All GLG News Analyses Filed Under: Investment Banking & Commercial Finance

Mortgage/Financial Industry Due Diligence Alert

November 28, 2008

Analysis by: GLG Expert Contributor

Analysis of:Due diligence, recession style | venturebeat.com

This response  is directed to the due diligence performed on countless residential mortgages originated during the past five years on a stated income basis.  The statement above is correct in regard to the mistakes lenders make or have made by accepting stated income during stronger economic times without taking into consideration that real estate/economic trends are traditionally cyclical in nature and many of those borrowers were employed in industries that would be affected in a market down turn.  The surprise is that the Wall Street firms that purchased those loans did not have or use proper analytic models to determine the level of risk involved and take the steps needed to protect investors against those inevitable down turns.

Himadri BanerjiChairman and Managing DirectorBas Management Solutions Pvt. Ltd.

Uncover the Veil on Glitches and Hidden Liabilities

November 24, 2008

Analysis of:Due diligence, recession style | venturebeat.com

As per the article, financial-statement fraud increases during recessions as management teams grow ever-more desperate to make their numbers. A private CRM software company in Seattle had raised over $50 million from VC firms like Ignition Partners and Sigma Partners, deliberately overstating annual revenue to the board and investors . In 2000 and 2001 similar fictitious revenue were declared by software companies like MicroStrategy, Critical Path, and Lernout & Hauspie. Even if fraud isn’t apparent in past documents, management made assumptions and estimates during happier times that dint reflect present day reality. The author suggests that now, the Venture Capitalists and Investors are therefore relying more on due diligence than during the better and fatter times. 

Distressed bulls eye for Oaktree, but done at Japanese individual shareholders expense.

November 17, 2008

Analysis by: GLG Expert Contributor

Analysis of:Oaktree Will Boost Investment in Japanese REITs as Shares Drop | www.bloomberg.com

Foreign Investors taking advantage of distressed situations in the Japanese mid-size REIT universe. But this won't restore confidence if done at the expense of investors

Patrick YoungFounder and ChairmanDerivatives Vision

Where MF Global Went, Will Man Follow?

November 17, 2008

Analysis of:Man Group stocks slump on shock performance | business.timesonline.co.uk

Man Group is suffering a lack of investor confidence that may not be unrelated to the aftermath of the somewhat disastrous first listed year of its MF Global subsidiary.

Harnath SithamrajuConsultantHarnath Sithamraju

Tinker,tailor,bolder,try

November 10, 2008

Analysis of:India's SBI cuts lending rate, plans to raise funds | www.reuters.com

1. Global crisis making the central banks the world over bolder in taking initiatives. 2. Interest rate cuts though welcome are not enough.

US$10b aggregated loss for fiscal first half, dismal but manageable.

November 3, 2008

Analysis by: GLG Expert Contributor

Analysis of:Mitsubishi UFJ, Mizuho Slash Profit Forecasts as Bad-Loan Costs Increase | www.bloomberg.com

Japan financial system traditional achille's heel makes situation bad at home for Japanese banking industry but bears no comparison with worldwide banking industry.

The Great CDO Unwind

October 31, 2008

Analysis by: GLG Expert Contributor

Analysis of:CDO Cuts Show $1 Trillion Corporate-Debt Bets Toxic | www.bloomberg.com

Now that CDOs are being unwound there is some interesting information emerging about the scale and structure of the CDO market. It is becoming clear how big a part the structured credit boom played in keeping credit spreads so low for so long. More evidence is also emerging how the rating structure of CDOs could have lead to higher risk collateral. Analysing the CDO unwind process, as it is being played out through widening credit spreads and rating downgrades, gives some insight into the current level of credit pricing vis-à-vis the deteriorating economic outlook.

Japan Not Necessarily Employee-Friendly

October 16, 2008

Analysis by: GLG Expert Contributor

Analysis of:If you must get sacked, try to do it in Japan | us.ft.com

1. Article propagates the myth that employees are better protected in Japan than in other industrialized countries. 2. Article fails to point out that, at least for readers of The Financial Times, litigating a wrongful dismissal suit in Japan can be a financial disaster. 3. Employee-friendly workplaces are far fewer in Japan than they were 20 years ago. The economy argues against such workplaces, and public opinion, while strongly in favor of fair treatment of employees, does not translate into legislation or actual practice.

Jonathan FefferPresidentJF Maritime, Inc.

Drop in shipping markets

October 14, 2008

Analysis of:US Banks Move into Covered Bonds | www.efinancialnews.com

Demand for commodities carried bulk diminishing Shipyard order book very large Older vessels retained in servicefor recent higher earnings Finamcial constraintes affecting ship yards and ship owners

Understanding the European Financial Crisis

October 8, 2008

Analysis by: GLG Expert Contributor

Analysis of:Europe's Real Estate Slump May Spark Wave of Local Bank Mergers | www.bloomberg.com

There is a bank capital crisis in Europe; while headlines focus on the largest institutions in trouble (UBS, Fortis, RBS), the problem extends to the smaller banks as well.  The search for capital will radically change the structure of the European financial system.

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