Re:

I was planning on changing the morning meeting as you indicated.

The problem with the P&L loss is one of time. We have given back 25 million
this quarter, and very few traders took profits at any time. I expect
traders to lose money at times, but we have other constraints. I'd be happy
to have a call with you once we finish our budget process about how we will
get to our numbers next year. Of course spread trading is a good idea, but
when I look at the portfolio in aggregate, the position story I'm being told
doesn't make sense.
We'll get there.

Chris Mahoney
10/24/2000 07:21 PM
To: Jeffrey A Shankman/HOU/ECT@ECT
cc: John L Nowlan/HOU/ECT@ECT, Don Schroeder/HOU/ECT@ECT, David J
Botchlett/HOU/ECT@ECT, Ross Koller/LON/ECT@ECT
Subject: Re:

The issue of making the morning meetings more inspiring is a challege we need
to take up. I would suggest we move to traders
telling what the main positions are in their books (3 max) and then give a
bullish (max +2) to bearish (max -2) view of their mkt. If we
moved more quickly through this we might have time for more meaningful
discussion at the end. I think that the discussion at the
end we can keep flexible but for instance when we have major issues like spr
sales or an opec meeting we should delegate somebody
to do a review of that. In terms of the wed meeting, unless there is
something special, I would recommend letting the new research
analyst we have hired in London do a quick API review.

The issue of high volatility in the markets makes a good argument for
lowering position sizes but the issue of not having
any money to lose won't ever go away. I base that statement on the premise
that with the budget for next year set at 175 million
we will always be under pressure to meet budget and not give back any
profits. The books that have historically made the most
money in enron global products have been more spread trading/view oriented
rather then flat price/momentum oriented. I know
you would prefer we move away from this and become more the latter but I
would encourage you to consider the fact that we have
little edge in forecasting short term price movements but hopefully have
enough staying power and experience to position ourselves
correctly for the big moves.

From: Jeffrey A Shankman 23/10/2000 22:14

To: John L Nowlan/HOU/ECT@ECT, Don Schroeder/HOU/ECT@ECT, David J
Botchlett/HOU/ECT@ECT, Chris Mahoney/LON/ECT@ECT, Ross Koller/LON/ECT@ECT
cc:

Subject:

It seems to me we are in the middle of no man's land with respect to the
following: Opec production speculation, Mid east crisis and renewed
tensions, US elections and what looks like a slowing economy (?), and no
real weather anywhere in the world. I think it would be most prudent to play
the markets from a very flat price position and try to day trade more
aggressively. I have no intentions of outguessing Mr. Greenspan, the US.
electorate, the Opec ministers and their new important roles, The Israeli and
Palestinian leaders, and somewhat importantly, Mother Nature. Given that,
and that we cannot afford to lose any more money, and that Var seems to be a
problem, let's be as flat as possible. I'm ok with spread risk (not front to
backs, but commodity spreads).

The morning meetings are not inspiring, and I don't have a real feel for
everyone's passion with respect to the markets. As such, I'd like to ask
John N. to run the morning meetings on Mon. and Wed.

Thanks. Jeff