Where is the
peace dividend that was supposed to come after the end of the Cold War? Where
are the fruits of the amazing gains in efficiency that technology has afforded?
It has been eaten by the bureaucracy that manages our every move on this earth.
The voracious and insatiable monster here is called the Federal Code that calls
on thousands of agencies to exercise the police power to prevent us from living
It is as Bastiat
said: the real cost of the state is the prosperity we do not see, the jobs that
don't exist, the technologies to which we do not have access, the businesses
that do not come into existence, and the bright future that is stolen from us.
The state has looted us just as surely as a robber who enters our home at night
and steals all that we love.
William "Bill" Bonner
Exactly what happened in Europe
yesterday? The market reacted like it was the Second Coming of the Solution to
End All Solutions. No problem here! The European debt crisis is solved! But if
you look deeply (almost always dangerous when it comes to Europe) there is more
to the market "melt-up" than simple euphoria and relief. What you find is a
very disturbing unintended consequence that will come back to haunt us, as,
sadly, I have written about in the past. The finger points to our old friends
derivatives and credit default swaps. This week, as I recover from a rather
nasty bug, we look at gamma and delta and other odd entities that may be behind
the real reason for the market response, as we march inexorably toward the final
chapters of the Endgame. Let's see how far out on a limb I can go.
But first an important
announcement. I am very excited to be able to introduce my readers to a mutual
fund offered by my friends at Altegris Investments. This special fund is a
blend of five commodity trading advisors, or CTAs. Normally, to access a CTA
you be to be an accredited investor, with all the net-worth requirements and
limited liquidity. But Altegris has figured out how to wrap a mutual fund
around CTAs and create a fund of commodity traders with all the usual aspects
of a mutual fund (daily pricing, liquidity, etc.).
I have long been involved in the
commodity-trading advisor space (some 20 years) and am a proponent of CTAs as a
way to diversify portfolio risk. I have written a detailed report on this
fascinating sector in relation to the fund, and it is available for free at http://www.altegrismutualfunds.com/landing/mauldinreports1.aspx,
along with more information on the fund (including the offering memorandum and
important risk disclosures, which are also included at the end of this letter).
The fund has been very well received
since its launch and has grown rapidly to almost $1 billion. There has been
very active interest in the professional community, as advisors and brokers are
looking for simple and realistic ways to diversify their clients' portfolio
risk in a manner that is truly noncorrelated to typical stock funds and many
other asset classes. Whether you are a professional or individual, you really
should take the time to research what I think is a very solid fund. My partners
at Altegris have decades of experience in the CTA space, with the largest available
database of CTAs and long-term relationships with many of the managers (I
actually started my investment career in the commodity fund space, so I have
more than a passing knowledge of the arena). Given the potential for volatility
in the global markets, I think it makes sense to have some exposure to funds
that can go both long and short (depending on their models). I urge you to read