Some reflections on First Lady Hillary Rodham Clinton's commodities trading profits:
1) A 'modest' trader turning a 'minuscule' profit by futures industry standards
"At the request of the White House, I have examined the records which reflect Mrs. Clinton's trading activity at Refco. It is my considered opinion that unless there are additional records to indicate otherwise, this is a tempest in a teapot. Nothing in these records appears to reflect any trading violations on the part of Mrs. Clinton. ...
"What these records show is that Mrs. Clinton was, during 1978 and 1979, a relatively modest trader who traded in a variety of commodities, including cattle, soybeans and hogs. ... (O)n balance, she did extremely well. This was by no means unprecedented at that time. ... Mrs. Clinton's profit, while substantial in every day life, was minuscule when measured against the background of that market era."
Excerpts from an April 12 statement by Leo Melamed, former chairman of the Chicago Mercantile Exchange and current chairman and chief executive officer of Sakura Dellsher Inc., Chicago.
2) No violations
Based on Chicago Mercantile Exchange records newly released by Mrs. Clinton, "I have no reason to change my original assessment that Mrs. Clinton violated no rules in the course of her transactions."
Excerpt from Mr. Melamed's May 26 statement.
3) Inconceivable and distressing
"(A) very smart friend of mine said that he thought Warren Buffett should be taking lessons from Hillary and that there is no possible way that Warren Buffett can compete with the kind of returns Hillary Clinton got. If you're asking in a serious way, I think it's inconceivable that it was earned ... and it's very distressing to me that it happened ... It bears on her fitness to be president." [Audience laughter.]
Benjamin J. Stein, lawyer, author, actor, speaking May 17 at the Association for Investment Management and Research's conference in Washington.
So what does one make of these aforementioned reflections?
CME records on Hillary trades reveal one interesting fact. They show Mrs. Clinton's initial trade in commodities, on Oct. 11, 1978, was a short sale. That raises some questions.
Among them, Mrs. Clinton and others have said she was in the market at a fortuitous time when cattle futures were rising. Yet she began trading with a short sale.
Also, in light of Mrs. Clinton's remarks about being a neophyte investor, how likely is it a first-time investor will sell short? How many investors sell short on their first entry into the market?
Despite his expertise, Mr. Melamed gives an unsatisfying assessment of the trades. He calls the First Lady a modest trader and he considers her profits - she earned $99,000 on a $1,000 stake in less than a year of trading - nothing extraordinary. Unfortunately, he provides no context on which he based his analysis.
Clearly, Mrs. Clinton still owes the public a fuller explanation of her commodities involvement.