FXCM Is Buying RefcoFX - Deal is Done - Funds are safe

[Trader/God]

Quote from Rearden Metal:

FXCM clients who make money get put on manual execution. I'm not a forex guy, but I remember reading that here on ET.

Hysterical, so basically traders win and dealing desks lose. FXCM doesn't care if you make or lose money on a trade they only make a spread and like most market makers offset most trades internally.

Unless you believe that they have the staff 24 hours a day to monitor your $300 mini account and attack your stops for all 50,000 of their clients.

Trader/God

 

[uninvited_guest]

Quote from Trader/God:

.......and like most market makers offset most trades internally.

Unless you believe that they have the staff 24 hours a day to monitor your $300 mini account and attack your stops for all 50,000 of their clients.

Trader/God

And of course open trades in those mini accounts also offset each other (EUR/USD sell, EUR/USD buy), which I guess would be the same as "market makers offset most trades internally".

 

[Deptrai]

Quote from Rearden Metal:

FXCM clients who make money get put on manual execution. I'm not a forex guy, but I remember reading that here on ET.

I think that it is FXCM clients who do a lot of scalping who get put on manual execution. Not the ones who make money. I make money from Gain Capital. I've been with them for 5 years. Gain has never put me on manual execution. Just look at my long positions from 1.2788 to 1.3100 in USDCHF. Who do you think is my broker on those transactions? Anyway, I am glad for the whole retail forex industry that this refcofx problem is being resolved. Amen. Thanks be to God. Chood, I really don't know. I would have to go back 10 years ago when I was a losing trader.

 

[jimrockford]

Question for anyone who believes that they will be made whole by the FXCM and RefcoFX deal.

RefcoFX originally claimed that the current situation could never occur:

At RefcoFX you have COMPLETE SAFETY OF FUNDS:

• Stability and Financial Integrity
• No Counterparty Risk
• Global Presence

STABILITY AND FINANCIAL INTEGRITY

RefcoFX offers its customers the reliability and financial strength that most other forex firms cannot rival.

There is no way to eliminate market risk in forex transactions. However, forex customers should not have to worry about the stability and financial integrity of their forex dealer. That is where the benefit of dealing with RefcoFX comes in. With customer equity exceeding $4 billion, more than 250,000 customer accounts and over 3,000 employees in 14 countries throughout the world, the companies of the Refco Group are committed to providing the highest quality service to clients ranging from small individual investors to some of the largest institutions in the world.

NO COUNTERPARTY RISK

Size matters. The broker you align yourself with is the counterparty to EVERY transaction. RefcoFX is the single biggest counterparty in the retail FX world and a safer counterparty with which to conduct trading.

Smaller firms have limited access to the Interbank market and hence may not be able to fulfill the obligations of their clients' forex transactions. Small firms also face difficulties modernizing their technology infrastructure as well as keeping it safe and secure.

See http://www.fxtradertools.com/beta/whyrefco.html

Why did you believe them when they made these false claims? What mistakes did you make? What did you learn from your mistakes?

You are now being told that you will be made whole. Why do you believe them this time? Do you think they might derive some benefit by lying to you about the likelihood that you will be made whole? What would you be doing differently, right now, if you knew that you were never going to get your money back?

 

[globalfxtrainer]

Quote from jimrockford:

Question for anyone who believes that they will be made whole by the FXCM and RefcoFX deal.

RefcoFX originally claimed that the current situation could never occur:


See http://www.fxtradertools.com/beta/whyrefco.html

Why did you believe them when they made these false claims? What mistakes did you make? What did you learn from your mistakes?

You are now being told that you will be made whole. Why do you believe them this time? Do you think they might derive some benefit by lying to you about the likelihood that you will be made whole?

I don't see how there's any upside for them lying about that.

The following paragraph was very encouraging -- it came from a press release that I'll put the link to below:

"This transaction is subject to the approval of the bankruptcy court, after an open bidding process whereby other potential buyers may also compete with FXCM for these assets but will also be required to protect retail customer accounts. The MOU contains a schedule that could result in a closing of a transaction within thirty days. Then all of RefcoFX retail clients' funds currently tied up in the bankruptcy proceedings would be available to them," said Niv.

http://biz.yahoo.com/prnews/051111/nyf080.html?.v=29

 

[jimrockford]

Quote from globalfxtrainer:

I don't see how there's any upside for them lying about that.

Did you see an upside for them lying to you the first time, when they promised that the current situation could never possibly occur? Why do you think the second time will be different from the first time?

If people falsely believe they will get their money back, until such time as the media attention dies down, and they only later discover they won't get their money back, wouldn't this reduce the intensity of political pressure for criminal prosecutions of the people who ran RefcoFX, and who fraudulently promised that this situation could never occur?

Do you see any downside for them lying to you a second time? Was there any downside for them lying to you the first time?

We were told, of the rescue deal,

Of course its not certain yet but very likely it will go through and RefcoFX clietns will be able to use their funds anyway the want within two months. Etch it in stone, its going to happen.

How can we "etch it in stone", consider it a "done deal", and consider the funds to be "safe", all of which we were assured, if the rescue is only "very likely"? Is this not an example of what George Orwell called doublethink? Why would other creditors, competing with RefcoFX customers, or having priority over them, not object to a deal which makes customers whole at the expense of other creditors?

(P.S. I am asking these questions in an attempt to be helpful, not antagonistic toward RefcoFX victims.)

 

[globalfxtrainer]

Quote from jimrockford:

Did you see an upside for them lying to you the first time, when they promised that the current situation could never possibly occur? Why do you think the second time will be different from the first time?

If people falsely believe they will get their money back, until such time as the media attention dies down, and they only later discover they won't get their money back, wouldn't this reduce the intensity of political pressure for criminal prosecutions of the people who ran RefcoFX, and who fraudulently promised that this situation could never occur?

Do you see any downside for them lying to you a second time? Was there any downside for them lying to you the first time?

We were told, of the rescue deal,
Is this not an example of what George Orwell called doublethink?

(P.S. I am asking these questions in an attempt to be helpful, not antagonistic toward RefcoFX victims.)

Jim, I disagree. I think it would heighten the level of intensity dramatically. Drew Niv, and the press have created the expectation that people will be made whole. People have an even higher emotional investment at this point (it is as if you were about to drown on the Titanic and someone threw you a live preserver). If that were to turn sour, I suspect that there would be even a higher level of political pressure to right that 2nd wrong.

The first wrong was the naivete of becoming a RefcoFX customer to begin with "guilty as charged your honor". The 2nd wrong, which hopefully will not occur, is a different animal completely.

 

[globalfxtrainer]

Quote from ZoneTrooper:

The only problem is, who will own them at years end???

Will they still exist??????

If they don't, you're insured

 

[strat3x]

Quote from jimrockford:


RefcoFX originally claimed that the current situation could never occur

jimrockford,

Did it ever occur to you that maybe, just maybe, the folks who ran RefcoFX did not know that REFCO was a house of cards? Much in the same way that the NYSE did not know? Or in the same way that Jim Rogers did not know? Or in the same way that the investment bankers behind the IPO did not know?

Just wondering...

 

[jimrockford]

Quote from globalfxtrainer:

Jim, I disagree. I think it would heighten the level of intensity dramatically. Drew Niv, and the press have created the expectation that people will be made whole. People have an even higher emotional investment at this point (it is as if you were about to drown on the Titanic and someone threw you a live preserver). If that were to turn sour, I suspect that there would be even a higher level of political pressure to right that 2nd wrong.

The first wrong was the naivete of becoming a RefcoFX customer to begin with "guilty as charged your honor". The 2nd wrong, which hopefully will not occur, is a different animal completely.

I hope you are right and I wish you the best of luck.