GLG News by LBO and M&A Accounting & Tax Consultants

Patrick YoungFounder and ChairmanDerivatives Vision

Debt Worries Will Chill Brokerage Investors

December 2, 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

Debt issues often follow major periods of market volatility and all brokers with activities in leveraged products have some degree of risk. With market confidence fragile in the wake of various risk management issues in the brokerage world this year, investors are going to remain very nervous about companies in this sector, particularly those with a principal risk of any kind.

Patrick YoungFounder and ChairmanDerivatives Vision

Where MF Global Went, Will Man Follow?

November 17, 2008

Analysis of:Man Group stocks slump on shock performance | business.timesonline.co.uk

Man Group is suffering a lack of investor confidence that may not be unrelated to the aftermath of the somewhat disastrous first listed year of its MF Global subsidiary.

Patrick YoungFounder and ChairmanDerivatives Vision

Hardly Surprising...

November 17, 2008

Analysis of:Bank of Ireland scraps dividend as profits fall | business.timesonline.co.uk

Bank of Ireland is in a mess and has been working hard to counteract a huge property bubble

Patrick YoungFounder and ChairmanDerivatives Vision

Risk Transfer Is A Wondrous Thing!

November 17, 2008

Analysis of:Derivatives:Giving Credit Where It is Due | www.economist.com

CDS trading is a very useful tool for risk transfer. However, the fundamental precept of building houses on weak foundations or muddy ground remains an issue. There is a future for the marketplace without needing to resort to bans or major restrictions. A sound (and ideally open) CCP regime is a pre-requisite for the future of the marketplace.

Patrick YoungFounder and ChairmanDerivatives Vision

The Perils of A Single Product Line

November 17, 2008

Analysis of:LSE shares dive after cancelling buyback | business.timesonline.co.uk

LSE has significant issues in dealing with competition Lack of a significant derivatives platform leaves the exchange with a relative lack of options.

Nathaniel FinkinManaging Partner and PrincipalFinkin Capital Advisors

Financials trimming payrolls should be no surprise

October 3, 2008

Analysis of:HSBC Announces 1200 Tops Job Cut | abclive.in

I don't believe that HSBC's decision to eliminate about .3% of its workforce should surprise anyone, nor does it indicate some sort of underlying micro-level weakness at the firm.  Financial firms across the globe have to carefully analyze their most expensive assets - people, in light of the current situation and the short & intermediate term forecasts

Nathaniel FinkinManaging Partner and PrincipalFinkin Capital Advisors

Outright manipulation of the CDS marketplace in action

September 18, 2008

Analysis of:Leveraged Loan Risk Rises on Lehman Auction, LevX Index Shows | www.bloomberg.com

The marketplace for credit default swaps is being affected in part by rumors and irrational conduct, in also in part by a very coordinated effort to capitalized upon the effect of short positions on the perception of a firm's repayment ability.

John SalomoneManaging DirectorStructured Finance International, LLC

Factor In Reality

August 18, 2008

Analysis of:Bank Debt Risk Rises as Writedowns, Losses Exceed $500 Billion | www.bloomberg.com

Write downs are not actual losses and a mark-to-market loss is not a cash loss. Widening spreads in the credit default market, although real, must be recognized for what they are; namely, market monetization of perceived risks compared to recent backwards looking asset and cash flow valuations. Recovery in the general credit market should produce non-cash reported earnings increases starting in 2009 and similar narrowing of the exact credit default spreads that widened recently.

Patrick YoungFounder and ChairmanDerivatives Vision

Think Again Indeed!

July 29, 2008

Analysis of:Regulation of rating agencies is no panacea | www.ft.com

The idea of regulation for ratings agencies can appear a seductive panacea but it is riddled with dangerous implications...

Nathaniel FinkinManaging Partner and PrincipalFinkin Capital Advisors

The worst is likely still to come for consumer credit delinquency and charge offs

July 14, 2008

Analysis of:Credit Card Delinquency and Write-off Rates Still Below Historic Highs | www.nasdaq.com

While it is true that credit card delinquencies and charge offs are not at their historic peaks, there is considerable evidence that supports the argument that we have not yet seen the bottom of the consumer credit crisis, and that delinquencies and charge offs will likely increase in the next 12 months. While charge offs and delinquencies are not at all-time highs, consumer sentiment and consumer confidence are at or approaching all-time lows.  The impact of the all-time high prices of gasoline and energy have yet to fully impact consumer spending; that however will become much more evident in the months to come.  It is safe to presume that the continued drain of funds otherwise used for discretionary spending or simple maintenance living will leave many borrowers "upside down" and unable to meet their monthly obligations.

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