Peter Grandich: $510 may be the last line for the gold bears

Section:

'Amazed' at Copper Prices,
Rogue Trader Seeks New Job

By Yoshifumi Takemoto
Bloomberg News Service
Tuesday, December 6, 2005

http://www.bloomberg.com/apps/news?
pid=10000080&sid=ah8NjNyktBzw&refer=asia

TOKYO -- Yasuo Hamanaka, who was released from prison in July after
serving seven years for hiding $2.6 billion in copper trading
losses, said he's "amazed" at today's record prices for the metal
and is looking for a new job.

Hamanaka, 57, dubbed "Mr. Copper" and "Mr. Five Percent" because he
once bought as much as 5 percent of all the copper traded in the
world each year, said he expects to start working again in April.

"I'll decide where to work in a couple of months," he said in an
interview outside a two-story house where he lives with his family
in Kawasaki, near Tokyo. "I'm looking at various options," he said
Dec. 3, declining to comment on whether he would go back to copper
trading.

Hamanaka, Sumitomo Corp.'s former chief copper trader, was sentenced
to eight years in prison in 1998 after pleading guilty to hiding the
losses, which were the biggest ever blamed on a single trader.
Sumitomo said it was unaware of the trades.

The case echoes that of Chinese trader Liu Qibing who China says
made losing bets this year by selling copper he didn't own in the
belief prices would fall. Prices rose to records. The government
says Liu alone was responsible for the trades.

Hamanaka's job hunt comes at a favorable time if he is thinking of
going back to trading. Oil prices have soared to records and metals
from aluminum to gold have risen to their highest in more than 10
years, sparking competition for commodities traders and increasing
bonuses.

Japanese commodity exchange regulations have no rules stopping
someone who has been in jail from trading, unless they were a
company director, according to a spokesman for the Tokyo Commodity
Exchange. Hamanaka was not a director of Sumitomo Corp.

Copper prices have risen 39 percent this year as demand for the
metal used in power cables and plumbing outpaced supply. Metal for
three-month delivery reached a record $4,435 a ton on the London
Metal Exchange Dec. 2. That's more than double the $1,943 at the end
of June 1996, the month Hamanaka was fired.

The metal closed at $4,392 a ton yesterday.

Speculation China's stockpiling agency, the State Reserve Bureau,
has to buy as much as 130,000 tons of copper in the world market to
deliver against contracts agreed by Liu has pushed up international
prices.

The agency is now selling copper on the domestic market to damp
prices and raise funds to help it settle the wrong-way bets, say
traders including Li Ling from Shenzhen Star Futures Co. in
Shanghai. China may lose as much as $300 million from the trades,
according to Wang Zheng from Shanghai Dalu Futures Co.

Liu has been under house arrest since mid-October, the Economic
Observer, a state-owned newspaper based in the eastern province of
Shandong, reported Nov. 21, without citing anyone. He hasn't
responded to e-mails and his mobile phone is off.

Where Liu was short of copper, Hamanaka was long, amassing more than
500,000 tons of the metal, according to trade estimates at the time.

"Mr. Liu seems to be a mirror image of Mr. Hamanaka," wrote
Francesca Edwards, a consultant at Lombard Street Research in
London, on Nov. 15. "Same metal, reverse positions."

Hamanaka wouldn't be drawn on the Sumitomo losses in the interview
on Dec. 3. "Too many days have passed and I don't remember all the
details," he said.

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