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

December 20, 2008

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!!!!

" An Uneasy Truce"! Companies and Lenders are at a Competitive Stand-Off.

December 16, 2008

Analysis of:Waiving or drowning? | www.economist.com

1. How much influence will Government Agencies Affect the Credit Crisis. Participation at a high level May Not make a viable contribution. 2.Hard choices are evident - Many will not be able to draw down on credit lines and, hence stagnate the operational capacity. 3.A Survival rate , under the circumstances may be as low as twelve (12) months. An enhanced Capitalization Rate is unattainable. 4." At Risk" is the breaching of Loan Covenants. The cost of such a breach will have a Dramatic Affect on all Long Term financial Activity. 5.Many Institutions MUST forge NEW relationships , in order, to explore alternative methods of financing - Not a Likely Alternative. 6.Default rates are extended to the year 2010 and are not avoidable, in many cases, by liquidation. 7.The reality between Financial Distress and Financial Disaster , now, becomes a reality to all players!!!!

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

December 11, 2008

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!

"Quantitative Healing: The Rescue of the U.K. Economy. "Risk or Return"!

December 11, 2008

Analysis of:HSBC to Increase U.K. Mortgage Loans by 20%, Boost Small Business Lending | bloomberg.com

Implications: 1.Risk vs Return - Close the Door to Consumers; Unlikley! 2.A Bank that answers the call for "Help" does the same Without Tapping the Bailout PLan. 3.HSBC uses a Unique Capitalization by funding the venture by way of it's own Resources and, not, that of the Gonernment! 4.A Prime example - small and medium sized firms' in the Far East havw received loans from the mentioned Bank: Recourse or Non-Recourse? 5.A Term coined as "New Money" may well be a prime example for other like-kind Insitutions and a representation of future capitalization. 6.A BRASH comment - " The British Government Bailout has been given to "" FAILED Managements""! No value added to over-all welfare of the System!!!!!!

"No Risk - No Return"! Risk Adversion overcomes the Financial Marketplace.

December 8, 2008

Analysis of:Commerzbank to Close Dresdner Kleinwort U.K. M&A Unit | www.bloomberg.com

Implications: 1.The Sale of Shares deminish and Merger and Acquisition fades in a Downward Spiral Economy. 2.A compilation of data indicates that Merger and Acquisition activity falls by 36% of prior activity. 3.Hence, proprietary trading in the marketplace and asset-based securities are at a stand-off. Fire Sales are , now, a commom denominator!!!!! 4.European Operations have a deficit balance and downsized by a number close to 200,000 employment closures. 5.Investment Banking is , possibly, becoming a lost patron of the Financial Marketplace. 6.Dresdner Klienwort was the Number 13 Advisor on U.K. takeovers and, now, falls by the wayside: Under/Over Capitalization and Management - A concept to be re-defined by the Industry!

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

December 8, 2008

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.

Consumer Confidence at an ALL time Low: Sentiment has Fallen to a Four Year Baseline!

December 4, 2008

Analysis of:RBS Promises Borrowers Six-Month Respite Before Foreclosing on Mortgages | www.bloomberg.com

Implications: 1.The Economic Positioning of Europe has Fallen into a Recession! 2.The Index for the Euro has risen to a new low of 25 minus vs a 24 minus within a thirty day period. 3.Policy Making Institutions MUST seek a Global Recourse to stem the Economic Damage from the Financial Turmoil. 4. Economic Downturns: Manufacturing, Services,Retail ,Consumer Confidence, Exports are a Causation and a redeeming factor MUST be developed! 5.All indicators appear to be dire and a 50 basis point cut may well be in the forecast of the near future! 6.Forecasting indicates a 75 basis point as a realistic outcome.  

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

December 3, 2008

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 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!

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

December 1, 2008

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.

HSBC : Ignors A Quasi - Regulatory , Questionable Policy and Dictates a Direction!

November 27, 2008

Analysis of:HSBC fails to pass on full Bank of England cut | www.timesonline.co.uk

Implications: 1.A Major Financial Banking Insitution will not pass - along a percentage reduction in Interest Rates : A managerial decision wit merit! 2.It may appear as though Government Regulation in the UK is trying to supercede that of management decision-making and, hence, usurp the goals set by management.At best, "Out of Context". 3.A pace-setting decision - not to provide a pass through of a full 1.5% rate reduction. A re-alignment of priorities established by authorities' is not acceptable business policy and reactive signal is sent by a reputable business entity. 4.Lenders have, in effect , closed the window or many first - time borrowers: a calculated decision for that sector not meeting various deposit requirements. A viable decision. 5.A concept that MayBe popular for the consumer sector will not, in all case, be a value-added decision. Management has , now, provided a new Blue Print for the Industry! A positive Financial decision for market correction.

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

November 26, 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

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!

Turmoil in the Financial/Economic Global Markets: One other Incident of Casuality!

November 25, 2008

Analysis of:Macquarie profits plunge 43% | www.ft.com

Implications: 1.A problematic issue goes Unresolved. A Core Issue of either Over/Under Capitalization or Poor Management - " A large Investment Bank's Profits plunge by 43%." $ 1.14 bn of write-downs ? 2.A Change in Corporate Governance is a likely alternative as Operations cannot support Revenue.Interference by whom? Management or Department Staff. 3.A Matter of Accountability: Underlying assets are regeared to fund Distributions. Another indication that Regulatory Intervention maybe required to restore order to the Financial/Economic Markets.Direct Financial aid is Not a Requirement for Success! 4.Liquidity does not appear to be a salient issue for this Institution, however , a clear explanation has not been offered. 5.Additional write-downs appear to be forecasted  ( $400m) , which presents a non-viable situation for Banking Institution, Public and Management.Avoidance of the same should have been the scenerio oresented by the Insitution!  

The Course of Monetary Policy:Irrelavent and Unstable due to "Policy Shifts"!

November 24, 2008

Analysis of:Money Rates Decline in Europe on Cash Injections, Rate Cut Bets | www.bloomberg.com

Implications: 1. The Cost of Borrowing FALLS due to Speculation? Unsound Financial judgement. 2. Money Markets present an appearance of improvement due to the central banks reliance of a liquidity provision: Fact or Fiction?. An unqualified position in the Economic/Financial Market. 3.Massive Cash injections and Reduction in Borrowing costs - a deepening recessionary cloud is in existence without a Sound and Grounded economic scenerio. 4.The Concept of Lending must must, still face the brunt of Trillions of Dollars in writedowns, losses of the sub-prime mortgage collapse and the prospect of additional corporate failures. 5.U.S. Corporations are, still, seeking a "Bailout" and world-wide Traders in the marketplace are "Betting" on an additional fall in the rate structure? A "Financial" catastrophe is evident!

Dominance and Control of Retail Lending: Deutsche Bank's Strategic Positioning!

September 17, 2008

Analysis of:Deutsche Bank swoops on Postbank | uk.reuters.com

Implications: 1. Eventual Objective of the Bank - A complete take-over of Postbank. The Strategy is incremental in nature and a strong, meaningful management posture in the Financial Marketplace. 2."At Risk" is the shareholder/investor as the unknown consequences reveal themselves over a period of time. 3.A primary objective of the Bank may be the ability to raise new capital from the marketplace after losing substantial market share and devaluation of stock value. 4.Some Analyst's have indicated that there is not a fit and, hence,  price and spontaniety become material factors of the decision-making process. 5.The Strategy appears to indicate a two (2) stage process: (A) Obtain a thirty (30) % postion position - now and, (B) At a future date , the remainder of shares fir complete control. 6.The "Final Goal" , as stated by senior management - Secure a Dominant, Strategic position in Europe's largest economy at a minmum cost.It is a matter of Timing and Strategy.

Financial Opportunities Arise: Credit Suisse Seizes the Imbalance caused by Market Dislocation!

September 12, 2008

Analysis of:Credit Suisse sees opportunities in market crisis | www.reuters.com

Implications: 1.Being Financially astute enables the bank to explore opportunities despite the subprime-led financial crisis. 2.It may be , well, expected that other larger banks crushed by the crisis will have to sell a stake of their business. 3.In lieu of losing clients , many other Institutions are experiencin positive financial results resulting in a positive position. 4.Conversely, the credit crisis might be far from over for many other entities in the Financial Sector. 5.All sectors in the Industry are, still, involved by the very nature of the Turmoil.These sectirs include but , are not limited to Private Banking, Investment Banking and Asset Management. 6.As a general statement - the Financial Marketplace is , still, drifting lower as the Banking Industry salvation is being off-set by circumstances created by the concerns for Oil.

Leveraging Buyout Debt, Loans, Credit Swaps Enhances a Negative Financial Outlook!

September 11, 2008

Analysis of:CDO Performance Outlook Cut on Increased Defaults, Moody's Says | www.bloomberg.com

Implications: 1.All Global and Domestic default rates have risen and a strong forecast of a Recession are on the radar screen. 2.Emerging Market Debt and Loans by the Japanese to large coporations appear to be the only issues that have a positive synergy. 3." Emerging Markets " appear to present themselves with a factor of growth. Long and/or Short implications of the same may or may not be predictable. 4.The CDO vehicle is the pooling of income securities and derivatives with the theory of being able to channel income to investors by way of differing credit risks and/or returns: either weak or strong by virtue of the type of investment. 5.A frightening option - the viability of an economic/financial recession is  "high" in most developed ecomomies!

A Higher Level of Balance Sheet Inequities Leads to a 7.5 Billion pd Capitalization Default!

September 8, 2008

Analysis of:Barclays May Face 7.5 Billion-Pound Capital Shortfall | www.bloomberg.com

Implications: 1.Common Equity is low compared to that of Securities Firms.A deviation does exist between the Securities Industry and the Banking Industry. The question, at hand, is the common ground? 2." A Large and Growing Equity Shortfall "has not kept pace with the Financial Institution's ability to absorp losses - hence re-capitalization. 3.It is , entirely possible, that the bank will, indeed, suffer a further erosion of capital due to additional write-downs and increasing consumer debt. 4.The true causation may , still, be unqualified with the exception of a Special Liquidity Scenerio: Allowing British lenders to swap mortgage- backed Securities for Government Bonds. 5.Investors are the ultimate victum as they must search for new methods of judging the Financial Strength of banks after world widwide wtitedowns seem to be the norm in the industry!

Does The Worst Seem to Be Over for the UK Credit Crunch?

September 8, 2008

Analysis of:Mortgage market improves with new market-leading deals | www.timesonline.co.uk

Implications: 1.The Credit Crisis seems to be leveling - off and Mortgage Rates seemed to have fallen into a downward trend. 2.Raising funds on-the-swap market may have relieved the Major burden. The question , at hand, is the length of time for proof positive. 3.Decision Makers have chosen to raise the rate by .75 points - the "new" base rate of 5.75%. 4.The salient issue is the amount of required deposit by the consumer - a deposit of 10% to 25%. The question remains as to reasonableness. 5.Competition between lenders is predicated by the fact that Rates are on a downward slope. 6.The application of the theory applies, primarily , to Fixed Rates and Variable Rates are not at hand!

Capitalistic Opportunity - The Ability to Buy-Out Corporate Pension Funds!

September 5, 2008

Analysis of:Buyouts boost as Pru takes £1bn C&W pensions | business.timesonline.co.uk

Implications: 1.Record breaking deal to off-load Pension Liabilities to Prudential Insurance Comapny: A Boost for the Cable & Wireless Company. Unload the Liability! 2.The LARGEST Transfer of Liabilities to an Insurer: The trend becomes more apparant. Keep the Assets and Transfer the Liabilities. End result: A better Balance Sheet and related ratios. 3.The causation - falling liabilities enhance the sale as the costs associated with the same delete or eliminate themselves. 4.A hugh amount of monies are on the table and approach E 1 billion in pension liabilities. 5.In return for the assumption of the liability- C & W infused E 10  million into the pipeline : a Material amount of money. 6.The original pension provider reduces it's liability by half, while the existing Trustees administer the Fund.

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