Andrew Hall isn't some young punk "rising star of the moment" oil trader. This guy has been around for years and essentially running an energy hedge-fund out of Citi, after the Phibro Salomon Brothers acquisition. He "nailed" the oil markets with a call in 2003 that was incredibly bright and insightful. As part of his deal in joining Citi from Phibro, he essentially told Citi to just leave him alone, and if they ever interfered, he and his team would "walk". It's been a good relationship for Citi, thus far. http://www.bloggingstocks.com/2008/02/28/andrew-hall-citigroups-quarter-billion-dollar-oil-trader/
So by the same reasoning, should stock traders have to take posession of chunks of the companies they buy too? If I buy some CVS or WAG, does that mean I should be stashing a bunch of mouthwash and Viagra at some point?
He technically is his own shop which got acquired. He got a great package thrown at him, which essentially makes his risk zero as even if his group blows the fuck up, he gets his salary & back bonuses. And having a big bank as your backer is always a plus. When you get acquired by a big bank, the key concern is their red tape & bureaucracy. The money is never the issue.
Seems to me that groups like this aren't much different from any other asset class. Perhaps Citi should consider selling them en masse to another bank, let the market determine their value.
People like Andrew Hall are not an asset-class . . . they are not "property" of Citicorp and can walk.
He just might do that someday. However, right now he has access to some incredibly cheap cost of capital via Citi and what is most likely a very generous employment contract.
Sure...can him and dont pay the bonus...send them to London or Dubai to trade with their banks and their money. Maybe a SWF like the Saudis or Taiwan should hire his team (Sovereign Wealth Fund) then it goes from producing a net gain for the US economy to a net loss for us. Perhaps we should just ban the NYMEX and put massive limits on energy trading so the entire industry shifts to ICE or the DME all these protectionist rants and jealous rages dont help or solve anything...last time I checked we're in the US and not socialist China. The trading these guys are doing isnt easy at all and be glad theyre on our side...remember Energy markets are traded by the whole world and by big players...theyre not robbing the coffers of middle class america.