Unfortunately, with JPMorgan’s announcement yesterday that one of their traders, nicknamed the “London Whale”, racked up a whole lot of wrong-sided positions on credit default swaps over the last several months (leaving the bank with losses that will probably exceed $2billion), has re-armed and re-invigorated the characters behind Dodd-Frank, including THE Frank.  As Senator Barney noted yesterday,  “The argument that financial institutions do not need the new rules to help them avoid the irresponsible actions that led to the crisis of 2008 is at least $2 billion harder to make today.”  Proponents of DF are taking great pleasure in the fact that JPMorgan’s CEO Jamie Dimon has been one of the most vocal and effective opponents of moving forward with the new rules.

Republican nominee in waiting, Mitt Romney, had previously said he would make repelling DF one of his priorities if elected, hence the commodities traders optimism.  However, in light of yesterday’s events, one of Romney’s spokespeople has come out and said that the news of JPMorgan’s losses increases “the importance of oversight and transparency in the derivatives market” and that if he gets elected, Romney would push for “common-sense regulation that gives regulators tools to do their jobs and that gives investors more clarity.”  In light of the Democrat’s rhetoric around this latest event, its hard to imagine that Romney is going to be able to avoid backing at least some aspects of Dodd-Frank, if not the entire package.

In spite of all this, CEO Jamie Dimon isn’t giving up on his opposition to more regulation, noting “Just because we are stupid doesn’t mean everybody else was.”

Mining industry’s leading EAM and ERP solution to support thermal coal company’s rapid growth strategy

Date: May 8, 2012

ATLANTA — Ventyx, an ABB company, today announced that Ambre Energy Limited, a thermal coal mining and export company with operations in Australia and the United States, has licensed Ventyx Ellipse 8 in a deal valued at US$2 million. Ambre Energy will standardize on the Ellipse 8 solution for enterprise asset management (EAM) and enterprise resource planning (ERP) across all its U.S. mining operations.

“We are actively building an integrated thermal coal mining and export business in the U.S., and require business solutions that support our rapid-growth strategy,” said Darin Adlard, corporate controller, Ambre Energy. “With functionality that uniquely supports our requirements as a mining operation, Ventyx Ellipse 8 will help manage our complex assets and distributed workforce while reducing risk. And it possesses the scalability and functionality we need as we develop long-term mining operations, and build out the logistical infrastructure to expand our markets.”

Specifically, Ambre Energy will deploy Ellipse 8 modules for asset and work management, human resources and supply chain. The agreement also includes full application implementation, hosting and ongoing maintenance services provided by Ventyx’s managed services team.

“An emerging leader in export thermal coal, Ambre Energy joins a steadily expanding base of Ellipse 8 customers in North America and around the world,” said Craig Jones, COO, Ventyx. “Ventyx is widely recognized as the world’s leading EAM supplier to the global mining industry. We’re pleased to witness the growing adoption of our next-generation Ellipse 8 solution by leaders in the mining community worldwide.”

Ventyx Ellipse 8 is one of the most comprehensive, mobile-enabled EAM and ERP solution for asset-intensive businesses such as mining, energy and public infrastructure. Currently 18 of the world’s 20 largest mining companies rely on Ventyx’s leading enterprise solutions.

Founded in 2005, Ambre Energy is building a vertically integrated thermal coal mining and export business in the United States, and maintains a domestic mining operation in Australia. The company acquires undervalued coal assets in the US, and develops the logistical infrastructure required to service strong and growing export markets with a high-quality thermal coal product.
About Ventyx

Ventyx, an ABB company, is a world-leading supplier of Industrial Enterprise Software for essential industries such as energy, mining and public infrastructure. Ventyx solutions bridge the gap between information technologies (IT) and operational technologies (OT), enabling clients to make faster, better-informed decisions in both daily operations and long-term planning strategies. Some of the world’s largest organizations rely on Ventyx solutions to minimize risk, enhance operational and financial performance, and execute the right strategies for the future. For more details, see www.ventyx.com.
Contacts

Samantha Moore
Ventyx
(m) +1 408.712.0612
(e) samantha.moore@ventyx.abb.com

Neil Torres
Blanc & Otus
(o) +1 415.856.5140
(m) +1 415.948.6345
(e) ntorres@blancandotus.com

Source

Zug, Switzerland – May 8, 2012 – Amphora, Inc., Energy Risk’s ETRM software house of the year in 2011, announces the addition of the Affinity Gas and Power ETRM suite to its portfolio of products.

The Affinity suite, acquired from Société Générale, has a well-proven track record as a high-quality platform for the trading, scheduling and settlement of gas and power instruments. The software also provides users with advanced risk and reporting features.

“This represents a significant broadening of Amphora’s offer to our customers,” said David Newton, CEO and President of Amphora. “Affinity has a highly-respected reputation, gained across its years of development at Sempra, RBS and Société Générale, and we are delighted to have acquired such a valuable asset.” Newton goes on to say, “This acquisition allows us to bring a state-of-the-art capability to the gas and power market that is comparable to our deep functional capability in the liquid hydrocarbon market.”

The Affinity suite contains class-leading components, including trade capture, trader tools, gas and power scheduling, confirmations, settlement, credit, full position, profit/loss, and extensive business intelligence tools.

“Amphora has an unrivalled reputation for delivering on its promises and getting the numbers right, and with this exciting acquisition we are now able to replicate this success with gas, power and other asset class customers,”
Newton added. Amphora is delighted to establish a presence in Stamford, Connecticut and welcomes to its team a number of professionals who were involved in the design, development, implementation and support of the Affinity suite.

About Amphora
Founded as TradeCapture Inc., in 1997, Amphora is headquartered in Houston, Texas with offices in Zug,
Switzerland; Singapore; and Hyderabad, India. Clients include significant physical players in the liquid hydrocarbon
markets such as integrated oil companies, merchant traders, refiners and marketers, utilities and financial players
such as banks. For more information, please visit www.amphorainc.com or contact:

For more information contact:
Darko Novakovic
Zählerweg 10, CH-6300 Zug
Switzerland
Tel: +41 41 729 54 00

Source

Amphora’s president, David Newton, is quoted in the press release as noting that the system has had “…years of development at Sempra, RBS and Societe Generale…”  Though not stated in the announcement, the Affinity system appears to be the result of an internal development effort at RBS Sempra, a company that was subsequently acquired by Societe Generale in January 2011.  Societe Generale shut down their physical trading operations in North America less than a year later.

Amphora notes that as part of the acquisition, they will be taking over the Stamford Connecticut development group/office associated with Affinity.

This is an interesting development for Amphora as they had for many years resisted moving out of their core markets of crude and products.  Being somewhat familiar with the team at Sempra that developed the system, I do think this could be a lucrative move for the company – gaining solid, proven capabilities for servicing the North American gas and power markets, and doing so without having to spend the years of development effort that would normally required.  However, there is little question that it can be challenging to take what has been an internally developed software system and translate that into a commercial product.

CommodityPoint, in our recent study Data Management Solutions, observes that the data management software category is one that has seen rapid growth in recent years, driven by the recognition that there are multiple and specialized issues in the commodity trading and risk management industry that have not yet been adequately addressed via traditional integration methods and tools. These issues include:

•  Management requiring access to results in a more timely manner
•  Greater need for sophisticated analysis capability to adapt to changing conditions
•  Increased focus on risk management both internally and externally
•  Increasing compliance measurement standards
•  Increased need for transparency of decision making from boards, stakeholders, investors, and government
•  The ability to see an integrated view of data currently maintained in disparate databases and systems, requiring: 1) Basic data collection and aggregation (including the ability to quickly add new data sources – either internal or  external; a capability that appears to be problematic for many solutions), 2) Ability to handle vast quantities of data and extract meaning from it (including the many subclasses of data, such as price, risk and other forms which may require specialized solutions), and 3) A systematic approach to data cleansing, conformation, audit, balancing, and system of record identification from the various disparate sources

As a result of these drivers, the data management software category is growing and evolving rapidly, attracting new entrants from start-ups to established firms from the financial services arena, while existing vendors of price and data aggregation technologies (“price servers”) are broadening their footprints to encompass many of these new needs.

CommodityPoint has also observed that a majority of the larger energy marketing and trading firms are seeking to implement these types of solutions as their companies have become burdened with complex technical infrastructures that have evolved organically, driven by events such as the acquisition of specialized applications (including full ETRM/CTRM systems) in order to address sometimes unique needs of specific commodities or geographic markets. Additionally, in an industry that is constantly evolving through mergers and acquisitions, newly acquired businesses bring with them differing technologies that must be merged into the acquiring companies architecture, leading to an infrastructure that, while operational, is certainly less than optimal and one that would have never been road-mapped under any other circumstances. And now, with emerging regulations like Dodd-Frank in the US and EMIR in Europe, market participants are faced with urgent technological changes to their hugely complex trading infrastructures in order to meet mandated reporting requirements.

In the latest whitepaper from CommodityPoint, we examine the growth of these complex technical infrastructures, the increasing financial and operational risks presented by such architectures, and take a look at SunGard Global Services’ systematic approach for solving the issue of data management and integration.

To download your free copy of this latest CommodityPoint Whitepaper, visit www.utilipoint.com.

CommodityPoint, in our recent study Data Management Solutions, observes that the data management software category is one that has seen rapid growth in recent years, driven by the recognition that there are multiple and specialized issues in the commodity trading and risk management industry that have not yet been adequately addressed via traditional integration methods and tools.

Download the Report »

In their new interim rule, a revision to Part 32, the CFTC does assert that 1) physical options do count as swaps and 2) that they do have jurisdiction over such transactions (thumbing their noses at the FERC who argued otherwise). However, for all those market participants that aren’t swap dealers (SD’s) or major swap participants (MSP’s), it does appear that the CFTC is giving a significant reprieve from the reporting rules. Under this new regime, if a physical option is entered into by two parties that are not covered by the “as soon as technically practical” reporting requirements of the SD’s and MSP’s, that contract does not have to be reported at that time – the CFTC will only require an annual reporting of all physical options for that group of market participants. This is a significant development as it should lighten the reporting/technical infrastructure burden substantially for most physical commodity traders.

It appears that some in our current administration are also familiar with the concept of the Boogie Man. Though in their version, he’s moved out from under the bed and is currently embodied in energy traders. His new mission is no longer eating small children; he’s now busying himself by consuming the hard earned dollars of American citizens. His ill gotten gains come from “speculation” in the crude markets and only our brave leaders are equipped to take him on via new laws that would, amongst other things, reduce liquidity in US-based markets. Of course for a populace that believes that ExxonMobil, ConocoPhillips, and Chevron are the boogie man and control the price of oil (despite the fact that these companies account for only a small fraction of global production), this message really resonates – “Finally someone is on the side of ME, the poor consumer!” Despite the lack of any real empirical evidence that oil traders and speculators actually contribute to higher prices, battling the boogie man makes for some terrific election year theater and wins the hearts of folks that haven’t yet figured out how energy markets work.

Here’s our president making his pitch and CNN analyst, Ali Velshi, saying something about “…pants on fire!”…

Attempting to stifle speculative trading in the US will most likely result in a game of “Whack a Mole”…traders can simply move offshore to other markets and ply their trade there, resulting in no real effect other than potentially creating regional market imbalances that will manifest themselves in greater price volatility.