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Quite aware of all you say. I worked in the industry for some years, specifically in both clearance and compliance, and I've traded w/REFCO for many years.

The futures arm of REFCO is 100% capitalised, right this minute, courtesy of exchange and CFTC rules, and the vast majority of customer funds are segregated, quite literally untouchable. Plus, as you note, the Clearing Corp. has frozen REFCO's pb deposits. No problems at all here, except that some number of clients and some number of IBs are unquestionably heading for the exits, presumably on the ''other shoe about to drop'' theory. It won't, but they don't ''know'' that, so the policy of better-safe-than-sorry kicks in.

I've no idea why what I typed isn't perfectly clear to you. The very first sentence of the article says:

In an attempt to bring stability to the crisis at Refco Inc., regulators have asked Goldman Sachs Group Inc. and other firms to buy or assume financial responsibility for its massive futures-trading operation, people familiar with the matter said. (emphasis added)

I in turn responded that Goldman wants no part of a bailout (which is exactly what 'assumption of financial responsibility' is, just under another name). What's the problem here? Also, please note that the concept of 'conflict of interest' bothers Goldman about as much as the weight of their employees' fingernails. Conflict, schmonflict, afatc.

BTW, according to the Man people that I and my assistant spoke with Thursday and Friday, they probably will not step up and try to take over all of REFCO's retail accounts. Anything might happen, of course, but the logistics of undertaking such an action were described to me variously as ''overwhelming'', ''pretty thoroughly disruptive'', and ''impossible unless we can get their backoffice'' (this last was from, guess what, one of their backoffice honchos, when I asked about clearing issues and transference).

As ever, we will shortly see what's what.

bailout (which is exactly what 'assumption of financial responsibility' is, just under another name).

Not really. "Bailout" implies a financial problem which, as we both agree, doesn't exist, at least not yet. Which is why I responded in the first place.

Funny that we both have Refco futures accounts. I wound up there after 15 nice, quiet, uneventful years with Lind prior to the acquisition by Refco. I wonder what Barry thinks of this mess. If he took a piece of Refco in payment and still has it, he can't be happy at all.