Friday, July 20, 2012

Red Kite Wins Time In Fight Against JP Morgan Copper ETF

For some reason I hear the name Yasuo Hamanaka.*
From FINalternatives:
U.S. regulators will mull for a little longer a proposed copper exchange-traded fund that is bitterly opposed by a major commodities hedge fund.

The Securities and Exchange Commission said yesterday that it has asked JPMorgan Chase, which wants to launch the fund, for more information. The bank has been trying to get the JPM XF Physical Copper Trust off the ground for some two years, but will have to wait another week for a ruling from the SEC.

Opponents of the plan, including RK Capital Management, which runs the Red Kite hedge funds, will then have another 30 days to comment. The SEC's decision means that the ETF could not launch until mid-September at the earliest.

RK and copper users have warned that an ETF backed by physical copper would inflate prices, harm supply and "wreak havoc on the U.S. and global economy." RK's lawyers have said the ETF could eat up as much as one-third of the copper traded on the London Metal Exchange....MORE
*Hamanaka was the Sumitomo trader who in 1996 decided to corner the world's copper market.
He got to around 5% before he couldn't blow the bubble any bigger.
The collapse cost his employer $2.6 Billion.

For more on Red Kite:

Dec. 22, 2011 
UPDATED--Barclays Hit With "Immense" Copper Trading Loss; 50 Sigma Move In Cancelled Aluminum Warrants (50-Sigma events don't happen)
Dec. 22, 2011 
Barclays Capital to Wall Street Journal on Copper Losses: "Nonsense"
Dec. 23, 2011 
Barclays, No Sumitomo here, Copper Traders Whupped by Red Kite (BARC.L)
Jan. 13, 2012 
Red Kite: The Folks Who Bested Barclays' Copper Traders