Thursday, 18 September 2014
Last updated 1 min ago
Sep 10 2007 | 1:59pm ET
The subprime debacle is making its presence felt not only on Wall Street, but in the heartland as well. Lincoln, Neb.-based DEC Capital, a commodity trading advisor, suffered a 12.4% drawdown last month in its $18 million Commodity Alternatives program, leaving it down 2.32% year-to-date.
The agricultural futures trader cited problems in the housing and credit markets and implied volatility affecting its positions in soybeans futures. “August was another volatile month for traditional investments,” said the firm, in its latest monthly investor letter.
“The problems in the housing and credit markets are well documented, with some worried that this is a tipping point for the U.S. economy. DEC's portfolio was affected by these outside developments—the subprime Wall Street volatility adversely affected our core length in soybeans futures and an expansion in implied volatility hurt our option premium positions.”
The firm also said favorable weather conditions coupled with “very efficient production of U.S. growers” and heightened biofuel demand for corn adversely affected its forecast for soybeans and feed grain. “DEC had built up an inter-market Kansas City vs. Chicago wheat strategy, but heightened volatility pushed it outside of DEC's risk parameters, which forced us to close it out at a loss.”
Aug 25 2014 | 11:21am ET
As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…
Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.