The french are very hung up on what degree you have and where you got. Pity Mr Market doesn't give a crap.
To be fair, with that size position, it doesn't matter if you are maximum bullish, you must still unwind it until it is at more normal levels. It is completely unacceptable to risk bankruptcy under any conditions. They should have said "are we maximum bullish? If so, and we were flat, what size position would we have put on?" Let's say that was a 5 billion position (pretty big). Well, that's the position they should have. But they found themselves long 50 billion. So they have to unwind 45 billion just for risk control, no matter how bullish they are. To not unwind, would be equivalent to going from flat to long 50 billion on that Monday - a totally insane level of risk. So if they traded well they would have lost like 4.5 bill instead of 5.5.
So you think they should just have bet the entire company and carried a 50 billion position in equities? What if the fed had not done their cut, and the market had crashed another 20%? They would have had a margin call and be forced to sell into an even more panicky market at much lower prices. The bank would be wiped out. The trader who was assigned the position did the right thing. In that situation, survival is the number 1 priority. He liquidated a gigantic position and only moved the market down about 5% (and not all that was his selling - Asia and the overnight S&P cratered too). That's not too bad.
If anyone thinks that 10 million position can go unnoticed for days, you never worked in a brokerage. Impossible , unless the brokerage is in Jamaica, of course,
Firstly they should have know what their position was when was the last time you had a position you did not know about? Secondly I think they could have closed it out a lot more efficiently than, lets just sell it as they appeared to do. For my little odd lots sure when I make a mistake I can just go the other way, my biggest cost is comm and the market movement, but the biggest cost for large large traders is market impact!