Cocoa Puffed
July 22, 2010 2:55 PM Subscribe
Earlier this week news bubbled up that a hedge fund manager with a Bond-villain nickname had made a Bond-villain move: "Choc Finger" bought a whopping 241,000 tons of cocoa beans -- 7% of the world's cocoa supply and enough to make 5 billion chocolate bars -- driving prices to 33-year highs.
The explanations ran from the obvious -- Choc Finger, aka Anthony Ward of Armajaro, wanted to corner the market, cause a shortage and cash in -- to the convoluted -- that he was on the wrong end of a private hedging deal involving Swiss chocolate juggernaut Barry Callebout AG.
The Financial Times sees nothing wrong with the move. Meanwhile, the Mirror reports on a sweet campaign contribution to the Tories.
And he's done it before.
Meanwhile, markets are fickle. Hot cocoa has cooled, and Choc Finger is seeing red, at least for now.
Bonus: lots more "on the politics and economics of cocoa and chocolate". [Chocolate politics previously]
The explanations ran from the obvious -- Choc Finger, aka Anthony Ward of Armajaro, wanted to corner the market, cause a shortage and cash in -- to the convoluted -- that he was on the wrong end of a private hedging deal involving Swiss chocolate juggernaut Barry Callebout AG.
The Financial Times sees nothing wrong with the move. Meanwhile, the Mirror reports on a sweet campaign contribution to the Tories.
And he's done it before.
Meanwhile, markets are fickle. Hot cocoa has cooled, and Choc Finger is seeing red, at least for now.
Bonus: lots more "on the politics and economics of cocoa and chocolate". [Chocolate politics previously]
Unfortunately, I couldn't find an online version of "Timing, and a Diversion: The Cocoa Game," a brilliant essay on this strange market by "Adam Smith" (George Goodman), featured in his collection The Money Game and also in Tom Wolfe's The New Journalism.
posted by chavenet at 2:59 PM on July 22, 2010
posted by chavenet at 2:59 PM on July 22, 2010
If this works the same way as Porsche's attempted short-squeeze on Volkswagen, he'll ended up bought by Hershey's, or something.
posted by qvantamon at 2:59 PM on July 22, 2010 [1 favorite]
posted by qvantamon at 2:59 PM on July 22, 2010 [1 favorite]
I assumed it was Wonka when I first heard news of the sale.
posted by battleshipkropotkin at 3:02 PM on July 22, 2010 [3 favorites]
posted by battleshipkropotkin at 3:02 PM on July 22, 2010 [3 favorites]
“He suggests a trade. The cocoa for your life.”
Bond: “Well, I heard the price of cocoa was up, but isn’t that a little high?”
posted by furiousxgeorge at 3:09 PM on July 22, 2010
Bond: “Well, I heard the price of cocoa was up, but isn’t that a little high?”
posted by furiousxgeorge at 3:09 PM on July 22, 2010
Choc Finger sounds horribly akin to something along the lines of Dirty Sanchez, frankly.
posted by elizardbits at 3:10 PM on July 22, 2010 [12 favorites]
posted by elizardbits at 3:10 PM on July 22, 2010 [12 favorites]
Does anybody else see a caramel-centered Death Star out their kitchen windows?
posted by obiwanwasabi at 3:10 PM on July 22, 2010 [1 favorite]
posted by obiwanwasabi at 3:10 PM on July 22, 2010 [1 favorite]
I expected another of those trading whilst shitfaced stories like that man who drove up the price of oil after a night of heavy drinking.
posted by Transparent Yak at 3:18 PM on July 22, 2010
posted by Transparent Yak at 3:18 PM on July 22, 2010
"No, no, no, I said buy £658,000,000 of COCA LEAVES not COCOA BEANS!"
posted by nathancaswell at 3:19 PM on July 22, 2010 [5 favorites]
posted by nathancaswell at 3:19 PM on July 22, 2010 [5 favorites]
It's only funny because 1) he failed and 2) it's not wheat, maize or rice.
posted by filthy light thief at 3:20 PM on July 22, 2010 [4 favorites]
posted by filthy light thief at 3:20 PM on July 22, 2010 [4 favorites]
I assumed it was Wonka when I first heard news of the sale.
As per the Mail Online's article headline: "Choc finger: Meet the real-life Willy Wonka who's just bought an incredible £658m of cocoa beans..."
posted by ericb at 3:22 PM on July 22, 2010
As per the Mail Online's article headline: "Choc finger: Meet the real-life Willy Wonka who's just bought an incredible £658m of cocoa beans..."
posted by ericb at 3:22 PM on July 22, 2010
I said buy £658,000,000 of COCA LEAVES not COCOA BEANS!"
I had a classmate in a Latin American politics class confuse the two. She was understandably confused why the US government would spent billions on eradication in Colombia just to prevent some chocolate from being smuggled in.
posted by Adam_S at 3:29 PM on July 22, 2010 [2 favorites]
I had a classmate in a Latin American politics class confuse the two. She was understandably confused why the US government would spent billions on eradication in Colombia just to prevent some chocolate from being smuggled in.
posted by Adam_S at 3:29 PM on July 22, 2010 [2 favorites]
"His latest purchase has raised questions about Liffe and its regulations. The London market is considered less-regulated than ICE Futures... "
Dude, that's like saying less regulated than the drunken Russian Roulette industry in The Deer Hunter.
posted by Xoebe at 3:33 PM on July 22, 2010 [3 favorites]
Dude, that's like saying less regulated than the drunken Russian Roulette industry in The Deer Hunter.
posted by Xoebe at 3:33 PM on July 22, 2010 [3 favorites]
> Too bad he wasn't forced to take a physical shipment to his secret lair.
Previously: "It was that moment that Brad’s palm almost immediately made contact with his forehead. He realized that something must have really gone awry: instead of virtually trading 28,000 tons of coal, Brad had somehow ended up with 28,000 tons of real coal."
posted by ardgedee at 3:33 PM on July 22, 2010
Previously: "It was that moment that Brad’s palm almost immediately made contact with his forehead. He realized that something must have really gone awry: instead of virtually trading 28,000 tons of coal, Brad had somehow ended up with 28,000 tons of real coal."
posted by ardgedee at 3:33 PM on July 22, 2010
Aww, poor guy lost £27m on a failed plan to cynically manipulate prices.
And by "Aww" I mean, "Ha!"
posted by quin at 3:38 PM on July 22, 2010 [4 favorites]
And by "Aww" I mean, "Ha!"
posted by quin at 3:38 PM on July 22, 2010 [4 favorites]
> Too bad he wasn't forced to take a physical shipment to his secret lair.
Near enough though. From the Daily Mail link: "It is likely that the mountain of beans will be held in warehouses in London, Liverpool, Humberside and Holland."
Bring your own plate...
posted by chavenet at 3:48 PM on July 22, 2010
Near enough though. From the Daily Mail link: "It is likely that the mountain of beans will be held in warehouses in London, Liverpool, Humberside and Holland."
Bring your own plate...
posted by chavenet at 3:48 PM on July 22, 2010
Hedge funds should be banned. There, I said it.
posted by contessa at 3:55 PM on July 22, 2010 [3 favorites]
posted by contessa at 3:55 PM on July 22, 2010 [3 favorites]
"Do you expect me to talk?"
"No Mr. Bond.... I expect you to melt in my mouth, not on my hands."
posted by CynicalKnight at 4:14 PM on July 22, 2010 [10 favorites]
"No Mr. Bond.... I expect you to melt in my mouth, not on my hands."
posted by CynicalKnight at 4:14 PM on July 22, 2010 [10 favorites]
contessa, I share your disdain for hedge funds (of late coinage ~the last nineteen years). I daresay that one hedge fund manager showed the way for all to follow when he nearly shorted the GBP into oblivion. When you do something like this, be sure that:
1) The opportunity of selling short or buying up *will* persist in your favor
2) There's nobody willing to call you out who's richer or has more good leverage than you
3) You're not building a monument to yourself
Lacking such information, which is generally illegal to have, go long/short ETFs till you're wearing a barrel, if you like that kind of thing.
posted by nj_subgenius at 4:20 PM on July 22, 2010
1) The opportunity of selling short or buying up *will* persist in your favor
2) There's nobody willing to call you out who's richer or has more good leverage than you
3) You're not building a monument to yourself
Lacking such information, which is generally illegal to have, go long/short ETFs till you're wearing a barrel, if you like that kind of thing.
posted by nj_subgenius at 4:20 PM on July 22, 2010
...Uh, point 3 is just an ego thing.
posted by nj_subgenius at 4:22 PM on July 22, 2010
posted by nj_subgenius at 4:22 PM on July 22, 2010
I'm more amused that there's a 'chocolate juggernaut' with the name Barry Callebout AG. How Pynchonesque!
posted by mannequito at 4:28 PM on July 22, 2010 [2 favorites]
posted by mannequito at 4:28 PM on July 22, 2010 [2 favorites]
ardgedee: "instead of virtually trading 28,000 tons of coal, Brad had somehow ended up with 28,000 tons of real coal.""
Since you brought it up, it looks like there was no agreement on whether that actually happened or how much DailyWTF embellished. My estimation is they put it in and the exchange rejected it; recalling how much shit this trader lavished onto the the verification team, they got the intern to pose as barge captain and scare the hell out of Brad.
posted by pwnguin at 4:29 PM on July 22, 2010
Since you brought it up, it looks like there was no agreement on whether that actually happened or how much DailyWTF embellished. My estimation is they put it in and the exchange rejected it; recalling how much shit this trader lavished onto the the verification team, they got the intern to pose as barge captain and scare the hell out of Brad.
posted by pwnguin at 4:29 PM on July 22, 2010
No, Mister Bond, I expect you to eat vanilla sheet cake!
posted by adipocere at 4:30 PM on July 22, 2010
posted by adipocere at 4:30 PM on July 22, 2010
Dude must be suicidal. I don't care who you are, you simply do not fuck with chocolate.
Twenty bucks says he's ripped to tiny, bloody pieces by an angry mob of post-menstrual women.
posted by Civil_Disobedient at 4:32 PM on July 22, 2010 [2 favorites]
Twenty bucks says he's ripped to tiny, bloody pieces by an angry mob of post-menstrual women.
posted by Civil_Disobedient at 4:32 PM on July 22, 2010 [2 favorites]
Any chance he just fat fingered the trade?
posted by cjorgensen at 4:55 PM on July 22, 2010
posted by cjorgensen at 4:55 PM on July 22, 2010
I don't care who you are, you simply do not fuck with chocolate.
Perhaps, but it is excellent with a blowjob.
posted by weapons-grade pandemonium at 4:56 PM on July 22, 2010 [3 favorites]
Perhaps, but it is excellent with a blowjob.
posted by weapons-grade pandemonium at 4:56 PM on July 22, 2010 [3 favorites]
Couple things I noticed about the story were that his worth was £36m, so it would seem that he's lost his firm's £27m of the £658m invested. Aka, not my money.
Also, 4%, not a fatal loss. Futures don't usually refer to later that week.
Carry on.
posted by Toekneesan at 4:56 PM on July 22, 2010
Also, 4%, not a fatal loss. Futures don't usually refer to later that week.
Carry on.
posted by Toekneesan at 4:56 PM on July 22, 2010
Obviously he is going to use that chocolate to coat all the Egyptian cotton that he bought.
posted by Dormant Gorilla at 4:57 PM on July 22, 2010 [9 favorites]
posted by Dormant Gorilla at 4:57 PM on July 22, 2010 [9 favorites]
You can laugh now, but you won't be laughing so hard when his delicious choco-minions surround you.
posted by whir at 5:04 PM on July 22, 2010 [2 favorites]
posted by whir at 5:04 PM on July 22, 2010 [2 favorites]
Dormant Gorilla: "Obviously he is going to use that chocolate to coat all the Egyptian cotton that he bought."
...and everyone has a share.
posted by griphus at 5:45 PM on July 22, 2010
...and everyone has a share.
posted by griphus at 5:45 PM on July 22, 2010
Tim Geithner has 700 billion dollars in TARP money he can do anything he wants with. The GSA and US military is also a huge buyer of just about any staple; not to mention customs and others can delay product to market by holding things up in port or flood the market with the right trade rule change. We should take the opposite side of the trade and then use our market power and clean these guys out. Taxing them is too hard to pass through congress, this is much more efficient. Also more fun.
posted by humanfont at 7:13 PM on July 22, 2010
posted by humanfont at 7:13 PM on July 22, 2010
"Ahh, Mr. Bond. I see you've met my loyal assistant, Snickers."
posted by Cool Papa Bell at 7:47 PM on July 22, 2010
posted by Cool Papa Bell at 7:47 PM on July 22, 2010
"Ahh, Mr. Bond. I see you've met my loyal assistant, Snickers."
Don't forget his beautiful female pilot, Cherry Twizzler.
posted by KingEdRa at 9:06 PM on July 22, 2010 [2 favorites]
Don't forget his beautiful female pilot, Cherry Twizzler.
posted by KingEdRa at 9:06 PM on July 22, 2010 [2 favorites]
Callebaut is Swiss now? I'm scandalized. I own a 5-kilo bag of Callebaut chocolate chips, I bought in Belgium, and brought to Switzerland. Callebaut is the most available couverture I've seen in both Europe and Africa. It's nice chocolate, but about 10% lighter than I'd prefer.
posted by Goofyy at 9:13 PM on July 22, 2010
posted by Goofyy at 9:13 PM on July 22, 2010
"No, Mr. Bond! I expect you to get diabetes!"
posted by dirigibleman at 10:22 PM on July 22, 2010 [3 favorites]
posted by dirigibleman at 10:22 PM on July 22, 2010 [3 favorites]
Remember Bunker Hunt? They called him Silverfingers.
posted by adamvasco at 12:35 AM on July 23, 2010 [1 favorite]
posted by adamvasco at 12:35 AM on July 23, 2010 [1 favorite]
A Bond villain? Not quite what I was thinking...
Let your journey into hugeness teach us all a lesson. Absolute power is a sticky wicket. And, Arthur, chum, this was the stickiest. Don't you get it, good friend? Some of the best things come in small packages. But large things can't. Unless they're inflatable, or require some assembly, or unless they're hearts. Yes, giant, juicy, loving hearts. As big as the moon, but much, much warmer.
posted by Durn Bronzefist at 7:58 AM on July 23, 2010
Let your journey into hugeness teach us all a lesson. Absolute power is a sticky wicket. And, Arthur, chum, this was the stickiest. Don't you get it, good friend? Some of the best things come in small packages. But large things can't. Unless they're inflatable, or require some assembly, or unless they're hearts. Yes, giant, juicy, loving hearts. As big as the moon, but much, much warmer.
posted by Durn Bronzefist at 7:58 AM on July 23, 2010
The "Pit!" mention is great. I have an early set of those cards (this one), I think from the 1950s, plus a later (earlier?) edition (this one), both of which I found cleaning out my grandfather's house. Love the design for both.
posted by chavenet at 4:30 PM on July 23, 2010
posted by chavenet at 4:30 PM on July 23, 2010
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posted by The Winsome Parker Lewis at 2:58 PM on July 22, 2010 [15 favorites]