The job of a trader is a confluence of responsibilities, essentially limited to executing trades and IMing. Anyone who’s ever interfaced with one of God’s special creatures through AIM knows such an experience is a guided tour through copious spelling errors, homonym problems that suggest serious learning disabilities, response times that range from jackhammer to 3-hours-later-I’m-still-sitting-here and cockiness as far as the eye can see (*very* occasionally justified, most often not).
So while they’re not particularly revealing, it’s nice to read through some instant-message conversations between Brian Hunter, Matthew Donohoe, other Amaranth employees and a trader at another firm, who were all included in CFTC’s complaint against Hunter y Amaranth, and see that the biggest hedge fund fuckup of all time’s “experimental” grammar is no better than his actual trading. Next, we’ll publish his IMs with thefish. Those are some quality exchanges not to be missed.
Archive for July 2007
- Posted in:
Amaranth
Brian Hunter Is Unavailable Because He Is Playing A Computer Game That Takes Up His Whole Screen Called Losing Billions of Dollars
By Bess Levin
Sony is on the cusp (in the glacial sense) of reemerging as the dominant home console maker with a hefty 21% gain in PS3 sales from May to June. It looks like chopping $100 off the staggeringly short-sighted $599 “I can buy two Wiis and two games for this” initial price worked. The Blu-Ray revolution is here, a format so innovative that it can properly eulogize the Mini-Disc and UMD.
The PS2 is famously cited as selling over 100 million units, averaging over 15 million units sold per year. To contrast, Sony sold 98,500 PS3s in June. SeekingAlpha points out (was not too lazy to do the math) that at this pace, it will take 83 years to sell 100 million consoles, a shade off the 5-6 year time frame Sony execs projected. Monthly PS3 sales would have to increase over 1500% to about 1.65 million to hit the century mark by 2013. That 21% sales “surge” looks a little empty in context.
Sony reports that its $100 price cut has shot (unreleased) PS3 sales up 135%, although the slashed $499 console is soon to be phased out, displaced with a “new and improved” $599 version. “New and improved” defined by Sony is 20GB more on a hard drive, boldly charging $100 for about a $10 manufacturing cost difference (got to make up those negative margins somewhere).
Microsoft balked on announcing an Xbox 360 price cut during E3 this year, but there are rumors that Microsoft will slash $50 sometime in August. The Core Xbox 360 costs $299.
The Wii-coup is almost complete, and Nintendo holds almost half the next-gen home console market, completing the first to worst to first circle. The Wii sold more than twice the number of Xbox 360s sold last month, which sold more than twice the number of PS3s.
Game Over For Sony In The Console Wars [SeekingAlpha]
PS3 Price Cut Is Fake [DigitalBattle]
Xbox 360 Price Cut Coming? [SlipperyBrick]
- Posted in:
Earnings Reports
Ford Shocks Street, Conventional Wisdom, Shareholders to Turn Profit
By Bess Levin
The Ford Motor Co. nailed a quarterly profit for the first time in two years, it was announced today. (Ford purists will be happy to know that in spite of gains, the automaker continued its red-hot losing streak in its core market of North American SUV/oil enthusiast). Ford, in the throes of a restructuring program that will close 16 plans and slash up to 45,000 jobs, made a net profit of $750 million (31 cents/share), versus last year’s $317 million (17 cents/share) loss. Profits from continuing operations handily beat the Street’s expectations of a loss of 37 cents/share with a 13 cents/share gain.
Profits were posted in all regions excluding North America, which lost $279 million, marking an improvement from last year’s $789 million loss. Ford said that profitability is not in the cards for North America until 2009, if ever.
Lest we take this as some sort of sign that the tide is turning for Ford’s Fjords, cynics should be pleased to note that the swing to profit may throw a wrench in F’s plans to F its workers during negotiations with the United Automobile Workers union this summer. That the automaker is not hurting for cash did not escape union prez Ron Gettelfinger, who the Times reports declined to comment on how Ford’s $12.6 billion 2006 loss would affect dialogue but noted, “They have a lot of cash, by the way.”
Ford swings to surprising 2nd-quarter profit [Reuters]
Geoffrey Raymond is at it again! Now he’s gone off and painted good ‘ol Rupert Murdoch in his classic style, but this time he’s asking for a little help from the viewer. Raymond is displaying his masterpiece outside of One World Financial Center so that Wall Street Journal employees and tourists alike can add their feelings about Rupes directly to the piece. WSJ employees in red marker, everyone else in black, with Raymond acting as a moderator. Barring rain, Raymond will be there until the end of the week and then the painting is going to the highest bidder. By highest bidder we mean any bidder, as the eBay auction starting at $3,500 has no bids to date with just three days left.
To one man walking by who refused to stop but still seemed interested, Raymond said defensively, “It’s not a picture of Rupert Murdoch, it’s a picture of a moment in the history of the Wall Street Journal.” Apparently this painting took only about two weeks to complete with Raymond rushing to finish before any official announcement about the fate of Dow Jones is announced. His painting of the $Honey is still a work in progress, he told DealBreaker — Raymond hasn’t yet figured out the finishing touch.
After the jump we bring you some pictures of the painting’s set up on Liberty Street.
The Annotated Murdoch [eBay]
An investment group that advises a coalition of labor unions sent a letter to Whole Foods’ lead independent director yesterday, advising the board to do business sans Crazy from this point forward. CtW, whose members own around 900,000 shares of WFMI, was apparently made uncomfortable with the revelation that the company’s co-founder and CEO had spent the better half of a decade posting comments in financial chat rooms about Whole Foods, rival Wild Oats and a few from the grab-bag, including “Mackey looks like a model for Brooks Brothers” and “I like Mackey’s haircut.”
The group strongly urged Whole Foods’ board to immediately name an independent chairman in order to assure government regulators and shareholders that Whole Foods takes a hard line on what some small-minded people might call “sociopathic tendencies.” Rahodeb, Aohber and Hodebra are among the names in the hopper for possible appointees.
Shares of WFMI are down 33 cents to $37.20.
Firm Asks Mackey To Log Out [New York Post]
Apple’s Quarterly Earnings Show The iPhone Revolution Is Succeeding (InformationWeek)
So there was some initial confusion over Apple’s earnings reports. You shoulda seen the Yahoo message boards — a mix of elation and despair, a volatile situation caused mainly by the fact that the posters on it seem to have a hard time grasping financial statements and the fact that Apple isn’t the most transparent company in the world. The iPhone, it’s selling like crazy, but not that crazy. Initial estimates that the company may have sold nearly a million handsets in the first weekend proved waaay too optimistic. On the other hand, the company sold regular, old-fashioned computers at a scary clip. Articles will note that the company’s guidance was “cautious”, as its estimates for the coming quarter are well below what Wall Street’s finest have been predicting. We have a message to Apple: stop predicting earnings. You lowball every single time, and it’s a totally obvious, bush-league move. It’s one thing to under-promise and over-deliver on the product side — that’s good business. But you accomplish nothing by taking such an extreme approach to earnings.
Federal Minimum Wage Increase Goes Into Effect (Cato Daily Dispatch)
Ah, we’d been wondering why there were so many homeless people picking through our trash this week. Turns out a minimum wage hike went into effect earlier this week. That explains it.
Buffett Buys Kraft Stake, But Goal Is Unclear (WSJ)
Next time you go to Omaha for Buffett-stock, it looks like you’ll be getting some Oscar-Meyer weiners topped with Velveeta to eat alongside your Coca-Cola. And then when you’re done with all that, you’ll be so intoxicated with the sheer deliciousness of it all, you’ll go drop a few thousand on a diamond ring at Borsheims. Yes, Buffett is at it again, adding another iconic American brand, Kraft, to his portfolio of expensive high-priced “value” stocks. Not that there’s anything original about buying Kraft — we can’t tell you how many times we saw some analyst on CNBC tout the company because their daughter couldn’t stop eating their macaroni and cheese.
Toyota, UC researchers to test plug-in hybrid vehicles (San Jose Mercury News)
Apparently, the Prius isn’t the end all and be all, at least to Toyota. Not that that should be any surprise. They’re all about kaizen baby — continuous improvement. You can’t rest on your laurels, not even for a moment. The company is planning on doing more research into plug-in vehicles, a nice concept (in theory), because power plants are more efficient than engines, but a challenge, because typically plug-in vehicles are bound to traveling short distances. Crack this nut and there may be a niche for this model.
$$$ What do you need to start your own hedge fund? Just three things [Andy Borowitz|]
$$$ Even Anti-Market Forces Can’t Fight The Market [LoSC]
$$$ London– set of the ‘Wall Street‘ sequel? [Banker's Ball]
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