Hooray! Now that's out of the way and everyone know's where I stand, let me continue.
Most energy commodities traded are settled on the basis of a third-party price report. I used to be a price reporter. It's not a terrible job...except for having to deal with people blatantly trying to manipulate where you end up placing the price all day every day. Your part in the process is to talk to enough people who actually participated in the market (be it gasoline, vacuum gasoil, LPG, benzene, crude oil, natural gas... whatever) on that particular day to be able to throw out the bad data points and post a price accurately reflecting where trades occurred.
- Ah, the smirk of repentence. Michelle Valencia, sentenced to 57 months in August 2008
Some days went by quick and easy: no contention, lots of activity = clear price. Other days you'd spend the entire time being threatened, belittled, cajoled, flattered, etc., by people obviously on the 'wrong' side of whereever the market was moving. And that's the thing they never got: how transparent and desperate they were. Anybody doing the price reporting job reasonably well KNOWS where the market is, and no amout of tom-foolery is going to make it anywhere else.
Because of this, when I read Tom Fowler's article in the Houston Chronicle today and see things like former managing director James Brooks saying: "I am a sinner. If I have caused anyone pain or suffering I pray in the name of my Lord Jesus Christ they forgive me. I made a mistake of listening to another man. I trusted him blindly," my reaction is "Fuck you. Happy you found 'Jesus' because you obviously were unacquainted with him at the time. Maybe he'll save your ass in the hereafter, but in the meantime go rot in jail. You were a greedy son-of-a-bitch and got what you deserved. You were trying to maximize YOUR paycheck asshole."
Another El Paso employee, Wes Walton was also found guilty of market manipulation and cried about how long he was going to have to go away for (11 years). Boo-f-ing-hoo. Prosecuters played phone conversations in which Walton used profanity in his attempts to maniupulate price reporters. His post-sentencing response? "I am a good person. I was very embarrassed by the way I sounded on those the tapes. I'm a good father. I believe if you had a chance to meet my sons you'd see I'm not the raving lunatic on those tapes."
Oh yes you are fuckhead. I never talked to you, but I talked to plenty like you. You're not being persecuted. Your crime was not victimless. In your attempts to do whatever it took to enrich yourself you artificially inflated the price us common folk you so disdain pay for the energy we need to stay warm and cook our food. Looks like Jr.'s about to join the real world asshole.
He continues: "But I'm a trader, and a trader can't be successful if they don't have a lot of confidence in themselves." I dunno...maybe a trader can be successful by managing his book properly, or keeping something other than his OWN bottom line in mind? Just kind of thinking out loud here.
I like the fact these fucks signed up for substance abuse programs in prison in order to get their sentences shortened. I'm sure if the state offered them the ability to lop off another year for denouncing the evils of the market they abused they'd do that too. After all, being willing to say or do anything to advance themselves is what got them where they are.
In an earlier blog entry Mr. Fowler reported the CFTC had gathered $445 million in fines from dozens of companies that took part in the false reporting.
False prices were reported to Platts' Inside FERC's Gas Market Report.