The latest news, blogs and commentary about people, events and companies in the securities financing industry. Free registration at http://longshortreport.com

1. LONGSHORTREPORT ISSUE 2
MAY 2010
The latest news, blogs and commentary about people, events and companies in the securities financing industry: www.longshortreport.com
Will Duff Gordon 25th May
The man from Pru
We are always keen to announced. Peer Aviva sees 24% of their
ARTICLES shine a light on the shares in the hands of big asset managers
facts when it comes to and this is little changed. It will be
BREVAN HOWARD’S highly publicized interesting to see if institutional investors
NEW $200 MILLION
COMMODITIES HEDGE M&A activity. UK continue to sell their holdings in PRU as
FUND OPENS TO NEW listed Prudential's events unfold.
INVESTORS attempted takeover of
Brevan Howard Asset AIG's Asian Mark Faulkner 20th May
Management LLP has begun insurance arm is in This is politics, not
raising assets from outside the news constantly. New news is that economics
investors for its new Brevan they have listed shares in Hong Kong There is tangible fear in
Howard Commodities Strategies and Singapore very recently. So what are the markets that has
Master Fund Ltd. ... read more the facts and what is going on from a been created by the
about Brevan Howard online short interest perspective? German
announcement of short
DEUTSCHE BANK HIRES The short base in PRU in London is sale bans and
PRIME FINANCE RISK 11.5% which is an increase of 60% on exacerbated by the
MANAGE where it was a week ago. 3 possible possibility of a pan
Last month, for example,
European application.
Deutsche Bank hired risk
As I write the markets across Europe
specialist Richard Newman from
are down over 2% and the CNBC
JP Morgan to become its senior
banner reads “ European Shares Tank on
risk manager for global prime
Shorting ban fears”
finance. ... read more about
Deutsche Bank online
Playing to the German political
grandstand is not a good way to establish
CITI LAUNCHES a coherent economic policy.
COLLATERAL reasons for this large increase: 1.
MANAGEMENT SERVICE Speculation that this deal is harmful to
Rajen M. Shah was replaced as I never thought I’d hear myself say
PRU and will lower its share price over
global head of custody at JP this BUT I agree with French Economy
the medium term (does this explain
Morgan at the end of 2009 by Minister Christine Lagarde, who has
Lansdowne's publicly disclosed short
Nick Rudenstine, global securities spoken out against the German move
position?). 2. Are sub underwriting banks
lending product head. ... read and confirmed that “France would not be
shorting shares in the PRU to hedge
more about Nick Rudenstine following a German move to ban the
themselves should the right issue not be
online naked short-selling of sovereign debt.” -
fully subscribed and the shares to fall
She is talking a great deal of sense.
below the rights issue discount? 3. Will
U.S. STOCKS DROP ON the issue of shares on other exchanges
LENDING RATES; S&P 500 Having spent two days with
lead to some arbitrage opportunities
AT SIX-MONTH LOW European regulators last week trying to
between them if the price on one lags the
Transatlantic Holdings Inc., filed a explain the benefits of the practice – his
others?
demand for arbitration against the frustration was obvious in remarks he
company tied to losses of more made at a recent Boston conference.”No
Meanwhile Institutions who lend
than $350 million from securities matter how much you want to impart
their shares own 21.7% of the PRU
lending. ... read more online logic to these people, they’re mired in
which compares with a comparative
figure of 24% before the deal was
THE LATEST NEWS AND COMMENTARY FOR THE SECURITIES FINANCING INDUSTRY www.longshortreport.com

2. LONGSHORTREPORT ISSUE 2
MAY 2010
their views of the past about the roles of replaced by nerves about Sterling the
speculators”. next; both follow on the heels of IMF PEOPLE
warnings about US fiscal woes. In the Bradley Pattelli
The Germans are mistaken in their international game of pass the debt Angelo Gordon's managing
backward looking and outdated parcel, markets cannot decide who will be director and a member of its
perspective on this problem. the biggest loser. leveraged loan team, Bradley
Blaming the speculators is missing Austerity is looming; rising taxes and Pattelli, has quit from his current
the point. There are greater forces at cuts in spending are likely to check the role... read more online
work. recovery in a number of economies. But
The Germans are playing politics 'quantitative easing' liquidity is still
Steven Kandarian, MetLife
when sound economics is what is called slopping around the system somewhere -
“We have a securities lending
for. UK headline inflation is currently more
business that performed above
The markets not the speculators are than 5%. So one scenario for the market
plan for 2009, and that certainly
telling them what they think of their to worry about is stagflation, where
helped our results” ... read more
misguided intervention. investors usually put a premium on real
online
Naked short selling in the equity assets - such as housing, equities in
markets is a smoke screen and banning it 'boring' (ie safe) companies, gold, and
Robert Munro
will make no difference. index linked stocks - where these are
Religare Capital Markets appoints
Reducing liquidity in the European issued by Governments with a secure
Government Bond markets now may be credit rating.... read more online
Robert Munro as COO … read
like screaming ”feuer” in a crowded
more
nightclub. Andrew Dyson 21st May
Mahmood Noorani
Where people really
I hope not – but I fear so. ... read Has joined Citi Capital Advisors
count
more online There is no
from Bluecrest Capital
doubt that the Management .. read more
David Carruthers 21st May securities lending
How to save money industry draws on Helia Ebrahimi
Money is in short supply at the considerable Man Group adds brawn to GLG's
moment. The recent Australian decision expertise and brain with $1.6bn… read more
to tax their gold mining companies has experience as it
led to nervousness about a similar move contemplates the challenges that it is Pauline Modjeski
from the Canadian Government. The facing today. When a beneficial owner or Hedge Funds are using social
troubles in Thailand have hit the tourist hedge fund client looks across the table at media platforms like Blogger,
industry hard, with revenues expected to a potential provider of either agency or Facebook, Twitter and LinkedIn,
be down by 20% this year. The German prime brokerage services, one of the key despite oft-cited concerns over
announcement of questions that they have to ask themselves running afoul of FINRA
curbs on naked CDS is ‘can the people over the table sort things regulations over allowable
purchases can be out when they don’t go as planned?’. communications ... read more
seen as an attempt to Notwithstanding the power of many
keep the Eurozone organizations in terms of balance sheet
cost of capital down. and operational capabilities this market is
The travails of the still a ‘people’ business where experience LongShortReport
Euro have focused and specific knowledge is at a premium. Get the latest securities finance
attention on The second thing that I believe is that and short selling news from all
currencies as an asset class. By defintion most businesses in this sector have been the top financial publications in
they are a zero sum game - they can't all remarkably well designed to withstand the the US, Asia and Europe.
depreciate. But which are most likely to sort of shocks that we saw around the
provide profits for short sellers? Rumours demise of Lehman Brothers.
of Japan being downgraded one day are
THE LATEST NEWS AND COMMENTARY FOR THE SECURITIES FINANCING INDUSTRY www.longshortreport.com