...if I don't hear from you by Thursday I will make this letter public ... to force this rule change on you.
Message #57417 from Alex at Aug 18, 2000
Latest from Butler...........
gold-eagle.com
August 14, 2000
Mr. Daniel Rappaport
Chairman
New York Mercantile Exchange, Inc
One North End Avenue
World Financial Center
New York, NY 10282
Dear Mr. Rappaport;
On August 11, 2000,
the New York Mercantile Exchange, Inc. (NYMEX)
issued a press release announcing margin increases
for your palladium contract.....
This is preposterous and absurd.
Obviously, the NYMEX has taken such drastic action
to eliminate the chance of default.....
That's bizarre.....
Only by mandating that shorts hold exchange-sanctioned
warehouse receipts by first notice day, or sooner,
will guarantee against default.
This was my message in the article I sent you
- The Shorts ARE Different - gold-eagle.com
Considering the NYMEX's poor record
in disorderly market conditions and defaults,
I would think you would want to fix the problem,
instead of continuing your unfair favoring of the shorts.
The absurdity of raising margin requirements beyond 100%
for longs is a clear signal to the world that the NYMEX
does not want their business.
You would rather turn away bona fide business,
than demand shorts be able to honor their commitments?
Do the shorts run your exchange?.....
Are these 1, 2, 3 or 4 traders in position to deliver silver
if called upon to, or are they naked short?.....
As of the date of this letter,
there are close to 300 million ounces of silver open,
held long and short, in your September silver contract,
with less than three weeks to go before first notice day.
This represents 300% of warehouse stocks,
and a shocking 50% of world annual mine production.
Half a year's worth of world production,
up for delivery in three weeks,
and your rules allow it.
Sir, like so many other things unique to your exchange,
this is without precedent in commodity futures history.....
If you adopt this rule,
you will never have another delivery problem.
If you don't,
you will have nothing but delivery problems
and the continuous threat of default.
Your recalcitrance against adopting a rule
that is fair to all your members and the public
and that will guarantee your exchange to be default-free,
is disheartening.
In fact, I can think of no legitimate reason
to not enacting immediately the rule
requiring shorts to hold warehouse delivery receipts on,
or before, first notice day, or liquidate or roll-over their position.
... I intend to hold NYMEX
and its officers and directors liable,
on a corporate and personal basis,
for aiding and abetting the shorts.
I also intend to attempt to persuade the authorities
to initiate criminal proceedings under the RICO statutes
for the ongoing and continuous manipulation in COMEX silver,
that has resulted from your refusal to enact rules
that would insure fair trade.
As I did the last time I contacted you,
I will keep this matter private,
if you demonstrate good faith
by you telling me that you intend
to enact the short-certifying rule change,
or offering a legitimate reason why not.
In either event,
if I don't hear from you by Thursday noon, August 17, 2000,
I will make this letter public and begin all efforts
to force this rule change on you.
The NYMEX and COMEX have favored and coddled the shorts
for too long. It's time to level the playing field.
Very truly yours,
Ted Butler |
