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

" Core Investment Banking,Trading, Asset Management and Wealth Management Business - Failed?

December 23, 2008

Analysis by: GLG Expert Contributor

Analysis of:Goldman, UBS, Deutsche, Morgan Stanley Lowered by S&P | www.bloomberg.com

Implications: 1.Writediwns are forcing large Institutions to raise New Capital to Offset Losses and extend a Lack of Willingness to extend Credit! 2.Banks are marking their Securities against an index: A Possible outcome is that losses MayBe 32 times worse than actual performance. 3.Fallacious Indexes have created More Problems than are required. 4.Hugh Writedowns in the Value of Bank Assets have gone to far and are disruptive in nature. 5.The question at hand: " Does Market to the Market in the midst of Financial Turmoil provide a viable alternative"? 6.A Statement of fact: The vast majority of of Banking Institutions are , still, well-capitalized and can support the writedowns and other types of losses. 7.Is a Bail-out scenerio being created for the Industry? 

Harnath SithamrajuConsultantHarnath Sithamraju

Email to Santa Claus

December 18, 2008

Analysis of:Madoff Fallout Spreads Worldwide | www.ft.com

1. If it is too good to be true - investigate. 2.There seems to be no end to skeletons falling from the cupboard. World waits in fear for a punch from the blue. 

Nitish GroverPrincipal, OwnerNitish Grover and Associates

The Madoff Financial System -Neglected Risks, Warnings, Controls and Confused Monetary Policy - Where Are We Headed

December 18, 2008

Analysis of:Madoff Fallout Spreads Worldwide | www.ft.com

The Madoff scam and the disappearance of over $50bn to God knows where is intriguing by itself. The entire scam and the confused monetary and fiscal policies of today point to a system of neglected risks, warnings, ignored controls and  a  lot more. In this analysis I look at what to expect after the Madoff scandal.

The Hedge Fund Model is Dead

December 15, 2008

Analysis by: GLG Expert Contributor

Analysis of:Hedge Funds Shrink by $64 Billion, Eurekahedge Says | www.bloomberg.com

The traditional hedge fund model (2/20) can only function in a world where hedge funds have easy access to leverage.  While some investors can outperform markets to a sufficient degree that they can provide reasonable returns after fees without much leverage, most cannot.  Following the credit problems of 2008 banks will be unwilling to provide sufficient credit to hedge funds to justify the traditional model.  The hedge fund model must change to adapt.

"Entire Re-Capitalization : Selling Common Shares to Raise the Equity Denominator - Dilution?"

December 11, 2008

Analysis by: GLG Expert Contributor

Analysis of:Mitsubishi UFJ to Sell $4.3 Billion in Common Shares to Replenish Capital | bloomberg.com

Implications: 1.Less than one-third of the capitilization rate because of a slump in the stock price: Long or Short term Analytics? 2.A causation factor: decline in domestic shareholdings and overseas investments - an analogy of POOR performance vs management of the Insitution. 3.A Posting of the Lowest quarterly Profits in the last four (4) years. Cotributing factors: (A) losses in stockholdings and (B) RISING BAD-DEBT. A preventable scenerio by management! 4.Unwarranted investments - a 21% stake in Morgan Stanley and billions to make UnionBanCal Corp a subsidiary. Wisdom or Lack of Foresight? 5.The end result - a contraction of Japan's Gross Domestic Product. The question at hand - " A recoverable commodity in the foreseable future"?. A make or break situation!

Gulf SWFs Investment Assumptions incorrect

December 8, 2008

Analysis by: GLG Expert Contributor

Analysis of:Dubai International Capital looks east as it confirms plans to retreat from Western markets | business.timesonline.co.uk

 Gulf and other SWFs have been burned by western investments and will be investing at home because they feel emerging markets are less indebted so their recovery could be faster. This is incorrect. Information, regulatory systems, bankruptcy systems, corporate structures make it very hard to determine the nature and extent of the debt and the probability of recovery which could be near zero rather than the US rate of 40% Like the post crises Asian Tiger economies, recovery of emerging markets will be much slower than in the US 

Patrick YoungFounder and ChairmanDerivatives Vision

UK war Loans A Trusty Tool

December 5, 2008

Analysis of:Hedge Fund Manager Hendry Bets on Deflation With U.K. War Loans | www.bloomberg.com

The perpetuals in the UK Gilt market have long been sleepy but have an intriguing habit of coming alive once a generation or thereabouts to provide a wonderful trading opportunity.

Role of MBA in global meltdown

December 5, 2008

Analysis by: GLG Expert Contributor

Analysis of:Global financial meltdown spreads | www.indianexpress.com

When investment market signalled the downward displacement of NAV, and when the carefully invested funds in mutual and hedge, dangled on the horizon over the past few months, rigorous activities of remedy did not save in time of volatility. Many banks downed the shutters with a note of bankrupt declaration. Suicidal attempts on the rise across the US and several million dollars lost value as on this day. What remedy should have been taken and who is to be blamed? Pumping of billions of dollars of fresh money into the pool alone is not sufficient but how it is to be streamlined and countered? Owing to the carnage, job cuts have sent shock waves, unrecoverable debts have added burden, loan interest have soared, fetching term deposit interest has dipped down, and basic living is shattered.

Economic Growth vs High Inflation: A Trade-Off to Counter an Economic Slowdown! Counterproductive?

December 3, 2008

Analysis by: GLG Expert Contributor

Analysis of:Polish Central Bank Cuts Main Interest Rate to 5.75% | www.bloomberg.com

Implications: 1.A Material Consequence - Slower Economic Growth. At best,  a mis-leading economic indicator. 2.An Expectation of a declining budget deficit or the alternative:The Government will not Increase the Budget Deficit in the coming year. 3.The most salient issue facing the Economy of Poland is wage pressure and pricing policy backed by High Consumption. 4.A Risk Mitigation Policy should be strictly Enforced by Government Policy and Mandated by Policy! 5.A Reactive concern is that of a Recession as a consequence of the Lack of Trading within the economy:Governmental Authorities must navigate the landscape to avoid failure. 6.A 6.7% Expansion of the Economic Scenerio is likely to be a causation Factor in the Trading Patterns of the Country!!!!

Global Recession! Acknowledgement by Senior Management and the Financial Consequence.

December 1, 2008

Analysis by: GLG Expert Contributor

Analysis of:Temasek Plans Pay Cut, Anticipates Global Recession | www.bloomberg.com

Implications: 1.A Senior Singapore Management Team anticipates a Global Recession beyond 2009 and accepts the ultimate sacrifice:Voluteering a 15% - 25% cut.A concept , which, is NOT readily acceptable by other like-kind Insitutions. 2. Investment in US and British troubled Financial Institutions turn sour and Asian Management accepts it's share of responsibilty: Ethical Standards prevail and ,perhaps, set a New - Higher Bar for all Global Firms. 3.Cost-cutting is, ordinarily assumed by reductions in staff positions and operations.Accountability should, surely, be assessed and assumed by Senior Management.Temasek sets a High-Road and the Bar,indeed, changes in a Positive Direction. Refreshing, at least - High Ethical Standards, at best. 4.While , Administrative charges have risen by 6.4% to $8.6 million, profits's have doubled to $18.2 billion by asset sales  countered by a slowing of stock market investments. 5. Knowledgeability, Wisdom and a Reputable STRATEGY prevail!

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