Hillary's futures trading

With Anya having an epileptic seizure about once every three days, and with the deadline looming for my software enhancements to pass testing even though the IL boys can't give me a decent testing environment, I haven't done much blogging. This is going to change soon as I tell some stories on The Princess. In the meantime, I can't resist following up on Her Anchorship's bit on Hillary's futures trading adventure.

You have to realize that I was a futures trader and broker at the time this story broke, and that my partner had worked for (and knew) the guy who, um, facilitated Hillary's little success story. And I remember just laughing my butt off at the very idea that Hillary had done what she said she had done:

1. Given a buddy (though certainly not somebody who owed her a political favor or might stand to benefit from a cozy relationship with the Governor's wife, oh certainly not that, never) a thousand bucks in order to open a futures account, which she was then allowed to trade aggressively by Arkansas-based (and ethically challenged) Refco despite being chronically undermargined, at one point going an entire month without enough money to cover the exchange-mandated margins and yet never getting margin-called.

2. Traded her $1,000 up to about $100,000 in ten months.

3. Closed the account and never traded again.

Now, cattle was going wild in 1979 and Refco was telling everybody to trade it, as Bill (my late partner) remembered very well himself; and I can understand Hillary's giving her friend some money to play with (though if memory serves she at first made the absurd claim that she had done most of the trading herself); and I can even accept that (given Refco's general sloppiness) it was understood by all concerned that Blair was good for any money she might lose so that his capital on account was informally applied to her margins (illegal, but not unthinkable).

But what was so unreasonable as to be comic was the idea that she would never take another shot -- unless she knew all along she wasn't really risking anything. And yet she tried, with a straight face (I can't imagine how) to pretend that she was doing real honest-to-God trading. I'm sorry, you will never convince me that Blair hadn't guaranteed to cover anything she might lose on his trading, and that when the guarantee was withdrawn, she closed the account. She didn't make $100,000 gambling with $1,000 in ten months, because if that's what she had done, she would have gambled some more later on -- hey, she'd've been playing with the house's money. That's how the 10% of us who make money on futures trading (not that I do it anymore, having retired after a very nice run because I was tired of the stress) make that money -- because you amateurs can never quit when you're ahead.

Hillary made $100,000 with no gambling at all because the guy doing the trading for her had told her he'd be good for anything she lost, and Refco didn't margin-call her because they knew perfectly well whose pockets any necessary money was going to come from. If you don't understand that then you don't know the futures game. Simple as that.

Whether you want to crucify her over it politically, by the way, is entirely up to you and does not interest me in the slightest. I myself just find the whole no-really-it-was-real-futures-trading shtick hilarious.