All GLG News Analyses Filed Under: Exchanges & Capital Markets

Is Now The Time To Buy Suprime MBS?

December 22, 2008

Analysis by: GLG Expert Contributor

Analysis of:Buy Subprime-Mortgage Bonds on Government Action, JPMorgan Says | www.bloomberg.com

While this advice may generally be sound, anyone wanting to use it, whether as investor or to assess the likely impact of the subprime mortgage crisis, needs to fully understand how best to use it. This is particularly important as there appears to be several apparently contradictory reference or pricing points in the market today. These seemingly contradictory reference points actually represent a landscape of different risk positions (or securities) and understanding them provides a richer understanding of the whole and is essential to make the best decisions.

" Consolidation" - The Answer for Hedge Fund lack of Liquidity!!

December 20, 2008

Analysis by: GLG Expert Contributor

Analysis of:Locked away | www.economist.com

Implications: 1.A Major Problem - small funds do not have the liquidoty to survive the Long Term. 2.As Fees seem to be the determinable factor: The goal manager has the objective to grow the fund ubtil the inevitable consequence becomes reality - a loss in valuation. 3.Consolidation has an embredded , potential conflict:A well-endowed newer fund vs the large asset base fund. A consequence to be faced at one other time in the future. 4.Diversification by Fund Management involves both the Manager and the Investor - either share the risk and or return:pread the capital between common shares and government bonds. 5.The Industry has , clearly, been overeached - Many funds have leveraged to straddle the the Bull Markets. 6.The structure of the hedge-fund industry has been and will continue to be less stable than conventional fund markets and or management!!!!

Using game theory as analytical tool in financial markets. www.patrickmcnutt.com/news.asp#News41

December 12, 2008

Analysis by: GLG Expert Contributor

Analysis of:Signalling cycle as explanation of financial crisis | www.patrickmcnutt.com

Signalling cycle as explanatory of the financial crisis     Modern game theory focuses on observed behaviour and, by identifying patterns in that behaviour proceeds to analyse possible solutions to a problem. It offers an interesting and novel take on the financial crisis by introducing the idea of a signalling cycle.      

The Real Cause of the Rating Agency Problem

December 12, 2008

Analysis by: GLG Expert Contributor

Analysis of:SEC Tightens Rules for Ratings Firms | online.wsj.com

The SEC is once again trying to get its arms around the rating agency problem. The effort is fine as far as it goes, but the underlying cause of the problem is that the three leading agencies are publicly-traded companies themselves or key units of publicly-traded companies that have marketed themselves as growth vehicles. The resulting market pressures intensify the conflict of interest issues inherent in the agencies' issuer pay business models.  It is virtually impossible to regulate this problem away. The solution must come from within the agencies.  

Patrick YoungFounder and ChairmanDerivatives Vision

The Department Store Versus the One Product Wonder?

December 5, 2008

Analysis of:London Stock Exchange loses trade to rivals | business.timesonline.co.uk

In many respects the market share drop in LSE's usual markets is alarming. At the same time, the beneficial impacts of MiFiD are actually being enjoyed by all exchanges - even those losing market share! However, the key problem for LSE remains its rather narrow product range, never minding its ongoing high cost basis compared to arriviste rivals.

Clearly MiFID is Having its Desired Effect

December 4, 2008

Analysis by: GLG Expert Contributor

Analysis of:London Stock Exchange loses trade to rivals | business.timesonline.co.uk

(1.)  Markets in Financial Instruments Directive (MiFID), was the result of pan-European legislation passed in 2004, which consolidated and made consistent the rules that govern the reporting of over-the-counter (OTC) trading in company shares in Europe. (2.)  MiFID took effect on November 5, 2007. (3.)  Already we see that European Exchanges have begun to lose out in the estimated $3 Billion annual spend for European market data and other trading fees, while buy-side customers and sell-side traders are becoming the eventual winners due to increased competiveness in share prices and transparency, all at a reduced cost.

Patrick YoungFounder and ChairmanDerivatives Vision

Debt Worries Will Chill Brokerage Investors

December 2, 2008

Analysis of:IG’s value plummets by 27% after spread bets on bank shares cause £12m of bad debts in one month | business.timesonline.co.uk

Debt issues often follow major periods of market volatility and all brokers with activities in leveraged products have some degree of risk. With market confidence fragile in the wake of various risk management issues in the brokerage world this year, investors are going to remain very nervous about companies in this sector, particularly those with a principal risk of any kind.

Will Exchanges be the Death of OTC Derivatives?

November 27, 2008

Analysis by: GLG Expert Contributor

Analysis of:Listed Derivatives Boosted by Need for Transparency | www.efinancialnews.com

The huge and lucrative OTC derivatives marketplace is virtually certain to undergo major structural change soon. The changes will determine how the instruments are traded and how the benefits--not to mention profits--from the business are allocated. A number of alternative models have been proposed, including a wholesale migration to existing exchanges to leaving the trading of the products in the OTC market and creating a centralized clearing and settlement platform.  The volume of futures exchanges such as the U.S. giant Chicago Mercantile Exchange and the Europe's Eurex unit of Deutsche Borse do bear witness to the attractiveness of futures. Most exchanges' volumes are up this year vs. last year, in sharp contrast to the near frozen OTC market.

Spread Betting: It is Apparent that IG's Venture did Not Grasp the Concept!

November 26, 2008

Analysis by: GLG Expert Contributor

Analysis of:IG’s value plummets by 27% after spread bets on bank shares cause £12m of bad debts in one month | business.timesonline.co.uk

Implications: 1.Betting Duty and Doubtful Debts were adversely affected by the impact of Market Volatility - casuality of the Marketplace. 2.It may appear as though the Larger Debts arose from client positions in RBS and the main equity indices. 3.Derivative Products are Advanced Financial techniques - It is the responsibilty of offering Institutions to educate the client base odf both the Upside and Downside od such a vehicle. 4.Many Institutions GAIN from Market Volatility.The issue , at hand, is Market Timing and the ability to accurately Forecast the Potential of a Gain/Loss. Not the case for IG's Financial Group. 5.The Major Failure was promoted by the UK Goverment unveiling a Bank Bailout plan - easily Predictable by management foresight!

Patrick YoungFounder and ChairmanDerivatives Vision

Risk Transfer Is A Wondrous Thing!

November 17, 2008

Analysis of:Derivatives:Giving Credit Where It is Due | www.economist.com

CDS trading is a very useful tool for risk transfer. However, the fundamental precept of building houses on weak foundations or muddy ground remains an issue. There is a future for the marketplace without needing to resort to bans or major restrictions. A sound (and ideally open) CCP regime is a pre-requisite for the future of the marketplace.

Previous Page : 567891011121314Next91 to 100 of 330