RIP refco, you lasted longer than I thought you would. You cornered the market in doing the business that no respectable bank would touch and suprise suprise it ended in tears. Sympathy, well I haven't got much for the people associated with refco. But if you couldn't see the way they were operating then I'm sorry you're so blind. Good riddance to bad rubbish. I look forward to a temporary lack of the over leveraged craziness that refco brought to the futures market. Though I'm sure that some crook is already plotting an empire that will far exceed refcos brief adventure.
firstly, in my part of the world, bond futures, refco have only become a force over roughly the last few years secondly, I'm a new member thats why I've got a new ID -some sort of welcome I'm getting... I had the "privilege" of being a client with refco for a couple of years. It was a nervy experience. Typically after a good day (they happen once every blue moon) I would ask the risk manager of that refco entity whether we were still in business. The truth is that on a handle of occasions it really was touch and go... The truth is that if I had lost my account during that period, I would have felt a fool because I knew what was going on. Fortunately for me, the penny dropped five years ago.
In U.S. Bond futures Refco was a massive player from 1980 on. In the early to mid 1980's they were regularly 10% of the daily volume in the CBOT bond pit.
www.sundayherald.com/52272 excerpt ... -The failure of a leading broker would reverberate throughout the City and Wall Street. Specifically, Refcoâs possible bankruptcy â the talk of the street on Friday â could damage or kill some hedge funds, which use aggressive and relatively-unregulated strategies to grow investment such as derivatives and selling short.- www.timesonline.co.uk/article/0,,2095-1827479,00.html some excerpts ... -GOLDMAN SACHS, the investment bank, will this weekend start a fire sale of the assets of Refco, the disgraced futures trader, as regulators attempt to stem widespread panic in financial markets- -Michael Greenberger of the University of Maryland said Refco could be the harbinger of a far bigger problem. Greenberger, a former Justice Department lawyer and director of the Commodity Futures Trading Commission, said: âMy fear is that Refco is the canary singing in the mine. I hope Iâm wrong.-
bloomberg has some am news on REFCO http://quote.bloomberg.com/apps/news?pid=10000006&sid=aTupI6O.rkeo&refer=home
"Refco processed 654 million derivative contracts in the fiscal year ended Feb. 28, 2005, more than what was traded at the Chicago Board of Trade, the Chicago Board Options Exchange, or the New York Mercantile Exchange during the same period. " That should tell us something about how important the futures business is to the overall market. Let's hope there isn't a huge amount of counterparty exposure...