Yes. Thank you for posting the article.
www.bugmenot.com doesn't work for the WSJ site.
www.bugmenot.com doesn't work for the WSJ site.
Refco Account Security
- Thread starter Htrader
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Nope, not at all.
You still don't get it, do you?
The Reuters headline, "REFCO Futures Unit to File For Bankruptcy" was incorrect, and retracted by Reuters.
For the 1500th time, the futures unit that deals in segregated futures accounts at REFCO is still operating, unlike the REFCO Capital Markets Group which handled foreign-exchange transactions and over the counter fixed-income transactions along with securities and securities lending transactions.
There is a distinct difference.
And unfortunately, many people here on ET still are unable to realize this even after over 60 PAGES of posts.
Rather than a lot of the inflammatory rhetoric that I see on this thread as well as others on ET by people that obviously have an axe to grind against REFCO, I however can PERSONALLY attest to the fact that I have not had any problems trading my personal futures account at REFCO every single day, since this news came out about REFCO Holdings . . .
Thus, the answer to your question is:
NO.
Interesting that after a forced change of ownership you still claim that the problems at the holding company did not affect the futures arm in any way! My question did not ask did it affect your account but rather had the firm been affected. You chose to answer a different question - perhaps you should move to the PR industry.
I will not bother repeating my other points as you did not answer them last time. I will just make one last observation before I leave you in peace though. Many many times you said after speaking to Refco LLC personally they had $1bn of free capital. Interesting that the FT and all press releases claim it was $750m - a difference of some $250m or 33%. Perhaps you were muddling up capital with client deposits and margins. An easy mistake to make and indeed one Refco has been guilty of in the past.
I may have mentioned that I actually set up a Refco futures trading account, but before I was able to wire money into the account, the whole Bennett mess exploded into public view, so I ended up not sending any money in. I guess you could say I dodged a _potential_ bullet -- potential because Refco's futures arm is apparently still functioning.
What's curious is that I started to get calls from Refco's reps after JC Flowers emerged as the savior/buyer of Refco's futures arm. The standard script seems to be that now that JC Flowers is the new group in charge, existing customers should stop draining their accounts, and prospective customers should start doing business w/ Refco agian.
What's left unsaid is that the JC Flowers/Refco's deal is a "memorandum of understanding" w/ some contigencies. One of them being that the deal may be called off if the futures sub's customer account value falls below some number like $3.75MM. Yesterday's WSJ revealed that during the bankrupcy hearing on Wednesday, Refco lawyers said Refco's futures arm has lost 40%of the the pre-scandal account value to around $4.1MM -- which is pretty close to the $3.75MM threshold. And lord knows what has happened since then.
It is telling that JC Flowers called the Refco futures subsidiary a "perishable asset". As some pt, if enough customers jump ship, the ship may not be worth salvaging. It is also telling that the announced deal is around $780MM (writing from memory here) or so, but that includes the existing Refco Futures sub's regulatory capital of around $760MM, so JC Flowers is only paying $20MM to get that business. Since JC Flowers is a pretty smart guy, you know he built some margin of safety into the deal. But that margin of safety may not last.
In my opinion, the rival Dubai all-in $1B deal proposal is a joke -- all that revealed is that the people behind the Dubai don't know what they are getting into.
What's curious is that I started to get calls from Refco's reps after JC Flowers emerged as the savior/buyer of Refco's futures arm. The standard script seems to be that now that JC Flowers is the new group in charge, existing customers should stop draining their accounts, and prospective customers should start doing business w/ Refco agian.
What's left unsaid is that the JC Flowers/Refco's deal is a "memorandum of understanding" w/ some contigencies. One of them being that the deal may be called off if the futures sub's customer account value falls below some number like $3.75MM. Yesterday's WSJ revealed that during the bankrupcy hearing on Wednesday, Refco lawyers said Refco's futures arm has lost 40%of the the pre-scandal account value to around $4.1MM -- which is pretty close to the $3.75MM threshold. And lord knows what has happened since then.
It is telling that JC Flowers called the Refco futures subsidiary a "perishable asset". As some pt, if enough customers jump ship, the ship may not be worth salvaging. It is also telling that the announced deal is around $780MM (writing from memory here) or so, but that includes the existing Refco Futures sub's regulatory capital of around $760MM, so JC Flowers is only paying $20MM to get that business. Since JC Flowers is a pretty smart guy, you know he built some margin of safety into the deal. But that margin of safety may not last.
In my opinion, the rival Dubai all-in $1B deal proposal is a joke -- all that revealed is that the people behind the Dubai don't know what they are getting into.
Surely this is wrong and inflammatory. Various people on the topic have said the futures arm was and will be unaffected and that there is no evidence of people pulling their funds out.
After 60 pages people are still making the same mistakes, I give up! (Don't you idiots understand the money was repaid WITH interest?)
Your assertions are incorrrect (unless you were being sarcarstic??):
The futures arm has lost 40% of its customer assets, customer assets now stand at $4.1B and that figure is changing daily, plus that figure is close to the $3.75B trigger, where JC Flowers can terminate his MOU.
The loan was repaid with interest backed by worthless shares. The bank that made the loan- BAWAG of Austria is now creditor number one on the bankruptcy filing.
The situation while salvageable is still very fluid. REFCO faces numerous risks: class-action lawsuits, creditors and fleeing customers on the Refco Capital Markets side, fleeing customers on the regulated futures side, felling customers form REFCO Securities, potential additional financial shenanigans (most times these frauds are not singular occurrences).
REFCO is a great business, but like JC Fkowrs said it was struck by a meteor. If the abruptly proceedings move quickly (this thing must be resolved by October 31, November at the max), I think REFCO will be bought over by a competitor (Calyon Finaical & IB are reportedly interested) or the Dubai group or some other PE group. I actually forsee a bidding war.
So I think REFCO will survive and overcome this nightmare, but time is of the essence.
In the interim, we must acknowledge the situation is still very fluid and somewhat precarious.
FredBloggs
Guest
ib buy refco!!!!! :eek: that should be in joke of the day thread!!!
id be very interested to know where you got that information from - or is it just speculation on your part?
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