Star trader threatens to leave Citi

Quote from fkbsuhites:

These traders bonuses are null and void given that they'd be on the streets if it wasn't for Bush Jr bailing them out.

The entire mess started when Bush Jr decided that these banks were "too big to fail" and proceeded to threaten congress into giving him and Paulson Trillions to throw at their buddies.

The govt. should let all these banks go out of business and only secure the depositors.
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You are such a fucking idiot, shameless liar!!! Didn't you watch TV??? Everytime a bailout was proposed, the Democrats in Congress jumped up with joy, while the Republicans opposed.

Bush had little to do with it.

Are u fucking blind??? Or just bent on distorting history???

I remember the Saturday night before Congress voted on the bailout plan, I had a short position and I was on vacation. I was hoping the bailout would not pass until market opened on Monday.

I kept my hotel TV on all the time on CNN, hoping the Democrats would take a break for the weekend. But to my disappointment, the Democrats were busy, very busy. The fucking Democrats were busy doing everything to push through the bailout plan.

That idiot Barney Frank declared on TV: "We've got to pass the plan before the Asian market opens." That idiot wanted to manipulate not only the US market but also the Asian market. I was so worried that I cut short my vacation, got home and closed my short position on Sunday evening.

You know what? the market tanked anyway after the fucking Democrats passed the bailout plan. I should have held my short position. Fuck the Democrats.

And fuck you LIAR!
 
Quote from rubibond007:

I Agree 1000% with you Preston. Landis82 is right too, Mr Hall is a TRUE star trader in the same league as Tudor, Kovner etc. Phibro is the one bit of Citi which is working really well and making lots of money ($800 millions last year in profits).

The Oil trading world doesn't need the US exchanges, the US need those players BIG time.
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Isn't Phibro the commodity trading company Marc Rich worked for?
 
Quote from poyayan:

This doesn't sound too complicated. As long as the future premium cover tankers rental cost, physical delivery cost...etc.

If it is a sure bet, you can leverage to the teeth too.

I am surprised that tanker companies don't do this themselves.
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It's not complicated at all but very capital intensive and requires good credit so that the tankers take you seriously. If you get screwed and the tanker bails out on you (which they do during high demand), you're stuck sitting out there with barrels of oil. Also, logistics are important.

The tanker companies don't need to take the risk, they just lease or sell their equipment. When contango opportunities get serious, they simply raise their rates. No need to deploy capital & deal with the logistics, they take their piece of the pie regardless.

Speaking of contango, looks like Light Sweet got a nice spread going on right now. Started earlier this week.
 
Quote from BPtrader:

Everytime a bailout was proposed, the Democrats in Congress jumped up with joy, while the Republicans opposed.
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The overwhelming majority of them still voted "YES", so if you're trying to justify one group of scumbags over the other when they are both the same, you're just stooping down to the "fkbushites" troll's level.
 
Speaking logically, and leaving the feminine emotional sensationalism out of money talk:

1. It's an agreement. Honor your integrity, even in loss.
2. If such agreements force the firm out of business, oh well. Losing money, by your own word, is part of free enterprise.
3. If the government mortgages future taxpayer receivables to selectively enrich firms, with the knowledge of historical and specific intent on the part of the firm to enter such agreements (bonuses, etc) regardless of solvency, the government exercises inequality in fiscal judgement and irresponsibility toward the originators of those future taxpayer receivables, who are motivated by force of law to approve of legislative compliance with any administration due to political bias.
4. Obama has given out many, many times the bailouts as Bush, in only six months, with a second round of future taxpayer receivables-financed bailouts pending.
 
I have a question as to the logistics of this thing.

So, if he makes $100M for himself, he made about $800M for citi.

Say the spread between the spot price and the futures price is $3. There are 55 gallons in a drum and 42 gallons in a barrel as per an internet site I found. The price of 1 barrel is say $70 per the spot price, and the futures price is $73. It seems to me that in order to make that $3 differential (or whatever the typical spread is) come to $800M in profits, you have to have stored a shit load of oil.

My question is this. How many barrels did he need to store to make this kind of money? Does the oil get sucked from the ground, loaded on umpteen number of trucks, and then stored in some place overseas, or does it get stored in the US (maybe it is West Texas Intermediate on the gulf)? Does it depend on where the physical is being delivered to? Are there multiple places it can be delivered to? Does the exchange notify him of the persons taking delivery? Who insures the transport?

I guess the logistics of the trade are interesting to me.
 
Quote from nitro:

I have a question as to the logistics of this thing.
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You're making it more complicated than it is.

Light Sweet Crude Sep contract is trading around $63.40. The October contract is around $65.30. That's almost a 2 dollar per barrel difference, when the cost of receiving, storing & delivering is less than $1 per barrel, even with the markup the tankers are putting on right now since the contango is obvious. Every contract is 1000 barrels. Look at the volume right, 130k (sep) and 70k (oct). Execute 5k contracts in that spread, while netting $1 per barrell, that's $5 mil right there that you set up in a day. And with a 1-2 months turnaround, although if you're doing this on a regular basis, it's a monthly thing. It is quite scalable, so $800M is very possible if the spreads are there.

That is your arbitrage and you may put on the position to secure that profit but it also gives you options to hold the oil into later months if you see oil spike up.

Obviously, you need to do a certain minimum amount of contracts for the economies of scale to kick in. Let's not forget taking the delivery, which requires deep pockets.

Back in winter, the spread between the back & front month was like 8 dollars. That's HUMONGOUS money for the contango trade, almost impossible to imagine as the arb profits are so obvious even when it hits a couple dollars difference. I am sure every trading operation which plays contango went all in on that.

Without taking delivery, you can simply play on the contango via a spread trade, but it may bite you in the ass as the prices may not even come in line for a while.
 
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?
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Is it just me noticing, or is everybody who joined ET in 2009 really a fucking dimwit?
 
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