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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Paul Kern who wrote (85159)	8/16/2007 8:04:42 AM
From: Paul Kern	Respond to of 110194

Chicago Mercantile to Raise Margin Requirements Today (Update1) By Nandini Sukumar Aug. 16 (Bloomberg) -- CME Group Inc., the world's largest futures exchange, will increase margin requirements on some securities traded on its markets from today's close. CME raised margin requirements on some currency, interest rate and stock-index futures, according to a notice sent by the exchange to members. CME, formed last month by the combination of the Chicago Mercantile Exchange and Chicago Board of Trade, cited financial futures traded on both markets. Agricultural contracts weren't affected. A collapse in the subprime-mortgage market has pushed down prices on fixed-income securities including corporate bonds and loans. The credit crunch forced hedge funds managed by Bear Stearns Cos. and Sowood Capital Management LP to liquidate last month. It spilled over to equity markets last week and caused losses at funds run by firms including Goldman Sachs Group Inc. Sentinel Management Group Inc., the Illinois-based cash- management firm that oversees $1.6 billion, froze client withdrawals this week after saying that credit-market turmoil made it impossible to trade without incurring losses. CME said Aug. 14 that Sentinel told the Commodity Futures Trading Commission the firm would stop accepting redemptions. Some of the firms that do business on CME's exchange use Sentinel for investment services. It didn't name the firms. No Sentinel customer funds are on deposit with the CME, the exchange said. Traders have to lodge money with the clearing house of an exchange as collateral against losses. The CME has about $53.4 billion from customers such as Goldman and Bear Sterns to act as collateral against possible trading losses and to guarantee position holdings during market swings, according to the exchange. To contact the reporters on this story: Nandini Sukumar in London at nsukumar@bloomberg.net . Last Updated: August 16, 2007 07:41 EDT