Derivatives at Refco

I’ve written a lot about Refco and its quick and shocking descent into bankruptcy, and suspected much of its demise had to do with derivatives. I don’t believe I’ve written about the extent of its derivative positions.

Now today, I read in The Independent by Janet Bush: Mad, bad and dangerous to know … or do derivatives just need a bit of loving care?

In 2005, Refco, the fourth- largest futures broker in the US, filed for bankruptcy. In February 2004, it was reported to have had $69bn in off-balance sheet derivative contracts; that figure had risen to $150bn by May 2005.(emphasis added)

The article is an excellent capsule about a subject that has some clearly worried.

Janet Bush Refco Finance

One Response to “Derivatives at Refco”

  1. It is amazing how Refco Inc continues to be on denial. Carlos Abadi put a plan to pay in cash as much as 80% of client assets plus a note for the remaining based on recoveries and Refco turns the nose. Abadi;s plan is supported by injection of capital, Dressner bank etc. I got my hands on the plan (i have a copy). Refco continue to play bad games while creditors still have the account frozen. AMAZING!!!!

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