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Here's something I scraped of "TheStreet.com" on the subject:
Fund Watch Features: Hot Copy: Straight
From The Fax Machine, Niederhoffer Tells
Customers The Bad News
By
10/29/97 6:13 PM ET
The following unsigned letter was faxed to
clients of Victor
Niederhoffer on Wednesday, October 29, 1997
after 5:00 p.m.
EDT:
October 29, 1997
To:
Limited Partners of Niederhoffer Intermarket
Fund, L.P.
Limited Partners of Niederhoffer Friends
Partnership, L.P.
Shareholders of Niederhoffer Global Systems,
S.A.
Dear Customers:
As you no doubt are aware, the New York stock
market dropped
precipitously on Monday, October 27, 1997. That
drop followed
large declines on two previous days. This
precipitous decline
caused substantial losses in the fund's
positions, particularly
their positions in puts on the Standard &
Poor's 500 Index. As
you also know from my previous correspondence
with you, the
funds suffered substantial losses earlier in
the year as a result
of the collapse in the East Asian markets,
especially in
Thailand.
The cumulation [sic] of these adverse
developments led to the
situation where, at the close of business on
Monday, the funds
were unable to meet minimum capital
requirements for the
maintenance of their margin accounts. It is not
yet clear what is
the precise extent (if any) to which the funds'
equity balances are
negative. We have been working with our
broker-dealers since
Monday evening to try to meet the funds'
obligations in an
orderly fashion. However, right now the
indications are that the entire equity positions in the funds has
been wiped out.
Sadly, it would appear that if it had been
possible to delay
liquidated most of the funds' accounts for one
more day, a
liquidation could have been avoided.
Nevertheless, we cannot
deal with "would have been." We took risks. We
were
successful for a long time. This time we did
not succeed, and I
regret to say that all of us have suffered some
very large losses.
© 1997 TheStreet.com, All Rights Reserved.
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