Directional
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have heard no word in the London offices other than business as usual. Refco apparently have $20bn in segregated customer funds, and even at the $10 share mark they are capitalized at $1.5bn or something, and cleared around $170m in profit last year. Not exactly a shaky business model.
But any institution relies on liquidity not profitability. If enough large players decide to withdraw funds then the situation could get horrible very quickly. I am not saying it is the most likely sceanrio but in my view anyone keeping funds with Refco at the moment must be mad.
Directional
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yes, and they also rely on trust, which seems like Refco have lost at the moment.
Arbitrageur said:
With the boss hiding $400m in bad debt ,is it a surprise trust is in short supply?
Add to that the law suits that are being filed against them for misleading potential shareholders at their IPO in August where they arranged $580m by allegedly providing false accounts and now they themselves are saying the accounts going back to 2002 cannot be relied upon.
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mickandpete
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Just a thought
Where does it stop?
How many other broker/SB firms have money tied up with them?
Where does it stop?
How many other broker/SB firms have money tied up with them?
Directional
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okwon said:
Business as usual here at RTS
Nothing seems to have changed here at RTS, I came in this morning expecting a padlock on the door, but nothing has changed. I think the panic which set in yesterday has calmed down now. The LCH and CME have put out statements saying our money is whole and safe, I along with other guys are waiting for Eurex to say the same.
Calypso said:I wonder which is the safer arcade to join now ? Is it TCA or Refco
Not TCA, the difference here is that eveyone will get their money back it just may take a little time. This is not a bad trade, this is bad news and the flood of clients taking their money out on the back of the news and snowballing the situation.
Refco have a good balance sheet and are FSA registered to hold client funds so under FSA and CFTC rules will have too make good all client balances. Refco have a substantial balance sheet so this is not a "Griffin" or "ICA".
My advice would be to find another high quality balance sheet arcade where you would enjoy the same level of protection.
Directional
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and excluding arcades that clear through refco? that will cut the number by a large percentage
Mint Futures
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Well as Dick is now running SFX at STA, and STA are not clearing Refco. I would say Schneider Trading is a viable alternative?........... And they are matching the Refco rates.
