Re: 1 mil var for london distillates

I understand, however, each book you assign to a trader will have a line so
you and I can follow the performance of each book/trader. Ok if you want to
take over arb books, but they (positions and p&l will be your responsibility
and will be judged by performance--like any other book/trader) must be
managed without the team approach of books prior. The 1 million Var
applies to the line next to Ross's name on the p&l sheets. I don't know how
many people trade that book, but I assume it is only ross. If ross get's
bulled up at every sign of snow in london, all the more reason to get a
weather guy hired asap.

Small positions, and taking profit frequently is the key to turning this boat
around.

Later, Jeff

Chris Mahoney
01/02/2001 03:22 PM
To: Jeffrey A Shankman/HOU/ECT@ECT
cc: John L Nowlan/HOU/ECT@ECT, Scott Earnest/HOU/ECT@ECT, Bjorn
Hagelmann/HOU/ECT@ECT
Subject: Re: 1 mil var for london distillates

jeff - in the anticipation of moving to a global book I have had the back
office set-up individual books for all of the
distillate traders. I had asked the traders two weeks ago to clean-up the
book as much as possible as we
approached year end so that we could break-up the book easily in early
january. unfortunately, they have
not done this and I had instructed all of the london distillate traders
(koller,o'brien,talvitie) today that if they
wanted any positions they were to let me know by the cob today because I
would be liquidating the book this
week. the only thing I insisted they take is the otc diff swaps that are
traded for the physical bbls they are
all assigned to trade. in the case of ross these are large positions but
the back office is making those changes
tonight and we can see what the var of those positions is tomorrow. the 1
million var limit for london distillates we
will need to calculate by the sum of their 3 positions. in regards to the
book presently under ross I will
get that down to 1 mil var but ask that you give me weds and thurs to get
this done. I will try to get this all done
by tomorrow and had been reducing the positions today. I would like to get a
var for the global distillate
book and will assume for now that the 1 mil will be for the 3 london
traders. I will assume ownership
of all of those positions in the koller distillate book from now on so that
these these guys, and ross specifically,
can clear their heads and start over with as close as possible to a clean
sheet of paper. I made if very clear
to them that starting over was a question of rebuilding credability and they
should take great efforts to ensure
that any positions they liked was put on at a low risk entry point and with
small volumes. to get some of the
losses clawed back from friday though I would like to make you aware that
this book has about a 3.5 million
dollar climb to just get back to breakeven for 2001. lastly, I will also
take over all of the positions in the london/
singapore and us/uk arb books. I would like this book to be renamed -
mahoney physical. the koller
distillate book will be renamed mahoney financial.

From: Jeffrey A Shankman 02/01/2001 20:52

To: John L Nowlan/HOU/ECT@ECT, Chris Mahoney/LON/ECT@ECT
cc: Scott Earnest/HOU/ECT@ECT, Bjorn Hagelmann/HOU/ECT@ECT

Subject:

Starting tomorrow, Jan 3, the London Distillates book run by Ross Koller will
have a max var position of $1 million. Chris, please take care of this
with Ross.

Thanks

Jeff