The avarice of Anderson of Ospraie Capital

With the demise of the "commodity" king, readers with a short memory should take a look at the following article in Der Spiegel written at the end of April about Dwight Anderson, and Ospraie Capital. And like most on Wall Street, they preyed on the poor. But this time it was the poor that were hungry!

But no matter how you dress it up, once again, it is just big bets gone bad.

Now that his commodity fund is being liquidated, his investors find that he also didn't care about them, when he decided to unload his positions. Down almost 40% this year, his high water mark was too big to overcome.

So treat your investors, as ruthlessly as you did those affected by the manipulation of the commodity markets that he tried to corner.

Today he blames it on bad stock trades. So sell the stocks down hard, so it becomes believable! And let the broker on the other end of the trade, make some money off of your sales.

You'll need him again!

DEADLY GREED
The Role of Speculators in the Global Food Crisis
By Beat Balzli and Frank Hornig

Vast amounts of money are flooding the world's commodities markets, driving up prices of staple foods like wheat and rice. Biofuels and droughts can't fully explain the recent food crisis -- hedge funds and small investors bear some responsibility for global hunger.

Not long ago, Dwight Anderson welcomed reporters with open arms. He liked to entertain them with stories from the world of big money. Anderson is a New York hedge fund manager, and as recently as last October he would talk with enthusiasm about his visits to Malaysian palm-oil plantations and Brazilian grain farms. "You could clearly see how supply was getting tight," he said.

In mid-2006 Anderson was touting the "extraordinary profitability" of field crops from corn to soybeans. He was convinced that rising worldwide hunger would be synonymous with highly profitable -- and dead-certain -- investment bargains.

In search of new investments, Anderson sends dozens of his employees to visit agricultural regions around the world. Back in New York, at his company's headquarters on the 27th floor of an office building high above Park Avenue, they bet on agricultural markets from Peru to Vietnam.

But in the towers above Manhattan's urban canyons, it's easy to lose touch with the ground. Hedge fund manager John Paulson was recently celebrated for achieving a record annual profit of $3.7 billion (€2.3 billion). Those who work in this environment have only one rule: Don't disappoint profit-hungry investors.

"I'm constantly wired," Anderson used to say, back when he talked to journalists. His nickname in the industry is the "Commodities King," and his Ospraie hedge fund is the world's largest. These days, though, Anderson avoids the media. He's even kept his face out of the media by buying up rights to all photos of himself on the market. His spokesman is now paid, mainly, to say nothing.

A Broken Market?

There are plenty of questions to ask Anderson, though -- in particular about the role of international investors in the current spike in the price of staple food. Not only is there talk that investors have profited from desperate hunger in Honduras, the Philippines and Bangladesh; critics also wonder if commodity speculators are making the crisis worse.

On Tuesday in Washington, DC, a regulatory body called the Commodity Futures Trading Commission held public hearings on this very question. Farmers and food producers argued that the market was "broken," suggesting that the steep rise in the price of staple crops was hurting everyone -- farmers as well as the people they feed. "The market is broken, it's out of whack," said Billy Dunavant, head of a cotton-producing firm in the United States, at the Tuesday hearing....

But some basic market rules seem to have stopped working. "The enormous influx of capital has resulted in the futures markets no longer reflecting supply and demand," says Todd Kemp of the US National Grain and Feed Association. Ironically, investors have placed their wildest bets on staple foods. Information about supply bottlenecks and famines at the other end of the world is not noted on market quotations.

A commodities dealer named Christoph Eibl soberly concludes that financial managers just want to "benefit from the scarcity of these commodities." Eibl's Stuttgart-based investment firm, Tiberius, manages €1 billion ($1.6 billion). His in-house experts estimate that hundreds of billions of dollars have flowed into the futures sector as a whole within the last five years, much of it for agricultural commodities. Eibl admits the whole thing demands an "ethical discussion." Some futures traders argue that they don't cause prices to rise in the real world because as a rule they never take delivery of a given crop -- other parts of the economy control the actual street price. But futures prices affect real-world behavior (such as inventory hoarding), and Eibl says that buying futures in rice, for example, "eventually causes consumer prices to rise in developing countries like Haiti."

...Financial giant ABN Amro has been especially adept at turning a profit in the current market. As a provider of commodities-investment products for private investors, ABN Amro last March became the first bank to offer certificates allowing small investors to place bets on rising rice prices on the Chicago Futures Exchange.

The bank's marketing department has reacted with cold precision to headlines about famine around the world. Two weeks ago, when experts warned of an impending hunger crisis and the political instability associated with it, ABN Amro introduced a new ad campaign on its website. As India imposes a ban on rice exports, the ad said, world rice supplies have declined to a minimum: Now ABN Amro was making it possible, for the first time, to invest in Asia's most important basic food product.

Unveiling an investment product during a supply bottleneck that has since led to riots? Are ABN Amro's bankers really such clichéd, unscrupulous bean counters? "We are aware of the current discussions relating to agricultural commodities," says Önder Ciftci, head of ABN Amro's German certificate business. But he's not interested in a discussion of ethics. "We make the drills, but others have to do the drilling," he says.
http://www.spiegel.de/international/world/0,1518,549187,00.html

Wall Street justice meted out!