germany has been falling for more than a decade, a trend that experts have attributed to an increasingly health-conscious public and aging population.