by essex » Mon 15 Dec 2008, 13:30:44
What is most interesting is what Simmons had to say about a secretive Swiss commodity trader, Glencore , which may be at the root of the current decline in the price of oil. They are in big trouble and with OPEC taking oil off the market from next week and a likely spike in price they could go under.
From a web search.
I caught a post today on the Swiss Blog Zeitenwende about Glencore, the Swiss corporate giant, which should reinforce the fact that this credit crisis is far from over. As the original post was in German, I have translated it into English below:
If Charts could speak, what would the following one tell us then? This concerns five-year Credit default Swaps of the company Glencore. In case you have never heard of this company, then now is the critical time. Glencore is the largest enterprise by turnover in Switzerland, recording record sales of 142.3 billion USD in 2007. According to its own data, Glencore directly or indirectly employs 52,000 employees. And obviously some of it has gone pear-shaped
The company, which is active in raw materials, was originally founded by notorious Marc Rich and has always been completely in private ownership.
Today Glencore ranks among the leading raw material companies world-wide and deals with, among other things, production, processing and trade of aluminum, alumina, bauxite, ferrous alloys, nickel, zinc, copper, lead, coal and oil, as well as agricultural products. Right now, things are looking bad for raw materials. Apparently, bad is how things are going at Glencore, if this Chart reflects the reality of the company. Only - one does not know the details. Concerning the rumors that Glencore could be having liquidity problems, an analyst at BNP said that the company has more than 3.5 billion USD of cash and open lines of credit as of the end of of Octobers.
The chart speaks volumes. While you may have never heard of Glencore until now, I suspect it is a company that will become very familiar to us in due course.
From Wikipedia:
Glencore International AG (management buy out of Marc Rich & Co AG) is one of the world's largest suppliers of commodities and raw materials, and is also among the world's largest privately held companies. As of 2006, it was Europe's sixth-largest company in terms of turnover.[1] According to The Sunday Times,[2] the company had USD 10.9 billion in shareholders' equity at the end of 2006 and is completely owned by its management.
With production facilities around the world, Glencore supplies metals, minerals, crude oil, oil products, coal, natural gas and agricultural products to international customers in the automotive, power generation, steel production and food processing industries.
According to an Australian Public Radio report, "Glencore's history reads like a spy novel".[3] The company was founded as Marc Rich & Co. AG in 1974 by billionaire commodity trader Marc Rich, who was charged with tax evasion and illegal business dealings with Iran in the U.S., but pardoned by President Bill Clinton in 2001. In 1993 and 1994, Rich sold all of his majority share in Marc Rich & Co. AG back to the company.[4] The enterprise, renamed Glencore, is now owned and run by his former associates, including former Glencore CEO Willy Strothotte and present CEO Ivan Glasenberg. In 2005, proceeds from an oil sale to Glencore were seized as fraudulent, in an investigation into corruption in the Republic of Congo[5].