Since the economic decline in 2008, there has been a growing demand of individual and institutional investors to consider various choices of non-correlated investments to reduce tail risk (downside deviation)(i) and correlation risk, often known as alternative investments.
There is a good chance an investor will have stocks and bonds in their portfolio via a 401k, IRA, pension fund or directly into mutual funds. Perhaps they have some real estate either as an investment or the home they live in and maybe some private equity.
In 2008 and 2009, most stocks both domestically and foreign became highly correlated as they headed south and everyone was seeking the exit door simultaneously, thus causing losses to extend as panic selling and the need to liquidate increased.
One of the increasing areas of non-correlation investment is the currency market or sometimes called forex or FX (foreign exchange). In August, 1971 President Nixon removed the U.S. dollar from the gold standard, ending the Bretton Woods agreement and causing currencies to float at market rates. In December 1971, Professor Milton Friedman wrote “The Need for Futures Markets in Currencies”.(ii) May, 1972, the Chicago Mercantile Exchange introduced currency futures.(iii)
Past performance is not necessarily indicative of future results. There is risk of loss when investing in futures and options. Always review a complete CTA disclosure document before investing in any Managed Futures program. Managed futures can be a volatile and risky investment; only use appropriate risk capital; this investment is not for everyone. The opinions expressed are solely those of the author and are only for educational purposes. Please talk to your financial advisor before making any investment decisions.
Published July 31, 2012 CBOE Futures Exchange “Futures in Volatility” Newsletter By Mark Shore
While analyzing the utility value of the CBOE Volatility Index (VIX) futures® contract relative to the underlying market (S&P 500), a question often arises regarding the correlation of these two instruments. In this article we look at various durations of rolling correlations to determine its utility value.
The “static” correlation of two investment components is often quoted in a correlation matrix table when multiple markets are discussed or if there are only two markets, a single quote.
From January 2004 to June 2012, static correlation of daily VIX end of day data to the S&P 500 is -0.75. However, a static correlation does not always offer a strong profile of correlation. Correlation typically depends on the time duration of a holding period, thus building a profile of that period. One must keep in mind the S&P 500 has a growth component, whereas the VIX is more of a mean reverting market with moments of upward or downward spikes.
Between January 2004 and June 2012, the VIX reached its maximum close of 80.06 on October 27, 2008. It reached a minimum of 9.89 on January 24, 2007. During this period the VIX has averaged 21.08
Past performance is not necessarily indicative of future results. There is risk of loss when investing in futures and options. Always review a complete CTA disclosure document before investing in any Managed Futures program. Managed futures can be a volatile and risky investment; only use appropriate risk capital; this investment is not for everyone. The opinions expressed are solely those of the author and are only for educational purposes. Please talk to your financial advisor before making any investment decisions.
By Mark Shore CBOE Futures Exchange “Futures In Volatility” Newsletter May 31, 2012
Many investors are familiar with the CBOE Volatility Index (VIX) that is calculated based on options on the S&P 500 Index option and is an indicator of implied volatility and investor sentiment. But some may not be aware that CBOE Futures Exchange (CFE) lists and trades the VIX futures contract (Ticker symbol: VX).
The popularity of the VX futures contract has grown and the VX futures contract recently experienced its highest trading volume month in March 2012 with 1.96 million contracts traded, which is an 84% increase from a year earlier.
As the popularity of the VX futures contract increases, CFE continues to expand the volatility index franchise to include futures and security futures contracts covering several underlying markets. See the table below for a list of the volatility index futures and security futures that CFE currently offers for trading on its market.
From the retail investor to the institutional investor or money manager such as a Commodity Trading Advisor or hedge fund, there is always the question: “How can an investor utilize these contracts in a portfolio?”
Mark Shore is also an Adjunct Professor 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 and the CBOE Futures Exchange.
Past performance is not necessarily indicative of future results. There is risk of loss when investing in futures and options. Always review a complete CTA disclosure document before investing in any Managed Futures program. Managed futures can be a volatile and risky investment; only use appropriate risk capital; this investment is not for everyone. The opinions expressed are solely those of the author and are only for educational purposes. Please talk to your financial advisor before making any investment decisions.
We find ourselves living in historic times along many fronts.
At a recent campaign event, presidential hopeful Mitt Romney took a hard look at the reality of government debt, noting that the thorny crisis caused by perpetual can kicking will likely be faced by our kids in the near future.
While Mr. Romney is right to address the seriousness of the government debt issue, he may be slightly off on the timing of this trade. While he anticipates the debt crisis to require attention “by our kids,” mathematical logic might indicate the problem could fester in the very near future – potentially in three to five years in the United States, according to some projections. The mathematical logic indicates that the over expansive monetary policy that lead governments to embrace expenditures significantly higher than their revenues is coming to an end. Greece is example A of a society that received a natural margin call. With debt to GDP breaking into triple digits, investors might take note that all governments will likely receive their “margin call” at some point. The question is, when?
Republican Congressman Paul Ryan (Wisconsin) may have corrected Romney’s timing. Speaking on Meet the Press on Sunday, May 20, Representative Ryan called for a potential US debt crisis in two to four years. This coincides with other credible projections. “We could have a debt crisis in (the US in) 2-3 years absent action,” observed David Walker, former US Controller General and head of the Government Accountability Office (GAO). “There is a lot of irony and hypocrisy in Washington’s desire to make sure that JP Morgan has proper risk management practices,” Mr. Walker added, noting a general lack of appropriate risk management in government regarding deficit spending and leverage usage. Mr. Walker has been the early leader in speaking to the mathematical logic of a coming debt crisis, a message that few care to hear.
Making the required difficult and unpopular political decisions required to fix the debt problem will require significant political will. David Gregory of NBC’s Meet The Press noted this in his May 20, 2012 grilling of Republican Congressman Paul Ryan and Democratic Senator Dick Durbin. This is because over-leveraged governments have really two choices, neither of which are positive. In other words, there are no easy answers to the debt problem, only “worse and worser,” as author John Mauldin is so fond to point out the harsh reality.
What is the mathematical and practical logic behind a two to three year debt crisis projection?
Here is the reality, the wakeup call: In the United States, a demographic shift in three to five years is about to strain budgets as the government continues to spend nearly double its revenue. This is well documented in a Bloomberg BusinessWeek article written July 27, 2011. This demographic shift occurs when baby booming seniors retire in historic numbers, straining government benefits. This strain may occur the same time interest rates have risen, as a once infallible fiat currency discovers its fallibility. This strains a budget just when expenditures are running nearly double revenues. That’s the mathematical logic, one potential outcome. But the undeniable truth is that deficit spending such as being exhibited by government would be alarming on any balance sheet, but the fact that it isn’t even being addressed in a serious fashion is troubling, the root cause of the debt crisis.
Consider Greece from the basic perspective of their out of control leverage usage, with government spending well beyond revenues for years. When asked to face the economic problem and address the core structural issues through austerity – the widely unpopular `political choice – politicians prefer to kick the can down the road. The problem Greek political leaders face is they have just discovered the limits of how far the can kicking can last.
Is Greece a “One Off?”
When investors take a pure mathematical look at the structural problems, similar core issues appear in other over-leveraged western societies. Portugal, Spain, Italy, France, to name a few, all have the same structural spending problem, which could come to a head shortly. And from a mathematical perspective similar problems exist with the government who currently holds the reserve currency of choice status. At a basic level an understanding needs to take place that the root of the difficult problem is spending must be cut and revenues need to be increased. This will become a political football, a tug of war of epic proportion.
Will False “Growth” Through Easy Monetary Policy Solve the Problem?
In the past, the easy solution for government has been to stimulate growth through quantitative easing. Such tactics of “adding liquidity” typically work well early in a debt cycle but have less impact the more they are used. An example of this in the US can be found by examining the significant impact of an easy monetary policy during the 1980s and contrasting this to the relatively diminishing return on “growth” that today’s quantitative easing has on the economy. If one were a trader looking at the debt crisis they might conclude the significant risk of adding leverage to the government debt trade might not be worth the diminishing reward.
The key for investors is to recognize that the market environment to which western economies are headed may require difficult political solutions, which will not be easily solved without volatility. This could lead to a very different economic environment to which investors should be prepared to defend against. Economic environments that perhaps could be punctuated with bouts of volatility with strong market price trends emerging both positive and negative.
Mark Melin will be speaking on a panel at HedgeWorld June 6 @ 1:30 regarding MF Global. Click here for the agenda.
About the Author: Mark Melin is host of the internet video show Uncorrelated Investing and editor of Opalesque Futures Intelligence, a newsletter written for professional investors that covers investments in the futures and options industry. A futures industry practitioner and consultant, Mark has taught managed futures as an adjunct instructor at Northwestern University / Chicago and has written or edited three books, including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008). Mark has worked as a consultant to the Chicago Board of Trade and OneChicago, the single stock futures exchange. He was director of the managed futures division at Alaron Trading until they were acquired by Peregrine Financial Group in 2009. Mark worked with Peregrine Financial Group until 2011.
Risk Disclosure: This article is intended for educational and informational purposes. Past performance is not always indicative of future results. There is risk of loss when investing in futures and options. Managed futures investing can involve volatility and may not be appropriate for all investors. The opinions expressed are solely those of the author, they are not appropriate for all investors and may not have considered all risk factors.
European regulators don’t need an excuse to tighten the screws on big finance and outlaw proprietary trading at investment banks. But JPMorgan’s $2 billion hedging loss plays right into their hands.
“The Volcker rule, aimed at banning banks speculating with depositors’ cash, will become law in the United States,” Reuters’ Jamie McGeever reports. “JPMorgan’s oversight failure here could push Europe to follow suit.”
When one considers the lack of investigatory zeal in the MF Global scandal, it might raise questions as to the need to make the investigation of MF Global’s top executives – which is occurring some six months after a potential crime was committed – eventually a matter of public record.
MF Global is a story that publicly debuted with a fraud allegation. This is when CMEGroup president Terry Duffy famously proclaimed in Congressional testimony that critical account segregation reports had been falsified by MF Global to regulators during their final week of operation. Further, Mr. Duffy clearly called into question the honesty of MF Global CEO Jon Corzine’s now famous testimony “I simply don’t know where the money went.”
With credible acquisitions of potential fraud highlighting a major pronouncement regarding the eighth largest bankruptcy in the US, one might assume that an investigation, or at least questioning, of MF Global’s top executives might take place. This is particularly the case as reports had surfaced in leading publications quoting those close to the investigation as saying “the case is cold” and “prosecution is unlikely.” With all this, one might assume questioning of the top executives had taken place.
That didn’t happen.
According to the New York Times, MF Global’s inner circle of executives, including CEO Jon Corzine, General Counsel Laurie Ferber, president Bradley Abelow, along with newly employed Henri Steenkamp, Chief Financial Officer, had not been initially questioned after the “loss” of $1.6 billion in customer segregated funds. In Congressional testimony on March 28, 2012 rumors that top MF Global executives had yet to be questioned were confirmed when both Ms. Ferber and Mr. Steenkamp testified they had not yet been directly questioned by investigators. However, in this same testimony it was confirmed that Chicago back office employee Christine Serwinski, chief financial officer for North America, had been questioned twice. Sources have indicated that back office employees have undergone extensive questioning while watching MF Global top executives float freely through the company with impunity. These same sources say that the back office employees who remained at MF Global were sequestered and not allowed to talk to one another about MF Global or its demise, while MF Global’s top executives operated the company that was plundered and had the ability to wire transfer money out of MF Global for up to six weeks after the firm declared bankruptcy.
When it comes to investigations, the type of questions and how they are asked can greatly impact the outcome. Given the fact that an investigation into the top officers might never have taken place without public pressure, and with such un-even investigation of the back office, is it not reasonable to ask that the now long overdue investigation into MF Global’s top executives be made transparent so it can be held to a higher standard?
Transparency need not be immediately made public. It can occur after a trial or when the “case is cold.” The point is known transparency into a situation can alter behavior and operate as a most cost effective regulator.
In many ways, Wednesday’s House Financial Services subcommittee hearing on the eighth largest bankruptcy in US history was as much about what was not said than what was said.
Much attention was focused on MF Global assistant treasurer Edith O’Brien and her widely anticipated move of declining to answer questions during the hearing. Ms O’Brien has been at the center of questions surrounding her role in questionable money transfers of nearly $1 billion during the final days of MF Global’s existence. Speculation is Ms O’Brien received instructions from top officers at MF Global to transfer the money, a charge which has been denied by the executives, who generally claim either to not be aware of “where the money went” or claim they did not provide specific instructions to dip into customer segregated funds. A handful of money transfers were sent to the likes of JP Morgan and related MF Global overseas brokerage units in the final days of the firm’s existence. The staggering size of the money transfers makes it impossible for such transfers to have occurred without dipping into customer segregated funds, as the reported $1.6 billion “missing” from MF Global far exceeds the company’s net worth at the time.
While O’Brien was up-front about not answering questions, the remaining panelists might have just taken “the fifth” because their responses often didn’t answer questions.
In a contest for the most absurd answer of the hearing, MF Global chief financial officer Henri Steenkamp may be the winner. When asked about the historic money transfers in the final week of existence, Mr. Steenkamp claimed he was unaware of fund transfers due to his “global role” and he was engaged in “other serious matters” that apparently took his attention away from the draining of $1.6 billion in assets from the firm.
While the transfers were initially painted by quotes in news reports as due to “chaos” and implications were made that money vanished due to clerical errors, questions remain as to how $1.6 billion in cash – an amount in excess of MF Global’s total liquidation value at the time – could have escaped the notice of top executives. In fact, testimony highlighted how the bankruptcy trustee clearly identified October 26 as the date the segregated funds short fall was officially identified, while in testimony Mr. Steenkamp claimed learning of the transfers several days later.
“The height of absurdity is thinking that $1.6 billion simply vanished without the CFO’s knowledge,” noted Stanley Haar, who runs a managed futures hedge fund and has been a leader in bringing the MF Global issue to the attention of Congress.
When asked an obvious question regarding the role of creditor’s bankruptcy trustee Louis Freeh and his stated motivation to deliver assets to creditors as opposed to customers, Steenkamp answered with “I’m not an expert in bankruptcy.” Mr. Freeh is effectively Mr. Steenkamp’s employer and has authorized bonuses be paid to MF Global executives such as Steenkamp who have remained at the firm while it is being liquidated.
If Mr. Steenkamp was consistent in one area, it was avoidance of questions – and this drew the ire of Committee Chairman Randy Neugebauer, who flatly questioned Mr. Steenkamp’s honesty. At one point Congressmen queried Mr. Steenkamp regarding relatively arcane details of his college life, which he remembered. Then the Congressman proceeded in asking why the CFO of a financial firm couldn’t remember details regarding what were likely the most significant money transfers in MF Global’s 224 year history.
Ferber Confirms Investigators Finally Questioning Top Executives
While MF Global chief legal officer Laurie Ferber was generally evasive, one interesting piece of information to emerge is that investigators are beginning to question the firm’s top executives. Unlike MF Global’s back office, which had been questioned by executives early in the process, Ms. Ferber acknowledged that she will be questioned for the first time in April – close to six months after the fact. Mr. Steenkamp confirmed that he has not spoken to investigators, although his lawyers have answered questions. MF Global’s chief financial officer for North America, Christine Serwinski, who worked in the Chicago back office, confirmed in testimony she had been previously questioned twice by investigators. “I’m shocked,” said Congressman William Posey, speaking of the fact investigators have not interviewed MF Global’s top executives until long after the potential crime had occurred.
Ferber also made statements confirming that Mr. Corzine was involved in MF Global’s questionable money transfers to JP Morgan and she acknowledged she was responsible for compliance and disclosure to regulators. One issue in the MF Global case is that proper disclosure of segregated account balances was not made to regulators during the final week of the firm’s life.
Finger Pointing to Steenkamp, Serwinski, O’Brien
During a rare moment of candor, at one point Mr Steenkamp was asked who would have authority over money transfers and he apparently pointed a finger at Ms Serwinski, who proceeded to point the finger at an absent Ms. O’Brien. When Ms Serwinski was asked if she would have approved the wire transfer in question had she been in the office, she said she would not have approved the transfer.
Committee Treats JP Morgan to Soft Questions
Among other panelists was JP Morgan, which played a number of reported conflicting roles as MF Global’s primary lender, provided clearing services and was custodian of certain MF Global customer funds. Questions that might point more specifically to JP Morgan’s intimate knowledge that such money transfers took place from customer funds were left alone in the testimony.
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Mark Melin is author of three books, including HIgh Performance Managed Futures.He taught managed futures at Northwestern University in Chicago and has consulted for a variety of futures exchanges, hedge funds and professional traders. He can be reached at: markhmelin(at)yahoo.com
Contents Copyright (C) 2012 Mark H. Melin all rights reserved.
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.
While no one person can speak for a diverse industry, it might not be true to generalize the futures and options industry hates Jon Corzine. Many, including myself, don’t personally know the man.
What is known is that an industry has been brought to the brink and a serious test of its backbone is underway. Many of our business associates and friends have been dramatically impacted by actions from someone known as an arrogant individual used to getting his way most of the time, a man who demonstrated a complete disregard for MF Global and the industry in which it operated.
Not only did Mr. Corzine expect special treatment, he was surprised when he didn’t get it. Here is a man that is said to have engineered the toppling of a CFTC regulator in 1998 over the issue of transparency. This lack of transparency and disregard for regulators are career trait many practitioners in the futures and options industry couldn’t get away with. Why should a man who brought an industry to its brink and had a history of complete disregard for regulators and transparency be given special treatment?
As such, it’s time for the tough questions to be asked because we are getting close to the point where if this were regulators would descend on a mid-sized FCM or IB with the force of a predator drone attacking a domestic terrorist. (Mr. Corzine, to clarify in the previous sentence “IB” stands for “Introducing Broker,” not “Investment Banker.”)
Here are key points that have emerged since his compelling testimony:
As Futures Magazine’s Dan Collins aptly noted in an article after Corzine’s initial testimony, the most significant information to come out of the testimony didn’t come from the “lawyered up” Corzine statements, but rather from the Chicago Mercantile Exchange (CME). The CME essentially established what had previously been undisclosed by Mr. Corzine: Funds were improperly transferred at 2:00 AM Monday morning.
The question is: who is responsible for that transfer? To think that Mr. Corzine or the top two or three officials at the top of MF Global were not aware of the transfer of $1.2 billion out of customer segregated funds might be similar to belief in the tooth fairy.
When the transfer occurred, how could it be that those “pushing the button” not be aware they were violating CFTC fund segregation rules? Or perhaps with a history of ignoring regulation, those “pushing the button” might have assumed they would be accorded special treatment.
Are regulators expected to prevent such an action, or is their role simply to recognize how the regulation works and then enforce strict rules?
These questions should be answered in the context of a larger picture being painted. Here is what likely happened, pointing to the questions to which Mr. Corzine should be responsible to answer.
(Note: what follows is highly speculative and opinionated)
In the chaos of the early-morning realization liquidity was gone, a decision was made to move segregated funds. In almost any imaginable case inside an FCM, the only ones with access and authority to move such a large amount of capital at 2 AM was a high level official. At minimum, such activity would likely have been reported to top officials at MF Global early Monday morning as mid-level and high-level officials would have been alerted to the transfer through even the most basic FCM security process. MF Global was not a “basic” FCM and had a more detailed process in place, leading to a question: Why did it take so long for this activity to get reported?
And here is where another inconsistency appears:
Upon entering the brokerage, it was said the “account records were a mess.” Really? Is this disorganization consistent or did it occur only after the transfer of capital out of segregated funds? Based on subjective observations, those close to the industry might find such disorganization inconsistent. Does the disorganization of critical account documents point to attempts to hide the paper trail that was clearly present at MF Global before funds were missing?
But perhaps most inconsistent are Mr. Corzine’s own statements.
“In testimony on Capitol Hill on Thursday, Mr. Corzine only added to the mystery. He said that transferring customer funds was ‘a complex process’ and, asked who could execute such a transfer, said ‘I wouldn’t know probably who that person is.’”
In this testimony Corzine is making two potentially inaccurate statements.
First, he claims the process is “complex.” Ok, taking this at face value “complex” likely implies a number of people associated with such a transfer and a process that would also trigger alarm bells. When were the alarms reported to regulators?
But more to the point, is the process really that complex for Mr. Corzine or his top deputies? In all likelihood there were potentially a handful of those within the FCM that had the ability to authorize a large capital transfer out of segregated funds, including Mr. Corzine. In many cases moving such capital out of segregated funds cannot be authorized by one individual, but might require a counter-signature.
Is Mr. Corzine seriously claiming that he doesn’t know the people or the process? One can only imagine the day after the transfer of segregated funds was discovered, Mr. Corzine and top brokerage firm executives were notified of the transfer by the internal fraud alarm system. Most certainly at that point if Mr. Corzine were un-involved he would have investigated the people and the process. Remember, this is an individual who the New York Times noted in an article had a keen insight for remembering names.
Mr. Corzine expecting Congress and regulators to believe he doesn’t know the people or process involved in transferring $1.2 billion out of segregated funds seems entirely inconsistent. But then the only real consistency in this story might be the special treatment Mr. Corzine typically received.
Risk Disclosure: Managed futures can be a volatile investment and is not appropriate for all investors. 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.
Last Friday the markets cheered news of leadership change in the center of Europe’s debt crisis. However, there is reason to believe this won’t be the end of a thorny problem that will likely add volatility to the markets for decades. There is one reason for this:
Voters.
The debt crisis won’t end until voters accept sacrifice in the way of budget cuts and revenue enhancements – or the markets force action. In fact, if the debt crisis ends quickly, it will mean the markets have forced action. The more likely event is a long, political debate over how sacrifice is carved out. 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. Word is that traders have baked debt committee failure into their fundamental analysis of the situation, but never say never. 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. This won’t be easy. Political constituencies might be required to give things up. 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. 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. There will be a point at which voters will be required to face the debt crisis. 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. That is unlikely, as the shear numbers behind the debt problem are just too big to achieve a political solution that doesn’t include revenue enhancements and spending cuts. 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. Efforts from Bixby and various ratings agencies to warn regarding debt should be lauded. In fact, S&P’s “fat finger” episode where an e-mail warning a potential French bond downgrade is interesting. Was it a mistake or a method of the ratings agency warning about the debt truth? The fact that S&P might have felt it couldn’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. Voters need to understand the U.S. can easily become the next Italy if solutions and sacrifice are accepted now. 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. 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. 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. 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. This is something political marketers understand and exploit, which is too bad. The real issue Ohio voters should have faced: Are you willing to pay higher taxes or cut critical social spending to support government worker’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. Only with such transparency into the real issues and problems will solutions be found. 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. 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. He is previous author / editor of three books, includingHigh Performance Managed Futures (Wiley, 2010) and an adjunct instructor in managed futures at Northwestern University. He can be reached at markhmelin@gmail.com 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. 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.
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