NOt a great deal to "blog" about today. The Frauds article that i wrote was published all over the internet, and i received a lot of complimentary emails which is allways good, guess it makes you feel that you have a valid contribuition to make.

The Amaranth blow up was certainly serious, we have had Natural Gas positions on many occasions the last one blew up like Amaranths, but for a lot less money. What i found strange is that the Natural Gas market is notoriously volatile, Brian Hunter the enery trader at Amaranth was not only using dangerous volumes of leverage, but had not heard of stop losses !!!!! result he took the whole fund down.

You also have to be on your guard 100% of the time, ready for the unexpected. Brian Hunter was a hedge fund superstar becuase he had correctly forecast the huge Natural Gas rise after Katrina what he did not factor in was the arrival of JP Morgan Chase into the market in a serious way. When it all went wrong, it was a combination of JP Morgan Chase and Citadel Investments who were on the other sides of the trades and were there at end to liquidate Amaranths trades.

Also fortuitous that Goldman Sachs decided to suddenly change the weighting of there commodities index which led to a major shakeout in all the energies markets. The politically acceptable commodities takedown was obviousl GASOLINE just before the November elections.

Amaranth to me looked like a classic case of too much trader enthusiasm and margin fostered by a big winning streak after Katrina versus Wall Street/Political interests. They got stretchered out of the game.

Allways be very wary of anything the politicians do or say, and even more carefull of Wall Street instituitions, they are as President Jackson once said "A Den Of Vipers". I am certain that Brian Hunter of Amaranth would agree.