The Secret Club That Runs the World: Inside the Fraternity of Commodity Traders (33 page)

BOOK: The Secret Club That Runs the World: Inside the Fraternity of Commodity Traders
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Bagley as first chairman of,
88
–89

Chilton as commissioner of,
91
–93

complaints about position limits of,
187

early weak powers of,
85
,
89

enforcement toughened by,
198
–99,
200
–201

establishment of,
85
,
87
–88

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

lifestyle of,
10
,
227

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)

for Glencore,
45
,
46
,
51
–52,
58

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

Danieli, Francesca,
94
,
97
,
184

David, Craig,
134

Davis, Mick.
See also
Xstrata

on al-Sayed’s psyche as trader,
176

anger at Glencore merger terms and,
180

character of,
163
,
164

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

defined,
66
–67,
190

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

Downey, Morgan,
70
,
83

Dunn, Michael,
185
,
188
,
189

Ealet, Isabelle,
24
,
25
,
153
–54

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

education of,
70
,
72

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

Arab Spring and,
16
,
112

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

Fundamentals,
5
,
20
–21

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

character of,
97
,
98
,
200

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

Meister hired by,
190
,
191

on position limits,
99

rules crafted after Dodd-Frank of,
103
–4,
181
–82

on speculation’s effect on prices,
86
–87,
95
–96

tough rhetoric of,
182
,
183

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

anxiety about assets of,
60
,
62

appointed CEO of Glencore,
61

attention to physical detail by,
61

character of,
59
,
158

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

education of,
59
,
60

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

industrial arm of,
48
,
143
,
159

insularity of,
54

IPO decided upon by,
63
–64

IPO of,
159
,
161

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

vulnerability after 2008 downturn of,
45
–46,
58

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