Note to Wall $treet: Curb Your Enthusiasm

Go know. Amaranth Advisor's misfortune turns out to be the big opportunity that wannabe energy traders have been waiting for. On Wednesday, Greenwich, Conn., hedge fund manager Amaranth told investors it had transferred its energy portfolio to a third party. That party wasn't identified, but it was later revealed that the assets were sold to two entities: Citadel Investment Group, the $12 billion Chicago hedge fund, and JPMorgan Chase .

Now, Citigroup is considering taking a stake in Amaranth. Many Wall Street banks have been taking a look at the fund in the last couple of days.

Citadel and JPMorgan are said to have taken on $2 billion and sold much of that to waiting buyers on Wednesday. Spokesmen for Citadel, JPMorgan and Citigroup wouldn't comment. JPMorgan has an existing relationship with Amaranth as its clearing bank.

The scramble to buy the trading portfolios of Amaranth, to relieve it of exposure to volatile energy markets and perhaps to salvage what assets remain and keep it running, highlights the intense interest Wall Street has in energy trading.

Many banks had gotten out of the market in the 1990s, seeing it as too volatile, and others never built up a capability. But that changed in recent years, as rivals enviously watched Goldman Sachs and Morgan Stanley rake in profits.

In 2004, Merrill Lynch bought the energy trading business of Entergy-Koch. UBS inherited 600 or so employees from Enron, the Houston energy company that collapsed in 2001. The Swiss banking concern winnowed that group down to under 100 before beginning to rebuild. Some star Enron traders founded their own firm, Centaurus Energy, in Houston.

The potential for huge losses doesn't seem to be much of a deterrent, either. So what are we missing here? The Mega-Moolah Factor.

http://www.forbes.com/business/energy/2006/09/21/amaranth-energy-trading-markets-comm-cx_lm_0921amaranth.html