Amaranth Government Report - Primer on Natural Gas Market

The government in 2007 published a very informative report on Amaranth's demise. Of note to curious investing types, so that the paper summarizes some great background information on the natural gas market and also some basic spreads / strategies employed by traders.

You can find the report here: Amaranth SEC - Excessive Speculation

For most of us not expert on the workings of nat gas, there's a few interesting sections: what drives natural gas demand, how do traders implement their views, the difference between winter and summer prices. The report also paper validates what I've heard from a few people in commodities - that Hunter's positions were enormous, not just compared to the normal volume in the natural gas market but relative also to the US annual natural gas consumption. If anything, Amaranth is a great practical example of what can go wrong when one player in a market tries to manipulate and squeeze out other participants. But to be fair to Hunter, he was successful in squeezing out and bankrupting a few funds on his way up (before he marched into his own Battle of the Little Bighorn).

Interesting enough, after the Amaranth meltdown, Hunter launched another fund called Solengo Capital Partners. It amazes me that he was able to even raise capital. Basically, if you invest, there is a chance you lose 100% of your money - so I guess you could call it a one-of-a-kind investing opportunity. Ironically, Hunter was also dismissed by Deutsche Bank after taking extreme positions and losing a ton of money (but not before he tried to convince a judge that he deserved a bonus from the money he made from previous reckless bets). But last from what I read on the news, he's fighting some regulatory charges, although one could speculate that he doesn't really need to work after his years at Deutsche Bank and Amaranth.