How do you lose $5 billion in one week?

LTCM lost 4.6 billion but over 4 months according to wikipedia.
Nick Leeson lost 1.4 billion at Barings Bank.

So a $5 billion blowup in 5 days has to be the biggest and fastest blowup of all time. Or am I wrong?
 
hey all i was just watching bloomberg tv. the reporter was interviewing a professor from boston university and asked him what is the risk to the buyer of amaranth's energy portfolio. the professor replied:

"well, i like to look at risk simply. nat gas can go to 0, so that's about $5. but just a few months ago nat gas was at $15. so the upside is better than the downside."
:D


Quote from riskarb:

I haven't a clue. I was told this by a former Amaranth investor. I doubt it was contractual, however.

Amaranth Funds are trading on hedgebay.com The bids are rising a bit now that Citadel has agreed to buy the energy portfolio. Ken Griffin has got some balls.
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Quote from Thunderdog:

I don't think that it necessarily works that way. Depending on risk parameters, etc., both sides can get shaken out of a poorly timed trade. Also, I don't think that your comment is meaningful in this particular circumstance. Anyone can say after the fact in which direction someone should have taken a stupid flyer.
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Ok. Pick a strategy that you know will lose money going forward.
 
i wonder who will be taking the otherside of the trade when they unwind their natural gas positions. this may be the short term bottom for natural gas....
 
Quote from m4a1:

"well, i like to look at risk simply. nat gas can go to 0, so that's about $5. but just a few months ago nat gas was at $15. so the upside is better than the downside."
:D [/B]
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If this guy isn't cool, I don't know :D
 
It's like this

First all the hedge funds robbed the public blind by kiting the energy complex beyond all reason.

Then the tables were turned.

It's a nasty business, aint it.
 
I'ts a lot easier to lose money due to the very thing that is supposed to keep you from losing money.

I'll let you guess what it is.
 
FWIW, Citadel will make a billion off this deal, minimum. They have the capital to ride out the shots the funds may take. WTF would attempt to run stops at $5.00 against Citadel?

Time to buy NatGas. I think it's going to be an abnormally cold Winter.
 
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