CALGARY, Alberta -- Of all the traders gambling big sums on energy, a 32-year-old Canadian named Brian Hunter made some of the brashest bets and the fastest money.
Last week, he fell hard, proof of how quickly fortunes can reverse in gyrating commodities markets.
Here in this bustling new energy frontier, Mr. Hunter headed the energy desk for a Connecticut hedge fund called Amaranth Advisors. At the end of August, trading natural gas, he was up approximately $2 billion for the year. Then Mr. Hunter lost roughly $5 billion, in about a week.
His losses savaged returns for Amaranth, dragging its assets under management down to $4.5 billion from $9 billion at the start of September. In disclosing the losses to investors in a letter yesterday, the fund said it was "aggressively reducing" its natural-gas bets, though Mr. Hunter remains at the fund.
What hurt Mr. Hunter is what he had ridden to glory for the past year or so: volatility.
Though unknown in public, he had created a buzz on Wall Street -- a wunderkind to some, a ticking bomb to others. From a cramped trading desk here, he thrived on big price swings, reaping billions of dollars on price declines and surges alike. But late last week, he watched with growing alarm as gas prices took a steep dive, particularly in futures contracts for delivery of gas for this coming winter. His losses mounted in after-hours trading last weekend.
Backed by borrowed money and a deep-pocketed fund, Mr. Hunter took on more exposure to certain futures contracts than do some big investment banks employing more than 100 energy traders, say several traders and ex-colleagues. He sometimes held open positions to buy or sell tens of billions of dollars of commodities.
He was up for the year roughly $2 billion by April, scoring a return of 11% to 13% that month alone, say investors in the Amaranth fund. Then he had a loss of nearly $1 billion in May when prices of gas for delivery far in the future suddenly collapsed, investors add. He won back the $1 billion over the summer, only to lose that and much more last week.
15 comments:
I know how he feels. The frozen Orange Juice market has been similarly volatile
I had to re-new my license last week and take the test. Always take the computer test, it's easier than the written. I missed one- What is the safest distance between you and a vehicle you are following? One second, two seconds, or three seconds. Of course I guessed three but the machine said two. I passed anyway but argued with the DOT lady to over-ride the incorrect answer. She looked at me like I was nuts and of course did nothing. I'm still annoyed. They don't put your weight on licenses anymore.
It is futile to argue with DOT ladies. You were correct. How is 2 seconds safer than 3?
Ed, does this mean some guy is going to repossess your car in the middle of the night?
When Council Bluffs was going through the banning pit bulls controversy (way before the school board slapping incident) a guy was testifying in front of the city council about how any dog can be mean, but also any dog can be made to calm down. He was a big, kind of dirty-looking unshaven guy wearing a coat that was all ripped up. He said "In my line of work..." so many times that the mayor finally asked what he did. He said, "I'm a repo man."
I like living here. Good mix.
Tom and I found out, a little while ago, that our Licences expired on our Birthdays LAST YEAR! We have still not renewed them. :-<> Gotta re-test now. :-(
I can't believe it 'cuz when we moved here in October '01...they expired and we retook the test in 2002. I don't remember my Minnesota license expiring only after 3 years??? Whadupwihdat?
the repo man is always intense.
Joe - I recently took the test in Illinois. They don't have a computer test here and when my test was graded by some guy who didn't have an answer sheet he marked one of my sign idendifications wrong. I know HE was the one that was wrong, but I let is slide since I (somehow) had managed to sneak to the front of the line and avoided a 2.5 hour wait to take the test.
They still include the weight. My car is not in jeopardy.
BAck to the dish washer.
you can always do without cable. easily.
I used to think mtv was the root of all evil, now I know it is all tv. an evil i enjoy, all the same.
I am not considered a wunderkind. More of an uberslacker.
I have neither cable nor a dishwasher. I'll take either. Dishwasher would win, though.
P
Dishwashers are imperative when sanitizing baby bottles.
Tom and Nance-get your licenses right away. You'll have to re-test but the rule is if the license has been expired less than a year, a driving test is not mandatory but at the discretion of the DOT. After a year it's mandatory. You have to provide a registered, insured vehicle. My suggestion is I'll take you to the Ft. Dodge DOT place some monday afternoon and you can both test. Ft. Dodge is busier than Algona so lt's likely they'll let you slide on the driving test. I was in and out in 35 minutes. There's a nice bar in Badger we could hit on the way home.
You can verify the one year thing at 800 532 1121. Hit option 1, then option 1, then option 9 and wait for a live person.
Joe3 ~ WooHoo...it's a date!
Are they open on Mondays? The one in Cedar Rapids is closed on Mondays. Or is it Fridays?
Monica
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