Andrew Abraham

andy-0101 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.

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If you are interested in contacting for speaking engagements. Please email me at Andrabr9@gmail.com or call 954 903 0638.

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Futures and commodity trading involve substantial risk. The evaluations of futures and commodities may fluctuate and as a result, clients may lose more than their original investment. In no event should the content of this website be construed as an express or an implied promise, guarantee or implication by, that you will profit, or that losses can or will be limited in any manner whatsoever. Past results are no indication of future performance. Information provided on this website is intended solely for informative purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible, where projections of future conditions are attempted.

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MF Global’s Shortfall

If truly there is a “Shortage” of segregated client monies, lets call it what it really is. It is not a shortfall, it is out and out all THEFT! No other words about it. These accounts were segregated and a cardinal rule was violated. I explained to my children in very simple terms and this is how the regulators must look at this.

We all have bank accounts and deposit monies in “OUR” own accounts. These are our accounts, not the bank. Lets say for example the bank makes some bad loans. Instead of facing the consequences of their actions they decide sneakily to go into “OUR” personal accounts and take some of this money to make up for their bad decisions.

This is the best analogy of what transpired if there is this so called ” Shortfall”. Last night the CFTC sent out a letter which states

“The CME, in its letter, estimated that, at the close of business on November 1,2011, MF
Global’s current segregated funds requirement was approximately $5,445,839,890, and that there
was a customer segregated funds shortfall at MF Global of $633,027,696, or a deficiency of
approximately 11.6%.”

mfglobalcmeletter110211-2-1

A simple question is if a FCM, or simpler terms can go into your account and take funds out for their own use, WHAT IS SAFE?

Is your account at your stock broker safe? Is your account at your bank safe?

The regulators have frozen accounts and positions. In order to maintain any sense of market integrity they need to liquidate all positions and start transferring monies out of the frozen segregated accounts of the clients of MF Global. Otherwise who will invest?, Who will hedge?

The cardinal rule has been broken. The integrity of the markets have been violated. I pray that Corzine’s lavish donations to Obama do not taint justice. Lives have been ruined over potential theft. Clients are leaving CTAs..if they can..Clients are leaving IBs.

Come on Regulators…you need to regulate!

Andrew Abraham
Abrahamcta.com


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3 comments to MF Global’s Shortfall

  • domenico laruccia

    but this CME data include also positions of MFG UK clients or just MFG US ones ?

  • Gerald

    Great post Andy…its truly horrific that a broker can take money out of client accounts. Rule number one of the industry has been broken and the regulators / judicial system needs to make an example of this.

  • Andre

    The lesson to learn… We can’t rely on any finantial firm who has a large portfolio and need access to funds, we should always aim for pure brokers. neither we can’t rely on regulators for doing audits and constant supervision (that’s what THEY need, they want us to beg them to keep an army of bureaucrats supervising people. But that’s what not WE need) , instead we need to demand simpler rules for effective regulation. Why not financial institutions start to act as a mere bridge between our accounts, held at the central bank, instead of us leaving money at these firms directly? we should all have the power to open direct account at the central bank. We need smarter supervision, we can’t leave the thief with the keys of our house and pretend an army of police will avoid him breaking into our homes. And the key to our house in the financial case is fractional-reserve banking, and lack of direct central bank access. Of course, that’s not to say these people should not be in jail, I really hope they end up there.

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