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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: ForYourEyesOnly who wrote (35481)	6/17/1999 7:51:00 PM
From: Tom Byron	Read Replies (1) \| Respond to of 116764

me thinks the ball is in someone's court...yes?...(.)

To: ForYourEyesOnly who wrote (35481)	6/19/1999 7:02:00 PM
From: Bill Murphy	Respond to of 116764

Has every one forgotten about Clinton wagging his finger at us? LTCM Rejects Gold Group's Market Manipulation Claims 06/17/1999 Dow Jones Commodities Service (Copyright (c) 1999, Dow Jones & Company, Inc.) NEW YORK (Dow Jones)--Long-Term Capital Management L.P. has rejected claims by a group of gold investors that it was involved in the manipulation of gold prices. LTCM sent an affidavit to lawyers for the Gold Antitrust Action Committee, or GATA, in response to allegations by GATA Chairman Bill Murphy that LTCM was involved in manipulation of the gold market. Gata sent a copy of the affidavit to Dow Jones Newswires Thursday. "None of LTCM, LTCP (Long-Term Capital Portfolio), nor their affiliates has ever entered into any transaction involving the purchase or sale of gold, including without limitation spot, forwards, options, futures, loans, borrowings, repurchases, coin or bullion, long or short, physical or derivative or in any other form whatsoever," Eric R. Rosenfeld, a principal of LTCM and member of its management committee, said in the affidavit. In a cover letter signed by LTCM General Counsel James G. Rickards, LTCM requests that Murphy "take immediate and effective steps to retract the defamatory comments regarding LTCM which have appeared on its internet website and elsewhere." A LTCM spokesman told Dow Jones Newswires that the "affidavit speaks for itself. We've totally researched and taken early legal steps to convince this group that, as far as Long-Term is concerned, there's no basis for their claim." The spokesman declined to say whether LTCM would consider suing Murphy if he fails to retract is statements. "I'm not going to speculate on our next action," he said. "All options are open. " Earlier this year, GATA Chairman Murphy alleged that LTCM was short 300 metric tons of gold at the time of its near collapse and that investment banks bailed it out in order to avoid a spike in the price of gold. "It might have been better to say they were exposed to the tune of 300 tons," Murphy told Dow Jones Newswires Thursday. "We never said they did transactions. In essence, what we've been told is that many people lent them money, including bullion dealers," he explained. "People were using this method of financing" - the gold carry trade - "so much, that when Long-Term Capital blew up, everyone was looking at each other and saying: what are we going to do?" GATA alleges that the gold carry trade is at the center of what it alleges is gold market manipulation. The gold carry trade involves financial institutions borrowing gold at 1% interest, selling the gold, then using the return to invest elsewhere. The group is alleging that a cabal of unnamed Wall Street investment houses and bullion banks involved in the gold carry trade have been manipulating the gold market to ensure that the price doesn't rise. As long as the price of gold holds steady or declines, gold carry trades are profitable. But an unexpected increase in gold's price would cause borrowers to scramble for supply, in turn driving the price of gold substantially higher, and making the cost of the loan's principal prohibitively expensive. Murphy says GATA isn't investigating LTCM. But he is alleging that the fund's bailout is evidence of collusion in the gold market. In late April, GATA retained Berger & Montague, a Philadelphia-based law firm specializing in anti-trust suits, to further its investigation and possibly launch a lawsuit. So far, the group has raised more than $80,000, "with more promised or coming," said Murphy. - By Janet Whitman ; 201-938-2208; Janet . Whitman @dowjones.com (END) Dow Jones Newswires 17-06-99