Jim Rogers was on CNBC last week to give his investment outlook going forward. As expected, he pushed the advantages of currencies and commodities, particularly foodstuffs right now, much to the chagrin of the CNBC hosts apparently. Instead of asking why he made those picks, the hosts practically berated him for not wanting to own equities. Rogers holds his own, though, explaining the fallacies being touted about farmers, energy and speculators. (more…)
I was fortunate to get a couple extra days of warm weather as I was in Florida for the Managed Funds Association (MFA) conference last week and was stranded there (no angry letters please). A lot of people were in the same boat and some had been away from home for quite some time as there was another Florida conference that preceded MFA Network.
When I started writing about managed futures and hedge funds about a decade ago I did a story about the different strategies involved and a veteran told me “Global Macro” was not so much a specific strategy but a marketing tool by Commodity Trading Advisors (CTAs) tired of being rejected by allocators afraid of the futures space. Some managed futures managers started calling themselves Global Macro hedge funds and apparently it opened some doors. While Global Macro encompasses more than CTAs, I still view it as a term that doesn’t tell you a whole lot about the manager defining himself with it. Which may be its purpose.
BarclayHedge reported on Tuesday that the managed futures sector surpassed all other hedge fund strategies in assets under management at the end of the second quarter. According to the Iowa based data provider money under management in managed futures grew to $223.4 billion in the second quarter, surpassing all the other hedge fund sub sectors it lists.
I had the pleasure of moderating a panel of expert traders and educators this week at Windy City Workshop sponsored by the Diversified Trading Institute (DTI). Because the panel was so diverse I tried to keep the discussion on general themes as opposed to specific strategies and it was surprising how much unanimity there was.
Throughout the day of congressional hearings with Goldman Sachs officials this week and in countless news stories, editorials and blogs we keep hearing the word “complexity” when referring to the Abacus 2007-AC1 collateralized debt obligation (CDO) at the heart of the Securities and Exchange Commission’s (SEC) case against Goldman. Albert Einstein is credited with the phrase, “make things as simple as possible but not any simpler.” Basically it means make things clear but do not leave out material details. Some things, rocket science for one, are complex by their nature. But what is the purpose of the complexity of something like the Abacus CDO?
A couple of weeks ago I went down to Key Biscayne, Florida for the Managed Funds Association (MFA) conference. To be more precise, I went down to Florida to meet with and interview several commodity trading advisors who managed to earn positive returns in a difficult year.
Throughout the battle over who or what caused crude oil to spike to $147 per barrel last year CME Group and Intercontinental Exchange (ICE) have consistently contended that despite the bluster from certain members of Congress and analysis of self appointed experts, there has been no empirical study that linked the spike to speculators or the positions held by commodity index funds.
Whether that claim can still be made or not is debatable as Rice University just released a paper calling previous Commodity Futures Trading Commission (CFTC) studies that showed excess speculation was not responsible, flawed.
Documents from New York University’s lawsuit against former GMAC non-executive Chairman Ezra Merkin and the hedge fund, Gabriel Capital LP, which Merkin is the general partner, were made public last week revealing that he was warned regarding the credibility of the returns from investments with Bernard Madoff. Merkin through Gabriel Capital invested $24 million of the NYU endowment with Madoff according to the New York Times.
I don’t know if the fact that the allegation about Merkin’s knowledge comes from a convicted felon detracts from the case or simply provides an added level of irony to this sordid episode but one thing is for sure, there will be many more lawsuits and there probably should be.
The Managed Funds Association (MFA) conference in Key Biscayne Fl. (held Feb. 8-10) was a tale of two asset classes. Much of the discussion surrounded the financial crisis, poor performance and expected additional regulation.
But the strategy/asset class best represented at the conference in terms of actual managers in attendance was managed futures, and commodity trading advisors (CTAs) had a great year in 2008. There was some confusion when a sponsor from a CTA introducing a panel, talked about how outstanding a year it was for the industry. There were some quizzical looks around the room from those who worked at or serviced the larger universe of equity based hedge funds. See it wasn’t so good of a year for them.
