Financial & Business Services News by GLG Council Members

Since January 2007 the world’s biggest commercial and investment banks have written down $497bn of bad debt. The optimists suggest the worse is now behind us. Perhaps, but the bounce will be limited from here. Hope springs from the belief that banks have written down what there is to be written down, the authorities are bending over backwards to help and buyers of credit are emerging. Markets are...

Reduced insurer profits. Reduced insurer shareholder return on equity. Higher insurance premiums in near future. Increased insurer M&A activity. Maybe time to buy insurer stock.

Implications: 1.Prompt action by Credit Suisse avoided a MUCH Larger Fine by the Regulatory authorities by cooperating and providing concessions. 2.Intersting Implication - Investors have become distrustful of credit risk ratings related to complex investment alternatives, which has become a world-wide scenerio. 3.The high Ethical Standards  of Credit Suisse have been called into question...

1. For banks to stay ahead, more mergers in the Australian banking industry can be expected. 2. Australian banking industry is heading into a period of churning and consolidation.A fallout of the increasing interest rates and fears of recession.

Implications: 1.Bank losses are a severe restriction on lending practices of Financial Institutions. 2.Severe Financial and Economic damage to corporations and the individual consumer as delinquencies on home and commercial loans rise. 3.Many U.S banking institutions , now have, a substantial deteriortion of their capitalization base and related " Market Value"! 4.The rise in Debt Speculation indicates...

The Department of Homeland Security is currently rolling out enforcement of Public Law 110-53, Title IX requiring all public and private businesses to  have continuity plan with independent third party certification. This law represents the potential to create a Sarbanes Oxley level of commitment and expense for all businesses. DHS will began contacting 7 million business next month. Every business...

The prior several years have definitely been a severe downturn (stating the obvious) in the destruction of existing housing prices. Bloated inventories, overextended borrowers, lack of decent funding, macro economics, lack of faith in the valuations have all contributed to this mess. But it definately is a cycle, and cycles CHANGE.

Sovereign Wealth Funds (SWF) have a lot of money. So they can buy advice. What they do with it is another matter. Investing in Blackstone was investing in a reputable firm at a bad time. So short term the investment looks bad. Long term is the the time horizon of SWF and in the longer term it may turn out fine.

Write downs are not actual losses and a mark-to-market loss is not a cash loss. Widening spreads in the credit default market, although real, must be recognized for what they are; namely, market monetization of perceived risks compared to recent backwards looking asset and cash flow valuations. Recovery in the general credit market should produce non-cash reported earnings increases starting in 2009...

Imlpications: 1.An appearance of the Lack of Economic Growth Opportunities in the Domestic Markerplace has caused a drop in premiums and, hence, profits. 2.The two (2) salient issues the demographic changes in population and economic growth. 3.A rapidly aging in the country's population may be the motivating factor for considerations given to the conversion to stock ownership to enhance finance acquisitions....