Import/Export for the FYBR/ ITSI Trader

GENERALLY: UNDERSTANDING THE BEAST.
Theory of “Commercial Exploitation In Trinity”.
The Mechanism


IN TRINITY
Those who have purchase any FTN Exporting publication already understand the meaning of the “In Trinity” application as such prevails in a normal 2 party deal in where the third person - the intermediary, can legally and directly become wedged between the two main principals of a transaction. Those who have read FYBR/COFI are also privy to an example of how an intermediary creates his own pricing on secured goods by using the high /low prices of two benchmarks indexes in exploiting the goods being offered for commercial gain.

NO REAL DISCOUNT
Ostensibly , no such thing as a real discount exist for much sought after goods. Likewise the opportunity to obtain prices from suppliers perhaps at a few cents or dollars in discount seldom can be found for goods offered in a sellers market. A producer sells at wholesale prices as dictated by the cost of production from within his country . An end buyer buys at wholesale price in anther country at prices which can be resold to local retailers for a profit- In the middle stand the intermediary who is controlling and manipulating the deal so that he too may earn a gain for services provided at the cross roads of the deal therefore; potential commissions is rarely applied against discounts received from a producer, but from the ability of the intermediary to buy goods at one lower price for reselling a a higher price- The most crucial understanding of the whole process starts with a quote from a supplier. (Not easily done as some may think for much wanted goods)

THE BUYER AND SELLER
In the reality of a real trading scenario, an intermediary sourcing goods at one time must take up the position of a “Buyer/seller” or be attached to a well informed Buyer/seller or in effect there is no way a sourcing intermediary holding such a position can ever earn commission short of some kind of fluke. The practice of “Spotting” goods and obtaining a “Spotters” fee cannot be effectively applied in this business by intermediaries, yet so many are trying to do just that. In a localised “Spotters” deal, the intermediary sources a local supplier of goods, asks for a gets a quote or goods at one price, then offers the “Information’” to potential buyer for a “fee” . In such a case only the information is “surrendered” for a “fee”, which is paid first. The fee is paid and the information surrendered; allows the end buyer to close the purchase deal directly with the supplier. The fee here is only for “information” regardless if a deal closes or not. A 100 dollar spotters fee for every 5,000 dollar value is about at good as it gets in most instances.

As for the so called “Broker”, the nature of business dictates once more a position of representation. A principal runs the operation in where in house traders “trades” strictly on behalf of the said disclosed principal.

Note the term “Disclosed Principal”. Such a term denotes that the person taking consequences for the actions of his “Agents” is the principal, and if the “Agent” does not apply to trade in accordance with the instructions of his principal which must be disclosed and apparent at all times, the agent himself could face serious consequences for trading beyond the scope of his abilities- His “abilities” in other words is limited in that the agent can only trade freely within set boundaries as applied by his principal.

While intermediaries could in effect apply to trade on behalf of a disclosed Principal in the reality of such a situation without a mandated ship expressed in writing or other agreement, the intermediary trading on a such a platform is doing so for a base set “fee” or commission based on sales. Sales business is dependent on trying out many people who fail at achieving high sales so that the principal can secure only those people who are very goods at such applications. When a person is goods at making “Sales” then such a person could indeed make huge gains based on nothing more than Skill. It’s not the goods that walk out the door because they are much wanted, but rather the ability and skill of the sales person in getting others to buy such goods is the real attributes of a good broker or sales person totally differing to the application that needs to be used by an international trade intermediary, who needs to secure much wanted goods as a premier application in where buyers want to buy such goods outright, the same type of goods they themselves were unable to source.

In the frenzy of a primary market, International trade Intermediaries try to earn commission, not from discounts, but by buying from a supplier and selling such goods, less to an end user and more to a retailer or even wholesaler at differing prices, as a Buyer come Seller. Often said type of Intermediaries are required to deal in products which are controlled "artificially" by bench market index pricing such as LIFFE, EURONEXT, NYMEX..etc..etc.. which initially dictates prices for much sought after goods; or so it seems.


AN EXAMPLE: SUGAR
Lets, as an example pick on sugar. In the case of sugar (LIFFE) , such prices are for goods already "Stowed on board ship" at certain ports round the world applying FOB delivery status as per incoterms "Named port of shipment"- The prices quoted on a LIFFE board is for goods already “Stowed on board” ship and does not consider matters such as local custom fee’s, bank charges and indeed brokerage and other forwarding charge or document production charges.

FTNX commodity Index and the intermediaries who use such, do not deal in buying "on board" or spot type of commodities. FTNX deals in private advance pricing applications based upon negotiation. FTNX offers to buy goods at certain quantities and price TODAY for an agreed upon “Delivery” application sometime in the future.

The Intermediary here is the FTNX. The FTNX simply secure the supplier and resells to willing buyers, but does so in a manner so as to control the deal from start to finish. International trade intermediaries whether working in a corporate environment or simply from an office at home must apply the same principles of trade as the seemingly complex FTNX board application.

The supplier can either take or decline the FTNX offer to buy (or sell) made. As it applies to the type of business the FTNX applies, so does such practices apply to any private intermediary looking to earn and secure commission via such business applications, because the FTNX is only defining exactly the type of trade that an intermediary is applying or is suppose to apply, but! alas, there are simply too many intermediaries on the net today that simply have no idea on what they are doing ,nor have any conceptual idea that what is being explained here is specific to the nature of business they are attempting to conduct.

So many ill informed intermediaries on the net today also have tunnel vision, in that; they see something written on paper or a trade board and place all their misguided efforts is offering goods, using all sorts of terms and strange procedures without at all understanding whatsoever that the goods they are offering or is being sought will never lead to a deal being closed.

The term "Future" specific to the activities of the intermediary, usually means 90 days or more “Delivery” sometimes in the "Future" of standard daily seen LIFFE "benchmark" prices- In others words FTNX offers to buy goods way in advance of the bare "Ready now prices" because in the reality of a real PHYSICAL transaction intermediaries are open to a whole lot of factors before final delivery could be applied anyway, such factors that usually take 90 days or more to completely initiate (Quote,Offer,Contract, DLC, PG, Delivery, IPG, Reserving ship..etc)

Intermediaries don't have cash to buy stowed on board goods-and they cannot take possession of such goods anyway, now clearly defines that the intermediary has limitations on the way they can trade of such goods.

Anyone can walk into a brokerage firm and buy shares in stock, on the other hand there are not many people world wide that could enact complex procedures to buy and sell real good, let alone to do so for profit as well.

Another very important factor complimenting the activities in the way an intermediary does business is that ships are booked out for Lay can and berthing also way in advance because the "Ship loading" mechanism is ostensibly always in effect for a very good reasons, hence- ideally products like Brazilian sugar can easily be traded as it applies to the unseen but very TANGIBLE inherited "Value" of the "Stock " (via shares) , which has very little or NO reference to the act of actually buying physically deliverable Sugar-

LETS LOOK AT SOME “MECHANISMS”
Ships are loaded with sugar on board every day in Brazil, this "Ship loaded" mechanism allows for investment on "stocks" to be applied (Fluctuate) daily or even hourly .

In effect sugar prices go up and down daily based on shares in real stock traded and not on contracted shipment values. Shipment values define “sales”, thus stock shares are traded based merely on ships being ready and loaded at any given time is a truism. This defines the "Mechanism" applying that allows trading in shares can be applied as a daily event ; ie. Many ships being loaded/waiting at any given day means "Supply" is high (( This does not mean demand is high , but only means goods are in supply to meet "demand' needed- A soft drink factory still needs to operate no matter how high the price of sugar goes?)) thus "Share" prices change to higher levels at a whim (and Sellers has the market in their control) on the other hand , if not many ships has goods stowed in them, Warehouses become overloaded, production is slowing down while crops are booming, prices begin to fall (Buyers has the Market in their control)-

But there is more to it than that.Expenses, wages and costs to produce such goods don’t go up and down on a whim in where the shares do, thus giving clear indication that there are other forces in play, pushing prices up and down based on the will of speculators and not on actual real cost of goods.

With ships not being loaded the "Share market" can't sing out, “Look how much stocks in sugar we are selling"- If they can’t do that then the inherited value in such goods dramatically lose their appeal to daily investors-Nobody wants to invest in the "value" of goods that are not being "sold"-

But there is a deceptive element also in play here. Shares in stock values is supposed to be based on the availability of real physical stock, but its not because in essence the value here is in the monetary value of such stocks and not the physically value based on weight or quantity. While one ship may indeed be ready and loaded with 100,000 MT of Sugar, the “Share value” to such sugar may have been traded upon many times in a buying and selling frenzy, before the actual sugar is sold or delivered to the end buyer. You cannot sell the same loaded sugar twice once such is sold to an end buyer, but no so with shares. Share themselves can produce a secondary value in that the value of shares could also be traded upon.

If one is holding shares at the value for 1 billion dollars , then in effect there is the primary value of the shares and there is a secondary value to the shares while such is being held , being the inherited value of its “Collateral” status.Such collateral can again also be used to generate gains; in where the ship loaded remain static in physical price and quantity in where share values and the derivatives of such do not .

It’s the inherited value in the goods that is being traded and not the goods themselves defines the most important factor that applies in doing business in the speculative market, in the non speculative physical market that intermediaries ply, the opposite prevails- Intermediaries deal in the inherited value the actual physical goods secured specifically for buying then reselling.

Just like shares purchased on a stock market trading floor,intermediaries too trade in “Paper” being title documents of “delivery” and not actual possession of goods represented by such documents of title .

A “Spotter” nor “Broker“ deals in the title of the goods they ply. A International trade intermediary - the “Seller/Buyer’ does, now specifically defines the realm and nature of business that is being conducted.


TITLE OF GOODS
The Intermediary source goods makes arrangements to buy such goods, upon which he sells such goods to an end buyer. In the first instance the physical goods has to be not just sourced but also “secured” . In the second instance, the inherited value of the goods quantity is traded upon and sold to the end buyer in the form of a “title” . The title give right to the buyer to obtain possession of such goods, or gives right to the buyer to also use the inherited value of his own purchase to resell the goods again without even obtaining possession of such. One person or many people can make gains by simply selling title to the goods and without obtaining possession of such. The Bill of lading until it is “Endorsed in Blank” indeed allows for such a premise to prevail in where the very last person holding the blank endorsed Bill of lading is the person taking final possession of the goods once they have surrendered title to such goods at custom port of unloading.

Holding title to goods defines to imply that the nature of business, until title has been secured is ongoing , then stops once title leaves one owner and falls into the hand of another. Title dos not give the same value to one who holds such, as that who owns possession of the actual goods. An intermediary simply cannot obtain possession of goods because they have not paid for such goods. The person paying for such goods is the one who is able to obtain possession of such goods.

The “Title document” allows the right of passage for goods to reach the buyer taking possession of such, in where although the title could be transferred many times to many people , the goods cannot and ultimately will always lead to one person claiming possession of goods he has paid for, by surrendering the title to such goods to obtain the physical possession of such.The price paid for such goods is reinforced by the title, regardless of price movements apparent on any index. The actual price of the goods is a matter of contract in where terms and conditions of delivery play an independent role to the application applied in using the title as a sort of “ instrument” to transfer the value and quantity of goods from one person in one country to another person in another county. In effect the contract is a document related to the parties in the contract, the title document, the main being the Bill of Lading is also a transport document as well as a delivery document of presentation.The financial instruments is related to the financial side of the deal. All are related to the whole deal, but in fact each are independent transactions on their own ( The much said “ In Trinity” application)

Faults enountered in any part of the “In Trinity” application, can be rectified within the course of the actual transaction without causing the whole deal to collapse- Failure to rectify any problem within the “In Trinity” parts of the deal will cause the whole deal to collapse.

The best time for dealing as an intermediary is when the suppliers market become desperate. Desperation means benchmark PRIMARY indexes are abandoned in where "Secondary" market PRICES are sought by Suppliers looking for deals and money to stay afloat. ((Note; Cepea this week (December 2008) has reported secondary market sales at Mills were applied last month-))

Perception? Ships "Seem" to remain loaded at ports which "Seem" to be busy as is seems to others; in where share prices fluctuate because of the said
"Shipment loaded" Mechanism- Share are traded daily, in where prices applied to such shares are not being gained by suppliers for the sugar. In a bloated supply market suppliers will need to start hoarding goods like 'Squirrels". If a product like sugar begins to be plied strongly as Secondary market application, then products supported by sugar also begin to drop- i.e: Ethanol.

Lesser sales also means more carriers are not working in where better freight rates can also be sought.

In where Sugar fails to be shipped, investors begin to sell their shares in the inherited value of shipments which have not eventuated, as the price of shares drop, more and more shares are dumped at a loss, the lower the physical price of sugar applies- But like all commodities, there is a point in where no matter how far such goods fall, buyers must still buy to meet manufacturing demands if not sooner then later- When products fall to exceptionally low levels, this in itself, in effect also defines the introduction of another mechanism. Buyers will buy as a matter of necessity eventually, thus at the point when such buying begins to apply is also the point where investors begin to buy shares once more, or take advantage of shares not sold when purchased high. This “Breaking” allows the circle again to prevail in where; as prices begin to climb in shares so does the demand of physical purchase increase, which in turn allows ships to once more become full. Prices begin to escalate as the sellers takes control of the market again.

Markets may fall, but not so the world’s population which increases yearly. There may be an increase of lets say corn based ethanol used in cars , coincidentally deceasing he use of petrol driven cars, but such changes always develope at consequence of another protocol. Taking a weaker force to make a greater application is the best application in that the end result is a positive one. Taking a greater application to only produce another great application produces a negative result.

An increase in population means more corn needs to be produced to no just make ethanol, but also assist in providing important food staples to an ever increasing population base.

Prices lost due to a massive falls dictates that the “gap” between a once previous higher price and the lowest price being arrived at in any given month or year will be recovered. Recovered because the market has already proved that “Ships already once loaded” did exist at the higher prices, indicating the true potential usage or need of such goods that end buyer have applied once before, will eventually return. For one half of the world in being able to drive vehicles without concern of green house gases is a falwed process in where the other half of the world is habouring billions of people starving for lack of supply of a simple product like corn. The world’s population will increase and with such increase demand will force such return of high prices tif not sooner, then later.

THE MECHANISM OF CYCLE
Therefore it stands to reason that although crude oil has lost something like $107 dollar per BBL in a 5 month period , it did arrive at ; that suppliers were willing to pay $147 dollar per barrel for such oil, an that such suppliers will need to do so once more. To do so once more also defines that the potential of a new “gap” could reasonably be implied in that- when crude oil climbs back to benchmark prices of $147 dollars per barrel- then in theory it could go as high as $214 per barrel in twice the time it took to fall to its lowest selling price- Money lost in one time is recouped in another time.

Being that the intermediary is buying 90 days or even up i.e; 150 days in advance- then the Intermediary needs to work out a price that he is prepared to pay for much sought after goods let say i.e: 90 days ahead, while at the same time finding an end buyer to buy such goods 90 days in advance at the price as set by the intermediary.

Often a price set as a fixed price contract. It’s this fixed price application that is the most attractive aspect of the offer made to the end buyer- It’s also an attractive way for a supplier to offer advance pricing knowingly that no matter the scenario, some orders are secure in the “future”- It’s this future price application that most intermediaries are finding the most difficult to comprehend.

FTNX board is a secondary board application- FTNX is often assured, so long as certain quantities are ordered, certain prices will prevail- often below standard primary price board values. More so as the buyers market takes control, much lesser so when it’s a suppliers market. Like stock brokers trading in shares make their Commission when trading in the value of such stocks for the mental effort, so do intermediaries for their physical and mental efforts, accordingly and rightfully also earn commissions-

It has been a "Suppliers market" since 1999, many suppliers have been living off the "Fat from the hog" because high prices were being obtained for goods as per prices applied being dictated by others. The circle has turned, and the clowns are leaving in droves. FTNX knows from past experience that such a market could last for at least 3 years. Finally after 10 years, suppliers can no longer remain arrogate when requests are made for quotes from an intermediary who knows what they are doing.

In a three year cycle intermediaries have a narrow time to close deals. There is the building up and securing suppliers period of time of nearly 12 months , there is the actual frenzy of trade for 12 months and there is the declination of trade for 12 months until it all becomes difficult once more to secure real supply.

By the end of 2009 is going to be "Desperate suppliers market", buyers will be keenly sought and deals can be made, a buyers market coincidentally, ideally suited and being made ready for fully informed FTNX-AGI intermediaries to effectively trade in, is nearly apparent. It's time once more for the "Perfect Trading Storm" - These type of cycles come around every 8 years of so, and FTN exporting has been through 3 such cycles in 21 years of trading. With the release of ITSI, 2009 up to at least late 2010 is going to be a very busy period for the informed international trade intermediary, especially those who have secured suppliers.

Those who have purchased FTNs publication including ITSI- stay true to its doctrine no matter the temptations may come your way to do otherwise- Some will indeed become great traders most will not, but one thing is for sure- You’ll never know if trading is for you , if you don’t practice applying a genuine effective intermediary doctrine. ”The World is Yours” for the taking, but only if you know how.