REFCO bankruptcy before Bankruptcy law date?

Discussion in 'Stocks' started by mahram, Oct 13, 2005.

  1. Does anybody here think refco might declare bankruptcy before the bankruptcy laws change on tuesday? if thats the case, this would be the biggest brokerage failure in over 25 years. For equity traders, this would be like Goldman saks and lehman brothers declaring bankruptcy in the commodity world. Is that a right analogy.
  2. I bought 5k at 9.15 premarket. They are losing 75% of their revenue by clsing the capital markets division.
    The 9% bond due in 2012 is trading at 34.
    Bankruptcy is highly likely.
  3. (BN ) Refco Halts Client Withdrawals, Cash Isn't Sufficient
  4. No.
    Get your facts straight.
    J Aron, the commodities arm of GS is pretty sizeable in and of itself.
    Refco is the 8th largest futures broker.
    It is the largest independent U.S. futures broker.

    And the upcoming change in Bankruptcy Laws mostly effects personal bankruptcies.
    To a much lesser extent, it effects commercial entities, but not as much as private individuals.

    Companies will have less time to decide whether to assume or reject leases . . . less discretion in deciding whether to propose reorganization plans and will be required to have more cash availible to pay utilities and suppliers in order to keep operating.
  5. Then why did Delphi, delta, and northwest declared bankruptcy. The bankruptcy law changes was their deciding factor. Especially for delphi, which could have declared in 06 if they wanted to. If your looking at the delphi bonds they are trading at 33 cents on the dollar, down from 66, this is bankruptcy level.

  6. what would happen to all the people who holds accounts with refco if they do delcare on monday. Would they lose all their money

  7. Htrader

    Htrader Guest

    So why did you buy?... (did you mean short?)
  8. You need to better understand the entity known as Refco and the fact that Refco Capital Markets is distinct from Refco LLC., which handles futures trading. It is RCM that is declaring a 15-day moratorium on customer withdrawals, and NOT Refco LLC.

    You also need to learn what is meant by segregated accounts.
  9. I disagree.

    Delta and Northwest are in an industry that continues to deal with financial pressures and the increased costs of extremely high jet fuel prices for the foreseeable future, not too mention labor union issues. Too many significant macro issues here to simply and conveniently state that they declared BK because of the upcoming bankruptcy law changes.
  10. dont you think refco is facing a cash crunch. Or what cody williard likes to call a run on the bank. Whether your in the retail or the prime side, your going to pull out cash.

    #10     Oct 13, 2005