So many juicy topics to write about, so little space. (Now I know some of you are probably saying “thank goodness,” but you likely only get this far in my columns anyway.)

Thus, I think we are going to have to pass over the angel cake-like quality of President Bush’s final State of the Union address as it pertained to issues of interest to the industry. A perfunctory nod here, a crumb toss there–we’ve been there before in greater detail and more passion.

Similarly, we’ll give a breather this week to the continuing subprime catastrophe and the toll it has taken and will continue to take on the credit markets and the economy as a whole. Suffice it to say that a whole new twist has emerged with the potential shakiness of bond insurers due to exposure on mortgage investments gone bad.

The Times had a story on Jan. 31 which said a hedge fund manager had reported that two companies, MBIA and Ambac Financial Group, could be on the hook for $24 billion in losses. That managed to send some very unpleasant shivers through the market.

Likewise, we’ll deal another day with the fact that the presidential campaigns are now down to two competitors apiece. On the Democratic side that means dueling plans for health care overhaul and on the Republican side, health care reform, what’s that?

Actually Hillary’s and Barack’s plans are not all that different. It’s the search for reform plans on the GOP side that is the stuff of mystery. On one hand you’ve got McCain being even more perfunctory than the president in this area. And on the other hand you’ve got Romney running as fast as he can from the statewide reform he put into place in Massachusetts and which was the only real achievement of his administration in the People’s Republic. Sorry, Mitt, you can run but you can’t hide.

No, what I’m really dying to know is how one low-level trader at Soci?t? G?n?rale managed to cause his bank to lose over $7 billion and got away with it for so long. A corollary to that question is: How have that bank’s CEO and other senior execs managed up to now to keep their jobs in the face of such massive fraud?

Some of you who are still eating Freedom Fries might say ‘Well, that’s France for you!’ and think that explains everything. But in this extraordinary case, it doesn’t quite. Soci?t? G?n?rale is a representative of the new France–entrepreneurial, tech, market-driven.

The trader, J?r?me Kerviel, apparently has given testimony to prosecutors in France and some of this has leaked out in papers there and now here. The Wall Street Journal had some interesting background on what Kerviel’s real job was and how he managed to cook the books.

His real job never could have created such a big loss or, for a while, such huge gains. Essentially, according to the Journal, what he was supposed to do was make small bets on stock market fluctuations–”to invest by simultaneously taking opposite bets on the direction of the markets.” These were supposed to offset each other, producing small gains.

What he did instead apparently was start to bet on only one direction and falsify, when necessary, transactions in the other direction. For a while this produced gains that were outsized for his real function. At one point, the Journal says, he had racked up a gain of about 1.6 billion euros. Then things went south.

Kerviel maintains that senior management had to have known what he was doing and that they “closed their eyes.”

This has the ring of truth since it’s easy to visualize senior management sitting there ecstatic, dreaming with eyes closed, as the trough filled up–and not caring where the slop was coming from.