Re: Short squeeze on top - wir reden von 350 Mrd Dolores in einem (!) Fall

verfasst von dottore, 27.08.2003, 16:41

-->Aug 24, 2003 (Financial Mail on Sunday - Knight Ridder/Tribune Business News via COMTEX) -- Money broker


ICAP has been caught up in a major crisis in the US government bond market, which is beset by problems because
dealers cannot find any ten-year bonds to complete their trades.

The mysterious disappearance of billions of dollars worth of bonds, known as US treasuries, has meant some of the
biggest brokers in the market place have been forced to inject capital into their US businesses.

It is believed that UK-listed ICAP, led by chief executive Michael Spencer, has injected capital into BrokerTec, its US
government bond broker.

Cantor Fitzgerald, the biggest player in the market, has poured about UKpound 25 million into its operations. The
brokers have been hit because they have bought and sold the US treasuries on behalf of clients, but have been
unable to physically complete the transactions because of the shortage of available stock.

Brokers are usually able to borrow bonds from other companies and even from the US Treasury to settle trades, but
they have been unable to do so this time. It is believed that the US Treasury has just UKpound 18 billion of ten year
bonds on its books -- a fraction of the total required.

The cash injections were required because, under US regulations, if a trade fails because it cannot complete, money is
drawn against the broker's capital base. Regulators insist that financial companies set aside a specific amount of
capital to support their businesses. If the capital falls below the required levels, companies are legally obliged to top
it up.

One leading bank, thought to be Bank of New York, which acts as custodian and holds bonds on behalf of clients, is
awaiting delivery of about $350 billion of ten-year bonds.

Problems began in the market last month. Prices tumbled following comments by an official of the Federal Reserve,
the equivalent of the Bank of England, which spooked investors.

Traders believe that investors embarked on a major round of short-selling, which involves selling bonds that they did
not own, <font color="red">and actually sold more ten-year bonds than the American government had ever issued. </font>

Short-sellers are obliged to buy the bonds to cover their positions, and the investors have been scrambling around to
find them, which has exacerbated the problem.

Gruß!

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gesamter Thread:

• und jetzt noch die us-bond`s - könnte heute er tag X werden????? (owT) - LOMITAS, 27.08.2003, 16:01
  • Re: Short squeeze on top - wir reden von 350 Mrd Dolores in einem (!) Fall - dottore, 27.08.2003, 16:41
    • : aus solchen Turbulenzen entstehen Gold-Preis Bewegungen von $ 25.00 die Stunde - Emerald, 27.08.2003, 17:11