It's been six-and-a-half long years since Brian Hunter single-handedly destroyed a happy little "multi-strategy" hedge fund called Amaranth Advisors. Or did he?
Well, yea, with an assist from deregulation, the juvenile trading culture and some oversight that left a few things to be desired, according to the book we can now all turn to when we need a laugh at the man from Calgary's expense.
The highlights, courtesy of a book report:
Dreyfuss also captures the juvenile culture of trading luminaries who battle like enemies in some twisted fantasy. Hunter and futures trader John Arnold, founder of the hedge fund Centaurus Advisors LLC, fight each other in trading duels more suited to the video game Halo than real life….
By the time he left Deutsche Bank for Amaranth two-and-a-half years later, he’d been demoted by a supervisor who would say later in a deposition that Hunter couldn’t be trusted to “do the right thing for the bank.”
As is to be expected in the world Dreyfuss is describing, Hunter was “quickly scooped up” by Amaranth despite that rocky ending with Deutsche Bank….
BlackRock Inc., the New York investment-management firm, was concerned enough that it paid a penalty to bail out. After that, Hunter’s bosses began making the first of several unheeded requests that he cut back on his positions. In May, Amaranth lost more than $1.1 billion, and a death spiral was in full force….
In June 2006, when Amaranth was on its slide to oblivion, the clearly out-of-control Hunter observed to a colleague that other people in the markets “were getting out of control.” In another exchange, a trader who works with Hunter refers to the “fricken deviant market.”
Which is all great. But not as great as this:
“‘If you want to succeed and make money, you want to destroy someone else,’ a trader tells Dreyfuss. “‘That’s just how it works. If I want to be successful in this industry, I’m going to want to destroy five guys.’”
Amaranth Hit Death Spiral as Sycophants, Fools Cavorted: Book [Bloomberg via BW]