Star trader threatens to leave Citi

Landis82 · Jul 26, 2009

Quote from turkeyneck:

CHICAGO (MarketWatch) -- Citigroup Inc. could find itself between a rock and a hard spot as it determines how to handle a hefty pay package that is likely to draw the ire of the government, investors and the public, according to a media report Sunday.

A star trader and his team have threatened to quit the financial giant's Phibro LLC energy-trading unit if their 2009 contracts, which could earn them as much as $100 million, are not met, The Wall Street Journal reported in its online edition.

http://www.marketwatch.com/story/citigroup-may-be-in-pay-squeeze-2009-07-25

Andrew Hall isn't some young punk "rising star of the moment" oil trader. This guy has been around for years and essentially running an energy hedge-fund out of Citi, after the Phibro Salomon Brothers acquisition. He "nailed" the oil markets with a call in 2003 that was incredibly bright and insightful.

As part of his deal in joining Citi from Phibro, he essentially told Citi to just leave him alone, and if they ever interfered, he and his team would "walk".

It's been a good relationship for Citi, thus far.

http://www.bloggingstocks.com/2008/02/28/andrew-hall-citigroups-quarter-billion-dollar-oil-trader/

tomahawk · Jul 26, 2009

Quote from Eight:

All commodity traders should have to take physical possession of the commodities.. why steer all the best and the brightest into jobs that strip mine the economy?

So by the same reasoning, should stock traders have to take posession of chunks of the companies they buy too? If I buy some CVS or WAG, does that mean I should be stashing a bunch of mouthwash and Viagra at some point?

youngtrader · Jul 26, 2009

Quote from Eight:

All commodity traders should have to take physical possession of the commodities.. why steer all the best and the brightest into jobs that strip mine the economy?

Your not that smart are ya?

turkeyneck · Jul 26, 2009

Quote from Landis82:

Andrew Hall isn't some young punk "rising star of the moment" oil trader. This guy has been around for years and essentially running an energy hedge-fund out of Citi, after the Phibro Salomon Brothers acquisition. He "nailed" the oil markets with a call in 2003 that was incredibly bright and insightful.

As part of his deal in joining Citi from Phibro, he essentially told Citi to just leave him alone, and if they ever interfered, he and his team would "walk".

It's been a good relationship for Citi, thus far.

http://www.bloggingstocks.com/2008/02/28/andrew-hall-citigroups-quarter-billion-dollar-oil-trader/

How come he doesn't open his own shop?

texrex2002 · Jul 26, 2009

^ because he's making $100 million right now.

not a bad gig...

Anaconda · Jul 26, 2009

Quote from turkeyneck:

How come he doesn't open his own shop?

He technically is his own shop which got acquired. He got a great package thrown at him, which essentially makes his risk zero as even if his group blows the fuck up, he gets his salary & back bonuses. And having a big bank as your backer is always a plus.

When you get acquired by a big bank, the key concern is their red tape & bureaucracy. The money is never the issue.

Random.Capital · Jul 26, 2009

Seems to me that groups like this aren't much different from any other asset class. Perhaps Citi should consider selling them en masse to another bank, let the market determine their value.

Landis82 · Jul 28, 2009

Quote from Random.Capital:

Seems to me that groups like this aren't much different from any other asset class. Perhaps Citi should consider selling them en masse to another bank, let the market determine their value.

People like Andrew Hall are not an asset-class . . . they are not "property" of Citicorp and can walk.

Landis82 · Jul 28, 2009

Quote from turkeyneck:

How come he doesn't open his own shop?

He just might do that someday.

However, right now he has access to some incredibly cheap cost of capital via Citi and what is most likely a very generous employment contract.

Preston Forbes · Jul 28, 2009

Sure...can him and dont pay the bonus...send them to London or Dubai to trade with their banks and their money. Maybe a SWF like the Saudis or Taiwan should hire his team (Sovereign Wealth Fund)

then it goes from producing a net gain for the US economy to a net loss for us. Perhaps we should just ban the NYMEX and put massive limits on energy trading so the entire industry shifts to ICE or the DME

all these protectionist rants and jealous rages dont help or solve anything...last time I checked we're in the US and not socialist China. The trading these guys are doing isnt easy at all and be glad theyre on our side...remember Energy markets are traded by the whole world and by big players...theyre not robbing the coffers of middle class america.