Friday, November 18, 2005

Short on copper?

Liu, a trader in London with the State Reserves Bureau (SRB), has disappeared after building gigantic short positions in the metal, said to range from 100,000 to 600,000 tons. Liu apparently decided that prices of the metal would fall, and tried to take advantage of this by selling vast amounts of copper he did not actually possess for December delivery. Traders in London guessed that losses to the Chinese government could amount to US$200 million, and warned that China could find itself excluded from metal markets if it failed to cover Liu's contracts. Liu himself remained missing, although the South China Morning Post reported that he was believed to be at home in Shanghai.
The solutions looks simple to me: Just melt down the many million copper statues of the short red-book chairman! Again another problem solved. Seems like a good time to start the weekend!