The battle continues

Many apologies, as it has been almost two weeks since my last post.  I will do my best to avoid delays like this in the future. 

Banking problems are continuing.  Gordon Brown, having announced last year that he had “saved the world”, uhhh… “saved the UK banks” … had to save them again last week.  Well, at least those banks that wanted or needed his money.  Not all of them did, and a couple were pretty adamant about not taking his coin.

Today a number of prominent hedge fund managers will be appearing in front of a parliamentary panel to answer questions for MPs.  Chris Hohn of The Childrens Investment Fund (TCI) and Paul Marshall, chairman of Marshall Wace are amongst the “guests”.  Short selling is top of the agenda.  The committee is being chaired by John McFall, a Labour MP who doesn’t like short selling.  It will be interesting so see the fireworks.

Want to know why Mr McFall is concerned?  Check out this graphic on bank capital.  I saw it on the daily repo commentary from Jeff Kidwell of  AVM LP.  Jeff credited JP Morgan and Bloomberg for the chart.  I am speechless.

There has been amazing volatility in UK bank stocks in January so far, and of course the short selling ban expired on 16 January.  Unsurprisingly, short activity has risen in virtually all the bank shares, but check out the share price performance of the banks since the 16th.  I’ll let you look up the charts yourself to make it interesting for you.

Fortunately many politicians and bankers will have time for skiing discussion this week at the World Economic Forum in Davos Switzerland.  Don't worry, they'll work everything out and it will be fine next week when everyone is back.

IMN Arizona Conference

I am thrilled that I will be attending the IMN Beneficial Owners Securities Lending and Repo Summit next week.  The European version was held in Edinburgh last year not long after Lehman, It was a great opportunity to meet with people in the midst of the post-default clean-up operation.

Arizona will be even better.  I expect it to be the highlight of the conference calendar this year.  I think it is safe to say that this is a critical juncture in the credit cycle.  Never before has there been a securities lending gathering at a time of such system stress and confluence of important events.  There will be some people that have experienced losses, many who are concerned about potential losses and numerous providers that have done their best to manage the inherent risks in the business.  If I was only going to one conference this year, this would be the one.

I am covering the event for Global Custodian Magazine and am interested in meeting anyone that has an opinion or concern and wants to share it with me.  Either on the record or off the record.  I’ll be there from Sunday to Wednesday.   Drop me an  email and I’d be happy to meet.

Videocasts

Today I am taping the third of my weekly broadcasts about Securities Lending for Global Custodian Magazine.  Today I will be covering some of the issues surrounding being a winner in securities lending in 2009.   Remember that the objective is not to teach securities lending market professionals about the business, but to reach out to beneficial owners and those not directly involved on a daily basis.  Look for it at the end of the week.  (I am getting better at it – I hope!)