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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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 bankruptcy hits traders, farmers Trading firm’s failure leaves clients’ money frozen

This is from the Des Moines Register

The CME Group, owner of the Chicago Board of Trade, acknowledged in a letter Tuesday that the bankruptcy of MF Global created “a difficult period for many of our customers,” but asserted that commodity trading customers will be granted access to their brokerage accounts.

MF Global was the nation’s seventh largest trading firm and acted as a counterparty to investors who wanted to buy or sell commodities, including corn and soybeans. MF Global’s bankrutpcy on Oct. 31 reportedly was caused by investments in European debt.

The trading firm, owned and run by former U.S. senator and New Jersey Gov. John Corzine, is believed to have dipped into so-called segregated funds held by trading customers in a manner similar to bank deposits. MF Global and regulators are searching for about $600 million that went missing in the bankruptcy.

MF Global customer funds were frozen by the bankruptcy trustee after the Oct. 31 filing, meaning that some farmers and commodity traders have been without access to their money for the last week.

Some are pointing the finger at CME Group, which critics say had left the impression that it would make good any money lost.

Ken Ries, owner of a commodities brokerage in Ryan in Delaware County, has estimated potential losses as high as $1 million if the money is not released. He vowed he would make good any losses from his 100 farmer customers.

“For the past 30 years we have been operating under the assumption that customer funds are guaranteed under the umbrella of the CME and its clearing members,” Ries said in a letter to customers.

“However, with the events of this past we have come to learn that in this instance of rerouting segregated customer accounts the Exchange will not, in fact, guarantee customer funds,” Ries said.

CME Group acknowledged Tuesday the frustration felt by Ries and other customers, but said in its letter to traders Tuesday that its hands were tied because “the U.S. bankruptcy code requires that free credit balances be frozen at least on an interim basis, and that fully paid securities and warehouse receipts may not be made immediately.”

Ries said he expected “money will trickle in” as money is released by the bankruptcy trustee. “For any of our customers that have not received 100 percent of their segregated funds stolen from them by MF Global, Ries Ag will guarantee them and issue a check for the difference,” he said.

Ries, 62, a broker for 25 years, said he could make the guarantee because he owns Delaware County farmland that he could pledge.

The matter has taken on political overtones as well, in light of Corzine’s past political service, his closeness to President Barack Obama and the closeness of Commodity Futures Trading Commission chairman Gary Gensler to Corzine.

Gensler and Corzine worked together at Goldman Sachs for 18 years.

U.S. Sen. Chuck Grassley, R-Ia., said: “MF Global’s case is a big collapse that requires a lot of work from the commission to try to figure out what went wrong and minimize further investor losses if possible.

“It’s hard to see how the commission chairman could be completely objective in looking out for wronged investors when he has such strong ties to the principal of the failed firm. It seems recusal would be the best outcome for investors.”

Andrew Abraham
Abraham Investment Management

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