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Our Two Cents – Week of 3/26/12

While I spent much of last week in the U.K. for business—and enjoying a grilled ham and cheese with a fried egg—nothing beats catching up on all the financial headlines on a long flight across the pond.

In the U.S., economic confidence still resonates. A new Bloomberg survey finds U.S. economic optimism has hit an eight-year high. Nearly 35 percent of respondents in the monthly consumer expectations survey said the economy was improving—the largest jump since January 2004. These perspectives come on the heels of declining unemployment benefits, showing that the labor market is recovering. Unemployment claims dropped to 348,000, the lowest level since the financial crisis.

In the eurozone, the European Union proposed a heftier permanent bailout fund of 940 billion euros. While Greece had been in the news for much of its budget woes, it received a new commander for its monies when it named new finance minister Philippos Sachinidis. The week began with “Greek Deliverance Day” for bond payments, while the country also received the first 7.5 billion euros of aid from the new European Union/International Money Fund bailout. Next week is shaping up to be a busy one. Spain will present its full budget after ripping up its 2012 deficit target, and Italy will continue discussions about labor reforms, which will head to parliament.

Lastly, hedge fund investments posted an overall increase of 2.38 percent in February, according to the Barclay Hedge Fund Index.

• Bloomberg Survey: Economic Optimism Hits 8-Year High, Moneynews, March 23, 2012
• EU Proposes a Beefed-Up Permanent Bailout Fund , The Wall Street Journal, March 23, 2012
• US Jobless Claims Drop Below 350K, Forex Crunch, March 23, 2012
• Greece names new finance chief, strikes continue, Associated Press, March 21, 2012
• Hedge Funds Post Overall Gain For February – BarclayHedge, Man Group , Family Wealth Report, March 21, 2012
• Greece receives first tranche of new bailout aid, Reuters, March 20, 2012

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

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The seemingly never-ending Greek saga has weighed on market sentiment for more than two years, as investors increasingly questioned the troubled sovereign’s ability to repay its debt.  European policymakers insisted throughout that there was “no risk” of default, but the rhetoric ultimately proved long on hope, as the Hellenic Republic succumbed to the inevitable in recent weeks, and became the first developed country to default on its debt in six decades.

The largest sovereign default in history was greeted by investors with a mere shrug of the shoulders, a far cry from the violent reaction that policymakers long feared would bring the financial system to a standstill.  Simply put, the game has long since moved on, as investors relegated the Greek crisis to an uncomfortable but manageable sideshow, and the more pertinent question today is who’s next.

Policymakers argue that the Greek situation is a ‘unique and exceptional’ case, but such claims are certain to fall on deaf ears, given such rhetoric’s lack of credibility.  Indeed, investors have already placed Portugal firmly in their sights, and the beleaguered country’s sovereign debt has failed to participate in the meaningful downtick in euro-zone government bond yields precipitated by the first tranche of the ECB’s three-year long-term refinancing operation late last year.

Portuguese policymakers have expressed confusion at the debt market’s reaction to their seemingly heroic efforts to more-or-less meet the fiscal targets set-out by the troika in last year’s rescue package.  Indeed, the second review document published by the IMF last December revealed that the Lusitanian government managed to reduce the fiscal deficit by more than three percentage points of GDP last year to below six per cent, an impressive achievement against the background of a rapidly contracting economy.

Careful analysis however, suggests that the fiscal improvement is not as stellar as it might appear which will make it far more difficult to meet the targets for both this year and beyond.  In this regard, it is of concern to observe that last year’s effort would have fallen well short of target, but for the use of accounting cosmetics that masked the true magnitude of the underlying adjustment.

In fact, the reported deficit would have come in almost two percentage points below the desired level, but for a last-minute transfer of banking-sector pension funds to the government social security system.  This transfer accounted for almost sixty per cent of the fiscal adjustment in 2011, and removing this once-off item implies that the underlying improvement was actually 1.3 percentage points of GDP, considerably less than the ‘fudged’ reported number.

More importantly, the true fiscal position today reveals that the necessary adjustment to meet the target for 2012 is far greater than it appears in official documentation.  The deficit in 2011 – excluding the transfer of banking-sector funds – was 7.8 per cent rather than the 5.9 per cent reported, which means that the adjustment required to satisfy the 4.5 per cent target this year is more than three percentage points of GDP or two and a half times larger than the improvement implied by the unadjusted data.

The additional fiscal drag alongside an accelerating pace of domestic demand destruction and rapidly decelerating export growth means that this year’s economic contraction could well be much greater than the 3.3 per cent percentage point decline pencilled in official forecasts, which will make this year’s targets virtually unattainable.

Indeed, the year-on-year decline in domestic demand accelerated from below five per cent in last year’s third quarter to 9.5 per cent in the final three months of 2011, while export growth decelerated by more than three percentage points to below six per cent between the second and fourth quarter, as demand sagged in its major trading partners, most notably Spain.

Given the negative momentum, it is not difficult to construct a scenario in which the economy contracts by more than five per cent during the current year.  Given such an outcome, disappointing tax revenues alongside the strain on government expenditures could well see the fiscal deficit come in at seven per cent in 2012, while the level of outstanding public debt could jump to more than 120 per cent of GDP.

Needless to say, the notion that Portugal could return to the markets in the autumn of 2013 as currently envisaged under the rescue plan, would completely evaporate under such a scenario, while the pressure to restructure the Portuguese sovereign’s debt would likely prove insurmountable.

Further, it is important for investors to be aware that unlike Greece, the Portuguese crisis originally stemmed from excessive private-sector debts that currently amount to almost 200 per cent of GDP.  The large and persistent decline in the economy is certain to make a vast number of loans unserviceable, and the eventual losses incurred by the banking system could well become public debt.  In a nutshell, there could well be no option but to restructure Portugal’s sovereign debt in order to place its economy on a more sustainable path.

An ‘orderly’ debt default has been orchestrated in the case of Greece, but the insistence that it is a ‘unique and exceptional’ case looks empty as the spotlight turns to Portugal.  The negative momentum evident in the Lusitanian economy suggests that the restructuring of Portuguese sovereign debt could well prove unavoidable.  Investors should note that the euro crisis is far from over.

Previously posted on www.charliefell.com

Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

Author Bio

The so-called ‘fiscal compact’, as advocated by Europe’s policy makers towards the end of last year, is virtually certain to be subjected to intense debate in the days and weeks ahead as the Irish referendum nears.  Unfortunately, the latest plan to save the fragile monetary union is the wrong solution for the wrong crisis.

The EU’s leadership continues to view the crisis through the narrow prism of lax fiscal policies and excessive debt accumulation among the euro-zone’s periphery and, insist that painful fiscal austerity is the appropriate course of action.  Indeed, the new ‘fiscal compact’ approved by the European Council strengthens the Stability and Growth Pact (SGP), which was barely enforced during the single currency’s early years.

The new plan establishes a target for debt reduction – a 1/20 reduction of debt in excess of 60 per cent each year – and, sets a stringent target for the structural budget deficit that must not exceed one half of one per cent of GDP.  The latter measure does not preclude cyclical variations in the deficit, but such variations are to be capped at three per cent by the existing Excessive Deficit Procedure.

Surveillance procedures are to be significantly stepped up to support the new measures with the European Commission being granted a greater role in inspecting national budgets.  Those countries found to be running an excessive deficit will be required to submit an economic partnership programme that details reforms that will be implemented to correct the fiscal position.

This new treaty is not required in the current environment given that financial markets and the associated increase in government borrowing costs has already forced countries to take corrective action.  More importantly, it does nothing to address the crisis and could further undermine confidence in the medium-term, since it severely limits the ability to implement counter-cyclical fiscal policy at times of economic weakness.

It is important to appreciate that the euro-zone’s member states surrendered their monetary sovereignty upon admission to the single currency.  They became currency users rather than issuers and lost the ability to set their own monetary policy and exchange rates.  They did retain fiscal policy flexibility insofar as investors remained willing to absorb new issuance at reasonable rates but, the ‘fiscal compact’ will virtually eliminate this option and, in the absence of federal transfers, stability is likely to be eroded even further over time.

Europe’s policymakers refuse to accept that most of the troubled countries in the euro-zone’s periphery face not just one, but two major problems – excessive public debt alongside unsustainable levels of external debt.  Indeed, the availability of low-priced credit from banks in the eurozone’s core following the launch of the single currency more than a decade ago, allowed the periphery to run large and persistent current account deficits that sparked a disturbing increase in the level of external debt, both public and private.

Policymakers consistently argued that intra-regional trade imbalances were not relevant in a monetary union, but this belief proved to be embarrassingly wide of the mark once the ‘Great Recession’ prompted a dramatic reassessment of risk premiums.  Previously, the periphery had depended upon the willingness of member states with current account surpluses to fund their external deficits at reasonable rates of interest, but once the financial crisis struck, this source of capital evaporated and the buyers’ strike left the troubled countries with little option but to seek official assistance to fill the gap.

Harsh fiscal austerity programmes were imposed by the troika upon Greece, Ireland and Portugal, while the IMF continually advised that the said countries should cut nominal wages in order to restore international competitiveness.

Lower incomes and higher tax rates virtually ensured a sharp drop in domestic demand, but it was hoped that an improved external position would reduce the economic pain.  Unfortunately, most of the improvement in the trade accounts of both Greece and Portugal to date has been a function of falling imports rather than a buoyant export sector.

Importantly, fiscal austerity across almost the entire euro-zone as envisaged by the new plan is likely to reduce aggregate trade activity and, as a result, the periphery will be unable to export their way back to health.  Thus, the ‘fiscal compact’ could well contribute to no improvement in either the currently excessive public debt ratios or the unsustainable levels of external debt found in most of the periphery.

The so-called ‘fiscal compact’ is set to be put to the public vote in Ireland.  The Irish have little option but to vote ‘yes’ because financial support from the European Stability Mechanism is conditional upon the plan’s ratification.  Close analysis however, reveals that the new measures are bad policy and could well contribute to further instability in the future.

Previously posted on www.charliefell.com

Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

Author Bio

The world watched European leaders last week take the next step toward saving the euro, a move that sparked some optimism from bank officials. In the U.S., jobless claims fell to new lows, and confidence abounded from Wall Street women about alternative investments.

Applause sounded after leaders at the European Summit agreed to sign an intergovernmental treaty to enforce stricter fiscal standards in their future budgets. Efforts to get all 27 members of the European Union (EU) failed as Britain and Hungary opted out. Importantly, the 17 euro zone members agreed to the new treaty, a welcoming sign to the European Central Bank (ECB) that said the treaty would be the basis of good financial discipline moving forward. Before the summit, Standard and Poor’s warned of possible credit downgrades of 15 euro zone nations, preparing to place those nations—including the powerhouse of Germany—on credit watch negative. This action normally signals a downgrade within three months. According to S&P, the action was “prompted by [its] belief that systemic stresses in the eurozone have risen in recent weeks to the extent that they now put downward pressure on the credit standing of the eurozone as a whole.”

Also in Europe, Greece readied its next step for its bailout. Inspectors for the country’s international lenders and private credits are meeting and preparing for a new 130-billion euro bailout plan and bond swap to keep the country’s economy alive. The EU, International Monetary Fund (IMF) and the ECB—known as the troika—are visiting Athens to start preparing the bailout plan agreed in October as well as assessing the impact of debt swap plan on banks. Earlier last week, Greece approved its 2012 austerity budget as it tried to cut its debt and pull itself out of recession. Responding to the measures, many Greek youths protested, hurling stones, bottles and firebombs at police. The country’s fiscal package included some very tough cuts that will unfortunately keep many Greeks feeling cash strapped. While Greece’s fiscal matters proceeded, Hungary sought a 10-to-15 million euro package from the IMF and EU to help stabilize its economy. The country asked for assistance after its forint currency hit record weakness because of market skepticism about the government’s unconventional policies.

In the U.S., new jobless claims fell to a nine-month low, showing signs that the job market may be improving. The Labor Department said weekly applications declined by 23,000 to 381,000. Some more good news came from women on Wall Street as they planned to seek alternative investments. Nearly 65 percent of the women surveyed said they expected to find attractive investment opportunities, according to a study by the professional services firm Rothstein Kass and the international women’s group 85 Broads. More than half of the women said they planned to start new funds too.

• Greece braces for troika scrutiny and creditor talks, Reuters, Dec. 11, 2011
• Hungary aiming for 10-15 billion euro IMF/EU deal: analysts, Reuters, Dec. 10, 2011
• The euro survives … for now, CNN, Dec. 9, 2011
• New Jobless Claims Fall To 9-Month Low, NPR, Dec. 8, 2011
• Wall Street Women Optimistic About Investment Opportunities, New York Times, Dec. 7, 2011
• Greek lawmakers approve 2012 austerity budget, Associated Press, Dec. 6, 2011
• S&P to warn of downgrades for all of eurozone , MSNBC, Dec. 5, 2011

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

Author Bio

Europe’s technocrats announced to the world in September that they had just, “Six weeks to save the euro.”  The disturbing rhetoric was duly followed by the fourteenth summit in less than two years and, the third comprehensive attempt this year alone, to quell the rumbling debt crisis that continues to question the viability of the region’s monetary union.

The proposals agreed to at what was dubbed the, “summit to end all summits” were received enthusiastically by financial markets but, the initial euphoria was dashed by subsequent events in Greece that can only be described as farcical.

Athenian comedy aside, credit markets have had ample time to deliver their verdict and, the message emitted by debt investors is far from encouraging.  Perhaps this motley crew understands that the pro-cyclical nature of the agreed measures threatens to push the region’s economy ever closer to a deflationary abyss – absent sufficient and necessary support from the European Central Bank (ECB).

European leadership finally bowed to the obvious and admitted that the sovereign debt crisis had degenerated into a banking crisis and, as a result, accepted that the financial sector is in need of recapitalisation.  The news came just weeks after the new IMF chief, Christine Lagarde, was dismissed for daring to speak the truth, as the technocrats continued to insist that the banking sector was not short of capital.

The dramatic turnaround now sees officialdom accept albeit belatedly, that the banking sector is indeed undercapitalised to the tune of €108 billion and, has given the banks until the middle of next year to bring the ratio of capital to risk assets up to nine per cent.  Although the development is welcome, there is reason to believe that the proposal could have several negative unintended consequences.

First, the official estimate of little more than €100 billion is unlikely to ease the stress on bank funding costs for long.  The number falls well short of independent estimates that range from €200 to €400 billion, which is hardly surprising, given that the stress tests focus only on a Greek debt restructuring and, do not cater for an economic downturn that may well be in progress already.  Thus, the amount of the recapitalisation is unlikely to reassure investors, since it does not reflect the sector’s ability to absorb the losses arising from an adverse scenario.

Second, the decision to mark down all sovereign debt to market values based on prices on September 30, is likely to place a floor on yields, since lower levels would almost certainly lead to an avalanche of bank selling.  Furthermore, the negative impact on bond yields is likely to be compounded by the supposed ‘voluntary’ nature of the haircuts pertaining to the private sector holdings of Greek debt.

The fact that the large write-down on such debt is not deemed to be a negative credit event means that the market for insurance against sovereign default doesn’t really exist and, as a result, the yields on the debt of other struggling sovereigns is likely to trade higher than would otherwise be the case.

Third, it is unlikely that all banks will be able to meet the requirements via new security issuance, reduced dividend payments and share repurchases or from other cost-cutting measures.  Thus, at least some of the additional capital is likely to come from government, which would put further strain on already-stretched public sector balance sheets and, could precipitate a fresh round of rating downgrades.

Fourth, the evidence from Japan in the late-90s and, in the US at the height of the financial crisis, suggests that the plans to recapitalise the banking sector could precipitate a credit crunch and a nasty recession if sufficient monetary easing is not provided by the ECB.

It is virtually inevitable that the banking sector will attempt to meet the capital requirements through asset shrinkage rather than the sale of securities at distressed prices.  Restricting the availability of credit will push the private sector’s surplus higher and exert downward pressure on both consumption and investment, just as the public sector is engaging in fiscal consolidation and attempting to push its deficit lower.

A painful recession could well be the result unless exports absorbed the adjustment.  This is unlikely to happen however, as the rest of the world is hardly reporting robust growth numbers.  Thus, the adjustment is far more likely to be reflected in reduced imports rather than increased exports and, given that more than one-fifth of US exports are shipped to Europe and the region is China’s largest trading partner, this is the mechanism through which a euro-zone recession is likely to be transmitted to the rest of the world.

The ‘summit to end all summits’ a fortnight ago proposed a number of far-reaching measures intended to underpin financial stability in the euro-zone.  However, the pro-cyclical nature of the proposals including a bank recapitalisation plan, that threatens to push Europe ever closer to a deflationary abyss.  It’s time for the ECB to step up to the plate and employ its balance sheet.

Previously posted on www.charliefell.com

Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

Author Bio

The downward pressure on world stock markets, that began some months ago, continues to grow in intensity, as rising recession risks across the Western world can no longer be ignored.  The source of the turmoil has moved back-and-forth across the Atlantic Ocean in recent months, as a lame economic recovery in the US has collided with a debt crisis in the eurozone.  Indeed, the focal point for the latest bout of turbulence centers on Greece and its government’s inability to meet the ambitious targets as prescribed under the EU/IMF adjustment program.

Unfortunately, the focus on Athens has seen most commentators, investors and, even policymakers view the eurozone’s problems through the narrow prism of sovereign debt.  Viewed in this light, profligate government spending precipitated the build-up of sovereign debt to unsustainable levels and, as a consequence, many analysts seem to believe that successful fiscal consolidation in the troubled nations of Greece, Ireland and Portugal, will bring the crisis to an end.

Such a belief however, is extraordinarily naïve as the crisis should be seen, not as a sovereign debt crisis, but more appropriately as a balance of payments and external debt crisis.  The availability of low-priced credit from banks in the eurozone’s core following the launch of the single currency more than a decade ago, allowed the periphery to run large and persistent external deficits that sparked a disturbing increase in the level of foreign debt, both public and private.

The dependence on foreign debt made each of the peripheral nations vulnerable to a sudden reversal in capital flows.  A reassessment of risk premiums, as the ‘Great Recession’ took hold, led to a stunning increase in interest rates and one-by-one, the governments of the peripheral nations had no option, but to seek assistance.

However, while fiscal consolidation as prescribed by the EU/IMF adjustment programs may well be desirable and necessary, the reversal of primary budget deficits alone will not be sufficient to bring the crisis to an end.  The large current account deficits still present in Greece and Portugal in particular, must be eliminated if foreign debt loads are to stabilize but, in the absence of currency devaluation, that task looks nigh on impossible.

Foreign lenders in their search for yield in a low-return world, lent freely to the peripheral countries in the years leading up to the crisis.  Current account deficits were allowed to grow to alarming levels with little, if any, consideration for the true nature of the risks involved.

The Greek external deficit relative to GDP expanded by more than eight percentage points to almost fifteen per cent from 2003 to 2008; the Portuguese deficit widened by more than six percentage points to 12.6 per cent over the same period, while the Irish external position went from near-balance to a deficit of 5.6 per cent over the five-year period.

External imbalances were to be expected following the launch of the single currency, as relatively poorer countries played catch-up with their wealthier brethren.  However, borrowed funds were used primarily to finance current consumption, rather than productive capital investment designed to boost export potential, such that a significant proportion of the foreign lending may never be repaid.

The focus on sovereign debt is understandable in the case of Greece, since it was its unsustainable public debt position that sparked the confidence crisis.  Nevertheless, the country’s non-financial private sector debt ratios still managed to jump from 52 to almost 90 per cent of GDP between 2002 and 2009, as underleveraged Greek households and businesses caught the borrowing bug.

The Portuguese private sector partied that bit harder and the comparable debt ratio surged by more than 50 percentage points to 178 per cent over the same period, while the non-financial private sector in Ireland outdid everyone with the ratio increasing by more than 100 percentage points to almost 200 per cent.

An external financing crisis duly erupted in each country, as the borrowing capacity of both private and public sectors reached exhaustion with net external debt approaching 100 per cent of GDP.  Focus on such disturbing external imbalances was bound to happen sooner or later, irrespective of what happened elsewhere, though the meltdown in America’s mortgage market brought matters to a head sooner than might otherwise have been the case.

The fall-out was severe though hope springs eternal, as the Irish situation has since stabilised. A large trade surplus has allowed the current account to move into positive territory and, not surprisingly, yields on Irish debt have decoupled from their troubled brethren.  Be that as it may, a successful conclusion to the Irish problem hinges on events elsewhere.

Unfortunately, the news from both Greece and Portugal remains grim.  Chronic trade deficits persist in both countries, while foreign debt and interest payments abroad continue to grow.  A large double-digit percentage point reversal in the trade account as a share of GDP is required to stabilise the level of foreign debt in both cases.  Such a development is highly unlikely given the low value-added and uncompetitive nature of the respective export sectors, not to mention the slowdown in external growth.

Absent a herculean reversal in the export sector’s fortunes, the necessary external adjustment could only take place through a depression-like collapse in domestic demand, which would throw fiscal consolidation off course and result in no fall in aggregate debt levels.

Both Greece and Portugal are stuck in a debt-deflation trap and the harsh reality cannot be disguised – both countries are insolvent.  Eventual euro-exit should not be dismissed lightly.

Originally posted on www.charliefell.com

Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

Author Bio

Investing and business headlines this week were dominated by talks of currency manipulation and the G20 meeting. There were concerns over underestimated inflation in China, the weaker Eurozone economies dragging down stable partners, and what the safest (in relative terms) economy to invest in. It was a hectic week in news, indeed, but here’s to hoping that we won’t hear about quantitative easing (QE2) for a little while.

Here are our Top 10 headlines of the week we could not help but share:

• From Counting Pips, How do you analyze Forex News?
• The Economist, Accentuate the negative: A Very Unusual Sign of Confidence in Economic Policy
• Barrons, Is the Crowd Wrong on QE2?
• The Financial Times: Haven Currencies in Demand After G20
• Business Insider, The IMF Warns That A New PIIGs Crisis Could Sink The UK Recovery
• Smart Investing Daily, Is the Gold Standard Returning?
• The Economist:  Focus on Germany, the Fail Safe Economy
• Futures Magazine, The IMF on Mapping a Path to Financial Stability
• EuroMoney, Latin American Debt Markets, Where Local Currencies Thrive
• Lastly from Baby Pips, 5 Common Mental Mistakes New Traders Make

Happy Friday!

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.