Chapter 8. Size Matters


“In telling this tale I attempt no compliment to my own sagacity. I claim not to have controlled events, but confess plainly that events have controlled me.”

 --Abraham Lincoln[1]

Blood in the Water 1: Sumitomo Is Long and Wrong

On Friday, May 17, 1996, London Metals Exchange (LME) copper futures prices fell almost 5% in volatile trading before recovering slightly.[2] The proximate cause of the decline was unknown and many market observers were puzzled by it. However, some media accounts at the time attributed the price decline to rumors that Sumitomo and other large copper market players were unwinding long positions and to rumors that Mr. Yasuo Hamanaka, Sumitomo’s long-time head copper trader, was being reassigned to ...

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