GLG News by Sub Prime Mortgage Backed Securities Pricing Trend Experts

Maureen BoltonPrincipalGlobal Capital Access

Will Government's Promotion of Covered Bonds as Mortgage Funding Mechanisms Bring Back Investors to US Mortgage Market?

July 30, 2008

Analysis of:Treasury and Banks Kick Start Home Financing Tool | www.reuters.com

This article is important because it announces and describes: a) the US Treasury's support of covered bonds, an on-balance sheet method of funding mortgage originations, as an alternative to off-balance sheet mortgage securitizations or mbs b) Four major US banks announcements of their intentions to bring covered bond issues to market in the near future and and their commitment to provide pricing information in order to facilitate the trading of covered bonds and c) the FDIC's support of a covered bond market and its policy statement describing how it would treat covered bond investors in the event that an issuing bank become insolvent. The government and market participant actions described in the article are remarkable because they appear to contemplate an on-going involvement of the US Treasury and FDIC in the funding of mortgages that is more hands-on than any such actions to date, creating a defacto US govt gtd covered bond market.

Maureen BoltonPrincipalGlobal Capital Access

Like any proud shopper, Temasek is happy to have recognised a bargain in Merrill

January 7, 2008

Analysis of:Temasek Supports Merrill Despite Sub-Prime Losses | www.bankingtimes.co.uk

This article summarises Temasek's recent equity investment in Merrill, including the price paid and future intentions.  Temasek appears to be more than satisfied with its investment and is inclined toward similar investments (financial institutions undervalued due to over-estimates of subprime/CDO related losses) in the near future.

Maureen BoltonPrincipalGlobal Capital Access

Liquidity Sponge Could Be Full After Last Week's Leveraged Loan Sales

October 15, 2007

Analysis of:Debt on Sale: Banks Grease | online.wsj.com

This article is important because it reveals the current efforts of banks to sell off leveraged loans and contrasts such efforts with past sales.  The fact that banks are offering price guarantees and discounts to buyers of loans related to buyouts of recession-proof companies is an indication that getting rid of the enormous, committed leveraged loan pipeline will be much more difficult than anticipated. In addition to detailing the type of terms the banks were offering sellers, the article also contains a terrific illustration of the  current road show environment  -still crowded- and attendees -KKR attended and bought loans related to its very own deal-resulting in the borrower merging with the lender. 

Maureen BoltonPrincipalGlobal Capital Access

Once Again, UBS Gets Hurt By Following the Herd

October 4, 2007

Analysis of:UBS falls victim to credit squeeze | www.ft.com

This article is important not only because it announces a US$1.3 billion write-down of UBS' fixed income portfolio, but because it parallels the situation with that of Bear Stearns' (huge write-downs followed by the "departure" of a key executive) and questions whether there are more of such "disclosures" in the coming week as Merrill Lynch, Deutsche Bank and others announce their third quarter earnings.

Maureen BoltonPrincipalGlobal Capital Access

Will China's rich enrich Morgan Stanley

September 25, 2007

Analysis of:Morgan Stanley to buy stake in China's Jutian Fund | www.reuters.com

This article announcing Morgan Stanley's plans to invest in Jutian Fund Management is important because it reveals another component of Morgan Stanley's investment strategy.   It also indicates that wealthy Chinese may be a more lucrative target for foreign investors, as opposed to the potential billion retail accounts.

Maureen BoltonPrincipalGlobal Capital Access

Carribean for Customer Service;India for Intelligence

September 24, 2007

Analysis of:Forget India; Call Centers Boom in Caribbean | abcnews.go.com

This article is important because it describes the nearly five-fold rise in call center businesses in Carribean countries such as Jamaica and the Dominican Republic.  The article also details the positive economic impact that opening one call center can have on such small countries.  Finally, an optimistic prediction that such call centers can eventually evolve into more profitable work, such as creating web sites or assisting with IT problems is made along with the consequent mpact on the islands' employment levels and wages.

Maureen BoltonPrincipalGlobal Capital Access

C-Bass breaks up Radian/MGIC marriage

September 10, 2007

Analysis of:MGIC, Radian End Merger Deal As Joint Venture Sustains Losses | online.wsj.com

This article is important because it announces the break up of what was to be one of the most synergistic mergers in mortgage-insurance history.  MGIC with its portfolio of traditional mortgage and bond insurance business  coupled with a bit of international exposure and Radian with its new product development skills and ability to rapidly respond to clients and assist them in assessing and pricing risk.  Unfortunately Radian lost MGIC's interest when their in-housen expertise at pricing and profiting from distressed mortgages -C-Bass lost  US$1 billion in market value due to investments in non-investment grade subprime mbs.

Maureen BoltonPrincipalGlobal Capital Access

Schwartz May Be Smooth, But Spector Succeeded In Creating Bear Stearns' Primary Source of Growth

August 8, 2007

Analysis of:Bear Stearns Heir Apparent Tries to Restore Some Faith | www.nytimes.com

This article is important because it introduces the reader to Alan D. Schwartz, the new sole President of Bear Stearns, a dominant player in the mbs markets and raises the question of whether he can assure bankers regarding Bear's ability to retain the same access to the same money at the same rates.  The article also questions whether Bear Stearns can be successfully run by an investment banker and whether an outside investor may be solicited or decide to take advantage of Bear's lower stock price and take a sizeable position.  Current market conditions have caused the collapse of two hedge funds run by Bear and a crisis in confidence among its lenders. 

Maureen BoltonPrincipalGlobal Capital Access

China's Media Mirage

July 26, 2007

Analysis of:Cracks in the Great Wall of China | www.theglobalguru.com

Recent discoveries regarding Chinese distribution of poisonous toothpaste, dog food and candy should cause us to reassess China's position as an Economic powerhouse. Sure, the Japanese and Koreans once made dodgy products, but their mistakes were due to their learning curve, as opposed to a deliberate deception in order to save money by swapping poisonous materials for more expensive ones. In this article, Nicholas Vardy cogently compares the mirage of China created by the media with the cold reality of its shaky economic state.

Maureen BoltonPrincipalGlobal Capital Access

The Fed's estimates of subprime credit losses are irresponsible.

July 24, 2007

Analysis of:Subprime Losses Could Cost $100 Billion | newsmax.com

This article summarizes Fed Chief Ben Bernanke's recent testimony last week before the Senate Banking Committee and the House of Representatives. the Subprime Mortgage/housing market and the expansion of the Federal Regulators' role in monitoring mortgage lenders. Mr. Bernanke's remarks regarding both of these subjects are extremely significant, as hundreds of billions of subprime mbs and CDOs invested in such securities will be impacted by how the Fed views the damage caused by improper lending/underwriting and describes its impact on the overall potential for continued economic growth.  

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