Saturday, September 14, 2013

One  more reason...

Why most marketing strategies are useless (IMHO). We are kidding ourselves as producers if we think we are going to consistently outfox the market.

The truth is we're not even in the real game.
Take the grain titan Cargill. The largest private company in the U.S., Cargill has gathered and shipped a bulk of the world’s supply of wheat and corn for more than 100 years. Nowadays, however, Cargill also sells billions in derivatives to food companies, and runs two massive hedge funds, managing morethan $14 billion for investors. Or take Louis Dreyfus, another major grain trader. In 2008, Dreyfus launched its own fund enabling investors to bet on food prices. By 2011, the fund had grown so fast it stopped accepting new money.Trafigura, the third largest global trader of energy and metals, runs nine funds that together manage approximately $2.5 billion. Last year Glencore, a metals and mining giant, and Vitol, the world’s largest independent oil trader, financed a $10 billion loanfor a Russian oil company. As businesses struggle to secure large sums from traditional banks, analysts say these companies could continue filling in for banks as a source of capital. Recently, some experts have also noted that extensive interlinkages between commodity markets and the financial system could pose systemic risks to the global economy."To the extent these companies [are] trading commodity contracts and selling investment products, they seem virtually identical in their scope of activities to the banks," said Marcus Stanley, policy director at Americans for Financial Reform.Unlike the banks, though, most trading companies are privately owned, release scant information, and escape most regulation. Goldman Sachs and J.P. Morgan might obscure their commodity activities to the public, but they are still obliged to privately disclose them to the Federal Reserve. Firms like Vitol and Cargill, meanwhile, operate in near secrecy. They must register their hedge funds with the Securities and Exchange Commission, but no regulator sees the full stable of their businesses. The lack of rules around “insider trading” in commodity markets also opens a backdoor to manipulation. [More]
Now add in Black Box trading and I think drawing all the clever lines on bar charts is busywork for people who struggle with a random world. And boy, is it!

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