China has shown up in the “Daily Intelligence Briefing” even more than usual in the last few weeks. This “Country Snapshot” groups together the key points into four areas: fiscal stimulus, monetary policy, economic rebalancing, and political frictions. While the latest data has been mixed, we think that China’s recent trajectory of slowing growth is turning back up, presenting renewed investment opportunities in currently unpopular sectors like materials and energy, although political tensions are edging up and the risk of market disruption is material.
Spiking the Fiscal Punch
A now famous WikiLeak quoted Li Keqiang when we was a regional party secretary and told the US ambassador that China’s GDP statistics are “for reference only.” Now that he’s the premier, Li is providing the references. He recently declared that 7.5% is the “lower limit” for growth this year and 7.0% is the “bottom line” that cannot be crossed. The chief central planner duly confirmed that 7.5% can be achieved this year with “arduous efforts.” Perhaps coincidentally, the Bloomberg consensus for China’s economic growth in both 2013 and 2014 is exactly 7.5%.
China’s leaders say they’re confident they will meet this year’s economic growth target of 7.5%. But they’re taking a few extra measures just to be sure, such as a mini-stimulus that includes another round of railway and infrastructure investment as well as tax cuts and credits to small businesses. Perhaps most important, local governments have been told to spend everything in their budgets this year (rather than carry anything over into next year). That kind of economic management is in the DNA of centrally-planned economies, as much of China still is: a burst of activity to meet the plan (even if it means borrowing from the next plan), a message for more than just the local governments.
The Baijiu Bowl
In China, monetary policy still plays second fiddle to government fiscal policies, more often than not implementing measures that reflect decisions already made by the political leadership. Even so, the People’s Bank of China’s role has certainly grown more prominent as China shifts from administrative directives to market levers in the economy. Credit reforms are advancing. Just recently, the PBOC removed a floor on lending rates as it moves to expand the role of markets in its economy, a change that will require banks to raise more capital. However, even the PBOC itself pointed out that the caps on deposit rates remain in place; those kinds of reforms are being put off, at least for now.
In the US, the Federal Reserve has the dominant role in shaping the business cycle. As former Fed chairman William McChesney Martin famously put it, the job of the central bank is to “take away the punch just as the party gets going,” and raise rates to prevent the economy from overheating. When China’s overnight lending rate spiked in June, the People’s Bank of China looked like it was finally taking away the baijiu bowl. For several days, a brief but brutal credit crunch reduced bank lending to a trickle, reverberating through global markets, before the PBOC released a statement pledging market stability. They’re not taking away the baijiu bowl after all, at least not yet.
While launching short-term fiscal stimulus and keeping the monetary policy settings on hold, China’s current economic policies fall into two main types: rooting out corruption to make the existing system work better and introducing reforms to the economic system itself. Last year, the Communist Party leadership set an example at the top by banning its cadres from gifting fancy watches and other luxury goods. Individual transgressions are being given prominence: the former railway minister, whose tenure was marked by bribes and a fatal high-speed train crash, was recently given a life sentence. Bo Xilai, the regional party ejected from office last year, was recently indicted for bribery in a country where 99% of cases end in conviction. China is now conducting an audit of all of its government debt. As the crackdown reaches deeper into the business community and widens to pharmaceuticals, dairy, and powdered milk, foreign firms in particular have been singled out and expatriates are now being detained.
Over the longer term, China’s leadership is seeking to reform and rebalance the economy to shift away from years of investment-led growth and place greater weight on household consumption. It is not a new goal, but it is now receiving far more attention by policymakers and is a centerpiece of the current five-year plan. How far they succeed depends on how quickly they can increase consumption as well as how effectively they can restrain investment, a process that will unfold over many years to come. On the consumption side, the most recent data from 2011 shows that household spending now accounts for 35% of the economy, which is little changed in five years and still half that of the US, at least according to the official statistics. But according to the Bank of China’s deputy governor, rebalancing is farther along because the official statistics are too low: since consumer goods are so cheap in China, the data should be adjusted for purchasing power parity, an exercise that boosts measured consumption to at least 43% of GDP. Be that as it may, consumption is contributing less to GDP growth in 2013 than it did at the same point last year and still lags investment.
On the investment side, China is burdened with overcapacity in everything from steel to solar panels and from paper to cement. China has ordered more than 1,900 industrial plants to curtail excess production by the end of 3Q and shut down altogether by the end of the year, but even that’s still a drop in the bucket. Having helped create the global solar panel glut, China now plans to cut polysilicon production in half. Overcapacity in the shipping industry left China’s largest shipbuilder on the verge of collapse and needing support from the state. Meanwhile, while some prominent large-scale projects have lost steam, including a stalled $91 billion industrial project near Beijing, other sectors continue to add new capacity: pig iron consumption is slowing but output was still up in the first half of the year (against the backdrop of record steelmaking overseas).
While some analysts forecast a trillion dollar deleveraging of the largest housing bubble of all time, so far the data is still going the other way. On the supply side, the housing sector remains strong despite a raft of measures to curb prices and restrict ownership. House prices went up in July for the eighth month in a row. Local government revenues from land sales surged 46% in the first half of the year. Skyscraper construction is still strong. And there is still plenty of potential demand: In a radical departure from decades of collective ownership, farmers could soon rent or even sell their land, many of whom will move to the cities. That’s in addition to the 250 million people China is planning to relocate from the countryside into new towns and cities in the next dozen years.
While the Communist Party has been careful to limit spillover of economic reform into the political realm, China’s rapid growth has come with greater dissent at home and more disputes abroad. Internally, some of the protests come with the tacit approval of the authorities, such as protests outside factory gates owned by Japanese and other foreign firms. In other cases, protests are focused on broader issues, notably pollution, and are having some policy impact. The first known protest against nuclear power prodded the local government to cancel a processing plant. There are clear limits to these protests, however, and some forms of protest remain beyond the pale altogether. Chinese police opened fire at Tibetans during a birthday celebration for the Dalai Lama. In the northwest region of Xinjiang, clashes with police and outside immigrants are on the rise. Ethnic unrest shows that Beijing’s efforts to re-educate and relocate ethnic minorities are not going smoothly.
Abroad, China has extensive territorial claims in the South China Sea and the East China Sea that are in conflict with nearly every country in the region. Tensions between China and Japan again flared up recently as China started the construction of a new natural gas rig in contested waters. Ships in China’s new coast guard now conducts incursions into waters controlled by Japan almost every day. Japan’s defense ministry recently issued a white paper that included remarkably terse language to say that Beijing was using “force” and was in violation of international law. Japan’s prime minister says he would like to revise Japan’s pacifist constitution and take a more active role in the area, an idea that the Philippines has already endorsed. China also has a similar territorial dispute with the Philippines, as well as Brunei, Vietnam, South Korea, Malaysia, and Indonesia. There are plenty of potential flash points in the region to disrupt critical sea lanes as well as upset markets. But as regional disputes continue to fester, some trade frictions are getting ironed out: China and the EU reached an agreement resolving their solar panel trade spat, preventing it from spilling over into a broader trade war.
China’s new leadership has signaled that it is prepared to tolerate slower growth to rebalance the economy from investment to consumption. They have simultaneously deepened a crackdown on discipline to root out corruption. Balancing those goals while keeping economic growth on track will be a challenge, particularly in the context of rising discontent domestically and greater frictions regionally. While there is no shortage of long-term challenges, our view is that policymakers are opting once again to boost growth in the short-run.
Within emerging markets, China has started to outperform since the mini-stimulus was announced. The best investment opportunities, however, might be less in China itself than in the global sectors that have been slumping along with China and are tied to a renewal of economic growth. Industrials are a good place to start since the sector also benefits from stronger industrial production in the US and improved prospects in Europe. Within commodities, base metals are also firming and have been outperforming precious metals for some time, a trend that would only be strengthened by an upside surprise in China through the rest of the year. But some industry groups, notably steel and shipbuilding, should continue to lag as overcapacity in China persists. There are also rising risks to other industry groups that China has singled out in the crackdown on corruption, notably pharmaceuticals and dairy.
Over the longer run, China’s need for energy has yet to be met; while coal might enjoy some rebound, the eventual winner is likely to be nuclear: China has bigger plans on the drawing board today than before Fukushima. The Party’s efforts to improve its image by cutting down on fancy gifts will also run its course, as the combination of urbanization and rising incomes continues to create opportunities in luxury goods and automobiles.
Over the even longer run, China faces deep problems, many of which are well familiar: huge government debt, endemic corruption, wealth inequality, overinvestment, internal dissent, and external frictions. Others will undoubtedly emerge. There are enough internal contradictions to keep any Marxist busy, and not all of them will be resolved easily. Eventually, China itself will be one massive short. But not yet.
The charts below are extracted from the McAlinden Country Monitor. Click HERE for this week’s full deck.
MRP’s mission is to identify actionable investment themes. Here’s a look at some of our active themes right now. For the full theme reports, click HERE.
Extended Bull in Stocks: The rally in equities that began in 2009 has had a recent correction but the major indexes will see new highs at least over the next year, supported by ample liquidity and stronger economic growth that earnings estimates have yet to reflect.
Bear Market in Bonds: Globally, long-term interest rates have begun to rise generally. Many central banks continue to support bond prices through their purchase programs, which will slow â€“ Âbut not stop â€“ the rise in yields. And then there is the tricky inflation issue central banks will have to recon with.
Abe Trade: The recent correction in global equity markets hit the Nikkei hard, but it has rebounded and we expect the Abe Trade to persist. We look for the elections to the upper house in July as an important inflection point leading to another surge.
US Housing: Typically an early cycle source of growth, US housing is coming late and is now spreading into other sectors of the economy. We expect to see continued strength in financials (mortgages servicing, loan origination), paper and forest products (lumber), and consumer durables (white appliances, carpeting, etc).
France - Under Pressure: France just got downgraded by Fitch. And while France is not quite standing cap in hand in need of a formal bail out, our outlook is the same as in April: Bad economy, worse polity, ugly outlook.
Energy Infrastructure: Booming energy production in North America has helped keep a lid on West Texas oil prices and, since 2011, created a differential with global oil prices. This trend has a long way to go, giving North America’s energy users a competitive edge in industries from plastics to chemicals.
Media: Content providers of shows and other media continue to benefit from booming demand relative to their peers.
Asset Managers & Investment Banks: In the US, both groups are benefiting from rising markets, increased fund flows, more M&A, a pipeline of IPOs, and write-up of mortgages and other housing-related securities. European financials continue to face headwinds.
After he merely raised the issue of tapering off the Fed’s massive monetary easing at some distant point in the future, Ben Bernanke has taken a lot of blame for the renewed rout in the markets. Globally, stocks and bonds are down while currency markets are roiling. But perhaps he’s taking more blame than he deserves.
First, the reason that Fed officials can even bring up the idea of tapering in the first place is that their goals are being met: growth prospects are improving and the Fed must be welcoming the strength in the housing market with a huge sigh of relief â€“ just this morning, new homes sales and Case-Shiller home prices both hit cycle highs. While the economic recovery still has a long way to go, bond markets are pricing in stronger growth. Since early May, nominal 10-year Treasury yields have moved up from 1.6% to 2.6% over the past three months, breakeven inflation rates in the TIPS market have gone the other way, from 2.3% to 1.9%, pushing up annualized real growth expectations. Recent turbulence aside, the trends are clear.
Second, there are many other factors behind the market’s recent gyrations. The global sell-off in bonds really started in Japan, when yields started heading up in early April as the implications of the Abe Trade began to be priced into the bond markets. China is trying to find the right balance between digging out the rot in its financial system and supplying enough credit for the real economy, so far with uneven success. Europe is still Europe. Meanwhile, global riots have broken out from Brazil to Turkey and Indonesia. There’s been plenty of kindling for a spring sell-off, even without the Fed.
Finally, despite all the talk of tapering, the reality is that the Fed is still going full steam ahead with QE3. The Fed funds rate is still effectively zero and the Fed’s balance sheet just hit $3.5 trillion dollars and counting. Even if the Fed starts to curtail its bond purchases, it will merely be slowing the pace of monetary easing. It will be a long time before the Fed gets back to neutral, never mind starts outright tightening. The high-water mark of global liquidity has yet to be reached.
In the meantime, easy money from the Fed continues to flow along with most of the world’s major central banks. Bonds should continue to suffer: real growth expectations are already stronger and eventually we think higher inflation will follow, lifting bond yields and further depressing prices. Stocks can resume their rally after higher bond yields sinks in and analysts adjust their models: stronger growth means stronger earnings than are currently expected. As the global economy returns to normal, differences between countries will be decisive. Just as the notion of the BRICS has broken down, it is the variations within emerging markets and developed markets that will be key.
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Warren Hatch, PhD, CFA
Chief Investment Strategist
McAlinden Research - a division of Catalpa Capital Advisors, LLC
The third leg of the Abe Trade is finally kicking in: Japanese government bonds have begun to sell off. Last fall, ahead of Japan’s elections, Shinzo Abe began to emerge as the likely winner with a radical agenda for change. McAlinden Research mapped out how Abe’s strategy, if successful, would lift stocks but undermine bonds and the yen. Since Abe’s victory, stocks have surged and the yen has plunged. But government bonds had been holding up despite the massive shifts in fiscal and monetary policy.
Last month, JGB yields hit an all-time low of 0.4% and have been grinding up ever since. The market is recognizing that the new government’s reforms are credible and mark an inflection point for the economy. Japanese investors are already reallocating overseas. Although the coincident economic data remains mixed â€“ industrial production is still weak while retail sales are improving â€“ the OECD’s leading indicators are turning up and the latest purchasing manager survey is back in expansion. After years of sluggish growth and persistent deflation, stronger growth and rising inflation will push nominal yields higher.
The government’s stimulus policies have been helped by the rally in stocks and the sell-off of the yen (just ask the exporters), but policymakers won’t want to see rates rise too high or too quickly. If that happens, the Bank of Japan might intervene and buy even more bonds to slow the rise in yields. Whether slow or fast, however, yields are going up and bond prices are going down. The Abe Trade is now firing on all pistons with quite a long way yet to go.
Find more articles like this at www.mcalindenresearch.com
Warren Hatch, PhD, CFA
Chief Investment Strategist
McAlinden Research - a division of Catalpa Capital Advisors, LLC
Global financial conditions are about as good as they can get. Stock markets are hitting new highs. May has been the busiest month for IPOs in a decade. Lending conditions are easing. Many central banks are again cutting rates while others are still buying up assets as part of their massive quantitative easing programs. Although yields on US government debt have edged up, yields on corporate debt have kept coming down, leaving credit spreads as tight as they have been since before Lehmanâ€™s collapse. US high yield debt is now below 5% for the first time ever. The global stretch for yield has brought emerging market yields down to levels usually associated with developed markets â€“ and in some cases lower.
For borrowers, the drop in interest rates is great news. With mortgage rates so low, housing affordability remains at all-time highs. Corporate issuance has been booming, and even cash-rich companies like Apple are borrowing with rates this low. And Brazilâ€™s Petrobras is about to offer the biggest emerging market bond issue ever.
For central bankers, while low rates can be good for growth and asset prices, some policymakers are starting to voice some concerns about the risk of a new credit bubble forming â€“ but not enough to signal that they intend to reverse course any time soon. The most Ben Bernanke has said is that the Fed is â€śwatching particularly closelyâ€ť for signs of excessive risk taking. Meanwhile, the flood of liquidity is set to get even higher, thanks to the latest rounds of easing led by Japan. In this environment, all asset prices could go higher. According to Lipper, US fund flows are still strong for both stocks and bonds.
For investors, the asset allocation environment is shifting. With bond yields already pancake flat, bond prices are close to being capped out: there is not much more yield to reach for, at least for fixed income. The Barclayâ€™s Aggregate Bond Index has already been lagging the S&P 500 since last November. As the global economy regains momentum and inflation begins to turn up, investors should consider shifting into assets with better total-return prospects like stocks, commodities, and real estate.
International investor Jim Rogers says he’s shorting U.S. Treasuries in anticipation of the Fed-fueled bond bubble bursting. He’s also thinking about buying the rouble as a way to play the Russian markets.
First Business’ Bill Moller talks with Janet Tavakoli, president of Tavakoli Structured Finance, about her new book, The New Robber Barons, a compilation of articles and other pieces she wrote about the global financial crisis.
“What we’ve learned from this crisis is that when you throw trillions of dollars on the table, nobody tells the truth and everyone plays for keeps,” Tavakoli says.
Last Friday the markets cheered news of leadership change in the center of Europeâ€™s debt crisis.Â However, there is reason to believe this wonâ€™t be the end of a thorny problem that will likely add volatility to the markets for decades.Â There is one reason for this:
The debt crisis wonâ€™t end until voters accept sacrifice in the way of budget cuts and revenue enhancements â€“ or the markets force action.Â In fact, if the debt crisis ends quickly, it will mean the markets have forced action.Â The more likely event is a long, political debate over how sacrifice is carved out.Â If you think this is easy or a European problem, look no further than how the U.S. Debt Super Committee is dancing around anything that would jeopardize their re-election efforts.Â Word is that traders have baked debt committee failure into their fundamental analysis of the situation, but never say never.Â Markets frequently surprise even the most astute and seasoned observers.
With government spending is far in excess of revenue in both Europe and the U.S., the changes required to solve the debt problem involve societal change.Â This wonâ€™t be easy.Â Political constituencies might be required to give things up.Â Economists note the hard truth that a culture of government spending, bloated pensions and politically popular tax breaks may be required to give way to budget requirements and a different social atmosphere.
When voters meet difficult austerity measures, get ready for a volatile political environment.Â To assume that the debt crisis is over because a change in leadership occurs is to assume that the budget problems and fiscal austerity required will be able to tucked away without facing voters.Â There will be a point at which voters will be required to face the debt crisis.Â It is when this moment occurs that the rubber meets the road in the government debt crisis.
Government debt crisis discussions have historically been conducted behind closed doors, as if the problems created by politicians can be solved through the same fashion.Â That is unlikely, as the shear numbers behind the debt problem are just too big to achieve a political solution that doesnâ€™t include revenue enhancements and spending cuts.Â Speaking on CNN Money yesterday, Robert Bixby of the Concord Collation said it is better that government shine light on the problem rather than keep it behind a political cloak.Â Efforts from Bixby and various ratings agencies to warn regarding debt should be lauded.Â In fact, S&Pâ€™s â€śfat fingerâ€ť episode where an e-mail warning a potential French bond downgrade is interesting. Â Was it a mistake or a method of the ratings agency warning about the debt truth?Â The fact that S&P might have felt it couldnâ€™t come right out and publically downgrade Eurozone debt, much as it was criticized for downgrading U.S. debt over the summer, shows just how clandestine honest talk about the debt situation has been. However, this secrecy is viewed by many as a major tactical error.Â Voters need to understand the U.S. can easily become the next Italy if solutions and sacrifice are accepted now.Â That is the message voters must understand if anyone is to accept the difficult sacrifices required to keep a great nation great.
As example of the failure of the policy of keeping debt discussions under wraps, one needs to look no Look at the November 8, 2011 vote on collective bargaining in Ohio.Â This is a vote when government, fighting the difficult fight to reduce spending, lost a battle when voters re-affirmed the right of unions to continue to battle politically sensitive government in pension and wage negotiations.Â Voters educated in the budget crisis might have made the logical connection between bloated government pensions and the need for tax increases or spending cuts.Â But when such issues are taken on their own, out of this financial context, voters tend to be soft on human suffering and less sympathetic to very real budget matters.Â This is something political marketers understand and exploit, which is too bad.Â The real issue Ohio voters should have faced: Are you willing to pay higher taxes or cut critical social spending to support government workerâ€™s right to bloated pensions and socialistic work rules? Had the vote been phrased in this fashion the outcome might have been very different, indeed.
It is time the debt crisis is moved from the backroom and into the limelight.Â Only with such transparency into the real issues and problems will solutions be found.Â Qualified investors should recognize the very real nature of the debt crisis and the potential for volatility to the upside and downside and look for new methods of diversification.Â All investors should have a risk management plan that is designed with the goal to hold up under a number of circumstances, particularly at this moment in history.
Mark Melin is currently writing his fourth book on uncorrelated investing. Â He is previous author / editor of three books, includingHigh Performance Managed Futures (Wiley, 2010) and an adjunct instructor in managed futures at Northwestern University. Â He can be reached at firstname.lastname@example.org or visit the book’s web site at www.Go2ManagedFutures.com
Risk Disclosure: Managed futures can be a volatile investment and is not appropriate for all investors. Â Past performance is not indicative of future results.
The opinions expressed in this article are those of the author, may not have considered all risk factors and may not be appropriate for all investors.
The global economy faces a stagnation period in which safe haven protection can only work until western governments get a true grip on their public finances, says Better Capital Chairman Jon Moulton.
“â€¦ [T]he United States spends $1.40 for every dollar of income. The U.K. spends â€¦ GBP1.25 for every pound it gets in,” Moulton says. “Most of Europe’s in a similar sort of state. And it’s not a permanently sustainable model. And most people have worked that out, but they don’t really know what to do about it.” (more…)
The US government is currently exercising the largest amount of leverage usage in the history of civilization. If Uncle Sam were an uncorrelated managed futures investment program he would have received a margin call long ago â€“ and in all likelihood would have already flamed out in a blaze of infamy.
For those unfamiliar with investments uncorrelated to the performance of the stock market, a margin call occurs when an investor has over-leveraged themselves.
To understand the situation, consider the US financial position for a moment from the perspective of a homeowner:
Right now the government is essentially making mortgage payments with a credit card. It issues new bonds to pay interest on old bonds, a ponzi scheme to make Bernie Madoff proud.
Ever since the logical confines of the gold standard were lifted in 1971, and the political establishment began to realize in 1978 it could simply crank up the printing press to give voters what they wanted without raising taxes, our society embarked on a debt party the likes of which have never before been seen.
My father always said there is no such thing as a free lunch. Â The US government has been enjoying their lunch for close to thirty years under the delusion it can simply print free money without consequence. Â But alas, it will learn its lesson the hard way â€“ and unfortunately stock investors might take the fall.
As of this writing the US government is spending nearly twice what it makes â€“ racking up annual debt of $3.8 trillion and bringing in $2.2 trillion in revenue. While that’s been the headline number everyone discusses, its not the real number to pay attention to as it doesn’t include all the government’s liability.
A real number to watch is the projected fiscal gap. Â That’s the massive $211 trillion difference between spending and income that occurs in a few years when baby boomers start to retire and claim their god-given right to government medical benefits. Add to this the fact that interest rates could dramatically rise, particularly with the excessive printing of money. Â Running the printing press overtime could lead to the US Greenback being supplanted as the currency of choice. Â When this happens, watch out. Â The fiscal prospects for the US government, and stock investing, won’t look particularly attractive. It gets even uglier when you consider the political realities required to solve the problems.
This summer, politicians logically tried to close the existing budget gap, but couldn’t even get close. Relying on deeply entrenched Republican and Democratic political agendas to give way to one another could be a tall if not impossible order. Try asking a senior to give up a little Medicare and it’s like you are taking away their birth right. Itâ€™s almost as bad as asking Democrats to end fast and loose social spending or Republicans to tax the rich. Asking people to give something up, to sacrifice, is something our generation is not accustomed to doing. If you think it’s got to be easy to close his budget gap, think again. It will be a constant battle that could generate strong moves stock market moves to the upside and downside.
It is said that identifying the middle of a secular bear market is always difficult. While hindsight is always 20/20, one item to consider is the volatility that can occur in bear markets. Investors have already witnessed significant volatility in 2008, 2009, 2010 during the flash crash, and most recently 2011 when a debt warning shot was fired. Increasingly there could be a cause and effect relationship with such volatility and the loose management of a government printing press for the purposes of political expediency. How do investors know when this could unravel? If the US currency starts losing favor as the reserve currency of choice, something once considered unthinkable, we could be in for rough investing ahead. When US interest rates start to rise precipitously, investors would do well to find a nice investment uncorrelated to the performance of the stock market. But perhaps the real early warning signal is that voters are unwilling to give anything up, and their elected politicians represent their wishes. If a trend follower could somehow arrange an algorithmic formula to monitor public opinion, this might be its sell signal.
At this moment in history, investments unhinged from economic supply and demand at the performance driver level should be given significant consideration. Managed futures is in the right place, providing a needed service at the right time.
About the Author: Mark Melin is author of three books, including High Performance Managed Futures(Wiley 2010), and has taught managed futures at Northwestern University in Chicago. Mr. Melin consults with financial advisors, pension funds, family offices and high net worth investors on developing uncorrelated investments. Â The author is an associated person registered with the National Futures Association NFA ID#: 0348336. For further information visit his web site at www.Go2ManagedFutures.com or via e-mail at info@Go2ManagedFutures.com
Risk Disclosure: Past performance is not indicative of future results. Â There is risk of loss when investing in futures and options. Â Always review a complete CTA disclosure document before investing in any Managed Futures program. Â Managed futures can be a volatile and risky investment; only use appropriate risk capital; this investment is not for everyone. Â The opinions expressed are solely those of the author, they are not appropriate for all investors and may not have considered all risk factors.
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