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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: SOROS who wrote (22723)12/2/2004 1:31:49 PM
From: redfrecknj  Read Replies (1) of 110194
 
This is how it starts...out in the hinterland...in some lonely outpost...

"The disclosure this week that a Singapore-listed company controlled by a Chinese state-owned enterprise lost $550 million in derivatives transactions [for fuel oil] in the last five weeks has touched off an international scramble to determine who will cover the losses ... The heavy losses... have underlined three recurrent problems with state-owned companies and their affiliates. The problems involve the companies' often poor level of financial sophistication, their weak corporate governance and their uncertain financial backing from Beijing. Chinese copper companies were among the biggest losers when copper prices plunged in October, sustaining several hundred million dollars in losses, government-controlled news media in China reported at the time. The Chinese news media blamed a lack of skill among Chinese copper traders in hedging their bets for the losses, not malfeasance. It also blamed an excessive willingness to believe that an increase in prices over the summer would continue."

Article:http://news.ft.com/cms/s/18a0d834-4407-11d9-af06-00000e2511c8.html

I think we are in for a few surprises. Somewhere there is a major U.S. hedge fund, or several of them, that will have similar problems to the Singapore-China problem that FT has reported. That's where it starts...in some lonely outpost...
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