All GLG News Analyses Filed Under: Asset Management & Private Banking

Everybody is affected and confidence in the investment services community shaken.

December 17, 2008

Analysis by: GLG Expert Contributor

Analysis of:Santander Falls After Disclosing $3 Billion Madoff Exposure | www.bloomberg.com

Big names in banking  have large direct and indirect exposure to Bernard Madoff's fund.  This will take liquidity out of the market for individual and small businesses that are seeking credit. The headlines do not make bankers look good (or competent) at a time when confidence in banks has been shaken worldwide.  A lot of hedge funds are based in friendly jurisdictions; in Europe, their clients - mostly high net worth individuals - are classified as 'professional' so they are entitled to less protection than the average retail investor. Madoff's Ponzi scheme (not too difficult to identify if you are looking), could be the tipping point that will lead to regulate hedge fund irrespective of the jurisdiction where they are set up, a rush of clients asking to be 'downgraded' to retail clients and stricter rules regarding 'competence' checks on clients before classifying them as 'professional'.Investment guidelines for local government treasurers might be reviewed.

"In YOU we trust"

December 16, 2008

Analysis by: GLG Expert Contributor

Analysis of:Santander Falls After Disclosing $3 Billion Madoff Exposure | www.bloomberg.com

I recently read a book called "Why Should Anyone be Led by You" by authors Goffee and Jones.  What a great question and one that should be asked by anyone remotely associated with put any sum of money at risk, regardless of a fund manager's name or reputation.  Two words should be firmly ingrained in our minds as fiduciaries---Due Diligence.    The article on Santander is an important reminder of the vulnerability of the investment community—both those who place their trust in investment advisor and the institutions that promise to invest funds wisely on behalf of their investors.  Furthermore, it is a sobering reminder of vulnerable we are, despite a perceived and falsely comforting sense of sophistication.   

Joseph SmithPresident & CEODefault Mitigation Management

Will only owrk if they do something with the mortgages!

December 12, 2008

Analysis of:RBS Promises Borrowers Six-Month Respite Before Foreclosing on Mortgages | www.bloomberg.com

1. Only works if the loans are re-performed. 2. Can be a rat in the snake waiting to pass. 3. Can make the situation worse with failure to reperform 4. There are good and bad modifications

PRUDENT INITIATIVE BY RBS TO DEFER MORTGAGE FORECLOSURES

December 11, 2008

Analysis by: GLG Expert Contributor

Analysis of:RBS Promises Borrowers Six-Month Respite Before Foreclosing on Mortgages | www.bloomberg.com

undefinedundefined undefined The RBS initiative to give respite albeit of six months on foreclosures of delinquent mortgages is a strong message to the Mortgage lenders across UK to follow suit.   It could probably be a graded beginning to be followed by further extensions upon review of market conditions.   It is a prudent approach in the face of declining carrying costs & falling home prices.

Harnath SithamrajuConsultantHarnath Sithamraju

Global Stand-off-Recede or Recession

December 10, 2008

Analysis of:Westpac Bank Raises $1.6 Billion to Bolster Capital as Bad Debts Increase | www.bloomberg.com

1.The equity raising will boost tier-1 capital to 8.32 per cent on a pro-forma basis. 2. Action taken to withstand recession fallout.

"No Risk - No Return"! Risk Adversion overcomes the Financial Marketplace.

December 8, 2008

Analysis by: GLG Expert Contributor

Analysis of:Commerzbank to Close Dresdner Kleinwort U.K. M&A Unit | www.bloomberg.com

Implications: 1.The Sale of Shares deminish and Merger and Acquisition fades in a Downward Spiral Economy. 2.A compilation of data indicates that Merger and Acquisition activity falls by 36% of prior activity. 3.Hence, proprietary trading in the marketplace and asset-based securities are at a stand-off. Fire Sales are , now, a commom denominator!!!!! 4.European Operations have a deficit balance and downsized by a number close to 200,000 employment closures. 5.Investment Banking is , possibly, becoming a lost patron of the Financial Marketplace. 6.Dresdner Klienwort was the Number 13 Advisor on U.K. takeovers and, now, falls by the wayside: Under/Over Capitalization and Management - A concept to be re-defined by the Industry!

Mark MariottiChief Executive OfficerFuture Management Holdings Inc

Something is better than nothing

December 8, 2008

Analysis of:RBS Promises Borrowers Six-Month Respite Before Foreclosing on Mortgages | www.bloomberg.com

The last six months of this frm's operation has seen its share of challenges. Executives and equity holders have experienced severe penaltys for the onging global financial and real estate meltdown. If the equity holders can have something of a planned ROI, it is better than nothing. Sad that we are at this point, but unfortunately we are.

Unprecedented Efficiency in German Bank Consolidation

December 5, 2008

Analysis by: GLG Expert Contributor

Analysis of:Commerzbank Speeds Up $6.6 Billion Dresdner Takeover | www.bloomberg.com

Under pressure of the global financial crisis,  the accelerated pace of  Commerzbank's  takeover of Dresdner  could radically change  German banking culture facilitating consolidation and increasing efficiency across the sector. For nearly two decades, Germany has been overbanked and  unable to achieve successful domestic mergers. The 2000 failed Deutsche Dresdner and Deutsche Commerz mergers, the painstakingly slow  EU imposed unraveling of state subsidies for the Landesbanken and the  three large banks relatively small share of the domestic market  created a sharp dichotomy between the profitability and efficiency of German banks as a global versus a domestic brand. Germany culturally stuck in post war loyalty and sense of security provided by  regional banks, Sparkassen, local credit institutions has moved forward on  privatization, reforms and  mergers among the Landesbanken since 2006. The crisis proves that gradual adaptation is replaced by the "urgency of now".       

Contrasting Client Protection from the Collapses of New Star and London Scottish Bank

December 5, 2008

Analysis by: GLG Expert Contributor

Analysis of:Banks poised to control troubled New Star | business.timesonline.co.uk

Both New Star fund managers and London Scottish Bank have recently collapsed. The clients have had different fortunes. The fund assets are securely held by an independent custodian. The bank assets have largely disappeared, and shortfalls have to be made up by the UK government.

Consumer Confidence at an ALL time Low: Sentiment has Fallen to a Four Year Baseline!

December 4, 2008

Analysis by: GLG Expert Contributor

Analysis of:RBS Promises Borrowers Six-Month Respite Before Foreclosing on Mortgages | www.bloomberg.com

Implications: 1.The Economic Positioning of Europe has Fallen into a Recession! 2.The Index for the Euro has risen to a new low of 25 minus vs a 24 minus within a thirty day period. 3.Policy Making Institutions MUST seek a Global Recourse to stem the Economic Damage from the Financial Turmoil. 4. Economic Downturns: Manufacturing, Services,Retail ,Consumer Confidence, Exports are a Causation and a redeeming factor MUST be developed! 5.All indicators appear to be dire and a 50 basis point cut may well be in the forecast of the near future! 6.Forecasting indicates a 75 basis point as a realistic outcome.  

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