It is almost too coincidental to be a coincidence: on the day Ben Bernanke, who until a year ago was the biggest fixed income portfolio manager in the world courtesy of the Fed's $4.5 trillion in assets, joins Citadel as an advisor, the massively levered "market-neutral" hedge fund which as we showed earlier has $176 billion in regulatory assets, "loses" its global head of fixed income, senior managing director Derek Kaufman. Well not exactly loses. The reason for his "voluntary" departure: according to Bloomberg Kaufman is leaving Citadel not because he is about to be replaced by the former Fed chairman but because last year he lost $1 billion "in a variety of trades."

Some more details on Derek from his Linkedin Profile:

Derek Kaufman is [ZH: was] Head of Global Fixed Income and a member of Citadel’s Portfolio Committee. Prior to joining Citadel in 2008, Mr. Kaufman was a Managing Director at JPMorgan Chase, where he most recently served as Global Head of Fixed Income in the Proprietary Positioning Business. He started at J.P. Morgan in 1996. Mr. Kaufman is a member of the Treasury Borrowing Advisory Committee and the Federal Reserve Bank of New York’s Investor Advisory Committee on Financial Markets. He is a member of the Economic Club of New York, on the Board of Trustees for Third Way, an innovative think-tank in Washington, D.C., and on the Leadership Council of Robin Hood. Mr. Kaufman received a bachelor’s degree in Applied Math/Economics from Harvard College.

Bloomberg is sparse on the details but notes that Katie Spring, a spokeswoman for the Chicago-based firm founded by Ken Griffin, said Kaufman resigned two weeks ago and his portion of the portfolio has been liquidated, adding that the rest of his team is remaining. Calls to Kaufman weren’t answered. It is worth noting that Kaufman was happy to note that he won the 2013 award for Global Macro Fund of the Year from HedgeFund intelligence.

Citadel’s fixed-income operations are divided into 18 different portfolios that focus on specific regions of the world or various parts of the credit markets. Fourteen of these were profitable last year, but the $4 billion Global Fixed Income Fund ended the year up just 0.75 percent, said the person, who asked not to be named because the firm is private." Citadel, which manages about $26 billion in assets, hired Kaufman from JPMorgan Chase & Co. in 2008, where he was a proprietary trader, to expand the fixed-income operation beyond its Kensington and Wellington funds, two of the biggest pools the hedge fund operates. Kaufman also managed money for Kensington and Wellington, said the person.

What is particularly curious is that Kaufman is, as he notes on his profile, a member of the Treasury Borrowing Advisory Committee, or TBAC: the same committee which back in 2013 first rang the alarm bell over pervasive collateral and Treasury shorages.

One wonders if Kaufman's entire strategy was to be a part of the bandwagon that made up the second most crowded trade at the beginning of the year, i.e., shorting the 10 Year Treasury (the other most crowded trade of course being long the USD ahead of the Fed's "imminent" rate hike).

If so, it would explain some of the recent strength in the bond market, where billions in shorts had to be unwound, i.e., bought in the market. Also, one wonders how many other portfolio managers at other "market neutral" funds will follow in Kaufman's footsteps.

Ironically, with Bill Dudley recently admitting - according to Bank of America - not only that he would like stocks to keep rising, and US Treasurys to sell off (gradually) it would be simply poetic after Ben Bernanke is hired by Citadel, that Citadel's former head bond trader should be hired by that other massive hedge fund, the New York Fed for his Treasury shorting skills. It won't be difficult either: Kaufman already is a member of the Federal Reserve Bank of New York’s Investor Advisory Committee on Financial Markets.

Because with traders (and advisors) like really needs to be worried about how the Fed will sell its $4.5 trillion in assets when the day finally comes?