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

There are at least three reasons China shall be worried about the safety of U.S. debt

March 16, 2009

Analysis by: GLG Expert Contributor

Analysis of:China worried about safety of U.S. debt | money.cnn.com

By June China is the largest foreign holder of US securities of $1.2 trillion. 45% of the holdings are in long-term treasuries. US is running a deficit of $765 billion for the first 5 fiscal months of 2009. Obama and his government is going to pump more money hoping to stimulate the economy. Chinese government is worried and shall be worried when simply looking into these numbers. Its investment is exposed to risks.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

Investments, Hedge Funds and the Future Outlook

March 16, 2009

Analysis of:Hedge Funds to Cut 20,000 Jobs in 2009 | economictimes.indiatimes.com

The hedge fund outlook is changing fast and the glory of the past is giving way to the gloom of the present. In an era of disappearing jobs and declining economies the money available for hedge investments is on a downswing. In this emerging situation I look at where this new trend may lead to.

There are many traps to letting an insurer bail a muni bond out

March 12, 2009

Analysis by: GLG Expert Contributor

Analysis of:Buffett Warns Insured Muni Bonds Could Be Next Shoe to Drop | www.tradingmarkets.com

First, and foremost, munis are by and large extremely safe. No state general obligation has ever defaulted. Second, most insured bonds are for low rated revenue anticipation notes and bonds. Things like hospitals and transportation (tolls). School districts are another popular group. They expect to make payments based on revenue from operations. For the most part they do. The big question is whether insurers have enough reserves to swallow a sudden rash of failures.  Due to the next bullet point below, that may not be such a problem. Third, for an issuer to let an insurer bail them out will translate into failure and no chance of acquiring any further funding, except by taxpayers in rare instances (some school districts). That stigma alone would put the issuer out of business since they obviously don't have the necessary cash flows to cover maturing bonds or probably even day-to-day operations.

Really bad banks: China’s Asset Management Companies

March 10, 2009

Analysis by: GLG Expert Contributor

Analysis of:Amending bank bailouts | www.breakingviews.com

The best models for successful bank bailouts were the US's Resolution Trust Company and Sweden's Securum. Both used public funds, but private management to lower bad debts. The worst model was used by the big four Chinese state owned banks, which have not gotten rid of the bad loans from the 1999-2002 recession. No doubt the bad debts incurred by Chinese state owned banks since 2002 lead to questions of their solvency. 

Martin KamarckPrincipalMAKO Consulting LLC

Beyond Credit Enhancement: The Value of Risk Management

March 9, 2009

Analysis of:Buffett Warns Insured Muni Bonds Could Be Next Shoe to Drop | www.tradingmarkets.com

The Bond Buyer headline: A default is a default, is a default, is a default. For bond issues most vulnerable to fiscal stresses, monoline insurers "write themselves into the indenture," with surveillance rights, reporting requirements and -- most imprtantly -- covenants and remedies more akin to an (old fashioned) bank loan than a bond issue. Especially with their portfolios of insured risks under stress, the monolines will aggressively exercise those rights as proxy for bondholders, so insured bondholders should be, generally, better protected. If, in his haste to cash in on the market opportunity in muni bond insurance, Buffett missed this basic element of the business, then BHAC's loss experience could be much worse than predicted.

Don't Pay The Banks A Penny...Pay The Tax Payers!!

February 27, 2009

Analysis by: GLG Expert Contributor

Analysis of:Amending bank bailouts | www.breakingviews.com

Reduce mortgage debt, put more money into tax payers pockets, kick start the economy, reduce mortgage debt AND increase affordability!

Patrick YoungFounder and ChairmanDerivatives Vision

Ossie Grubel - A Man For All Seasons & All Swiss Banks?

February 26, 2009

Analysis of:Financial Times FT.com | www.ft.com

Oswald Grubel is a fascinating pair of safe hands for UBS at a time of turmoil. Yet the move represents a risk to Grubel whose reputation upon retirement as Credit Suisse CEO was simply outstanding.

Challenging Year for Thomson Reuters, Bloomberg and Financial Information/Analysis Market

February 17, 2009

Analysis by: GLG Expert Contributor

Analysis of:Financial-data providers face a 2009 revenue dip | online.wsj.com

A global economic crisis, a restructuring of the Investment Banking industry, and a reduction from the 'Big Three' market data providers to the 'Big Two' raises questions as to the resiliency and possible further contraction within the financial data industry.

Russia faces China for support

February 17, 2009

Analysis by: GLG Expert Contributor

Analysis of:RPT-Russia seeks to unlock $25 bln China oil loan talks | www.reuters.com

This lasting negotiating matter mirrors how trouble Russia is facing and what China has learned from its experiences dealing with Russia in the past. The possible deal covers financing, oil trading, and cross border cooperation in the oil and gas resources. Russia needs China now much more than China does.

Diran MajarianManaging DirectorAmalia Tankers Inc

ATM share offering: another 'bail-out' technique to recapitalize shipping companies

February 12, 2009

Analysis of:Owners 'drip feed' shares | www.tradewinds.no

'At the market' offerings (ATM's) are a means to raise capital in bad markets.  Ailing publicly listed shipping companies are using this technique to raise capital to recapitalize their impaired balance sheets. These offering when used to pay down debt and recapitalize are highly dilutive.  Investors should scrutinize carefully the longer term prospects of these companies.  At best they may end up owning half their original share of the company with an eventual recovery.  At worst, they may lose everything if recovery is slow to come to the shipping markets.

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