All GLG News Analyses Filed Under: Mortgages, Consumer & Specialty Finance

Denmark Lenders: Short on Money, Liquidity and Monetary Policy!

December 8, 2008

Analysis by: GLG Expert Contributor

Analysis of:Danish Mortgage Lenders May Struggle to Sell Notes at Annual Auctions | www.bloomberg.com

Implications: 1. Global Financial Turmoil devours the Investors appetite - $67.5 billion of mortgage notes on the auction block! 2.The Governmental Agency must shore - up the market by allowing pension funds re-calculate future obligations of available Pension Funds. Financing away from the Balance Sheet? Government Policy supercedes sound financial policy. 3.A Critical Mistake: Pension Funds hold 25% to 35% 0f ALL outstanding Mortgage Debt! 4.Implications of the same: Investors have a tendency to sell Everything with the Exception of their Safest Assets. 5.All Foreign Investors and Mutual Funds will exploit the opportunity and cut the Holdings of Danish Mortgages. A Short Term fix with Long Term consequences! 6. A Non-option is , now, at hand  - Social Pensions will provide the vehicle of Financial Support. At best, a non-viable option.

The Three T's: Transparency, Transparency and Transparency

December 8, 2008

Analysis by: GLG Expert Contributor

Analysis of:Banks to defy Government and raise mortgages rates | www.timesonline.co.uk

Until a few months ago, real estate benefited from the trusting and often naively unquestioning acquiescence of investors. When property and financial markets start moving again, the strategic long-term investors will be much more demanding in what they require from their interlocutors and the marketplace infrastructure itself. Transparency will be a prerequisite. Trust and confidence must follow before they will even consider real estate as a competitive investment asset. Value in future transactions will more rarely be a function of speculative anticipation of rapid market growth, but of the proper evaluation of the market risk inherent in the net revenue stream and of the reliability of the supporting data itself.

Nicholas KrsnichPresident & Portfolio ManagerJMN Financial LLC

2nd Chance

December 5, 2008

Analysis of:2nd Chance | www.jmnfinancial.com

Patterned after the depressions "New Deal", "2nd Chance" offers suggestions for bank recapitalization, handling of foreclosed homes, and restarting a struggling RMBS securities market.

Howard LiggettPresident and CEODistressed Real Estate Consulting Services, Inc.

Credit Default Swaps Are Dangerous Should the Waters Rise

December 5, 2008

Analysis of:N.Y. Approves ICE Credit-Default Swap Clearing Plan (Update 2) | www.bloomberg.com

Credit default swaps have been a major element in the ongoing financial crisis. That doesn't mean it's necessarily easy to understand just what the problem is with them.  In an effort to gain clarity I have engaged in a self-directed study on the topic with the following analogy to report.

Small Business: Short- Term Fixes Lending a Hand to Small Business! Temporary!

December 1, 2008

Analysis by: GLG Expert Contributor

Analysis of:Bank lending to small businesses rises 10% | business.timesonline.co.uk

Implications: 1.A Patch to Survive the Recession:A Government reaction - Real or Imagined? 2.The Liquidity Position ( Cash Flow) will  improve with the enhancement of a Small Loan Guarantee "Scheme" and an extended opportunity to carry - back losses to provide relief.A Short Term Fix. 3.It is imperative that the Governmental Agencies find cooperation with all related members in the private banking sector. 4.A material reliance upon High Street Banks " To make the process work in practice"! 5.Many conditional business practices must, also , be in place: (A) Measures to help UK Exporters, (B) Tax Relief - defer Small Business Tax Payments Indefinitely,The ability to deal effectively with a reduction in unemployment! 6.Governmet Contracts appear to be the only source of revenue stability.

Should the Government Help Homeowners?

November 18, 2008

Analysis by: GLG Expert Contributor

Analysis of:U.S. Steps Up Help for Homeowners | online.wsj.com

Government  help for homeowners is proposed to try and alleviate the public resentment that has arisen because of the $700 billion bailout of the financial system. Such help is not required and indeed risks setting  dangerous precedents.

The Next Shoe to Fall

November 13, 2008

Analysis by: GLG Expert Contributor

Analysis of:Credit card firms attacked for hiking rates to 17% | www.timesonline.co.uk

What's next ?  How about a credit card meltdown. With many people carrying $15,000 - $20,000 of revolving debt on multiple credit cards, it is now time to pay the piper. What seemed easy with low interest rates of 3%-4%, or with " teaser rates" of  0%, have now become a $3,400 a year expense, without paying the principle down by one dollar. Add to that higher minimum monthly payments, the risk of missing a payment with it's fee's, and more importantly, the risk of universal default. Will Hank Paulson bail out the plastic brigade with twenty or thirty billion to tide them over till better days? If not, we risk a disaster of magnanimous proportions for the working lower middle class who borrowed to finance an upwardly mobile life style they could not otherwise afford.                        

Banks to defy Government and raise mortgages rates

November 11, 2008

Analysis by: GLG Expert Contributor

Analysis of:Banks to defy Government and raise mortgages rates | www.timesonline.co.uk

Banks want to see more from the government as far as repaying these delinquent mortgage loans before they are confident in lending to consumers again. Banks are keeping interest rates higher until these see more funds released from the government and there is clear direction from the Presidential office as to what are the future pans for the financial sectors of the economy. Mortgage rates will come down as investor confidence is restored through the lending channels.

Mark MariottiChief Executive OfficerFuture Management Holdings Inc

Here We Go Again

November 10, 2008

Analysis of:Banks to defy Government and raise mortgages rates | www.timesonline.co.uk

Peter Mandelson, the UK Business Secretary, added to the pressure on lenders to pass on the Bank of England's expected base rate cut to homeowners, saying that that banks who did not would face a customer backlash. Henry M. Paulson Jr., the US Treasury Secretary plans to call for the Federal Reserve to be given new, explicit powers to intervene in the workings of Wall Street firms to protect the financial system, adapting his vision of how the financial world should be regulated to reflect the lessons of the collapse of Bear Stearns.

Douglas RossbachPartnerRossbach Consulting

There is a fair solution to the housing crisis without government bailouts

October 30, 2008

Analysis of:Why the Feds Rescue Banks, Not Homeowners | www.usnews.com

There is growing momentum in Washington (that is now being whipped into a frenzy by the upcoming elections) to help struggling homeowners directly by buying and or modifying their mortgages.  The government has so far failed to do this, preferring instead to pump capital and liquidity into the banking system.  The government's reluctance to get involved with homeowners is understandable.  The problem is massive and messy.  Five million loans are headed for foreclosure, many of these loans are sitting in securitizations and it is difficult to determine who controls them, and the government does not want to incur the moral hazard of helping or encouraging irresponsible behavior on the part of borrowers or lenders.

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