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Valuation of Banks and Gov. Supported Brokers Will Fall; Capital Costs Rise

January 22, 2010

Analysis of:Obama Moves to Limit 'Reckless Risks' of Banks - New York Times | economix.blogs.nytimes.com

Mr. Volcker ignited a firestorm over the question: why and when should the US tax payer insure banks and brokers who, by virtue of such guaranty, have no real risk of bankruptcy reorganization should they over extend their balance sheets. Mr. Volcker also questions the size and independent earnings power of such institutions as a primary determinant and cushion for systemic risk. He is correct. Valuations of banks and FDIC participating broker dealers must fall.

Mr. Wen is correct to be worried about the US Balance Sheet

March 19, 2009

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

Mr. Wen's remarks show an awareness about the potential inability of the US Treasury and Congress to constrain the growth of both US debt and the Federal Reserve Balance Sheet. The CDS market does agree with Mr. Wen by expanding its insurance premium to 97 basis points for US Government Debt.

Central Bankers Have No Choice But To Respond

September 30, 2008

Analysis of:European Central Banks Offer More Dollars From Fed | www.bloomberg.com

Central bankers must address the impending year end liquidity crisis now rather than waiting for its arrival of December. In addition, any structural reforms through newly established vehicles contemplated by the U. S. Treasury and the Federal Reserve must be in place and operating before year end arrives.

Central bankers must address the impending year end liquidity cycle now

September 29, 2008

Analysis of:Central Banks in Japan, Australia Pump $33 Billion Into Financial Markets | www.bloomberg.com

This issue could be both a liquidity issue and a credit quality issue

March 3, 2008

Analysis of:A Lender Halts U.S.-Backed Student Loans | www.nytimes.com

The announcement by the State of Pennsylvania is reflective of at least two issues: the failed market for auction priced student loans, and the deteriorating balance sheets of some of the lenders. Although there is a reference to the reduced Federal subsidies, this change has been in the market since the second quarter of last year. Consequently it is not a big surprise. There are several other elements at work, however.

Private equity returns and the leveraged loan market

February 7, 2008

Analysis of:Private equity investment returns slow down | www.financialnews-us.com

Private equity returns must revert to their traditional levels. The availability of leveraged loans for private equity will be reasonable for transactions under $ 1 billion in size.

Legg Mason: the Firm versus the Fund

December 10, 2007

Analysis of:Bill Millers New Streak | biz.yahoo.com

Do not forget to look at the whole picture for Legg Mason. There is a firm as well.

Response to Citigroup Capital Injection

November 28, 2007

Analysis of:Citigroup to Raise $7.5 Billion From Abu Dhabi State | www.bloomberg.com

This is really only the first round in Citi's restructuring.

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