Comments on: Citigroup can’t keep Phibro http://blogs.reuters.com/felix-salmon/2009/04/30/citigroup-cant-keep-phibro/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: George http://blogs.reuters.com/felix-salmon/2009/04/30/citigroup-cant-keep-phibro/comment-page-1/#comment-5037 Thu, 06 Aug 2009 01:56:37 +0000 http://blogs.reuters.com/felix-salmon/2009/04/30/citigroup-cant-keep-phibro/#comment-5037 Whit –

With all due respect, Phibro and Basis traders kept separate books. The refining business was bad for a few years, and Salomon (and Andy Hall) had no patience given the bond scandal and the fact that oil refining and trading were not core businesses. Basis lost more than they should have because they didn’t hedge the clean product cracks. Hill, PEUSA, and Basis were acquired and operated for 10 years using the same business plan practiced by Bill Greehy and Valero. You might say timing is everything.

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By: mcnet http://blogs.reuters.com/felix-salmon/2009/04/30/citigroup-cant-keep-phibro/comment-page-1/#comment-4903 Mon, 03 Aug 2009 08:06:24 +0000 http://blogs.reuters.com/felix-salmon/2009/04/30/citigroup-cant-keep-phibro/#comment-4903 Govt guaranteed hedge funds are insane. Spin them off and good luck to them.

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By: Brian http://blogs.reuters.com/felix-salmon/2009/04/30/citigroup-cant-keep-phibro/comment-page-1/#comment-4902 Sun, 02 Aug 2009 23:44:10 +0000 http://blogs.reuters.com/felix-salmon/2009/04/30/citigroup-cant-keep-phibro/#comment-4902 So we want to let a highly profitable company at Citi go because they are paying a bonus? A bonus to a man who has made billions for Citi and hasn’t had an unprofitable year in 15 years? This company is so going down if we are actually dumping profitable sections to spare the company as a whole some bad press.

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By: sweede http://blogs.reuters.com/felix-salmon/2009/04/30/citigroup-cant-keep-phibro/comment-page-1/#comment-4628 Mon, 27 Jul 2009 13:10:29 +0000 http://blogs.reuters.com/felix-salmon/2009/04/30/citigroup-cant-keep-phibro/#comment-4628 you are v right. they’re due a blow up. citi should be pleased to flick them and do need to present a perception of risklessness.

not sure i agree with the rest of the logic though, swfs are currently rampaging through most markets like super hedge funds. They’re all tax payer owned, just not western tax payers…..

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By: realist http://blogs.reuters.com/felix-salmon/2009/04/30/citigroup-cant-keep-phibro/comment-page-1/#comment-1170 Mon, 04 May 2009 06:20:00 +0000 http://blogs.reuters.com/felix-salmon/2009/04/30/citigroup-cant-keep-phibro/#comment-1170 If ( and when ) the socialists at Treasury finally tell Citi that they no longer can pay for performance at the consistently profitable Phibro, then it will be the pinnacle of stupidity in this witch hunt of 2009 in America…… the words ‘ cut off your nose to spite your face’ spring to mind. Despite many people thinking that ‘ people should just be happy with keeping their jobs’ …. the truth is that most talented people will not work for government mandated salaries. Geithner and Co should be careful what they wish for .. or else they will be left with a bunch of empty businesses that will have zero chance of repaying TARP.

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By: FlownOver http://blogs.reuters.com/felix-salmon/2009/04/30/citigroup-cant-keep-phibro/comment-page-1/#comment-1112 Fri, 01 May 2009 20:33:33 +0000 http://blogs.reuters.com/felix-salmon/2009/04/30/citigroup-cant-keep-phibro/#comment-1112 Good idea. Let them walk. Throw away a few more billion dollars in “taxpayer money” so that no one has to watch a news program about somebody’s castle.

Odd that Obama thinks it’s too complicated to run a hedge fund along with a bank, since he’s now running a hedge fund, a bank, an army, a navy, a retirement program, a medical insurer, an education system, a home-lunches-for-old-people-program . . . . Of course, he’s much smarter than the guys who ran Citi, and he’s got a lot more competent people under him, so maybe it will work.

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By: Paul Thomas http://blogs.reuters.com/felix-salmon/2009/04/30/citigroup-cant-keep-phibro/comment-page-1/#comment-1090 Fri, 01 May 2009 17:34:43 +0000 http://blogs.reuters.com/felix-salmon/2009/04/30/citigroup-cant-keep-phibro/#comment-1090 You are absolutely on point in your assertion, as is Obama in his observation. This type of operation has no place in the world of banking or insurance, which are vital to the economy and cannot be subject to the swings endemic to speculative trading outfits. (Can Congress bring back Glass Steagall?) Operations like Hall’s are speculative and volatile and subject to wild swings in earnings and losses. They make oversize returns when they bet right and incur oversize losses when they bet wrong. Such operations make and lose money through taking positions that are calculated and educated; yet these positions are nonetheless still nothing more than educated bets. AIG’s FP folks were wildly and consistently profitable too, until 2008 when their positions blew up. No doubt Hall is one of the best, but the activity he fills his days with does not belong as an appendage to a bank or insurance company. And despite his prowess and the insinuation that Phibro is consistently profitable, Phibro has in fact lost significant amounts of money at various times over the years. Ask Hall how his positions did during the Gulf War oil spike; better yet, ask someone who worked at now defunct Saloman Brothers, who were left to foot the bill for the trades.

Finally I have hope that the oversize bonuses shall become a relic of the past. Hall, like most other traders, is in a great position, he gets to bet other people’s money and keep a fat share of the winnings. If his bet pays off, he gets a big bonus. If his bet loses, he still has his oversized salary, no personal repurcussions and someone like Salomon Brothers picks up the tab. A better example, did Brian Hunter ever give back any of his $75 million bonus from the previous year after he blew up Amaranth?

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By: whit r http://blogs.reuters.com/felix-salmon/2009/04/30/citigroup-cant-keep-phibro/comment-page-1/#comment-1083 Fri, 01 May 2009 15:53:57 +0000 http://blogs.reuters.com/felix-salmon/2009/04/30/citigroup-cant-keep-phibro/#comment-1083 Andy Hall lives! Arrggghh I worked for Phibro Engergy aka Basis Petroleum which he and his traders drove into the ground so hard Salomon finally got disgusted and sold Basis to a medium sized refining company named …valero. Who promptly turned the refining around and make a handsome profit Andy couldn’t. Their business model was shove every bad trade into the refinery and make them take the loss to preserver their numbers and bonus. Sounds like another energy trading company named…. Enron? Interestingly while at Phibro we had many friendly dealings with Enron in ventures and software boondoggles ala Next Computers (Mr.Jobs?).

I hope his time has come. He’ll still have his castle and maybe the china and silver service I remember the traders ate off in their executive dining room.

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By: KenG http://blogs.reuters.com/felix-salmon/2009/04/30/citigroup-cant-keep-phibro/comment-page-1/#comment-1050 Fri, 01 May 2009 00:20:52 +0000 http://blogs.reuters.com/felix-salmon/2009/04/30/citigroup-cant-keep-phibro/#comment-1050 JHawk, if the banks sell their profitable non-core divisions, they might have enough capital so that they won’t need any welfare to survive. Or are you in favor of the government buying common stock in these horribly mismanaged companies to keep them from failing?

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By: JHawk http://blogs.reuters.com/felix-salmon/2009/04/30/citigroup-cant-keep-phibro/comment-page-1/#comment-1048 Fri, 01 May 2009 00:13:22 +0000 http://blogs.reuters.com/felix-salmon/2009/04/30/citigroup-cant-keep-phibro/#comment-1048 Let’s spin off ALL of the PROFITABLE divisions that had nothing to do with Subprime so that there will be nothing left with which to repay the tax payer bail-out. Brilliant.

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