The Secret Club That Runs the World: Inside the Fraternity of Commodity Traders (34 page)
Read The Secret Club That Runs the World: Inside the Fraternity of Commodity Traders Online
Authors: Kate Kelly
work for Xstrata,
161
–62
Glencore-Xstrata merger
announcement (February 7, 2012) of,
167
–68
banks representing parties of,
168
Blair’s diplomacy of,
175
,
177
,
178
coal price drop and,
170
Davis’s consideration of,
163
–64
discussion in 2007 of,
162
executive pay controversy and,
170
–72
executive pay packages of,
167
Glasenberg’s confidence about,
166
–67
Glasenberg’s need for control and,
165
–66,
177
,
179
initial discussion after Glencore IPO of,
170
–71
Klein’s diplomacy of,
164
–65,
166
,
175
,
177
,
178
nondisclosure agreements signed by,
166
Olsher’s diplomacy of,
172
–73
price ratio for Glencore share offering of,
164
–65,
166
,
170
,
173
–74,
175
,
176
–78
Qatar opposition to,
173
–74
shareholder objections to,
168
,
171
,
172
shareholder reactions to deal of,
179
Xstrata’s stalling on,
157
–58
Goldman Sachs.
See also
specific officers and employees
aluminum warehousing by,
141
,
227
Andurand’s interview with,
24
–25
Andurand’s work for,
25
–27
Cohn made partner at,
149
Cohn’s benefits to,
150
commodities revenue of,
13
downturn in 2008 and,
43
Ealet’s exploration of selling commodities business and,
154
Gensler’s work for,
93
–94
Glencore-Xstrata merger and,
168
legal inside information for,
142
–43
LME blamed for inefficient aluminum delivery by,
151
LME board seat secured by Cohn and,
148
as market advisor to competitors,
157
Metro International Trade Services purchased by,
142
in
New York Times
story on aluminum warehousing,
154
–55
physical assets ownership by,
68
profitability of aluminum warehousing for,
143
–44
prop trading revenues of,
69
Senate Banking Committee hearing on aluminum warehousing and,
155
sued for violating antitrust laws,
156
Volcker Rule stopping house trading and,
153
Goldman Sachs Commodity Index (GSCI)
embedded costs ruining,
225
food prices and,
16
rise from 2000 to mid-2008 of,
7
–8
sales to individual investors of,
8
sold to Standard & Poor’s as S&P GSCI,
145
as source of client interest,
71
Great Mutual Fund Trap, The,
96
Greenspan, Alan,
94
Griggs, Trey,
122
–23
Heidmar Inc.,
68
Henry Bath & Son warehousing company,
143
Higgs Capital,
229
Hirs, Edward,
209
house trading.
See
proprietary (prop) trading
Hunt brothers, soybean manipulation by,
88
–89
Hunter, Brian,
200
–201
Hurricane Katrina,
75
India, economic growth in,
36
individual commodities investors,
7
–8,
13
–14
Interactive Brokers,
196
J. Aron & Company,
144
,
145
,
146
,
148
,
149
Jacobson, Paul.
See also
Delta Air Lines
Delta hedging decisions and,
113
,
208
,
212
–14
Delta refinery purchase and,
120
Jaffe, Amy Myers,
98
jet fuel hedging
for Emirates by Morgan Stanley,
77
–83,
106
John, Elton,
134
JPMorgan
charged by FERC,
226
Glencore-Xstrata merger and,
168
,
172
Henry Bath & Son warehousing company and,
143
physical commodities business sale of,
226
Klein, Michael,
164
–65,
166
,
175
,
177
,
178
legal issues.
See
regulation and legal issues
Lehman Brothers, Chapter 11 filed by,
43
Levin, Carl,
85
–87
Lincoln, Blanche,
101
London Interbank Offered Rate (LIBOR) scandal,
190
,
200
London Metal Exchange (LME)
aluminum stockpiling complaints of,
141
,
142
,
144
,
151
Goldman board seat secured by Cohn,
148
minimum load-out rate mandated by,
144
,
152
,
155
sued for violating antitrust laws,
156
Mack, John
commodity traders’ arrogance disliked by,
77
Glasenberg advised about Glencore-Xstrata merger by,
166
negotiation with Emirates management by,
81
–83
Purchase, New York, office visited by,
76
as Rosneft director,
227
Managed Funds Association,
97
Marc Rich & Co.
See also
Glencore International
aluminum dealings by,
147
founding of,
56
joined by Glasenberg,
60
sold by Rich,
57
Masters, Mike,
186
–87
Mattson, George,
207
Medlock, Kenneth,
98
Meister, David
enforcement fines established by,
198
–99
first directions to his CFTC employees of,
191
–92
investigating Arcadia crude-oil case,
192
–93
meager accommodations for,
190
–91
Metro International Trade Services
business at Goldman’s time of purchase,
151
expansion after automakers’ crisis,
151
before Goldman’s purchase,
150
–51
Goldman’s purchase of,
142
lawsuit against,
227
load-out process at,
151
–52
New York Times
story on,
154
–55
profitability of,
143
–44
MF Global Holdings
bankruptcy protection filing of,
197
CFTC focus on,
194
Chilton and scandal over,
197
–98
court order against,
226
customer funds missing,
196
–97,
199
debt and Moody’s downgrading of,
193
Interactive Brokers offer on,
196
,
197
margin calls against,
195
negative rumors and stock drop of,
194
–95
S&P’s consideration of downgrading of,
193
–94
small investors wiped out by,
14
Millennium Management,
229
MillerCoors, complaint to LME by,
155
MIM (Mount Isa Mines),
162
Mohammed bin Rashid Al Maktoum “Sheik Mo,”
81
–83
Monroe, Chris,
206
Morgan Stanley.
See also
Fan, Jennifer; Mack, John
commodity index business of,
71
–72
commodity traders underpaid,
84
downturn in 2008 and,
43
economies of scale of,
68
Emirates Airline jet fuel hedge of,
77
–83,
106
Fan’s resignation,
84
flexibility toward Glencore of,
53
–54
Glencore-Xstrata merger and,
168
,
172
grace time requested from Glencore and,
52
margin call on Emirates Airline of,
80
–81
physical assets ownership of,
68
physical commodities business sale of,
226
–27
prop trading in commodities of,
68
–70
Purchase, New York, offices of,
65
Qatar offer of stake purchase of,
168
U.S. office eclipsed by London,
65
mortgage trading by Morgan Stanley,
69
–70
Mount Isa Mines (MIM),
162
multinational brokers
controversial tactics of,
11
–12,
54
warehouses bought by,
143
Nomura, Glencore-Xstrata merger and,
168
,
172
Novelis, complaint to LME by,
144
O’Brien, Edith,
195
Olsher, Brett.
See also
Goldman Sachs
advice sought by Glasenberg,
157
–58
Davis explaining cricket to,
163
Glencore-Xstrata merger aided by,
172
–73,
178
X2 Resources advised by,
229
Patel, Neel.
See also
BlueGold Capital Management
with Andurand Capital,
228
–29
Andurand’s $8 billion position and,
2
,
3
,
127
,
129
,
130
–31
anxiety about oil price spiral of,
130
–31
crude positions sold by,
129
hired as BlueGold execution trader,
127
savings invested in BlueGold by,
131
warning Andurand of price spiral of,
127
Paulson, John,
16
Phibro commodity trading firm,
55
–56
Pirrong, Craig,
98
position limits
CFTC hearing on,
99
CFTC proposal of,
99
–100
CFTC vote on,
189
complaints to CFTC about,
187
congressional angling for,
95
controversy about,
99
–100
Dunn’s disparagement of,
185
Masters as proponent of,
186
–87
new curbs proposed in 2013 of,
201
–2
Schultz as proponent of,
188
as thrown out by federal judge,
199
trade groups’ suits to halt,
199
White House support for,
100
President’s Working Group on Financial Markets,
90
Prevent Unfair Manipulation of Prices (PUMP) Act,
100
proprietary (prop) trading
to balance commodities hedges,
68
–69
as big moneymaker,
69
Morgan Stanley’s use of,
68
–70
of mortgages,
69
–70
speculation of,
69
Purcell, Philip,
166
Qatar Holding.
See also
Al Thani, Hamad bin Jassim bin Jaber; al-Sayed, Ahmad
demands for Xstrata-Glencore merger terms,
173
–76,
178
–79
described,
161
Glencore-Xstrata merger opposed by,
173
–74
pre-IPO investment offer on Glencore by,
161
,
176
stake purchase offer to Morgan Stanley by,
168
Xstrata investment by,
168
–70
Radhakrishnan, Ananda,
194
RBS Sempra Commodities,
143
Reagan, Ronald,
104
regulation and legal issues.
See also
Commodity Futures Trading Commission (CFTC); Position limits; Speculation’s effect on the market
Arcadia crude-oil case,
192
–93
commodities policing in 2013,
226
–27
Commodity Futures Modernization Act (2000),
94
Commodity Futures Trading Commission Act (1974),
88
Dodd-Frank Act (2010),
101
–2,
103
–4,
153
,
181
,
185
early regulation lacking for derivatives,
94
–95
Gensler’s catch-all approach to,
181
–82
Gensler’s tough stance on,
97
–98
LME and Goldman sued for violating antitrust laws,
156
LME-mandated minimum load-out rate for aluminum,
144
,
152
,
155
Metro lawsuit,
227
MF Global case,
14
,
193
–98,
199
,
226
Prevent Unfair Manipulation of Prices (PUMP) Act,
100
