Li Hejun And The Worst Business Trip Ever

The kind where you come back and find out you lost $14 billion.
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Nowhere to go but up now, right?

So we can all agree that UBS has had a pretty shitty couple of days, yes? Way shittier than, say, a Chinese billionaire might have expected when he went to a clean-energy convention instead of his company’s annual meeting, because nothing eventful could possibly happen, right? Wrong.

On the day Li Hejun lost roughly US$14 billion, he was skipping his company’s annual meeting to attend what it said was a clean-energy exhibition in Beijing. That company, Hanergy Thin Film Power Group Ltd., which Mr. Li controls, saw its shares plunge nearly 50% before trading was halted. Mr. Li, who at one time was considered China’s richest man based on the value of his majority stake in the Chinese solar company, saw his holdings suffer accordingly.

Hanergy Plunge: The Man Who Lost $14 Billion in One Day [WSJ]

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This Is The Last Greek CDS Post Ever*

There's that famous scene in Liar's Poker - are there non-famous scenes in Liar's Poker? - where the much maligned equity department sends a program trader to impress Michael Lewis's jackass fellow Salomon trainees with his brilliance. It does not work: He lectured on his specialty. Then he opened the floor to questions. An M.B.A. from Chicago named Franky Simon moved in for the kill. "When you trade equity options," asked my friend Franky, "do you hedge your gamma and theta or just your delta? And if you don't hedge your gamma and theta, why not?" The equity options specialist nodded for about ten seconds. I'm not sure he even understood the words. ... The options trader lamely tried to laugh himself out of his hole. "You know," he said, "I don't know the answer. That's probably why I don't have trouble trading. I'll find out and come back tomorrow. I'm not really up on options theory." "That," said Franky, "is why you are in equities." This is totes unfair to the actual equity vol traders I know, but I kind of felt like that guy after talking to a CDS lawyer yesterday about this craziness in Greece. It went something like this: Me: As an equity derivatives guy, I expect derivatives to transform into derivatives on whatever their underlying transforms into. And I'm troubled by them not doing that. Lawyer: You should not be troubled by the concept of cheapest to deliver. Yeah fair! That's the thing about CDS. Dopes like me think of it as just a rough proxy for default risk but when things get real like with Greece it turns into a cheapest to deliver convexity play and then I slink away in embarrassment. But yeah, as a matter of rough justice, if you can go be opportunistic about finding the cheapest to deliver bond, Greece can go be crappy about leaving you with only expensive to deliver bonds. I guess.