Archive for the ‘Economics’ Category
Thursday, October 3rd, 2013
Due to the U.S. government shutdown beginning on October 1, 2013; many departments and agencies are affected by the shutdown. If the shutdown is prolonged it may impact state and local governments and their respective economies in more material ways. We have listed several departments and agencies that are involved with the capital markets in various ways.
On October 1, 2013, the CME Group released a letter stating how a prolonged government shutdown could impact the futures markets. âA prolonged shutdown of the federal government and furloughing of USDA staff could result in interruptions or gaps in reporting key agricultural pricing information from the USDA’s Agricultural Marketing Service (AMS).â
The Bureau of Labor Statistics (BLS) within the Depart of Labor noted on their website the following: âThis website is currently not being updated due to the suspension of Federal government services.Â READ MORE
Copyright Â©2013 Mark Shore. Contact the author for permission for republication at email@example.com Mark Shore has more than 25 years of experience in the futures markets and managed futures, publishes research, consults on alternative investments and conducts educational workshops. www.shorecapmgmt.com
Mark Shore is also an Adjunct Professor and Board Member of Arditti Center of Risk Management at DePaul University’s Kellstadt Graduate School of Business in Chicago where he teaches a managed futures / global macro course and an Adjunct at the New York Institute of Finance. Mark is a contributing writer to Reuters HedgeWorld, CBOE Future Exchange (CFE) and Micro-Cap Review.
Wednesday, October 2nd, 2013
Here are the latest posts from Attain’s Managed Futures Blog
Morningstar’s Nadia Papagiannis Demystifies Alternatives:
The highlight of last weekâs Alternative Investments Conference for us was definitely Morningstarâs Nadia Papagiannis presentation. We have to hand it to her, she’s a pro when it comes to alternatives. Since Managed Futures got some of the spotlight, we are reviewing definitions, perceptions, allocation, and our takeaways. Continue Reading…
No Rain, Still Grain, and the Disappearing Live Stock
Rain fall totals from M6 Capital, an updated USDA crop report, and the beginning of Fall. Put that all together and you get harvest time for Grains. A look at how the contracts are reacting, and the supply of live stock. Continue Reading…
Government Shutdown: No CFTC, but the SEC stays open
Today marks day two of the government shutdown. From a futures standpoint, the impacts are far reaching… from essentially shutting down the CFTC, to the CME stating a prolonged shutdown could effect dairy and livestock settlement procedures. Plus, a list of the federal employees still in their offices, and government shutdown pick up lines. Continue Reading…
A Trend Following Trend Line
It’s always nice to got positive feedback from our latest newsletter, and it’s even better when they provide some of their own data to continue to conversation of Managed Futures in it’s drawdown period. Take a look. Continue Reading…
Monday, September 30th, 2013
If the Fed is getting nervous about the durability of the US recovery, Mr Abe has no such qualms about Japan which is, in his words: ‘for sure now on a solid growth and recovery path’. It seems increasingly likely that the VAT hike, currently pencilled in for April 2014, will be confirmed this week, probably with an accompanying statement about offsetting fiscal measures. Looking further ahead, however, it is the acceleration in import prices that presents the key threat to Abenomics. Inflation based on rising import prices could so harm real household incomes that it proves to be something of a Winner’s Curse.
Refresh Chart. Edit Chart.
At first glance, Japan appears to have set out on a path that will see it escape from deflation. Headline CPI inflation was 0.9% in the twelve-months to August, the strongest reading since November 2008. Core CPI inflation, which excludes fresh food, was 0.8%. However, much of the increase in inflation is of the ‘bad’ type, driven by higher import prices on the back of a weaker yen â ‘core core’ CPI inflation, which strips out food and energy costs, is still in negative territory, at -0.1%.
Accelerating import prices erode the disposable incomes of Japanese households, denting consumer sentiment and by extension private sector activity. Consumer confidence fell in August for a third straight month. Unfortunately higher import costsâparticularly for energyâ are unlikely to go away any time soon. Following a complete phasing out of its nuclear reactors, Japan will have to rely on imported oil and gas for the foreseeable future. Compared to electricity price inflation, already running at an annual 8.9% rate, a 300 basis point VAT hike seems like small beer.
Minister Amari has acknowledged that ‘an exit from deflation will become distant if we’re seeing cost-push inflation, where wages aren’t catching up with rising prices’. Japanese wage growth remains lacklustre, at best, so it hardly constitutes a boost to consumer confidence for the time being. While total cash earnings rose for the second straight month in July, by an annual 0.4%, this was predominantly on the back of overtime pay and bonuses, not contractual earnings. Real earningsâdefined as total wages minus CPI inflation excluding imputed rentâactually fell by 0.4% in the year to July, suggesting that the weaker yen is taking its toll on the consumer.
At this juncture, the government is more likely than not to proceed with an increase in indirect taxation. But investors would do well to look through the VAT issue and focus on what is becoming an increasingly difficult problem for Mr Abe: while striking a fine balance between pursuing growth and fiscal discipline is a difficult task in its own right, sustained ‘bad’ inflationary pressures further complicate the government’s policy options. Particularly as the linchpin of a sustainable recoveryâa pickup in real wage growthâremains largely elusive.
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Friday, September 27th, 2013
Our latest newsletter is outâŠ and weâre talking Wilson Phillips, wrecked Ferraris, smiley faces, and the worst drawdown managed futures has seen in 20+ years.
How bad is this Managed Futures Malaise that weâre talking rain dances and Wilson Philips songs? Pretty bad. The main CTA indices are all at 3.5 year lows and sitting on their worst drawdown levels in the past 15 years â at 28 months and -12% from their past all time highs.Â Â And with the year to date numbers negative through August (albeit a small amount),Â Â thereâs the very real possibility of managed futures postings its 4th losing year out of the past 5 in 2013. Whatâs more â a comparison of the 10 years prior to 2009 and the period from March 2009 until now shows the asset class at levels not seen decades, in terms of the amount and duration of the losses, reminding us of the âgenerational lowâ terminology used by the stock folks circa 2009).
(Disclaimer: Past performance is not necessarily indicative of future results).
(Disclaimer: Past performance is not necessarily indicative of futures results)
But as bad as it is, it isnât bad at all when compared to other asset classes worst periods. And indeed we are starting to see is a shift in attitude from those interested in managed futures exposureÂ â from invest in managed futures because of the crisis period performance and diversification value, etc. â toâŠ this is a generational buy in managed futures akin to US stocks in 2009. The new attitude is buy into managed futures not just because it will help your portfolio when the s^&% hits the fan, but because it isnât likely to get much worse from here (although it could). Itâs now a contrarian, dogs of the Dow, buy the beaten down asset class play.
Read the full newsletter to see just how bad it is â how the 10 largest CTAs have fared since 2009, the five reasons some people think managed futures is broken, the comparison of managed futures âworstâ period with stocks, bonds, real estate, and Gold; and more.
Friday, September 27th, 2013
Here are the latest posts from Attain’s Managed Futures Blog
The hype surrounding the Documentary FLOORED has been building over the past couple of months, as it became available streaming over the internet this month. Unfortunately, it seems the hype was better than the Documentary itself. We wish they chose to highlight the positive stories of those who successfully moved off the trading floor and are continuing to run businesses in the futures industry, rather than some broken men complaining about computers. Continue Reading…
5,000 Bushels of Corn on your Lawn
The comment that will never die when having a conversation with people unfamiliar with managed futures and commodities trading is something along the lines of, âSo, you ever get a truck full of Corn delivered to your house?â The short answer is no, and likely it’s never going to happen. Continue Reading…
Alternative Investment Conference Spotlights Managed Futures
We just couldnât get enough of the conference action last week with the NIBA and the CTA Expo, and spent the beginning of this week exploring what the âAlternative Investments Conferenceâ has to offer. Here are some highlights from day one including the discussion of whether alternative investments should receive a larger portion of portfolio allocation: Continue Reading…
Monday, September 23rd, 2013
From all of us at Attain Capital, we wish Barry Ritholtz and Josh Brown the best of success in their new venture in opening their own Registered Investment Advisor (RIA) firm named Ritholtz Wealth Management. The only thing we can’t get over is the name. For two incredibly creative guys, that’s the best they could come up with?Â Continue Reading…
Attention everyone with a student loan tied to the government, your interest rates are now Â tied to 10 yr Treasury Note Yields thanks for a new law. While there’s a cap on just how high the interest rates can go, the change has brought both praise and heavy criticism from the media. Being futures folk, this makes us think this may be just the thing to create the next wave of futures traders. Continue Reading…
Monday, September 23rd, 2013
The supposed shining star of commodity trading is closing up shop, with Clive Capital (managing over $5B AUM at one point) sending a letter to their clients explaining its âlong volatility approach,â didnât allow for many opportunities in this current market environment. While we don’t typically hear about Clive in the managed futures world it is important to point of their differences, as some small CTA’s would give and arm and leg for that kind of AUM. Continue Reading…
It seems like we’re all experiencing a little bit of Bernanke Deja Vu… The last time Fed Chairman Bernanke spoke about the QE, the markets reacted like it was Christmas on Wall Street… While Managed Futures experienced a risk on day, did that quate to a larger daily return? Continue Reading…
The CME is increasing position limits for multiple index futures contracts, allowing for nominal investment amounts that would make just about anyone nauseous. Particularly, the S&P 500 futures contract has been expanded to a position limit of 28,000 contracts, and the emini to 140,000. After crunching some numbers, a maxed out position could control a nominal value of over $11 Billion. Â Continue Reading…
Tuesday, September 17th, 2013
Chicago: Home of Futures Industry Welcomes conferences
We’re just a day away from the kickoff of two industry events in Chicago. Tomorrow, the NIBA Conference begins, followed by the CTA Expo, on Thursday. It’s a chance for Futures brokers to catch up on the latest regulations and a chance for CTA managers to raise money as just about everybody will be there.
If youâre coming into town for either conference, we would love to talk to you. Continue Reading…
YTD Asset Class Scoreboard
We’ve expanded our monthly post on asset class scoreboard for August YTD, adding a table tracking monthly changes, and a nice chart tracking YTD performance. Read âem and rejoice/weep, depending on your asset allocation: Continue Reading…
Last Week’s Linkfest
Last week, Attain Capital got some press that we couldn’t resist mentioning, with Jeff Eizenberg quoted in an article on the supposed âdeath of managed futuresâ. It just so happens to be the first article in last week’s linkfest. See for yourself. Continue Reading…
Thursday, August 29th, 2013
Will a Negative Roll Yield Shut Down Managed Futures Bond Tailwind?
Legendary Bond trader, Bill Gross, ponders if many of the greatest investors have the 30 years of falling interest rates to thank for their success. We see similarities to this in the managed futures world, as it provided a boon to many managers. With 10 yr bond yields up nearly 70% in the past 16 weeks (the highest change in 15 years), it’s left us wondering; will a down trend in bonds treat managed futures as well as the 30 yr up trend has?
We hear from bond guru, Jay Feurstein, and the infamous short-term volatility trader, Mr. Roy Niederhoffer. Continue Reading…
The $48 Million Platinum Payout
Itâs not every day you see a Forbes 400 Member settle a class action suit surrounding market manipulation â but that’s exactly what happened. Futures Industry âHall of Famerâ Louis Baconâs firm Moore Capital has agreed to pay $48 Million to settle allegations of manipulating Platinum and Palladium prices.
There’s no knowing what really happened… but if you traded Platinum and Palladium during a certain time period, why not submit a claim to be part of the class action suit, just don’t expect to retire off it. Continue Reading…
Wednesday, August 21st, 2013
The Field Guide to Surviving Volatility
Our friend Jeffrey Dow Jones (yes, that’s his real name) over at the Cognitive Concord Blog was out with the above titled post last week, and it couldn’t be more timely in our opinion. Now, we’re biased of course â but we couldn’t help but think managed futures fit perfectly with this approach, touching on owning something when times get volatile, and basing trade size on volatility. Continue Reading…
EuroDollars: The Biggest Market You’ve Never Heard of
What’s the most common futures market in nearly every managed futures portfolio we run across? The Eurodollar. While many mistake it as the official currency of the European Union, it actually refers to the US dollars deposited abroad. EuroDollar futures contracts are derivatives on the interest rate paid on those deposits. So why are millions of these contracts being traded a day? Continue Reading…