With so much leverage at its disposal, the bond market's judgments can have the power of prophecy — that is, they can be self-fulfilling, influencing events even as traders assess them from the trading floor.
This left traders to assess the risks of restarting trading.
The gas desk was being run by another prodigy, Jeffrey Shankman, then 28, who was remaking the gas desk by combining Enron's pipeline and financial trading operations, which helped traders better assess market trends.
Oil futures dipped below $46 a barrel Monday as traders assessed what appeared to be a short-lived cold snap in the United States, where cold weather and tight heating oil supplies helped drive prices sharply higher last week.
WHEN professional traders try to assess the risks in their securities portfolios, they calculate what is known as their value at risk.
When economists conduct "event studies" like this, they typically do so in the hope that movements in stock prices reflect the informed bets of traders trying to assess the future profitability of the businesses they're buying or selling.
This study reports the results of 15 experimental asset markets designed to investigate the effects of forecasts on market prices, traders' abilities to assess asset value, and the link between the two.
For example, even though assessing a sole trader's income might seem fairly straightforward – lenders use the pre-tax profit shown by the accounts – some will take the average of the last two or three years, and others the latest year or the worst year, depending on what trend the accounts are showing".
But until Xerox finds a way to pay off or refinance its bank debt, it will be difficult to assess the company's prospects, securities analysts and traders said.
The prosecutors have begun informally to gather information about the Enron executives and traders who helped shape trading strategies in California and to assess whether those strategies might have violated any laws, this person said.
