The tempting thing to conclude about the Glencore/Xstrata merger is that the process is a total shambles. That we are being offered a clear lesson in how not to pull off a merger. That diplomacy and tact have been eschewed in favour of blundering that has left egg on the faces of all concerned.
Xstrata accepted a low-ball offer that allowed its own management to pocket many millions, but seems unwilling to back a better deal that sees the directors get fewer rewards.
Glencore looks bolshy and sullen; difficult in all directions. And all of the banking advisers look plain silly, unable to influence a process spinning out of their control.
An alternative view is this: Glencore chief executive Ivan Glasenberg is a trading genius, a poker player par excellence, and the most likely outcome here is that he ends up getting exactly what he wanted for less than he might reasonably expect to have paid.
Perhaps he couldn't quite believe that everyone was falling for that cuddly talk early on about a merger of equals.
Perhaps he wondered if anyone involved in the deal had ever really seen him operate.
He played high-wire, winner-takes-all stakes. Insisting he was unmovable, that he'd let the whole thing collapse and walk away, then shifting apace when he absolutely had to.
If he alienated shareholders in both companies along the way, so what? He'd win them back when it mattered.
He left everything to the last possible minute and was entirely comfortable with engineering a huge fallout with Mick Davis, the Xstrata boss, who may have thought Mr Glasenberg was his mate.
In others words, in the battle between the trader and the miner, the trader wins. That's the way to bet.
My day as a Master of the Universe
Talking of trading, I had a dart at it myself the other day. Capital Spreads, a City spread betting house, set me up with a dummy account and some fantasy money and allowed me to let rip.
Originally the idea was that if I did well they'd send a cheque equal to my winnings to Great Ormond Street Hospital. But then the thought occurred that someone po-faced would find a reason to complain about this (Ill-gotten gains! Spivy City traders! Total sense of humour bypass!), so we changed our minds. Of course, that did also remove the possibility of the GOSH kids having to write a cheque to Capital covering my losses.
The event on which I bet – sorry, invested wisely – was the US non-farm payrolls that came out at 1.30pm last Friday.
The economists' consensus – the consensus is always wrong – was that the US would have created 125,000 jobs in the prior month.
My in-depth research led me to decide that the "experts" had undercooked this. They had misjudged America's recovery and when the real number came in – about 160,000, I reckoned – markets would rally, safe havens such as gold would sink and I'd be quids in.
Once you've got an account, trading is remarkably easy. You click and click again, and suddenly you're moving...
At Capital Spreads I am surrounded by eight screens pumping out data, some of which I understand, and have the obligatory three phones on the go, but in truth it is remarkably quiet while the office waits for this number to come out. It's tense, actually.
Anyway, I'm buying the Dow Jones aggressively. That market is going to the moon, son.
When the woman on the Squawk Box in front of me says "96,000" on the tick of 1.30pm, I think she's made a mistake or that I misheard her.
There are groans from across the floor, suggesting I'm not the only one who's made a hash of this.
The Dow Jones is suddenly the Down Jones. Gold goes beserk, as does silver. My position worsens by the second.
The sensible thing here is probably to reverse course, to cut and run, to take the hit and move on, a poorer but wiser man.
But I'm somewhere between stubborn and paralysed, so instead I sit tight.
Then a funny thing happens. The number is so bad that the market seems to collectively decide there is now bound to be more economic stimulus to aid the financial sector. Bank shares start shifting up and in no time at all my profit-and-loss account is suddenly very healthily in the black. I cash out, narrowly resisting the temptation to do a lap of honour.
Capital are awfully nice to me after the event, noting how wise I was to stick to my guns, but the truth is that my analysis was entirely wrong. I just got lucky that the market eventually went my way for reasons unconnected to my theories.
That, or a variant of it, happens every day to traders across the globe. A bizarrely chancey way to make a living, unless you're Ivan Glasenberg.Reuse content