The Secret Club That Runs the World: Inside the Fraternity of Commodity Traders (31 page)

Harrods and a huge skyscraper
:
Edna Fernandes, “How Qatar Bought Britain,”
Daily Mail
, March 10, 2012, http://www.dailymail.co.uk/news/article-2113159/.

“Bloody hell”
:
Anousha Sakoui, Javier Blas, and Helen Thomas, “Glencore Raises Stakes in Xstrata Deal,”
Financial Times,
September 7, 2012, http://www.ft.com/intl/cms/s/0/0cfe770c-f8b3-11e1-b4ba-00144feabdc0.html#axzz2rGnkpzbz.

10.
THE REFORMER

$600 trillion
:
Claudio Borio et al., eds., Bank of International Settlements:
Quarterly Review,
December 2011, Statistical Annex, p. A10, http://www.bis.org/publ/qtrpdf/r_qs1112.pdf.

like Delta
:
Kit R. Roane, “Mike Masters: The Making of a Maverick,”
Institutional Investor
, September 1, 2011, http://www.institutionalinvestor.com/Popups/PrintArticle.aspx?ArticleID=2892271.

Futures Industry Association echoed Dunn’s language
:
Futures Industry Association to David Stawick, Secretary of the Commodity Futures Trading Commission, March 25, 2011, http://www.futuresindustry.org/downloads/FIA_Position_Limits_Comment_Letter.pdf.

The proposal would “hamper”
:
Ann Battle, Associate at Sutherland, Asbill and Brennan LLP, on behalf of United States Commodity Funds LLC, to David Stawick, Secretary of the Commodity Futures Trading Commission, October 21, 2010. In the absence of a working link at cftc.gov, the letter can be viewed at http://www.marketsreformwiki.com/mktreformwiki/index.php/Position_Limits_Regulation_-_Comment_Letter_-_United_States_Commodity_Funds_-_October_21,_2010.

the CFTC finally held another vote
:
Asjylyn Loder and Silla Brush, “Top U.S. Regulator Approves New Limit on Commodity Speculation in 3–2 Vote,”
Bloomberg, October 18, 2011, http://www.bloomberg.com/news/2011-10-18/cftc-votes-3-2-to-approve-new-limits-on-commodity-speculation.html.

published his white paper
:
Frenk and Turbeville, “Commodity Index Traders.”

“enormous failure”
:
Jill E. Sommers, “Opening Statement, Fifth Open Meeting to Consider Final Rules Pursuant to the Dodd-Frank Act” (Commodity Futures Trading Commission Public Hearing, Washington, D.C., October 18, 2011).

“sideshow”
:
Michael V. Dunn, “Opening Statement, Public Meeting on Final Rules Under the Dodd-Frank Act” (Commodity Futures Trading Commission Public Hearing, Washington, D.C., October 18, 2011), http://www.cftc.gov/PressRoom/SpeechesTestimony/dunnstatement101811.

both of whom had worked previously at BP
:
Rex Dalton, “Oil Speculators: Civil Complaint Names Nicholas Wildgoose of Fairbanks Ranch,”
San Diego Reader
, June 22, 2011, http://www.sandiegoreader.com/news/2011/jun/22/citylights2-Nicholas-Wildgoose-oil-speculators/?page=1&.

“shitload of money”
:
Grant McCool, “Arcadia, Parnon Fight Oil Price Manipulation Lawsuits,” Reuters, October 10, 2012, http://www.reuters.com/article/2012/10/11/oil-futures-lawsuit-idUSL1E8LB1KK20121011.

$50 million in profits
:
Commodity Futures Trading Commission, “CFTC Charges Parnon Energy Inc. Arcadia Petroleum Ltd., and Arcadia Energy (Suisse) SA with Price Manipulation in the Crude Oil Market,” news release, May 24, 2011.

just above junk
:
Aaron Lucchetti, “Moody’s Cuts MF Global Rating to Near Junk,”
Wall Street Journal
, October 25, 2011, http://online.wsj.com/news/articles/SB10001424052970203911804576651462414325974?KEYWORDS=MF+Global+Moody.

MF Global stock fell slightly
:
Ibid.

MF opted to report quarterly earnings early
:
Peter Elkind with Doris Burke, “The Last Days of MF Global,”
Fortune
, June 4, 2012, http://finance.fortune.cnn.com/2012/06/04/the-last-days-of-mf-global/.

considering lowering MF Global’s credit rating to actual junk
:
Shira Ovide and Jacob Bunge, “S&P May Cut MF Global’s Credit Rating to Junk,”
Wall Street Journal,
Deal Journal blog, October 26, 2011, http://blogs.wsj.com/deals/2011/10/26/sp-cuts-mf-globals-credit-rating/.

eighth-largest futures broker
:
Jacob Bunge,
“
MF Global: What Would a Buyer Be Getting?”
Wall Street Journal,
Deal Journal blog,
October 30, 2011, http://blogs.wsj.com/deals/2011/10/30/mf-global-what-would-a-buyer-be-getting/?KEYWORDS=MF+Global.

two-thirds of its value
:
Jacob Bunge, “MF Global Shares Hung Up in Limbo,”
Wall Street Journal,
Deal Journal blog, October 31, 2011, http://blogs.wsj.com/deals/2011/10/31/mf-global-shares-hung-up-in-limbo/.

Central to the market’s
 . . . last-minute deal:
Aaron Lucchetti, Justin Baer, and Mike Spector, “Corzine Races to Save Firm,”
Wall Street Journal
, October 31, 2011, http://online.wsj.com/news/articles/SB10001424052970204528204577008090428088540 with additional reporting by the author.

Corzine directed his treasurer
:
“Email Ties Corzine to Missing Funds,” Mike Spector, Julie Steinberg, and Aaron Lucchetti,
Wall Street Journal
, March 25, 2012, http://online.wsj.com/news/articles/SB10001424052702304636404577299923967199372.

collaborated with Goldman’s rivals
:
Roger Lowenstein, “Corzine Forgot Lessons of Long-Term Capital,” Bloomberg, November 1, 2011, http://www.bloomberg.com/news/2011-11-02/corzine-forgot-lessons-of-long-term-capital-roger-lowenstein.html.

convince his fellow partners
:
Craig Horowitz, “The Deal He Made,”
New York,
July 18, 2005, http://nymag.com/nymetro/news/politics/12194/index6.html.

$400 million
:
Roben Farzad and Matthew Leising, “Corzine Lived Up to Risk-Taking Reputation at Helm of MF Global,” Bloomberg, November 3, 2011, http://www.bloomberg.com/news/2011-11-03/corzine-lived-up-to-risk-taking-reputation-at-mf-global-before-bankruptcy.html.

had abandoned his first marriage
:
Ibid.

been critically injured
:
Bryan Burrough, William D. Cohan, and Bethany McLean, “Jon Corzine’s Riskiest Business,”
Vanity Fair,
February 2012, http://www.vanityfair.com/business/2012/02/jon-corzine-201202.

guffawing about getting drunk
:
Skybridge Alternatives (SALT) Conference, May 2011. On a panel moderated by the author. Video available at http://www.businessinsider.com/video-jon-corzine-talks-about-getting-drunk-2011-11.

fired fourteen hundred people
:
Burrough, Cohan, and McLean, “Jon Corzine’s Riskiest Business.”

crude-oil volumes were lower than usual
:
Christian Berthelsen, “MF Global’s Ripples in Crude Oil Market,”
Wall Street Journal,
Deal Journal blog, October 31, 2011, http://blogs.wsj.com/deals/2011/10/31/mf-globals-ripples-in-crude-oil-market/.

effectively barred from the markets
:
Mike Spector, Jacob Bunge, and Aaron Lucchetti, “MF Global Collapses as Books Questioned,”
Wall Street Journal
, November 1, 2011, http://online.wsj.com/news/articles/SB10001424052970204528204577009473406903312.

he had used Corzine’s entry number
:
Silla Brush, “Corzine Wasn’t Too Close with CFTC Chief, Review Finds,” Bloomberg, July 31, 2012 http://www.bloomberg.com/news/2012-07-31/corzine-wasn-t-too-close-with-cftc-chief-review-finds.html. The “confidential” memo referred to in the article above can be viewed at
http://www.cftc.gov/ucm/groups//files/12/97/69/f129769/public/@freedomofinfor mationact/documents/file/participationmattersmfg.pdf.

Parnon, and the former BP traders was moving through the court system
:
This was still true as of February 2014. See Bob Van Voris, “Oil Probe Records Disclosure Won’t Be Delayed, Court Says,” Bloomberg, December 10, 2013, http://www.bloomberg.com/news/2013-12-10/oil-probe-records-disclosure-won-t-be-delayed-court-says.html.

ninety-nine different enforcement actions
:
Commodity Futures Trading Commission, “CFTC Releases Annual Enforcement Results,” news release, October 6, 2011, http://www.cftc.gov/PressRoom/PressReleases/pr6121-11.

Soon he was getting multiple hundreds of millions
:
Commodity Futures Trading Commission, “CFTC Releases Enforcement Division’s Annual Results,” news release, October 24, 2013, http://www.cftc.gov/PressRoom/PressReleases/pr6749-13.

threw out the CFTC proposal
:
Bill Singer, “Dramatic Federal Court Ruling Vacates CFTC Positions Limit Rule,”
Forbes
, September 28, 2012, http://www.forbes.com/sites/billsinger/2012/09/28/dramatic-federal-court-ruling-vacates-cftc-positions-limit-rule/.

which Corzine was fighting
:
Attempts by Corzine’s attorneys to have the CFTC suit, as well as other claims against him, dismissed failed. See Jacqueline Palank, “Judge Rules Suit Against Corzine Can Move Ahead,”
Wall Street Journal
, February 11, 2014, http://online.wsj.com/news/articles/SB10001424052702304104504579377141033786398.

rule filing
: Commodity Futures Trading Commission, “17 CFR Parts 1, 15, 17 et al. Position Limits for Derivatives, Proposed Rule,”
Federal Register
78, no. 239 (December 12, 2013): 75680.

he eviscerated the industry lobbying
 . . . until things turned in its favor:
William D. Cohan, “Angry Bart Takes His Parting Shot,” Bloomberg, December 24, 2013, http://www.bloomberg.com/news/2013-12-24/angry-bart-takes-his-parting-shot.html.

11.
THE SIDE BET

Citing a respected
:
FAA Aerospace Forecast Fiscal years 2012–2032, p. 35. http://www.faa.gov/about/office_org/headquarters_offices/apl/aviation_forecasts/aerospace_forecasts/2012-2032/media/FAA%20Aerospace%20Forecasts%20FY%202012-2032.pdf.

CNBC had the story
:
Kate Kelly, “Delta Eyeing ConocoPhillips Refinery for More Than $100 million,” CNBC, April 4, 2012, http://www.cnbc.com/id/46883861.

“because they’re stupid”
:
Steve Schaefer, “Why Buying a Refinery Could Be a Disaster for Delta Airlines (Even with JPMorgan’s Help),”
Forbes
, April 11, 2012, http://www.forbes.com/sites/steveschaefer/2012/04/11/why-buying-a-refinery-could-be-a-disaster-for-delta-air-lines-even-with-jpmorgans-help/.

Phillips 66
:
Effective May 2012, ConocoPhillips had split into two companies, and Phillips 66 was the name of the resultant entity that sold the Trainer facility to Delta. See Phillips 66, “Our History,” http://www.phillips66.com/EN/about/history/Pages/index.aspx.

in a television interview
:
Kate Kelly, CNBC, May 1, 2012, http://video.cnbc.com/gallery/?video=3000087462&play=1.

“It’s our intention”
:
Paul Burkhardt and Mary Schlangenstein, “Delta CEO Says Airline to Pressure Prices as Jet Fuel Seller,”
Bloomberg Businessweek
, June 15, 2012, http://www.businessweek.com/news/2012-06-15/delta-ceo-says-airline-to-pressure-prices-as-jet-fuel-seller.

pricing window
:
Platts, “An Introduction to Platts Market-on-Close Process in Petroleum,” McGraw Hill Financial, http://www.platts.com/IM.Platts.Content/aboutplatts/mediacenter/PDF/Platts_IntrooilMOC.pdf.

telling another reporter at Reuters
:
Janet McGurty, “Delta Says It Won’t Sell Jet Fuel on Open Market,” Reuters, June 18, 2012, http://in.reuters.com/article/2012/06/18/us-refinery-operations-delta-monroe-idINBRE85H12W20120618.

a margin requirement of $350 million
:
Delta Air Lines, “Delta Announces June Quarter Financial Results,” news release, July 25, 2012, http://ir.delta.com/files/earnings/2012/Delta%20Air%20Lines%20Announces%20June%202012%20Quarter%20Financial%20Results.pdf.

Iranian uranium-producing bunker
:
Phoebe Greenwood, “Mystery Over ‘Explosion’ at Iran’s Fordow Nuclear Site,”
Telegraph,
January 28, 2013,
http://www.telegraph.co.uk/news/worldnews/middleeast/iran/9831282/Mystery-over-explosion-at-Irans-Fordow-nuclear-site.html.

12.
THE POP

Clive Capital
:
While this was true in the relevant time frame, by September 2013, Clive Capital would also close
.
Jesse Westbrook and Chris Larson, “Clive Capital Fund Plans to Close after Two Years of Losses,” Bloomberg, September 20, 2013, http://www.bloomberg.com/news/2013-09-20/clive-capital-fund-plans-to-close-after-two-years-of-losses-1-.html.

on track to lose almost 3 percent
:
Newedge CTA Index, Monthly Return, http://www.newedge.com/content/dam/newedgecom/internal_feeds/Newedge_CTA_Monthly_Report.pdf.