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A Commodities Trading Titan Staffed With Former Goldman And JPM Employees Is Quietly Growing In Switzerland

Tyler Durden's picture




 

If there was any confusion about what may be coming next, now that the bulk of the TBTFs are liquidating their commodities trading divisions having been caught manipulating virtually every physical asset under the sun (except for Goldman: the bank will first stage a mutiny at the Fed before it is forced to spin off its legendary J Aron commodity group which spawned such taxpayer generosity recipients as Gary Cohn and Lloyd Blankfein), the most recent events at Swiss commodities giant Mercuria should clarify "next steps."

After Mercuria two months ago acquired JPMorgan's physical commodities trading business for $3.5 billion, however without retaining the services of the scandal-plagued Blythe Masters, the Geneva commodities group needed someone to fill in the big enough shoes which may now belong to the world's largest, and very much still under the radar, physical commodities trader.  It picked Magid Shenouda, who was co-head of commodities for Goldman until the end of last year.


As a reminder, Mercuria is firmly in bed with Goldman, having previously hired former Goldman executives Shameek Konar and Victoria Attwood Scott to be heads of investment and compliance respectively. The firm's co-founder, Marco Dunand, himself worked for several years for Goldman. So it should be no surprise that the private firm, whose funding may well include Goldman money, is rapidly becoming a Goldman and JPM commodities trading desk, but as far from the "vigilant" eye of the SEC and the regulatory efforts of the Fed as possible: Switzerland.

WSJ reports:

Magid Shenouda, who retired from Goldman Sachs toward the end of last year, will run Mercuria's trading business, joining the company's two Swiss founders, Marco Dunand and Daniel Jaeggi on the management team.

 

Mr. Shenouda will take over management of the company's trading operations from Mr. Jaeggi, giving the Swiss trader more time to focus on client relationships and the integration of J.P. Morgan's commodities business once the sale closes later this year, the person said.

 

"It makes sense to have another person…the size of the company has reached a level that it's tough to run with the current management," said a person familiar with the situation.

 

Mr. Shenouda spent 14 years at Goldman Sachs running the bank's European crude oil and oil products and gas and power trading desks before becoming global co-head of its commodities trading business.

 

Independent commodities merchants—an elite group of mostly privately held companies that specialize in trading everything from copper to cocoa—have grown rapidly over the past 10 years and are increasingly tapping big banks for executive talent as they seek to bolster their management teams.

Mercuria isn't the only commodities merchant to take advantage of Goldman talent:

Hong Kong-based trader Noble Group appointed former co-head of Goldman Sachs' operations in Asia, Yusuf Alireza, as its chief executive officer in 2012. Agricultural trading giant Louis Dreyfus Commodities is on the hunt for a new CEO from outside the company.

Just how big is little discussed Mercuria about to become? "With the acquisition of JPM's business we will substantially grow in size and are looking at a turnover of $130-$150 billion," reports Reuters.

So to summarize: any hopes that physical commodities manipulation would end with the liquidation of TBTF commodity trading groups in the US can be promptly dashed. Instead, "fair and efficient" trading of these assets will be conducted by the same people who traded them for the past decade, only not at their legacy firms such as Goldman and JPM, but instead in the peace and quiet, and regulator-free environment, of Switzerland where anything goes.

 

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Mon, 05/12/2014 - 10:30 | 4750648 Grande Tetons
Grande Tetons's picture

They all look like a bunch of smug fucks.

Well, when Golman owns the Cenrtal Bankers....smugness fits. 

Mon, 05/12/2014 - 11:40 | 4750938 WarHorse
WarHorse's picture

THe Govt has moved commodity trading from a somewhat regulated & transparent group to a non-regulated, much less transparent group ... such groups never put taxpayers or the financial system at risk ..... Long Term Capital Management says what ?

 

Gotta go, Marc Rich is on the phone

Mon, 05/12/2014 - 15:05 | 4751752 ajax
ajax's picture

Gotta go, Marc Rich is on the phone"

Yer late mate, Marc Rich has been dead for nearly a year now - all those cigars were bad for his heart.

http://www.marcrich.ch/

 

I only wish I could have met him and listened to Glenn Gould cds with him at his place outside Luzern...

Do read the book "The King of Oil" - it's terrific.

 

 

Mon, 05/12/2014 - 10:31 | 4750649 Squid Viscous
Squid Viscous's picture

Magid? I didn't see him at midnight mass... maybe he went to the morning service?

Mon, 05/12/2014 - 10:32 | 4750653 Winston Churchill
Winston Churchill's picture

Meet the new boss, same as......

Mon, 05/12/2014 - 10:32 | 4750655 becky quick and...
becky quick and her beautiful mouth's picture

one company running almost all of it, what could go wrong? transparency for sure.

Mon, 05/12/2014 - 10:39 | 4750656 chdwlch1
chdwlch1's picture

I think I saw these guys in a documentary film about "tax minimization" tactics global firms are implementing. These rule-benders then hire the tippy-top-dog from the GS commodities desk to run their newly aquired commodities businesses.  Now they're in the PM manipulation game in the country that refines the most gold in the world...this should turn out well.

The king is dead! Long live the king!

Mon, 05/12/2014 - 16:00 | 4752021 ajax
ajax's picture

 

 

"Now they're in the PM manipulation game in the country that refines the most gold in the world...this should turn out well."

...refines the most gold and provides practically all the specialty inks to print your currencies as well.

Meet SICPA Switzerland:

 

Every day, governments, companies and millions of people place their confidence in SICPA to protect the integrity and value of their currency, personal identity and consumable goods. In a world of constant technological innovation where any product and document can be counterfeited or tampered with, our customers need more than ever a reliable partner who can provide them with effective security solutions.

Established in 1927, SICPA is the trusted advisor to central banks for selecting and integrating security features into upgraded and new banknote series. Today we provide security inks and integrated solutions for most of the world's currencies, including the Euro, US Dollar and Swiss Franc.

We also provide security printers with a wide range of security ink solutions and technologies that together with their know-how as well as unique design and printing skills result in counterfeit- and tamper-proof, easy-to-authenticate documents and products.

 

Mon, 05/12/2014 - 10:35 | 4750667 Dr. Engali
Dr. Engali's picture

Is Corzine going with them?

Mon, 05/12/2014 - 10:38 | 4750676 Squid Viscous
Squid Viscous's picture

Can't decide who is more slap-worthy, the guy with the prison pussy or the guy wearing brown corduroys and brown sweater?

Mon, 05/12/2014 - 11:04 | 4750794 quasimodo
quasimodo's picture

The guy sitting is sporting semi wood...he must be really happy to be sitting there right then.

Mon, 05/12/2014 - 10:39 | 4750680 Kirk2NCC1701
Kirk2NCC1701's picture

Mercurial: changeable; volatile; fickle; flighty; erratic; a mercurial nature.

Mon, 05/12/2014 - 10:41 | 4750684 Its_the_economy...
Its_the_economy_stupid's picture

take posession, "its the only way to be sure"

 

http://www.youtube.com/watch?v=aCbfMkh940Q

Mon, 05/12/2014 - 10:45 | 4750706 WhiteWolf
WhiteWolf's picture

At least in Switzerland everyone owns a gun .....:)~

It is required that you own one. I am sure maybe someone in that country will have the balls to zero in on one of these guys. I sure hope so!!

Mon, 05/12/2014 - 15:19 | 4751826 ajax
ajax's picture

 

 

No WhiteWolf,

It is not required to own a gun in Switzerland, soldiers keep their arms at home when they're not doing their required military service.

The Swiss don't kill their billionaires - they don't "spit in their soup" as the French say...

Mon, 05/12/2014 - 10:45 | 4750707 WhiteWolf
WhiteWolf's picture

At least in Switzerland everyone owns a gun .....:)~

It is required that you own one. I am sure maybe someone in that country will have the balls to zero in on one of these guys. I sure hope so!!

Mon, 05/12/2014 - 11:04 | 4750792 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

I care not who owns the guns when I control your idoltry. As long as I can control that and you keep believing you can't feed your family without it then I always win in the end and you are never free.

Mon, 05/12/2014 - 11:22 | 4750863 WhiteWolf
WhiteWolf's picture

Maybe, but when people start starving they can do all kinds of things never imaginable. That is what I believe will soon start happening. And when it does, the celebration starts and the barbeque begins. Bankers Medium Rare please.

BWAAAAHHHAAH

Mon, 05/12/2014 - 11:41 | 4750942 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Is there enough self sustaining food sources within Switzerland for the people to feed themselves if the empire cut them off into a seige situation. Fortresses (natural or otherwise) can also serve as tombs or prisons without enough food or water or ability to renew it internally.

And yes they do when they start to starve, idoltry is a form of pyschological food so to speak.

Truth just is, you can kill idols through symbolic deception but you can't kill truth because it is and the system ceases to exist if it is violated. There is no amount of symbollism that can change that. Deceptive truth is just a conditional form of truth that can always be disproved by absolute truth.

Mon, 05/12/2014 - 15:24 | 4751845 ajax
ajax's picture

 

 

"Is there enough self sustaining food sources within Switzerland for the people to feed themselves if the empire cut them off into a seige situation."

Well sorry to tell you Dewey but while you were asleep the Nestle Corp. of Vevey Switzerland bought up practically every "food source" on earth. The Swiss will NEVER starve.

Mon, 05/12/2014 - 11:44 | 4750955 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

If I was the Swiss I'd be very concerned that the Jesuits are back in full control of the empire. The Swiss have always held a high and special place on their shitlist.

Mon, 05/12/2014 - 11:24 | 4750870 WhiteWolf
WhiteWolf's picture

Intellectual pride is one of the largest mistakes these guys make. The last thing they will see is their red growing bloth on their shirts. Then nothing!

Hopefully after that, Welcome to the Hotel California...such a lovely place, .....stab it with their steeley knives, but they just cant kill the beast...

Mon, 05/12/2014 - 11:24 | 4750871 WhiteWolf
WhiteWolf's picture

Intellectual pride is one of the largest mistakes these guys make. The last thing they will see is their red growing bloth on their shirts. Then nothing!

Hopefully after that, Welcome to the Hotel California...such a lovely place, .....stab it with their steeley knives, but they just cant kill the beast...

Mon, 05/12/2014 - 11:00 | 4750757 Amish Hacker
Amish Hacker's picture

Mmmm, what is it about this job opportunity that's so compelling it tempted Mr. Shinouda out of retirement? I suspect it has something to do with the excitement of being the wheel man in a drive-by shooting.

Mon, 05/12/2014 - 11:00 | 4750765 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

The Swiss will be eaten alive from the inside and turned into Swiss cheese by the Empire all while keep up the front of neutrality.

Mon, 05/12/2014 - 11:03 | 4750784 quasimodo
quasimodo's picture

I must admit I never saw this coming

Mon, 05/12/2014 - 11:05 | 4750799 LawsofPhysics
LawsofPhysics's picture

Great, yet another Enron...

Mon, 05/12/2014 - 11:05 | 4750800 Bullionaire
Bullionaire's picture

I proposed that all further "puzzling" gold price declines (like last night's) be henceforth referred to as "getting Merc-ed."

 

It's easier to pronounce than "Charoze-ed."

Mon, 05/12/2014 - 11:14 | 4750826 JRobby
JRobby's picture

All of your costs will rise. Just accept it. Think carpoolling and public transportation if you want to continue to feed your kids.

I agree acceptance is important. I also think nothing changes if nothing changes. Revolution.

 

Mon, 05/12/2014 - 11:14 | 4750830 luckylogger
luckylogger's picture

At least they will be doing gods work....

Mon, 05/12/2014 - 11:18 | 4750847 curbyourrisk
curbyourrisk's picture

US regulating manipulation OFF SHORE.  Seems it might have been smarter to keep all the manipulation here at home, at least then we could profit from it. 

Mon, 05/12/2014 - 12:04 | 4751043 Comte d'herblay
Comte d'herblay's picture

"we" are..

Just don't know which 'wes'.

We don't even know Who's on First. 

Mon, 05/12/2014 - 12:21 | 4751103 esum
esum's picture

aluminum russian mafia .... a good match for piani clad trader....lead vs cashmere... 

Mon, 05/12/2014 - 12:24 | 4751120 RaceToTheBottom
RaceToTheBottom's picture

I am sure they are up to no good...... :)

Mon, 05/12/2014 - 13:07 | 4751272 thorgodofthunder
thorgodofthunder's picture

Just so we are clear:

gold and silver go up- no manipulation.

gold and silver go down- manipulation, conspriacies, evil bankers, evil governments, every rich person is in on it, Wall Street are all criminals, etc.

 

Quit your incessant whining you fools and make some god damn money instead of making excuses.

Mon, 05/12/2014 - 14:48 | 4751673 NEOSERF
NEOSERF's picture

On another front, can someone explain me, just how the American renaissance in oil has occurred where we apparently are now outproducing just about everyone except Saudi Arabia and gasoline continues to rise?  What is the point of poisoning our water, creating earthquakes, environmental carnage if my gas price doesn't drop in half...is it all NG coming out of the ground?  Is it that we don't have enough refining capacity?  Are the refiners prices going through the roof?

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