Marching forward: Collapse, Resolution and Charity

March 2008… It was really at that point that it became clear that the markets wouldn’t be able to continue to ignore the problems that first became evident with the sub-prime problems from the summer of 2007.   Hedge funds went into 2008 leveraged and the seeds were sown for the worst year on record for hedgies. 

Take a look at the chart on the left showing the MSCI World Index from March 6 2007 until yesterday.  Not pretty, but you can see why short bias hedgies have done well.  The chart is from the MSCI Barra website.  If you click on it, you will get a larger pop-up.
 
Two big events occurred in March that set the tone for the year and had an impact on securities lending.

First, this coming week marks the one year anniversary since the bailout of Bear Stearns.  William Cohan has just released “House of Cards” a book which chronicles the demise of the mighty Bear.   You can read a book review from the LA Times here.  The review praises the book very highly and it is definitely on my Wish List! Also, the author has written an article on CNN about where key Bear employees are today.  You can read that article here.

Second, Opes Prime, a Melbourne based stockbroker collapsed.  Opes was inextricably linked to the securities lending business in Australia and served to undermine confidence in our business from a domestic Australian perspective which remains today.

A year down the road and it seems that some progress is finally being made towards resolution.  Opes’ financing banks, ANZ and Merrill Lynch have agreed a deal with the company’s liquidators offering investors 40 cents on the dollar approximately $253 million AUD.  The offer still requires approval from a majority of creditors with claims to at least 75 per cent of the total payout.

Charity begins at home … or at least on my website.  Take a look at the right sidebar on the site where you will see the lovely and talented Bill Foley’s name listed.  He is running the London Marathon in a little while and you can click on the box below his name to sponsor Bill.  I am also will to post up other people’s charity fundraising links on this site.  The only proviso is that you are a bona fide member of the Securities Lending Traders Network on LinkedIn or the XING Securities Lending group.  You can connect into both groups on the left sidebar and apply.  If you are approved for membership (it’s free, but you must be connected to this business in some way) and you are trying to raise money for a legitimate charity, drop me a note.  Please note:  I am not in any way endorsing any of these charities, nor validating or confirming that money is being raised for charity.  I am a humble facilitator and people are responsible for checking it out themselves before committing funds.