The Secret Club That Runs the World: Inside the Fraternity of Commodity Traders (32 page)
Read The Secret Club That Runs the World: Inside the Fraternity of Commodity Traders Online
Authors: Kate Kelly
like walking in front of a steamroller
:
Bruno J. Navarro, “Leon Cooperman’s Top Stocks for 2013,” CNBC, January 2, 2013, http://www.cnbc.com/id/100349212.
8 percent of it per year
:
Ianthe Jeanne Dugan, “Pension Funds Cut Back on Commodity Indexes,”
Wall Street Journal
, February 5, 2013, http://online.wsj.com/news/articles/SB10001424127887324761004578286172166045096.
the Iowa futures brokerage that
: Jacqueline Palank, “Court Approves Distribution to Peregrine Customers,”
Wall Street Journal
, December 18, 2013, http://online.wsj.com/news/articles/SB10001424052702304866904579266440192687088?KEYWORDS=peregrine+financial.
of MF Global
:
James O’Toole, “MF Global Ordered to Repay Customers $1.2B,”
CNNMoney
, November 18, 2013, http://money.cnn.com/2013/11/18/investing/mf-global/.
The bank was fined $410 million
:
Federal Energy Regulatory Commission, “FERC, JP Morgan Unit Agree to $410 Million in Penalties, Disgorgement to Rate Payers,” news release, July 30, 2013, http://www.ferc.gov/media/news-releases/2013/2013-3/07-30-13.asp#.Uunhg_lkSSo.
possible criminal actions
:
Emily Flitter, “JPMorgan Subject of Obstruction Probe in Energy Case,”
Reuters,
September 4, 2013, http://www.reuters.com/article/2013/09/04/us-jpm-ferc-doj-idUSBRE9830QM20130904. By the end of 2013, JP Morgan had disclosed that they were in fact the subject of eight on-going investigations by the Department of Justice, including the investigation into criminal activity related to the case brought against them by
FERC. See Dawn Kopecki and Hugh Son, “JPMorgan Discloses Eight DOJ Probes From Asia to Madoff,” Bloomberg, November 1, 2013, http://www.bloomberg.com/news/2013-11-01/jpmorgan-discloses-eight-doj-probes-from-asia-to-madoff.html.
JP Morgan announced plans
:
Kate Kelly, “Big Banks Are Looking to Dump Commodities Units,”
CNBC,
November 1, 2013, http://www.cnbc.com/id/101160422.
“Stealing Africa”
:
Stealing Africa
, a film directed by Christoffer Guldbrandsen (STEPS, 2013). http://www.whypoverty.net/en/all-about/stealing-africa/.
BBC documentary
:
John Sweeney, “Billionaires Behaving Badly?,”
BBC Panorama
, April 23, 2012, in the absence of a working BBC link, the program can be found at http://www.youtube.com/watch?v=aSr_RgAPQ1M. Glencore’s response can be found here: http://www.glencorexstrata.com/assets/Uploads/201204160800-Response-to=Panorama.pdf.
Arbalet Capital
. . . She was thirty:
Barani Krishnan, “Former Head of Arbalet Commodities Fund Joins Millennium,” Reuters, February 5, 2014, http://www.reuters.com/article/2014/02/05/us-hedgefund-commodities-fan-idUSBREA1421N20140205.
The page numbers in this index refer to the printed version of this book. The link provided will take you to the beginning of that print page. You may need to scroll forward from that location to find the corresponding reference on your e-reader.
Ahmed bin Saeed Al Maktoum,
79
,
81
airlines.
See also
Delta Air Lines
Emirates Airline hedge,
77
–83,
106
jet fuel price hedging of,
67
,
78
–79
mixed trading reputation of,
106
Al Thani, Hamad bin Jassim bin Jaber.
See also
Qatar Holding
Glencore-Xstrata merger negotiations and,
177
,
178
meetings with Davis,
173
pre-IPO Glencore investment offer of,
161
,
176
al-Sayed, Ahmad.
See also
Qatar Holding
demands for Glencore-Xstrata merger terms and,
173
–74,
175
Glencore-Xstrata merger negotiations and,
178
intrigued by Glencore IPO,
161
intrigued by Xstrata investment,
169
meetings with Davis,
173
relationship with Glasenberg,
173
aluminum
Cohn’s experience with warehousing,
144
–49
cornering versus warehousing, defined,
149
Detroit as destination of,
150
–51
legal inside information of,
142
–43
Marc Rich & Co. dealings and,
147
market contango in 1992 and,
146
–47
Midwest premium on,
142
,
152
,
153
,
155
minimum load-out rate of,
144
,
152
,
155
in
New York Times
story on warehousing,
154
–55
ownership control game of,
152
price increases of, due to warehousing,
142
price rally of, prompted by Goldman hoarding,
149
profitability of warehousing,
143
–44,
146
revenue generated by rental fees of,
152
Senate Banking Committee hearing and,
155
stockpiling complaints of,
141
,
142
,
144
,
151
,
155
Anderson, Richard.
See also
Delta Air Lines
character of,
109
–10
Delta hedging decisions and,
113
,
208
Delta profitability returned by,
110
Delta refinery purchase and,
120
–21,
210
–11
named Delta CEO,
109
physical oil asset considered by,
108
Ruggles interviewed by,
107
,
108
Andurand Capital,
228
–29
Andurand, Danielle,
134
Andurand, Pierre.
See also
BlueGold Capital Management; Slyusarenko, Evgenia
Andurand Capital opened by,
228
–29
anxiety of, about oil price spiral,
127
–33
autonomy sought at Vitol,
34
–35
with Bank of America,
27
–29
BlueGold closed by,
136
–37
BlueGold reflecting style of,
38
Bourlot’s deal with,
31
–32
Bourlot’s falling out with,
32
–33,
78
Brent market bet and,
39
–41
character of,
12
,
18
–20,
21
,
23
,
28
–29,
30
–31
competitiveness of,
21
Crema’s proposal to join in BlueGold and,
35
–36
Crema’s style compared with,
134
–35
crude oil high and low in 2008 called by,
2
,
41
–44
crude oil position for $8 billion of,
1
–4,
16
,
127
–32
on factors affecting oil market,
139
family bias of, against rich,
24
gall bladder surgery of,
40
–41
with Goldman Sachs,
25
–27
impatience with oil market of,
126
–27
interview with Goldman Sachs,
24
–25
investor letters by,
39
,
124
,
134
legal inside information for,
30
London relocation with Vitol and,
33
longer-term view learned by,
30
new hedge fund launched by,
139
–40
oil contracts purchased in 2011,
126
options after closing BlueGold,
137
–38
physical oil business dislike of,
12
sabbatical after Vitol,
35
settlement with Crema,
228
split with Crema,
135
–36
swimming ambitions of,
21
–22
trade gain during surgery,
2
trading missed after BlueGold,
139
vacation in southern France,
138
–39
Antakly, Michel,
177
Arbalet Capital,
229
Arcadia crude-oil case,
192
–93
Armajaro Holdings Ltd.,
102
–3
Arnold, John,
10
–11
Aviva, resignation of chief insurer for,
171
backwardation, defined,
33
Bagley, William,
88
–89
Balzac, Honoré de,
24
Bank of America
Andurand’s work for,
27
–29
Merrill Lynch sold to,
43
Ruggles with Merrill commodities and,
105
–6,
120
banks.
See also
specific organizations
commodities hedging for companies,
66
–68
commodities trading and,
13
house trading stopped by Dodd-Frank and,
226
physical assets ownership of,
68
proprietary trading and,
68
–70
speculation by,
69
Barclays Bank and shareholder spring,
171
Barings Bank scandal,
93
–94
Barnett, Gary,
194
Bastian, Edward.
See also
Delta Air Lines
Delta hedging decisions and,
113
,
208
,
213
Ruggles interviewed by,
107
,
108
Ruggles permitted to trade for profit by,
122
Bean, Elise,
86
Beard, Alex.
See also
Glencore International
calling oil market in 2008,
50
–51
early oil experience of,
47
–48
as football (soccer) fan,
50
as former BP employee,
46
Glencore’s marketing arm handled by,
49
IPO for Glencore favored by,
63
–64
long hours worked by,
48
low profile sought by,
50
made billionaire by Glencore IPO,
159
meeting with Trapp in 2008,
52
–54
named head of Glencore oil division,
49
pep talk in 2008 by,
46
–47
Qatar’s merger demands and,
174
Becker, David,
117
Berkovitz, Dan
Gensler coached by, for hearing,
95
at Levin’s meeting with Gensler,
86
as participant in formulating Dodd-Frank Act,
101
as position limits advocate,
185
–86
Better Markets think tank,
186
Blankfein, Lloyd,
148
BlueGold Capital Management.
See also
Andurand, Pierre; Crema, Dennis
Andurand’s style reflected in,
38
Brent purchases of,
37
–38
cash and borrowed money managed (2011) of,
126
closing of,
136
–37
competitors of,
10
–12
crude oil high and low in 2008 called by,
41
–44
crude oil position of $8 billion of,
1
–4,
16
,
127
–32
execution traders hired by,
127
founding of,
36
investor letters of,
38
,
39
,
124
,
134
split of partnership of,
135
–36
success in 2011 of,
124
work of placing a big market wager of,
127
Bourlot, Jean
deal with Andurand and,
31
–32
Emirates Airline jet fuel hedge set up by,
77
–78
falling out with Andurand of,
32
–33,
78
Higgs Capital closed by,
229
BP, fears about Glencore by,
46
Brent crude-oil futures
all-time-high market of,
41
–42
Andurand’s $8 billion position of,
1
–4,
16
,
127
–32
BlueGold purchases of,
37
–38
market bet well by Andurand of,
39
–41
pricing in summer of 2008 of,
39
Cable, Vince,
170
–71
California Public Employees’ Retirement System (Calpers),
225
cap-swap double-down extendable trade,
79
,
114
CDS.
See
credit default swap
Centaurus Energy,
10
–11
CFTC.
See
Commodity Futures Trading Commission
Chilton, Bart.
See also
Commodity Futures Trading Commission (CFTC)
attacks on commodity speculators of,
185
blasting Wall Street lobbying of,
202
cattle-auction anecdote of,
91
on CFTC position limit curbs,
202
The Ed Show
appearance of,
188
Gensler coached by, for hearing,
95
as hard man to pin down,
187
homespun language of,
187
–88
MF Global scandal and,
197
–98
as position limits advocate,
185
rebuking Sherrod at CFTC meeting of,
103
–4
skepticism about commodity market of,
91
–92
China, crude oil needed by,
36
–37
Citi
Glencore-Xstrata merger and,
168
,
172
client flow business
explained,
68
money made through,
72
position limits and,
99
prop trading versus,
68
–69
Volcker Rule and,
153
Clinton, Bill,
94
Clinton, Hillary,
203
Coca-Cola Company, The,
141
,
144
,
151
cocoa market scandal,
102
–3
Cohn, Gary.
See also
Goldman Sachs
aluminum complaints handled by,
155
–56
cattle positions inspected by,
145
on commodities’ volatility,
9
–10
LME board seat secured by,
148
making partner at Goldman,
149
prior experience with aluminum warehousing trade of,
144
–49
road to the top at Goldman of,
150
Commodities.
See also
specific kinds
commonly known examples of,
5
corporate investors of,
13
–14
defined,
5
drop after mid-2008 of,
8
–9
earliest bets on,
6
end of boom of,
222
–25
factors driving prices of,
8
,
20
–21
fundamentals affecting prices of,
5
,
20
–21
growth in London after U.S. regulation of,
65
history of trading of,
6
–7
indexes ruined by embedded costs of,
225
individual investors and,
7
–8,
13
–14
legal inside information on,
30
,
142
–43
overtaken by stocks of,
223
–24
policing in 2013 of,
226
–27
rise from 2000 to mid-2008 of,
6
–8
rout of 2008 of,
58
Volcker Rule stopping house trading and,
153
,
169
Commodity Futures Modernization Act (2000),
94
Commodity Futures Trading Commission Act (1974),
88
Commodity Futures Trading Commission (CFTC).
See also
Chilton, Bart; Gensler, Gary; Regulation and legal issues
backlash against, in 2008,
90