Mr. Marshall Mays

GLG News by Mr. Marshall Mays, Founder & Director

GLG News is now G+ Insights

G+ is a community for professionals, academics and entrepreneurs to connect through online discussions and in-person meetings. You will continue to see G+ Insights (formerly GLG News) here as well as on the G+ website, where you can share and discuss the G+ Insights you read.

Volatility is becoming "normal" again

October 2, 2009

Analysis of:After the storm – A “new normal” for the world economy | www.economist.com

1 - This opinion-leader concentrates on needed changes in public policy, which are unlikely to happen. What will happen to the markets during this period of waffle?2 - Currency management will matter, as another way governments cheat, but the very shift from emergency priming to actual use of funds will shake up the capital markets.3 - Beware the consequences of shifting consumption patterns. You may get what you wish for!

The new sub-prime market - another slow-motion disaster

October 1, 2009

Analysis of:Asian freight lines face threat of seizure | www.ft.com

1. Ship financing has usually been risky business, but during the 2003-07 go-go years that corresponded with the debt bubble it all seemed free and easy.2.Like US commercial property, ship construction got a lot of non-bank money, so now some funds will suffer - but so will the CDOs the bankers stuffed with ship credits.3. As the Baltic Dry Index plot suggests, a "death spiral" has begun in this asset class and a lot of balance sheets will suffer horribly.

Global capacity adjustment - not just a China PR stunt

September 30, 2009

Analysis of:China moves to curb industrial capacity | www.ft.com

1. Overcapacity is a recurring Chinese problem, in the name of employment management and overall growth. 2. High export dependency (42% in 4Q08) exposed the economy to infrastructure bottlenecks, trade friction and increased risk of oversteering. 3. The need to adjust is real, but the bigger risks are social fragmentation, a global loss of confidence in the China growth story and severely reduced manoeuvering room in the international area.

Near-term short on Daiwa is in order

September 14, 2009

Analysis of:Daiwa to buy out SMFG from venture for $2.2 billion | uk.reuters.com

1. A large, research-driven brokerage that has never fully adjusted to the realities of the post-90s Japan needed the deal-making and distribution muscle of SMFG.2. Its tightening of the relationship over a year ago was based on recognizing that weakness.3. The buy-out reflects a refusal of Daiwa leadership to try merging its culture with that of Nikko Cordial and the aggressive Sumitomo. A go-it alone strategy will be difficult - and lead to a new partner next year.

Perpetual mispricing machine - Durable misconceptions about Asia’s markets

July 1, 2009

Analysis of:Asian stocks struggle to gain ground | www.ft.com

1. China's growth, a two-decade-old story, has been rewarding on average to those allowed to tap it, but access price has been high and the disappointments painful. We face huge risk of another one now, at a time other exporters and financial investors can least afford it. When might a publicly disclosed slow-down arise? Will bank performance be the symptom or the cause? 2. Japan is clearly more linked to China's growth than other rich countries, so China's problems are Japan's. Can the accumulation of improvements in Japan make up for the weight of a continued slow-down in PRC demand? 3. If the current risk is no worse than that elsewhere, what about the long term prospects? Are they superior to those elsewhere? Are current earnings multiples justified? If not now, when?

Phoney Covered Bonds - Another Bit of Con-Artistry by Korea, Inc

May 8, 2009

Analysis of:Kookmin sells $1 bln worth of covered bonds | www.reuters.com

1. Korean regulators have pushed Kookmin as a tool in developing the consumer finance market and now must bail it out; 2. The big-3 rating agencies may not have learned their CDO lessons; 3. The arrival of a Covered Bond market in Asia may have been delayed by this bit of expediency.

Opportunity in Asia's Energy Sector

May 4, 2009

Analysis of:Industry Insight: Resourcefulness is not enough | linux.emerging-alpha.com

1) Our opinion remains that global demand will remain subdued for several more years, with many signs of spring followed by a late frost. 2) Extra fuel in the bunker appears a better coping strategy than stocking up the F&B larder for this year. 3) The high cyclicality of all three segments of the Resources sector, amplified by coverage trends and institutional investor mood swings, make them a good means of gaining exposure to the demographic trends of the region. But the problem for many of the sub-segments is that the downside is not symmetrical with the upside, implying a risky snack – but generally less so for Chinese coal. Although, the beta for the whole sector is higher than 1.2 can reach 1.8, so the snack is definitely not free.

Nearing the End of a Sucker Rally

April 17, 2009

Analysis of:Asian markets trim gains after weaker China growth | www.telegraph.co.uk

1. This article under-plays the importance of the global recession for Asia; thus, it misrepresents the risks and opportunities in Asia. 2. Its expert quotes reflect sell-side hopes and time frame, not the longer cycle in which this problem is unwinding. 3. By looking at the bigger picture of consumer demand for Asian production, and the way it is priced in Asia (vs Europe or the US), one can see that the last 6-week rally is petering out, as the victory of experience over hope. Yes, we can, but not this quarter.

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