My name in Andrew Abraham. I have been investing in commodities and managed futures since 1994. I adhere to the philosophy of trend following.
Trend following stresses a disciplined approach to commodity/ futures trading. Successful trend following and commodity futures investing requires patience, discipline and actively managing the risk. What sets me apart from other traders is that I am not only concerned about the return on investment but how much risk I will have to tolerate to achieve my goals.
130 Bank Failures and Complacency in the Markets
This last week the Fed closed 6 more banks making total to 130 bank failures since the crisis started. There are strong expectations that even more small and regional banks will fail. Just these 6 banks cost the FDIC $2.3 Billion dollars.I believe there is something like 500 banks on the FDIC watch list. However all this time there is complacency in the markets. Bad loans are still out there…you name it from credit card debt to residential housing to a more menacing threat the commercial real estate markets.
However we have a back drop of the world is wonderful. Unemployment ( supposedly ) fell to 10%. Stock markets are up…right world is wonderful.
Not that I am a pessimist.. maybe a realist…What I see is that this crisis has created banks that are even larger…and complex. Speaking about complex, do you remember why AIG had issues? Simple… it is called the $62 Trillion…yes with a t…Derivative monster created by these large banks. These derivatives without counter party assurances are still floating out there…I ask myself what has changed? Then the next issue is not just the amount of debt…what about servicing this debt. This debt is not just in the US..but throughout Europe..including Switzerland.
One can look at the VIX as a gauge of complacency in the markets…and you guessed it… Complacency with a capital C.
I find it very hard to believe we are out of the woods…and that a systematic collapse has been avoided.
As a commodity trading advisor… I do not need to figure out the world. All I need to do in order to succeed is follow my plan with discipline..patience and let the markets guide me. I realized many years ago.. No one knows any more than me…and all it comes down to are bets. I prefer to make bets based on trends…not my opinions..
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Andrew Abraham
A.Abraham@AngusJackson.com
www.AJpartnersinc.com
www.myinvestorsplace.com
Futures trading involves risk. People can and do lose money
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