This is part one of a year-end wrap-up package. To read Part 2, on the year's best moves, click here.
This year, many of the brightest minds in business made some truly boneheaded moves. Some may blame the messes they caused on bad luck. Some may blame it on fear. But investors should definitely blame some of it on greed. We do.
In fact, we blame billions of dollars in losses on greed, pride, sloth, gluttony and the rest of the seven deadly sins, to remind all that great wealth and power exist side by side with human frailties familiar to us all.
Here is MSN Money's staff-generated list of the biggest financial blunders of the year, together with our best shot at explaining how people could make mistakes this huge.
Jerome Kerviel,rogue trader.
Kerviel, a former options trader at France's second-largest bank, is this year's poster boy for risk tolerance run amok. It didn't appear to bother Kerviel when risky positions collapsed. He doubled down, then doubled down again. Société Générale alleges the 31-year-old manipulated its systems to place as much as €50 billion (about $63 billion at today's exchange rate) on market bets, many of which went bad in the end.
In January, the bank blamed a nearly €5 billion loss on Kerviel. They said he had mocked up fraudulent hedges to conceal the all-or-nothing nature of the risk he had taken on, in essence treating bank funds like his own personal blackjack stash. Kerviel maintains the bank knew what he was doing and didn't care as long as he made money. Way to be greedy, Kerviel.
Also afflicted: mortgage-backed securities traders.
But let's not let the bank off the hook. Or Wall Street. Kerviel's alleged actions are emblematic of a trading culture that turned some of the world's biggest financial institutions into casinos. Obsession with quarterly profits encouraged too much risk taking, too much leverage and too little careful research and planning for the long term. The attitude on Wall Street seemed to be that as long as you're making money this quarter, the potential for disaster doesn't matter. Not to worry about those pesky cyclical real-estate downturns.
Jerry Yang, the departing CEO of.
Any observer who read the details on the negotiations between Jerry Yang andCEO Steve Ballmer could see that something other than Yahoo's long-term earnings potential was behind Yang's dogged refusal to accept Microsoft's $33-per-share acquisition offer.