traders

Capitol Hill Gets All Gassy

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naturalgasburningblue.jpgSometimes when one door closes, another opens. And sometimes just when you try to crawl out, they pull you back in.
So even if Brian Hunter is ready to open his own hedge fund shop, not everyone is moving on so quickly. (By the way, if you’ve got a copy of the Solengo prospectus, please send it our way! Your anonymity is guaranteed!) Specfically, a US Senate probe into the natural gas futures market has reportedly unleashed a tidal wave of information from all over the market about experiences with market manipulation and regulatory proposals.
After Amaranth’s trading woes came to light, there were lots of allegations of market manipulation floating around Wall Street. Mysterious firings of prominent traders from big banks, rumors of breached Chinese Walls and talk about a “hit on the kid” were passed back and forth like a dusty mirror in this guy’s dorm room.
Wall Street has moved on but now the mirror has been passed to Capitol Hill, according to Platts news service.
Platts, which has done some of the best reporting on the Amaranth collapse, writes that lots of people have been talking to lawmakers and their cronies about the energy trading biz.

The amount of information submitted unsolicited to the committee is “enormous and surprising,” the spokesman said, and came from a wide variety of
sources.
“Wall Street, hedge funds, big financial players,” were just some of the bodies communicating directly with the committee, the spokesman said, but he declined to name names.


US Senate energy panel ‘flooded’ with market monitoring feedback [Platts]

    • 14 Mar 2007 at 12:34 PM
    • traders

    Daylight Savings Time Is The New Arabs

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    daylight-savings-time.jpgWe’re not exactly fans of the government meddling with our time–daylight savings time is like the metric system or Presidents Day–but we had to crack a smile when we heard this morning that traders are blaming America’s “go it alone” switch to early daylight savings time on this week’s market volatility. For all we know there might be something to it. Maybe the European markets being open an hour longer into the American markets really is causing the sell-off. But, really, that’s not the point.
    The point, as we said this morning, is to spin a plausible yarn, a logical lie. It’s irrefutable. And no one really knows what’s moving the market so this story is as good as any other.

      • 08 Mar 2007 at 1:40 PM
      • traders

      If Paula Abdul Can Bounce Back From Her Marriage To Emilio Estevez, Why Can’t Nick Leeson Start Trading Again?

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      leeson.jpg…is what Market Watch’s David Weidner (basically) wants to know. According to Weidner, Leeson, who you all know single-handedly brought down Barings Bank in the early 90’s, has picked the perfect time to get back in the biz.

      Nick Leeson contemplating a return to trading is kind of like Donald Rumsfeld considering another crack at Iraq or Jeff Skilling thinking about a return to management, or a sequel to “Gigli.”
      But what better time could there be for a man who once stole $1 billion to make bad currency bets. The road to redemption has been paved of late by ex-former analyst Henry Blodget, ex-former investment banker Frank Quattrone and I-promise-this-hedge-fund-won’t-require-a-multi-billion-dollar-bailout John Meriwether. If the Police can reunite for a tour, surely Leeson can make a stop in Singapore. After all, Judas Priest played a few dozen reunion dates a couple of years ago.
      [In the time since Leeson went to prison,] rogue traders continued to have their way. Regulators at the New York Stock Exchange prosecuted nearly 200 cases, barred 130 individuals — 35 permanently — and collected $27.7 million in fines from member firms in 2005, the last year such statistics are available. The violations run the gamut, but it’s safe to say most had some kind of failed supervisory function. In other words, no one was watching closely.
      All of this would make for fertile ground for Leeson, who could dazzle us and his clients with his trading prowess. In an interview with the local paper in Ireland where he now lives, Leeson assured the locals he wasn’t about to snooker the bank.

      Don’t bet against him [Market Watch]

        On The “Testicularity” of Equity Traders

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        bullsbronzeballs.jpgWe’ve been gagging to use the word “testicularity” ever since we heard Mark Haines invent it on CNBC back in January. Finally, this week’s market plunge gives us an excuse.
        You see, our reporting on the reaction of a trader stunned by Tuesday’s market plunge has attracted a lot of attention. Not the least from people who weren’t trading equities on Tuesday who have a lot of conviction that people who were trading equity are, basically, spineless wimps. Well, they didn’t quite say “spineless.” It was another piece of anatomy that they alleged the equity traders were missing.
        One correspondents—who we swear is not former Amaranth energy trader Brian Hunter—writes:

        Stock traders are such pussies. Market dropped 4%? Natural gas traders work in a market that drops 20% in a day and rebounds likewise. They must be manly men, even the girls. None of them are, however, older than 32. There’s got to be a reason for that. Sum: Equity trader – limpwrist. Energy trader: Volatility He-Man (or Her-Man).

        And over on one of our longtime favorite finance blogs—Going Private—Ms. Equity Private remarks:

        One would suppose- erroneously, it would now seem- that those on The Street were made of sterner stuff than this. The testicles on the famous bull are, after all, made of bronze last I checked- no? Perhaps, oh, anonymous aspirant to big swinging schmuck status, you better run out and get some duct-tape and plastic sheets for the imminent biological attack, too. I am certain, however, that once you recover from the shock, say, Friday afternoon or, perhaps, Monday morning, it might be a good time to go long on Anthrax remedies and buy those ethanol stocks “on the dip,” right?

        Drama Queens to the Floor, Please [Going Private]

          • 19 Jan 2007 at 8:47 AM
          • traders

          I, For One, Welcome Our Robot Leaders

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          tkf.jpgGoldman Sachs and Lehman Brothers laid off nine and six specialists, respectively, yesterday, as part of its shift from human to electronic trading. Lehman also laid of the entirety of its Direct Market Access staff; Goldman plans to shutter its Direct Access division by March. Lehman confirmed the news but had nothing else to comment (though, presumably, that the erstwhile colleagues ought not to let the door hit them on the way out). Goldman, typically known for being the more charitable organization, confirmed the moves and offered “We hear Starbucks gives all its employees health insurance—even for P/T! Not dental, though…but beggers can’t really be choosers, are we right?”
          BLOOD ON THE STREET: FLOOR TRADERS AXED [NYPost]

            Traders Versus Bankers, Revisted

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            sales&trading.jpgInformation Arbitrage is back with the second installment of his fantastic Wall Street Series. (If you missed the first installment, click here.) This time the focus is on the conflict between investment banking and sales & trading, and on the conflict between the sales guys and the traders.
            So is there some way for a Wall Street firm to put together these groups to eliminate the legendary conflicts? IA answers: “NO. It’s Us versus Them. It always has been and it always will be, given the structure of the Street and the chemical differences among the species in question.” And that’s just the sort of negativity we love.
            Here’s his description of the world view of sales & trading guys:

            We’re smart. We’re creative. We know how to monetize an asset. Bankers are stupid and weak, bending over backwards to kiss the client’s a** while jamming us. Screw them. We deserve the big cash. Sales & Trading says things like, “You got that deal because the client wanted to expand the syndicate to diversify financing risk” or “The Equity Trading desk took on a load of principal risk to get that block trade done for your client” or “The creativity of the Tax Structuring team was the catalyst for getting that buy-side assignment that saved a client $20 million on a cross-border acquisition.” In essence, Bankers are overpriced pieces of sh*t in suits that benefit from the creativity, capital and risk-taking skill of those in S&T. And it gets really complicated when you have client-type guys in Sales & Trading who, in fact, have better relationships with the clients than the Bankers themselves. This really, really pisses Bankers off. This is just too in-your-face for these guys to tolerate. And it just turns up the volume on the systematic conflict that already exists.

            The Wall Street Series Part II: Investment Banking vs. Sales & Trading – Can’t We Be Friends? [Information Arbitrage]

              • 03 Jan 2007 at 9:03 AM
              • traders

              Reminiscences of a Stock Operator

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              stockoperator.pngReminiscences of a Stock Operator is the classic trading book. It’s a slightly disguised biography of the famed trader Jesse Livermore, and it is the book most often cited by traders when we ask them to list influential books in their lives. And it’s finally entered to public domain. We tip our hats to Barry Ritholtz at the Big Picture, who first brought to our attention the fact that the entire book is now available as a pdf file.
              Reminscences of a Stock Operator pdf [Trading-Naked.com via The Big Picture]