Truck and Barter: Enron Traders and Me

June 03, 2004

Enron Traders and Me

By Bob

I am glad I was never an Enron energy trader. After listening to these clips from the company's trading desk phone records, my actions and words during that time may not be much different. My hesitation would probably come when the decision to break the law was made; yeah, I do have some ethics. What the conversations capture is an attitude which fairly accurately reflects my own.

"Burn, baby, burn" is something that I muttered a couple of times. For option traders like me, who always have disaster protection or are long volatility, those days, when the world seams to be coming to an end, are the ultimate thrill. Andreline takes over, but it doesn't manifest itself in physical activity, although sometimes it could.

One morning, I was waiting for my boss to get into the office when the phone rang. He was arrested that morning for driving on a suspended license( this was the result of not paying a parking ticket of all things). The reason he was pulled over in the first place was markets overnight were down hard and he ran a stop sign coming into work. The andreline flowing through his blood had fired him up.

Typically, the physical outburst during trading are by those who have the wrong positions. The voices by the Enron traders are those of people confident and in control. Comments like "burn, baby, burn" are just a release of nervous energy and, well, of course you're make jokes and laugh as you make in a day what most people make in a year(some people make multiples more than that, others less, it just depends on how big you are and for whom you trade). The guys sound like assholes and they probably are. The comments horrify many people; how could they be so mean? Maybe they are taking pleasure in other people's pain, I never did even while making plenty of jokes that would make it seam like it.

Posted at June 3, 2004 06:06 AM

Comments

Please proof things before posting them. Typical trader.

Comment by JT at June 3, 2004 08:46 AM | Permalink

Er, proof what?

Comment by Bob at June 3, 2004 09:21 AM | Permalink

JT, typical douchebag.

Comment by pills at June 3, 2004 11:55 AM | Permalink

it is adrenaline, but who really cares?

Comment by Rob at June 3, 2004 03:23 PM | Permalink

So with the release of these tapes, the Government (California or FERC) continues to reinforce the simplistic notion that it was Enron that caused the defenseless citizens of California (defenseless since they never received anything close to the right price signal during the crisis) to lose $9+ billion to Evil Capitalism. Boy, does this play well in a politically correct state dominated by Socialists (Sorry Arnold).

Having worked with these issues while employed at the Cal ISO during the 2000 energy crisis (oh yes, there will be more crises), I will admit that Enron definitely played games. But Enron's total take was actually quite small (as per studies done by the ISO) and most of the $9 billion was made possible only by colossally stupid regulation and criminal negligence on the part of the California state government, including the Legislature, the CPUC, and ISO itself. When will there be a study that quantifies the billions of extra charges that were actually caused by the incompetence of the aforementioned state agencies? Probably never.

Comment by Halloweenie at June 3, 2004 10:32 PM | Permalink

Enron was able to manipulate the market precisely because of California's ill-conceived deregulation. If you put a price cap on one side of the market but leave the other side free to float, it's only a matter of time before somebody figures it out and bankrupts the utility. People only talk about Enron because it had so many other cases of corporate greed and fraud. But what about Dynergy? El Paso Corp? Williams Brothers? They were all electricity traders too, and nobody is accusing them of market manipulation.

Comment by Jason at June 5, 2004 12:15 PM | Permalink

Anyone who listened to nursing home workers speak of residents "circling the drain" would be likely to see it as heartlessness and not the coping mechanism it really is. I have no trouble not thinking less of Enron traders after reading the transcript.

Comment by triticale at June 6, 2004 10:12 AM | Permalink

Let's be honest; a vacuous energy policy and cost-based regulatory paradigms cannot adequately protect consumers or utilities in an "instant" marketplace like the west coast. Regulating costs is much easier than regulating behavior. Policy makers failed to understand deregulation changes the equation from cost to trading behavior based regulation. The FERC and the CPUC both are institutionally arrogant in attempting to sell the public on how just a few traders...(none of which were affiliates of California utilities, yeah right) ruined the market by gaming the system. There would have been little or no gaming had the two entities been doing their jobs. But alas, the FERC sat on tariff sheets submitted by the ISO which would have closed many of the loopholes, and it allowed LADWP to profit on its NW power capacity with impunity-political power balances opportunistic behavior?

Comment by assassin at December 1, 2004 11:10 AM | Permalink