Commodity Trading & Trend Following

After the MF Global bankruptcy in which segregated client accounts were possibly violated many have asked me where to leave their money when they trend follow. What saved me from disaster with MF Global was that I learned many years ago from one of the commodity trading advisors in which I invested with was to [...]

The list of bank failures grew this weekend to 29 Bank failures for the year of 2009. What is alarming is that we are only 4 months into the year and we have surpassed all of 2008 bank failures ( 25 Bank failures). How does this bode for the rest of the year? How does this connect to the stress tests on the largest 19 banks? How solvent or insolvent are these leading banks?

The FED and the TARP program has lent or guaranteed almost $12.8 trillion if you add it all up. Putting this into perspective this massive sum is virtually approaching the total GDP or everything produced in the US last year. The nationג€™s gross domestic product was $14.2 trillion in 2008.

Very clearly there was extreme dissatisfaction over big bonuses paid by firms bailed out with U.S. taxpayer money. Is it hard to understand why when people are losing their jobs, houses or even hope. It is ironic when a salary of $100k is considered a great salary for someone in Iowa and bonuses in the $100 of thousands or even millions were given to incompentents.

What words can describe the current situation? Fear…Dispair… Disbelief..Hopelessness…? I am sure not everyone feels these feelings…but I would tend to believe a great many do. People are afraid of losing their jobs and with good reason. Many people are only a paycheck or two away from default. The mood of the country is surely down. Amplifying the mood has been all the expressed anger about bailing out banks and financial institutions that made poor decisions. Putting salt on the wound was the bonus-paying spree to the incompetents at insurance giant AIG and Fannie. Now billions of dollars are being promised to the auto industry. Where does it end? Will this really help the economy or is it another bailout where those who asked for bailouts came in their private jets.

There are estimates floating around that U.S. banks risk having to charge off an additional $84 billion of ADC loans between now and 2013, equal to a hit of nine percent of Tier 1 capital.

The question is do you really believe Citi the worst is over?

Or is it just beginning?

There is a bill being proposed by the Senate Banking Committee Chairman Christopher Dodd is moving to allow the Federal Deposit Insurance Corp. to temporarily borrow as much as $500 billion from the Treasury Department. Isn’t that great news. Last year ( if I am not mistaken) there was in the FDIC approx $50 billion dollars in the kitty for bank failures.