IB Traders Insight


1 2 3 4 5 2 1178


Macro

The emerging market capital structure trap; Comdols beware!


According to Professor Michael Pettis, the primary cause of crises in emerging markets (or less developed countries—LDCs) flows primarily from a mismatch within a country’s capital structure.  He refers to this as the capital structure trap.   

Prof. Pettis’ capital structure trap idea aligns closely with economist Hyman Minsky’s “financial instability hypothesis.”  Pettis explains it this way:                

“Minsky sees an economy as a system in which endogenous processes can generate ‘incoherent states.’ ‘Cycles and crises,’ he says, ‘are not the results of shocks to the system or of policy errors.  They are endogenous [having internal cause or origin].’”

So, accordingly, Minsky argues that crises are not caused “because of external events or bad policy choices force a revaluation of asset values but are instead determined inside the system.”  Pettis utilizes this framework built by Minsky to argue that a country’s capital structure is vitally important to how it reacts to external shocks and if country’s funding strategy does the following two things it is more exposed to crises:

1.      It links financial or debt servicing costs to the economy in an inverted way.

2.      More dramatically, it locks the borrower and its creditors into a self-reinforcing behavior in which small changes, good or bad, can force a players to behave in ways that exacerbate that changes.

Thus…

“The capital structure trap consists of an inverted liability structure in which an external shock can force both the borrower’s revenue and its debt servicing expense to move sharply in an adverse direction. This occurs to such a degree that it forces a sharp increase in the probability of bankruptcy, which, by changing the behavior of investors, then forces the capital structure to move even more strongly in an adverse direction.  This is what makes the trap different from an ‘ordinary’ badly designed capital structure.  A typical badly designed capital structure simply fails to take advantage of risk-reduction structures—in itself it does not add volatility.  The capital structure trap, on the other hand, exists when the capital structure itself incorporates a feedback mechanism that causes the domestic impact of the external shock to feed on itself until the debt burden spirals out of control.

                                    Michael Pettis, The Volatility Machine

So what major external shock has been delivered to emerging markets?  The same that has hit all countries: the credit crisis of 2007-2008.  But it has been particularly vicious for emerging markets as:

  1. The price of EMs key export component—commodities—have plummeted since Apr 2011; after the initial rebound from the credit crisis (as the cost of dollar funding has risen)…

2. Demand for their goods from both the developed world and China has fallen…

So, the profitability of EM-based corporations and cash flow to EM governments continues to fall, even as its debt levels and corporate leverage continue to soar….

This is from The Bank of International Settlements 5 February 2016 [my emphasis]:

“The growth of debt in the emerging economies has been dramatic, as shown in Graph 1 [below]. The left-hand panel shows the level of private credit as a proportion of GDP in the emerging economies compared with that in advanced economies. We see that although the level of private credit is higher in the advanced economies, the growth trajectory in the emerging economies has been very steep. Since 2009, the average level of private credit as a proportion of GDP has increased from around 75% to 125%. The slightly declining line of the advanced economies’ non-financial private sector debt hides significant differences among countries. Among the G20 economies, two have decreased private debt by 20 percentage points of GDP or more, while seven countries have increased debt by 20 percentage points of GDP or more. The centre panel of Graph 1 plots the steep upward trajectory for the growth of private credit as a proportion of GDP for Brazil and China. The trend is especially striking for the debt taken on by nonfinancial companies (Graph 1, right-hand panel). The debt of non-financial companies in emerging market economies (EMEs) has grown so rapidly that in 2013 it overtook that of advanced economies, as a proportion of GDP. Since then, the corporate debt of EMEs as a proportion of GDP has pulled ahead of that in the advanced economies even further.”

And on the EM corporate side of the fence, leverage is rising as profitability is falling…

“As we see from Graph 2, corporate leverage in emerging economies has risen in general. This does not only reflect the increased debt of commodity producers, as seen by the fact that the leverage of companies producing non-tradable goods has risen even more than that of those producing tradables (centre panel). Moreover, the increase in leverage is most marked in the highly indebted segment – the 75th percentile in the graph. This is presumably the lower-rated segment. Increased leverage would be less of a concern if debt is used to finance productive and profitable investments. However, the profitability of EME non-financial companies has fallen.Traditionally, EME firms have been more profitable than their advanced economy peers, but this is no longer the case, as we see in the right-hand panel of Graph 2. The profitability of EME corporates has fallen markedly in recent years, and has fallen below that of advanced economy firms.”

And though the graph below is a bit old, as of June 2014, EMs were sitting on about $6 trillion of US dollar credit [graphic below far right]. Yikes! 

…and that dollar credit cost is rising as the US dollar appreciates and US market interest rates creep higher.  Additionally, it’s not going to be easy to replace this dollar credit with euro funding as the Eurozone has its own host of troubles, not the least of which is Deutsche Bank.

I think this qualifies as a capital structure trap as defined by Mr. Pettis.  If so, the question is when will the crisis begin? 

So far, the level of complacency seems amazing as investors continue to bid up emerging market stocks and bonds:

Sound financial analysis is likely not the driving force of investor complacency in emerging markets; I think we can chalk it up to the ubiquitous stretch for yield.  Thanks again Janet & Company. 

From a currency perspective, there has been a fairly decent positive correlation betweenemerging market stocks and commodity currencies as you can see in the chart below:

https://static1.squarespace.com/static/530f66d6e4b05207a038945b/t/57ed7af520099e2216c5b37b/1475181305759/?format=750w

So, if you suspect emerging markets are vulnerable, but you also like the yield produced by holding the Comdols (Aussie and Kiwi more specifically), beware.  If the good professor is correct, Comdols are due for another bath it would seem.                                      

Black Swan Capital, LLC is an investment and trading research firm whose ideas cover foreign currencies, stocks, bonds, gold, and oil.  We integrate our global macro analysis with our technical pattern analysis (Elliott Wave) to produce unique and independent trading ideas for our newsletter subscribers.

This article is from Black Swan Capital, LLC and is being posted with Black Swan Capital, LLC’s permission. The views expressed in this article are solely those of the author and/or Black Swan Capital, LLC  and IB is not endorsing or recommending any investment or trading discussed in the article. This material is for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


11013




Macro

Bye bye austerity, hello fiscal easing


Policymakers are changing their tone on fiscal policy. Jean assesses the potential for more fiscal support in key economies, as well as the impact on global growth and asset prices.

 

Policymakers are changing their tone on fiscal policy. More governments are now looking at fiscal support, and the focus on austerity has faded as monetary easing reaches its limits.

The shift away from austerity and the acknowledgement of the need for fiscal and monetary coordination matter for financial markets. In our inaugural Global Macro Outlook, we assess the potential for more fiscal easing in key economies, and gauge the impact on global growth and asset prices.

The potential for fiscal easing

Governments in major economies are reconsidering austerity. They’re considering spurring growth via fiscal easing, as the global recovery struggles to gain traction despite years of monetary easing.

Behind the shift: Central banks are reaching limits, with rates testing the lower bound. Also, a lack of fiscal support may undermine the effectiveness of monetary easing, as argued in a 2016 paper by Nobel Prize-winner Chris Sims. Without the public and private sector taking advantage of easy financial conditions, low rates can hurt savers and foster deflationary forces.

Beyond continual disappointments in global growth, the need for public investment is stark. The average age of U.S. public infrastructure is the highest since at least 1950.

Just some of the signs of the shift: Infrastructure spending features in the U.S. presidential campaign. Japan and Canada have pushed ahead with public investment. The UK appears set to temper its fiscal consolidation.

The International Monetary Fund (IMF) has become a bigger champion of fiscal expansion, while the G20 committed in September to “greater policy coordination and deploying more growth-friendly fiscal policy.”

The potential impact on global growth and asset prices

This changing tone is unlikely to equate to an immediate acceleration in growth, and some big developing countries such as Brazil are tightening their belts. But economists are upgrading their forecasts. See the chart below.

undefined

We believe fiscal policy must take the baton from central banks to shore up growth. We favor measures that have a positive impact on long-term growth. There is never a case for reckless fiscal spending, but productivity-enhancing fiscal expansion, such as infrastructure investment, is likely to be more effective than usual, in our view.

Historical evidence suggests, an increase in the budget deficit tends to boost overall activity by the same amount (in dollar terms). This implies a fiscal multiplier close to 1. But the multiplier varies over the economic cycle—higher during recessions or when short-term rates are near zero, and lower when an economy runs near fully capacity.

Yet this is not your usual environment. Monetary policy is constrained and with global excess capacity, public investment is less likely to crowd out private investment. We believe fiscal policy should be more effective, and thus the multiplier higher than the historical average.

We estimate that the major economies’ expansionary plans in isolation (and excluding China and other emerging markets) could provide a cumulative boost of around 0.3% to world gross domestic product over the next two years. Using more optimistic assumptions about the fiscal multiplier effect and spending plans, we could see this rising to 0.7%.

We see the various fiscal expansion measures leading to rising primary structural budget deficits in the developed world, particularly in the United States. We do not expect a big jump, to be sure. But a return to rising deficits would mark a sea change. As the chart below shows, we see the shift to bigger fiscal spending among G7 economies now making a small contribution to global growth rather than subtracting from it, as the IMF still forecasts.

undefined

What is the impact on asset markets? Long-term yields typically rise on fiscal expansion, but central banks still have the intent and ability to limit any unwanted increase in yields.

Fiscal expansion could lead to FX appreciation. Yet we see little fallout on currencies for now due to the likely muted change in bond yields. Equities will likely receive mild support from stronger overall demand, with distinct impacts for some industries.

Bottom line

The shift from austerity to fiscal spending matters, even if the short-term growth implications will be limited. The current focus on fiscal expansion is likely just beginning.

Jean Boivin, PhD, is head of economic and markets research at the BlackRock Investment Institute. He is a regular contributor to The Blog.

This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of September 2016 and may change as subsequent conditions vary. The information and opinions contained in this post are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock, its officers, employees or agents. This post may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this post is at the sole discretion of the reader.

©2016 BlackRock, Inc. All rights reserved. BLACKROCK is a registered trademark of BlackRock, Inc., or its subsidiaries. All other marks are the property of their respective owners.

USR-10417

This article is from BlackRock and is being posted with BlackRock’s permission. The views expressed in this article are solely those of the author and/or BlackRock and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


11012




Stocks

Nasdaq Market Intelligence Desk - Equity Market Insight September 30,2016


Market Update: As of 11:14 PM EDT

NASDAQ Composite +0.82% Dow +1.08% S&P 500 +0.91% Russell 2000 +0.55%
NASDAQ Advancers: 1617 / Decliners: 551
Today’s Volume: +1.1%

US markets are modestly higher on light volumes while European markets move off their earlier lows.  Concerns over the viability of Deutsche Bank hit the markets yesterday afternoon, but today there is some speculation that the DoJ could accept a lower settlement.  Recall the DoJ initially sought as much as $14 billion in a mortgage-backed securities suit.  Most sectors are higher this morning with financials (+1.0%) in the top position.  Rate sensitive REITs (-0.1%) and utilities (-0.5%) are the only sectors seeing red.  The dollar is flat while gold and treasuries are slightly weaker.

  • Consumer Confidence rose for the 1st time since June, according University of Michigan Sentiment Index released this morning. Sentiment came in at 91.2 vs polled expectations of 90.00. The expectations index rose to 82.7 vs 78.7 estimates. However, the current economic conditions index fell to 104.2 from 107.0 last month. This last component is the lowest reading since October of last year and can be seen as a negative for consumer spending. According to the report, “Confidence edged upward in late September due to gains among higher income households, while the Sentiment Index among households with incomes under $75,000 has remained at exactly the same level for the third consecutive month.”
  • August Personal Income rose 0.2% as expected but that’s down from July’s 0.4% and the weakest read since February.  Personal Spending also declined, coming in at 0.0% versus an expected 0.1%.  “It was a soft month for consumer spending following a strong one, and it’s not anything to get worried about,” said Tom Simons, economist at Jefferies LLC in New York. 
  • Beginning tomorrow Yuan joins the Dollar, Euro, Pound and Yen to become an official global reserve currency in the IMF’s Special Drawing Rights.  The Yuan is the world’s fifth most used currency, and some think inclusion with SDR could push China toward adopting more market-oriented economic policies.  Bloomberg News noted that China accounts for more than 10% of world trade but less than 2% of global payments are in Yuan. 
  • Nasdaq welcomes enterprise cloud provider Nutanix, which launched its IPO today.  NTNX priced nearly 15 million shares at $16 and raised $238 million.  The stock opened with a 65% gain.
     

Technical Take:

One security investors should continue to keep on the forefront is the USDJPY currency pair.  Often considered a barometer of risk sentiment, the pair has been in a declining price channel throughout all of 2016, but recently in the entire 3rd quarter it has been consolidating in a descending triangle pattern of lower highs and horizontal support around the 100 level.  Over the last four weeks price action has been coiling as the declining support converges closely towards the horizontal resistance with little room left to the apex of the triangle.  Setups like this often resolve with meaningful breakouts, up or down, as price has nowhere else to go, resulting in a transition from consolidation to trend.  A breakdown below support would be consistent with the 2016 declining price channel, and could bode poorly for investor sentiment and overall risk assets.  

 

 

Nasdaq's Market Intelligence Desk (MID) Team includes:  

Michael Sokoll, CFA is a Senior Managing Director on the Market Intelligence Desk (MID) at Nasdaq with over 25 years of equity market experience. In this role, he manages a team of professionals responsible for providing NASDAQ-listed companies with real-time trading analysis and objective market information.
Jeffrey LaRocque is a Director on the Market Intelligence Desk (MID) at Nasdaq, covering U.S. equities with over 10 years of experience having learned market structure while working on institutional trading desks and as a stock surveillance analyst. Jeff's diverse professional knowledge includes IPOs, Technical Analysis and Options Trading.
Steven Brown is a Managing Director on the Market Intelligence Desk (MID) at Nasdaq with over twenty years of experience in equities. With a focus on client retention he currently covers the Financial, Energy and Media sectors.
Christopher Dearborn is a Managing Director on the Market Intelligence Desk (MID) at Nasdaq. Chris has over two decades of equity market experience including floor and screen based trading, corporate access, IPOs and asset allocation. Chris is responsible for providing timely, accurate and objective market and trading-related information to Nasdaq-listed companies.
Brian Joyce, CMT has 16 years of trading desk experience. Prior to joining Nasdaq Brian executed equity orders and provided trading ideas to institutional clients. He also contributed technical analysis to a fundamental research offering. Brian focuses on helping Nasdaq’s Financial, Healthcare and Airline companies among others understand the trading in their stock. Brian is a Chartered Market Technician.

This article is from Nasdaq and is being posted with Nasdaq’s permission. The views expressed in this article are solely those of the author and/or Nasdaq and IB is not endorsing or recommending any investment or trading discussed in the article. This material is for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


11011




Securities Lending

A Look at Sarepta Therapeutics and Lions Gate Entertainment



Brian Guerra takes a look at Sarepta Therapeutics and Lions Gate Entertainment

The analysis in this video is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


11010




Stocks

What's The Problem With Non-GAAP Earnings?


Non-GAAP earnings are back in the crosshairs. 15 years after the Enron scandal first prompted the SEC to create rules for non-GAAP metrics, the proliferation of these pro forma results—especially extreme cases such as Valeant (VRX)—have led to renewed scrutiny. Most notably, the SEC has created a task force to review companies’ use of non-GAAP metrics.

Whenever non-GAAP metrics get attacked, a slew of contrarians leap to defend them by pointing out that GAAP standards have many flaws. Traditional GAAP accounting, these critics argue, do a poor job of reflecting economic realities and already contain enough loopholes for executives to “manage” earnings.

These critics are right that GAAP is flawed. It’s just that non-GAAP is even worse.

GAAP Earnings Require Fixing

GAAP standards contain numerous loopholes that executives can use to manipulate earnings, which studies show they do with frequency and magnitude.

Given these flaws, it’s understandable that people would think non-GAAP metrics could better serve the interests of investors who want to understand the true cash profitability of businesses.

Companies Make Non-GAAP Earnings Worse Than GAAP

Non-GAAP earnings tend to be much worse than GAAP earnings when it comes to accurately reporting profits. GAAP standards at least hold companies to a common set of rules. Companies that report non-GAAP earnings can make up whatever rules they want, and they almost always use those rules to inflate their reported growth and profitability.

It is naïve to assume that accurate communication of the true profitability of the business is a top priority for management teams. Experience has taught us that executives are primarily concerned with maximizing their compensation, which leads them to report the results that drive the metrics to which their compensation plans are linked, not the results that are the most accurate.

Case Study on How Non-GAAP Hurts Investors

Like 90% of companies in the S&P 500, Newell Brands (NWL) reports non-GAAP earnings along with GAAP net income. However, this consumer staples company stands out for the way it uses these made up numbers to give the illusion of growing profitability.

Figure 1: GAAP Vs. Non-GAAP For Newell Brands (NWL)

NewConstructs_NWL_NonGAAPillusions_2016-09-23

Sources: New Constructs, LLC and company filings.

Should We Be Surprised That Non-GAAP Numbers Are Misleading?

No, not if you do a little digging. As we explain in 4 Reasons Executives Manipulate Earnings, ever since “performance-based” bonuses were made tax-deductible in 1993, an increasingly large portion of executive compensation has been tied to hitting certain performance targets. In many cases, these are “adjusted” non-GAAP metrics that are designed so that executives always hit the incentive targets.

Figure 1 shows how Newell Brand’s (NWL) non-GAAP earnings have risen in each of the past three years, contrasting with the decline in both its GAAP net income and its net operating profit after tax (NOPAT), a measure of operating profit that reverses GAAP’s accounting distortions on a consistent basis across companies.

Newell achieves this false growth through a variety of tactics. For one, it excludes “non-recurring” charges such as restructuring, which the company has incurred for almost 20 consecutive years. After two decades, it’s hard to argue these are one-time expenses.

Even when the company does exclude legitimately non-recurring expenses, such as a $10.2 million product recall charge, it still misleads investors by including non-recurring income. In 2015, the company earned $95.6 million in after-tax income from the sale of its Endicia shipping business. Even though this item is clearly a one-time, non-operating gain, it was not excluded from non-GAAP earnings.

Here are details on the types of adjustments companies make to create misleading non-GAAP metrics.

The Real Problem: Owner-Agent Conflict and the Integrity of the Capital Markets

When non-GAAP earnings push the focus further away from actual economic profits, they exacerbate the disconnect between executive incentives and the best interests of shareholders.

This Owner-Agent problem exists because executives (the Agent) are supposed to work in the best interests of the shareholders (the Owner) – in theory. In practice, they often serve their own interests first.

Take Valeant Pharmaceuticals (VRX) as an example. The company’s compensation structure incentivized CEO Mike Pearson to take big risks, inflate earnings, and chase short-term gains in the stock price. After the stock collapsed, average investors are left with big losses while Pearson walks away with a $9 million severance package.

Frauds such as Enron, Tyco and WorldCom, show that executives blatantly lie to investors to enrich themselves.

By obscuring true profitability and widening the gap between executive incentives and shareholder interests, non-GAAP metrics reduce the efficiency and integrity of capital markets.

Investors should do their diligence and not rely on information from conflicted sources.

This report originally published here on September 23, 2016.

About New Constructs

Our stock rating methodology instantly informs you of the quality of the business and the fairness of the stock’s valuation. We do the diligence on earnings quality and valuation so you don’t have to.

In-depth risk/reward analysis underpins our stock rating. Our stock rating methodology grades every stock according to what we believe are the 5 most important criteria for assessing the quality of a stock. Each grade reflects the balance of potential risk and reward of buying that stock. Our analysis results in the 5 ratings described below. Very Attractive and Attractive correspond to a "Buy" rating, Very Dangerous and Dangerous correspond to a "Sell" rating, while Neutral corresponds to a "Hold" rating.

Cutting-edge technology enables us to scale our forensics accounting expertise so that we can cover enough stocks to cover the ETFs that hold them as well. Learn more about New Constructs. Get a free trial. See what Barron’s has to say about our research.

This article is from New Constructs, LLC and is being posted with New Constructs, LLC’s permission. The views expressed in this article are solely those of the author and/or New Constructs, LLC and IB is not endorsing or recommending any investment or trading discussed in the article. This material is for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


11009




1 2 3 4 5 2 1178

Disclosures

We appreciate your feedback. If you have any questions or comments about IB Traders' Insight please contact ibti@ibkr.com.

The material (including articles and commentary) provided on IB Traders' Insight is offered for informational purposes only. The posted material is NOT a recommendation by Interactive Brokers (IB) that you or your clients should contract for the services of or invest with any of the independent advisors or hedge funds or others who may post on IB Traders' Insight or invest with any advisors or hedge funds. The advisors, hedge funds and other analysts who may post on IB Traders' Insight are independent of IB and IB does not make any representations or warranties concerning the past or future performance of these advisors, hedge funds and others or the accuracy of the information they provide. Interactive Brokers does not conduct a "suitability review" to make sure the trading of any advisor or hedge fund or other party is suitable for you.

Securities or other financial instruments mentioned in the material posted are not suitable for all investors. The material posted does not take into account your particular investment objectives, financial situations or needs and is not intended as a recommendation to you of any particular securities, financial instruments or strategies. Before making any investment or trade, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice. Past performance is no guarantee of future results.

Any information provided by third parties has been obtained from sources believed to be reliable and accurate; however, IB does not warrant its accuracy and assumes no responsibility for any errors or omissions.

Any information posted by employees of IB or an affiliated company is based upon information that is believed to be reliable. However, neither IB nor its affiliates warrant its completeness, accuracy or adequacy. IB does not make any representations or warranties concerning the past or future performance of any financial instrument. By posting material on IB Traders' Insight, IB is not representing that any particular financial instrument or trading strategy is appropriate for you.