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RICK:
Thanks for your note and staying in touch during a time when a huminatarian crises could easily spiral into something where the worste news is yet to come. Here is what Ive found out... NYMEX has contingencies (which they are yet to exercise) for back-up clearing, as well as a back-up site for open outcry trading. In the past, the first contingency has been exercised several times and is proven, though the later has never been tested in practice. Meanwhile, clearinghouse payments have been delayed as a result of the NYMEX closing and the exchange is likely to remain closed through the balance of the week (thus eliminating the need for daily payments). During this time the exchange is closed, an effort is to be made to trigger one or both of the contingencies above (based on yet to be clarified damage assessments). The fact that some degree of transaction data integrity exists suggests that long-term payment performance from NYMEX is not likely to be a problem. However, if clearing payment delays extend past the end of the month when swaps settle, then we may see delayed payments from weaker credits in related swap and physical markets. In this regard, the markets have breathing room since the terrorist attacks didnt occur late in the month. Finally, there have been general comments from Treasury and Fed Bank officials to guarantee stock exchange payments, and the assumption is that the same guarantees would apply to the NY commodity exchanges (but this asumption has not been validated or addressed directly in public comments). Hope this helps. Brad. -----Original Message----- From: Buy, Rick [mailto:Rick.Buy@ENRON.com] Sent: woensdag 12 september 2001 17:52 To: Brad.Horn@nuon.com Subject: RE: Systemic Market Risk to Follow NYMEX Failure Was out of town but back now. I asked my group to look at your note and apprise me. Will let you know when they do. Tx Rick -----Original Message----- From: Brad.Horn@nuon.com [mailto:Brad.Horn@nuon.com] Sent: Tuesday, September 11, 2001 11:30 AM To: rbuy@enron.com Subject: FW: Systemic Market Risk to Follow NYMEX Failure Rick: In light of recent events at the world trade center, Im concerned about the poitential for a systemic failure following the destruction of NYMEX. A quick note from you to confirm or deny would be appreciated. For example, if NYMEX payments are delayed significantly, Im worried that a larger payment failure in the energy derivatives market might follow. In this scenario, Enron?s large NYMEX position could put it in jeoprardy. As a result, I would think you would know before others if a NYMEX clearing falure is in the works. Do you have any insight at this time into NYMEX payment performance????? ********************************************************************** This e-mail is the property of Enron Corp. and/or its relevant affiliate and may contain confidential and privileged material for the sole use of the intended recipient (s). Any review, use, distribution or disclosure by others is strictly prohibited. If you are not the intended recipient (or authorized to receive for the recipient), please contact the sender or reply to Enron Corp. at enron.messaging.administration@enron.com and delete all copies of the message. This e-mail (and any attachments hereto) are not intended to be an offer (or an acceptance) and do not create or evidence a binding and enforceable contract between Enron Corp. (or any of its affiliates) and the intended recipient or any other party, and may not be relied on by anyone as the basis of a contract by estoppel or otherwise. Thank you. **********************************************************************
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