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04 May 2007 @ 09:47 pm
Please won't somebody think of the traders?  
Why does nobody ever say that? I can't work it out.

During a smoko today, some of us were reflecting on Amaranth Advisers, a hedge fund that lost US$6 billion in about a week on natural gas futures. It's got us wondering how the hedge funds have been doing out of the oil crisis, because you know someone will have had an interest in the oil price going up, besides people who actually own oil, and the derivatives players may have got a heck of a lot of vega out of the speed of the move, probably more than most of them could have possibly dreamt - or had nightmares about. If everyone has weathered the storm then we might not hear anything, but perhaps in a few months we'll hear one way or the other about who's done well and who's done badly. That's why the markets are down; it's all a zero-sum game, or a very slightly negative sum game, but the people who make gains tend to take them and the people who end up down tend to chase them even though they know they shouldn't. It's human nature. Who knows who owns what shares of which hedge funds, though? Some banks will have made a killing out of it, others will have suffered one. No wonder people are going mile-long on gold, as they always do in times of trouble, perhaps they smell a RUN ON THE BANKS!!! ;o)

Because I'm in a good mood - holiday next week, yippee - I'd better explain, but pay attention because I'll say this only once. All traders consider it good sport to try to convince poor innocent suckers that there's about to be a run on the banks, when there never really is. (Well, almost never.) We do this for two reasons: one, we could do with a giggle; two, we think it'll help our position. It's definitely case one here - nobody's having fun out of this.

Keep this to yourself, but the company I work for have been headhunting - a new boss for our team, actually. We've found our man and I don't want to say too much about him but he's got a reputation as long as your arm and he's white hot. The stunt he pulled, though... we all thought the contract was signed, sealed and delivered, but he threatened to pull out unless they changed it so that he'd get paid in Saudi Arabian Riyals. Same package, according to today's exchange rates, but you know as well as I do that that's not going to last long. He claims that it's because he has lots of family over there and needs to get ready funds for next time he goes to visit but, hey, it's got to be part tax dodge, part currency play. And you know what? Our company want the man so badly that they're going to go well out of their way and set up all sorts of accounting changes just to stop him from leaving before he even starts. Damn, now that's a way for a boss to get the respect of all his subordinates before day one on the job! ;o)
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