The Secret Club That Runs the World: Inside the Fraternity of Commodity Traders (33 page)
Read The Secret Club That Runs the World: Inside the Fraternity of Commodity Traders Online
Authors: Kate Kelly
Bagley as first chairman of,
88
–89
Chilton as commissioner of,
91
–93
complaints about position limits of,
187
enforcement toughened by,
198
–99,
200
–201
high fuel prices scrutinized by,
15
limited resources of,
96
–97
Meister hired to run enforcement and,
190
,
191
MF Global investigation into,
194
position limits proposed by,
99
–100
position limits vote of,
189
Ruggles probed by,
216
–17,
220
–21
rules crafted after Dodd-Frank of,
103
–4,
181
–82
supply-and-demand theory embraced by,
91
,
92
–93
ties to commodities industry and,
89
–90
White House access of,
90
Commodity traders.
See also
specific traders
anonymity of,
14
–15
compartmentalization of anxiety by,
12
–13
controversial tactics by,
11
–12
loose guidelines of,
216
as money changers,
12
personal trading by,
216
range of competitors of,
10
–12
small number of,
228
underpaid by Morgan Stanley,
84
veteran players’ advantages of,
9
Conrad, Kent,
96
contango, term origins,
38
–39
Cooperman, Leon,
224
copper, as economic growth predictor,
71
corporate commodities investors,
13
–14
Corzine, Jon
accomplishments of,
195
–96
CFTC suit filed against,
201
margin calls against,
195
MF Global case against,
14
,
193
–98,
199
reckless behavior of,
196
wrongdoing not acknowledged by,
199
Cox, Christopher,
182
credit default swap (CDS)
rate increase after 2008 downturn,
52
Crema, Dennis.
See also
BlueGold Capital Management
Andurand’s style compared with,
134
–35
baffled by crude’s sudden sell-off of,
128
BlueGold closed by,
136
–37
investor letters by,
39
,
124
,
134
proposal to join Andurand in BlueGold and,
35
–36
settlement with Andurand of,
228
split with Andurand and,
135
–36
success of,
35
Crude oil.
See also
Brent crude-oil futures
Andurand on factors affecting market of,
139
Andurand’s $8 billion position on,
1
–4,
16
,
127
–32
at BlueGold’s inception,
37
futures rise before mid-2008 of,
7
Goldman Sachs’ hedging service of,
26
high and low in 2008 called by Andurand,
41
–44
jet fuel price hedging and,
67
,
78
–79
as key to growth in China and India,
36
–37
market fall after bin Laden’s death and,
126
market in 2008 called by Beard and,
50
–51
Vitol’s dealings in,
29
–30
work of placing a big market wager on,
127
Currie, Jeff,
222
–24
David, Craig,
134
Davis, Mick.
See also
Xstrata
on al-Sayed’s psyche as trader,
176
anger at Glencore merger terms and,
180
considering Glencore merger,
163
–64
executive pay controversy for,
171
executive pay package for,
170
Glasenberg merger negotiations of,
164
–65
Glencore merger proposed to,
162
interests outside work,
163
ire at Glasenberg over lost Vale purchase of,
163
meetings with Al Thani and al-Sayed,
173
pleased by Qatar’s merger demands,
174
recruited to run Xstrata,
162
relationship with Glasenberg,
161
,
162
,
163
,
165
stalling on Glencore merger of,
157
–58
told of Qatar merger terms,
178
–79
X2 Resources started by,
229
Delta Air Lines.
See also
Anderson, Richard; Bastian, Edward; Jacobson, Paul; Ruggles, Jon
CFTC probe of Ruggles and,
216
–17,
220
–21
Chapter 11 filed by (2005),
109
contract purchasing before Ruggles of,
113
–14
gains generated by hedge book of,
123
hedging and fuel price troubles for,
110
–11,
113
,
212
,
213
market manipulation fears and refinery purchase of,
211
poor trading by,
107
profit-sharing pool funding short for,
121
–22
refinery purchase announced by,
210
refinery purchase idea ridiculed by,
208
–9
refinery purchase sought by,
120
–21,
208
derivatives
corporate hedging using,
66
–67
Gensler’s objections to,
190
lack of early regulation for,
94
–95
Deutsche Bank, Glencore-Xstrata merger and,
168
,
172
Diplas, Athanassios,
183
Dodd-Frank Act (2010),
101
–2,
103
–4,
153
,
181
,
185
,
226
Dow Jones–AIG commodity index,
71
Dow Jones–UBS commodity index,
225
Emirates Airline
company described,
77
–78
jet fuel hedge by Morgan Stanley and,
77
–83,
106
margin call by Morgan Stanley and,
80
–81
Falconbridge,
162
Fan, Jennifer
Arbalet Capital closed by,
229
character of,
70
choosing commodity index desk by,
71
–72
commodity index work of,
74
frustration at Morgan Stanley of,
83
–84
hired by Morgan Stanley,
70
–71
joining Millennium Management,
229
learning to drive,
72
–73
lucky bet on gas prices of,
74
–76
relationship with coworkers of,
73
resignation from Morgan Stanley of,
84
Federal Energy Regulatory Commission (FERC),
226
Feldman, Paul.
See also
BlueGold Capital Management
with Andurand Capital,
229
baffled by crude’s sudden sell-off of,
128
on BlueGold’s closing,
136
food prices
commodities trading and rise in,
15
–16
record high in 2011 of,
111
–12
forwards or futures
in ancient Sumeria,
6
rise from 2000 to mid-2008 of,
7
–8
Frank, Barney,
181
Frenk, David,
225
Futures Industry Association,
187
Geithner, Timothy,
100
Gensler, Gary.
See also
Commodity Futures Trading Commission (CFTC)
acceptance speech of,
96
on blessings in his life,
97
catch-all approach to regulation of,
181
–82
CFTC appointments named by,
181
on CFTC’s position limits setback,
199
confirmation hearing for,
86
–87,
95
–96
death of his wife,
97
enforcement not initially a priority of,
189
–90
family life of,
183
–84
with Goldman Sachs,
93
–94
Hillary Clinton’s remarks to,
203
on housing and commodities bubbles,
87
on industry objections as the hurdle,
100
meeting with Levin,
85
–87
on position limits,
99
rules crafted after Dodd-Frank of,
103
–4,
181
–82
on speculation’s effect on prices,
86
–87,
95
–96
tougher regulation intended by,
97
–98
Treasury Department job of,
94
–95
on Volcker Rule,
182
Wall Street connections of,
93
–94
work on Dodd-Frank Act by,
101
–2
Gensler, Robert,
96
German Cocoa Trade Association,
102
Glasenberg, Ivan.
See also
Glencore International
advice sought from Olsher by,
157
–58
ambitions of,
159
appointed CEO of Glencore,
61
attention to physical detail by,
61
confidence about Glencore-Xstrata merger,
166
–67
control needs and Glencore-Xstrata merger,
165
–66,
177
,
179
Davis told of Qatar merger terms,
178
–79
decision to temporarily cede control of Xstrata to Davis,
165
–66
ever-new challenges in running Glencore of,
158
–59
industrial assets desired by,
159
intransigence about Glencore-Xstrata merger and,
176
introduction to commodities trading and,
59
–60
IPO for Glencore sought by,
63
–64
Mack’s advice to, about Glencore-Xstrata merger,
166
made a billionaire by Glencore IPO,
159
Marc Rich & Co. joined by,
60
meeting Rich,
61
merger negotiations with Davis,
164
–65
merger with Xstrata proposed by,
162
pre-IPO PR,
161
Qatar’s merger demands and,
173
–74,
175
reflections on Glencore-Xstrata merger,
174
–75
relationship with al-Sayed of,
173
relationship with Davis of,
161
,
162
,
163
,
165
thriftiness of,
166
work-life balance not valued by,
48
Glencore International.
See also
Beard, Alex; Glasenberg, Ivan; Glencore-Xstrata merger; Marc Rich & Co.
breadth of commodities business of,
55
business revelations after IPO of,
159
–60
cash drain by shareholders of,
62
–63
challenges in 2008 of,
58
coal property sold to Xstrata of,
59
controversial tactics of,
11
–12,
54
credit default swaps and,
45
,
46
,
51
–52
employment agreement by senior officers and,
63
extent of business of,
47
financial numbers in 2011 of,
160
financial situation in 2008 of,
45
–47
insularity of,
54
IPO decided upon by,
63
–64
liabilities borne by,
160
limited spending power of,
49
marketing arm of,
48
–49
metal-warehousing division bought by,
143
Morgan Stanley requested for flexibility by,
53
–54
Morgan Stanley’s request for grace time from,
52
negative documentaries about,
227
–28
purchases and cash flow problems of,
59
Qatar pre-IPO investment offer of,
161
,
176
ratings downgrade threatened by,
63
reputation of,
45
under Rich’s direction,
47
,
54
,
56
–57
sales volume, revenue, and profits of,
55
supercycle profits of,
50
Vale offer to purchase Xstrata nixed by,
163