Futures Trader Sounds Off On Market Turmoil

Aug 17 2007 | 11:46am ET

Pascal Guessas, a CTA and founder of Montague Financial, has a few choice words about the current market volatility, and he’s betting most people who hear them are not going to by happy.

“I think that the down move that we have seen is far, far from over, and that we, in the U.S., will probably enter into the worst recession this country as ever seen,” begins Guessas, in a missive to investors.

“Do you remember about 10 months ago when God (a.k.a. Greenspan) dared to mention the ‘R’ word.... Does anyone of you really believe that this comment was just pure coincidence? Only CNBC and the large majority of their guests believed it was, and kept on talking the market up and up and up as if it would go on forever. Larry oh Larry what are you talking about... Goldilocks scenario....?”

The sub-prime debacle is not contained as Federal Reserve Chairman Ben Bernanke would suggest, according to Guessas, but is contagious affecting all investors and every part of the housing sector.

“There are a few more indicators that show that this is far from over but the latest one and most important one is the European Central Bank, which has injected so far in excess of US$200 billion to bail out a few institutions that made bad trading decisions. These people will never learn from past mistakes, like when Japan refused to let most banks with bad loans in their books go bust and entered the longest period of recession in their history (by the way they are still in it).”

Guessas’ P100, P50 and P-option futures programs are currently up about 7%, 16% and 8%, respectively, through Aug. 13. “Trading will be very light for the remainder of August, almost 95% of this month’s performance was realized on currencies as we made a conscious decision to avoid most trading signals on stock indices,” he wote.


In Depth

Q&A: TCA Fund Management's Bob Press on Small-Cap Private Equity

Aug 25 2016 | 8:55pm ET

The emergence of private credit as a replacement for traditional bank financing...

Lifestyle

Kiawah: Island Reversal

Aug 24 2016 | 9:59pm ET

Looking for real estate investments but the typical real estate fare isn’t cutting...

Guest Contributor

Old Hill Partners: Embrace Illiquidity

Aug 9 2016 | 2:39pm ET

The age-old financial concept that higher yields are the result of higher risk and...