GT. Thought I would post this over here as there does not appear to any interest in gold stuff on the GPM......looks like the crazies are in control over there.:-)
Chaos in unauthorised Comex trade post-US attack
Financial Express - India; Oct 5, 2001
THE devastating attacks on the World Trade Center (WTC), which rocked US financial markets have also put domestic unauthorised Comex futures trade in limbo. Punters across the country are worried about the fate of their outstanding positions in various commodities and currency futures.
The book runners conducting Comex trade from Dubai and other Indian Comex points are worried about their margin money lying with US-based brokers. The amount of unsettled outstanding positions and margin money is not exactly known but it figure up around Rs 500 crore. If the deadlock does not resolve soon, or markets goes haywire, a large-scale payment crisis in the Comex trade is not ruled out.
According to primary estimates, Indian punters and book runners are holding significant outstanding positions at Comex, NYBOT, and IMM. Among commodities, Comex copper gold, and silver accounts for major chunks while in the currencies, euro and pound accounts almost 90 per cent share in the open positions. According to market grapewine, deals which have been struck on the black Tuesday is likely to be treated as cancelled, given the abnormal circumstances but fate of outstanding positions is unclear as book runners and punters are scared, as they do not know how settlement will take place. Several book runners mainly of Dubai and some from the India who have direct accounts with Comex-based brokers are worried about their margin money lying with Us brokers as a collateral. ‰‰There is totally chaos. I do not know about my money, which is lying in two accounts at New York. The money, which I kept as a margin, is significant. One of the traders with whom I deal, has reportedly died at WTC, while other one is alive¡¡ said a leading book runner based at a small town in north Gujarat.
He informed this author that he is relatively more exposed to the risk, since he was directly dealing with Comex broker and had accounts over there. While his other counterparts, those who conduct business via Dubai are only exposed to market risk. They need not deposit margin. Explaining the reason for the direct dealing he said that if book runner- the man who facilitates trade directly deals with Comex- he will have to pay the $19 commission per trade, and he earned $45-50 as a commission from his clients. In case of those who deals through Dubai, they have to pay $25 to $30 to Dubai-based brokers who enroute deals to the Comex. He said that most of his clients have sizable exposure in Comex copper contract. Most of their clients were bearish since copper was falling.
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