Deutsche Bank Suspends New Issuance Of Double Long Agricultural ETF DAG

Tyler Durden's picture

This one caught us by surprise. Today, Deutsche Bank announced it was suspending new issuance in the PowerShares Agriculture Double Long ETF, the DAG. What is odd, is that unlike last week's announcement by Barclays that it would start unwinding its triple inverse S&P ETF (BXDD), which has logically been plunging as the market levitates ever higher on ever lower volume, the DAG has done exactly the opposite. In fact, as the chart below shows, the DAG is trading close to its 52 week high, having tripled from the 52 week low in July (yet still $12 away from its all time high reached in 2008). Therefore, this is not a performance issue, which needs a reverse stock split to be resolved, and likely indicates some deeper issues with creation of shares in what is rapidly becoming the hottest asset space.

We will bring you more information on the cause of this unwind should we encounter it.

 

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EscapeKey's picture

Wouldn't further capital inflow effectively cause rising prices in agricultural commodities, if issuance is to keep up?

Of course, all this will do is prevent the common man from making money; the insiders are still free to rape the futures - and hence 3rd world countries - as they see fit.

jmc8888's picture

Yes. So they'll probably spin this as corporate responsibility. (in the face of rising commodity prices)  But I think you summed it up correctly.

Glass-Steagall

Caviar Emptor's picture

I smell politics behind the scenes. Rolling up as many 'undesirable' ETFs as possible. 

Commodity futures won't be immune. Expect a combination of higher margin limits, lower position limits, jawboning and CFTC hearings broadcast on CNBS, and finally rules limiting futures to physical hedgers only

Caviar Emptor's picture

I smell politics behind the scenes. Rolling up as many 'undesirable' ETFs as possible. 

Commodity futures won't be immune. Expect a combination of higher margin limits, lower position limits, jawboning and CFTC hearings broadcast on CNBS, and finally rules limiting futures to physical hedgers only

Iam Rich's picture

I suspect these are all designed to provide lower cost entry points...I give you cotton as the most recent example.

Joe Sixpack's picture

Derivatives bitchez?

papaswamp's picture

Scooby say WTF? The commoner cash not good enough? or something much larger?

slaughterer's picture

DB did this with a leveraged oil ETF in 2009.  No surprise.  They suspend when the upside threatens to get out of hand... If DB fund managers cannot laugh at the people buying their funds, they terminate them...

Zero Govt's picture

+1 ...on the news DB managers are crying

Missing_Link's picture

I've never been able to buy DAG without getting jacked 8 ways to Sunday.  The HFT wolves are all over that one.  Maybe that's why it got suspended  ...

Cdad's picture

Tyler,

As you may or may not know, the most threatening distortions to next come into the market in the form of a crisis of confidence is very likely to be a direct result of the ETF market, on the whole.  I continue to dig on this count because the answers so far to my most basic questions sound like, "Oh, yes, on that count, we simply sell infinity." 

Now that folks have been driven from stocks, and driven from bonds, and are soon to be driven from metals, the only other area of the market which is gaining inflows is....of course....wait for it...ETFs.  And while that is just fine by me, what it also means is that the criminal syndicate known as Wall Street is, of course, fully engaged in arbitraging to death the entire ETF instrument.

And while I would like to raise my hand tonight and answer to this next level of Wall Street fraud, I'm afraid I am still stuck back at "selling infinity."  I'll keep trying...but I think you need a brain at least a touch smarter than mine...and one that receives fewer martini inflows... to actually crack this Wall Street corruption case.  Not that I've given up, mind you.

Oh my, how the kleptocrats have destroyed the entire system.  I'll be writing a book one day...

I raise my martini glass to you, Tyler, even now. It was a fine day of reporting...a fine day that you put in today.

Cdad

slaughterer's picture

Agreed, Tyler this was the best day put in so far!  Now, we want a turning point...  

A_MacLaren's picture

CFTC Postion Limits on Speculators, bitchez

Cdad's picture

If it were only that easy...I would dance a nake jig, while my best friends filmed it, and post it on Dipsh*t tube....and then send the link to Tyler.

Lord have mercy on the faithful.

Good grief [and by that I mean pass the bowl of infinity, please]!

treasurefish's picture

I don't know.  I am only an options buyer, and I wouldn't look at this thing twice.  How has it only gone up four (4) strikes in four (4) months?  I would have done better with SPY.  I'll bet they are getting sued, and I think it IS a performance issue.  Look at ADM, MOS, or POT over the same period!!!

 

If you want performing agriculture, DAG is not it!  It is nothing but a POS!

Quinvarius's picture

When UNG and UUP had share issuance problems, they both broke to the upside in a decently large way.  This should be interesting to watch tomorrow.

TradingJoe's picture

I agree! From what I have been reading and researching around this seems to be the sole reason! Some CNBS shmuck said "buy" in January...now they "close" it to "new" investors!!! I own 10K/shares for more then a year now, got the suckers @$6 so I am a little nervous, I manage OPM!! I guess "they" closed it just for THAT...shake out the weak hands, get them shares before it really takes off! DUG does not trade options so a true hedge is only DBA, another Deusche Spbank "Product"! My oh my!!!

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