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 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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How To Pay Back MF Global Customers 100%

There was a great article in Forbes on how to get MF Global Clients made 100% whole by Robert Green

The supposed $1.2 billion or $600 million as the CME claims in today’s world is not so much money. Why can the FED bail out AIG or numerous bank while leaving farmers and ranchers to rend for themselves. Worse yet, Why would Obama give Gazans $900 million dollars to rebuild after the 2008 war.

NYTimes article

Why give did Obama give terrorists who danced in the streets after 911 $900 million dollars yet today leave all without any confidence in the US Financial system or integrity?

Below the article…It makes such good sense!

I have a common-sense solution for returning MF Global‘s customers 100% of their money quickly, well before forensic accountants try to find it.

The Federal Reserve could make a temporary loan to the MF Global bankruptcy trustee, enough to cover the entire shortfall in customers’ accounts, perhaps around $1.2 billion as reported. The MF Global trustee can then immediately pay back customers 100% of their account balances based on the valuation on the bankruptcy filing date or the date the account was frozen. There will be some kinks to work out.

As U.S. House Agriculture Committee Ranking Member Collin Peterson, D-Minn., pointed out while taking testimony from MF Global CEO Jon Corzine, many MF customers are small-business farmers, who must get their money back soon to buy feed and stock for the next farming season. Customers also include many small business traders, hedge funds, investors, and small businesses who hedge their products and services in the futures market. Customers are the David to counterparties being the Goliath.

CFTC Partially To Blame

The CFTC has been assuring the public for many years that customer funds were safeguarded through the CFTC’s ironclad requirement for “segregation of customer funds” — walled off from risks within a bank, or brokerage firm. The CFTC promised it would duly supervise futures brokers as well. This turned out to be another hollow promise from regulators and government officials in the case of MF Global and its predecessor Refco, who also burned customers. Once is sad, twice is foolish.

In the Commodity Futures Modernization Act of 2000, the CFTC should have added more customer protection on futures, like simply extending SIPIC to futures accounts too. At that time, futures were already competing against securities, with each generating a bevy of new products to simulate each other’s market places. E-minis and ETFs have been on a tear ever since.

For many hedgers, traders and investors, futures now resemble securities. An E-mini on the Nasdaq 100 is a futures contract and is very similar to an ETF on the Nasdaq 100 (QQQ), which is a security.

What’s this ridiculous CFTC rule change reported in the media yesterday, allowing futures brokers to risk customer funds for their own firm’s benefit, trading on sovereign debt? We’re not talking about U.S. Treasuries, which can be considered a cash equivalent.

The CFTC has a lot to answer for here and CFTC Chairman Gary Gensler, alumni of Goldman Sachs under CEO Corzine’s leadership, shouldn’t be allowed to conveniently duck out of the proceedings with a recusal. In all due respect, Chairman Gensler should resign instead. We need a new chairman, and not one from the revolving door on Wall Street.

Federal Reserve Should Help Little Guy

The Federal Reserve bailed out the big banks last time around, and many pundits assert they overlooked the needs of home owners and people on Main Street, who were most hurt in the 2008 meltdown.


They believe the Fed owes Main Street, and I believe a Fed bailout loan just for customers of MF Global is a good start. Consider it a mini-TARP loan that will be paid back. In this case, our farmers are “too valued to fail.”

How To Get The Money

The MF Global trustees should reverse every single banking transaction, especially the illegal tapping of customer accounts, over the weeks before the bankruptcy filing. They will probably find the fraudulent transactions during that frantic period of insolvency. If not, then they should keep going back further in time until they find it.

I suspect that MF Global incurred some large losses on its own account, perhaps on rogue trades or approved trades pushed through by Corzine, over the objection of his chief risk officer. MF Global’s counterparties may have demanded more margin and posting of cash collateral, which MF Global probably didn’t have and decided to tap customer funds for. MF Global leadership may have figured it was just a loan, and no one would notice, so it was worth the risk in order to survive another day.

Video: Viva Europa: No Sinking This Bismarck

Jim Cramer’s Picks For A Year-End Rally
John Dobosz
Forbes Staff

Jon Corzine’s Congressional Testimony: Oops, I Didn’t Know
Agustino Fontevecchia
Forbes Staff
The Eerie Parts Of Corzine’s Testimony
Robert Lenzner
Forbes Staff
Like Warren Buffett always says, when the tide goes out, you see who is overexposed. Corzine said he did not intend to break the CFTC rules, and maybe he figured a very short-term loan was not breaking the rules.

This case should be argued like the Madoff Ponzi scheme case
Paying off MF Global’s counterparties from customer funds on MF Global’s own trading losses isn’t legal and it should be reversed immediately. If you want to borrow customer funds, you need to sign a promissory note with those customers after getting their permission first. Paying margin to counterparties for trading losses on sovereign debt and other risky bets is way beyond any interpretation of allowed uses for customer funds. Banks, counterparties, companies and individuals who received this money must return it.

Once all illegal customer transactions are rescinded, the trustees can work out which counterparties are entitled to be paid what and share net losses accordingly. They should take the haircuts, not the customers. Let counterparties wait in line for the bankruptcy deliberations, not the customers. Customers should not be last in line in a bankruptcy process; they shouldn’t be in line at all.

Don’t Cry For Counterparties
They traded with MF Global and extended 30:1 leverage on risky trades and overnight repo loans. That practice sank Bear Stearns and Lehman Brothers; you would think the industry would have learned some of these lessons. These counterparties still figure they will be made whole and taxpayers are the lenders of last resort. The biggest gripe taxpayers had with TARP was that the government paid counterparties 100%, whereas they should have used their leverage at the time to pay haircuts. Why pay back Goldman Sachs 100% and foreign banks too?

How about not shafting the little guy this time around?
In a bankruptcy process, under fraudulent conveyance rules, transactions with related parties may be reversed by the trustee. This is often done when insiders rob a company of its funds, prejudicing the senior interests of creditors and others. Maybe it can be argued that many counterparties were related parties in this case too. Certainly, the interests of customer funds come before all obligations of others, including counterparties.

Corzine Gets No Get-Out-Of-Jail Pass
Why have the SEC, CFTC and Justice Department been settling with Wall Street and collecting the settlement funds for their own agencies? These penalties aren’t stiff based on Wall Street wealth.

They have really come up short in their efforts to put white-collar criminals in jail and return funds for individuals abused in the process. We don’t need Dodd-Frank and other new rules; we have existing rules to deal with these types of fraud. And, that goes for Fannie-Mae and Freddie-Mac executives too, no matter if they are protected by Newt Gingrich or not.

Corzine was the chief executive at MF Global, and he overrode the well-stated objections of his chief risk officer. Isn’t that against compliance rules and doesn’t that render these trades rogue trades? Corzine bet his customers’ family farms on PIIGS debt and, losing their money and turning himself into a pig. Maybe he figured a short-term loan from customers would not wind up being a final use of their money, so he could say he “did not intend to use customer money” in his testimony yesterday. That may come back to haunt him.

It’s scary to think President Obama may have considered Corzine to replace Secretary of the Treasury Timothy Geithner. Now, Corzine seems to be a reckless or rogue trader who could have caused serious damage to the U.S. financial position. (Although it’s pretty damaged already on its own.)

Corzine had this reputation at Goldman, too. Some of these top tier guys never listen. The gall of Corzine to reshape a profitable futures broker into the next Goldman Sachs evil-doer of yesteryear.

Have you noticed what all white-collar criminals have in common? Every white-collar crook has a good banker, lawyer and accountant. As an accountant myself — but for the good guys — I simply don’t understand what’s so confusing here.

If you share the view that Wall Street has gotten a better deal than Main Street with all these meltdowns to date, then get behind my plan to fix this MF Global customer money rip-off. It’s time to turn the tide.

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