tag:www.structurednotes.co.uk,2008://12 2008-09-05T09:04:55Z Movable Type 3.36 tag:www.structurednotes.co.uk,2008://12.51956 2008-09-05T09:03:52Z 2008-09-05T09:04:55Z

Rising above the doom and gloom, thankfully we have the return of the interesting, witty and creative marketing campaign that the structured products industry is so famed for. Without competition from the moribund structured finance industry, which has almost acronymed...

Richard Jory Rising above the doom and gloom, thankfully we have the return of the interesting, witty and creative marketing campaign that the structured products industry is so famed for. Without competition from the moribund structured finance industry, which has almost acronymed itself into an early grave, the fight back begins. And it’s Merrill Lynch that is leading the way, with Mast. If you want to know what the acronym stands for then read yesterday’s story on Structured Products News, but if you want to get the theme, here goes. Using the word Mast allows Merrill to justifiably put an old-fashioned tea clipper on the cover of all their marketing material. Although the product has yet to find its way to a launch (no pun intended, but happily found) in the UK market, all that sailing from the Olympics on the TV will have helped the cause. And all the talk of commodities, which were first transported in size in these kind of ships, will have also added a following wind (pun intended). In straitened times, it is this kind of creativity that will restore order to damaged financial markets. Back to what the acronym stands for. It stands for everything: equity, fixed income (or just bonds), commodities and currencies. So it covers the whole gamut of what structured products can reasonably and regularly offer. While we ponder more headlines in our attempt to match this refreshing rush of SP-style marketing, we await also your offerings. The usual answers taped to a bottle of champagne are gratefully accepted. tag:www.structurednotes.co.uk,2008://12.51341 2008-06-30T10:06:30Z 2008-06-30T10:14:00Z

It was the way in Asia last year, that all you needed to do was to offer investors a structured product stylised as an accumulator, and watch the money roll in. It was one of the two ways in 2007...

Richard Jory It was the way in Asia last year, that all you needed to do was to offer investors a structured product stylised as an accumulator, and watch the money roll in. It was one of the two ways in 2007 to ‘make a killing’ in structured products in the region. In true derivatives fashion, everyone was a winner so free (or at least fee-based) money for all. This year all change. The same product is on offer – you can still buy accumulators of a sort. As a matter of structural accuracy, it is fair to say that the product now on offer is the opposite of the one in the open market last year – this year’s favourite is the deaccumulator. The fact that the structure has been turned on its head tells you the story of what people now think of the accumulator – they don’t like them and they don’t want them. So much so that the structure has adopted a new name based on the phonetics of the original. Rather than the 'Acc-um-u-lator', Asia has now coined the same structure the ‘I-Kill-U-Later’. The joke kind of works, and offers a token solace to those that have watched their investments go down, as well as down just a little more. tag:www.structurednotes.co.uk,2008://12.51203 2008-06-17T11:44:53Z 2008-06-17T11:47:53Z

While most wait for next month to see how the financial markets settle, if they ever will, we are waiting for a different reason. We want to know which senior structured products banker will be profiled by SRP.com in its...

Richard Jory While most wait for next month to see how the financial markets settle, if they ever will, we are waiting for a different reason. We want to know which senior structured products banker will be profiled by SRP.com in its monthly web-based magazine. Why are we interested – other than wanting to have a healthy knowledge of the competition? It’s the profile page that we want to see and the reason is that the online magazine has developed an unerring kiss of death when it comes to its choices. Last month in Structured Products magazine we wrote about the departure of Giles Rothwell, who left JP Morgan’s London offices merely weeks after he was profiled by SRP.com. As of this Monday, we have a new story about a senior SP banker leaving his post, with Adam Habib leaving Lehman Brothers. Eerily, the February issue of SRP.com profiled Adam Habib. It may work to be profiled in a magazine. You get publicity and all the rewards that may come with that. You just may not have a job. tag:www.structurednotes.co.uk,2008://12.50925 2008-05-20T14:53:58Z 2008-05-20T14:54:42Z

So did he end up working in advertising, after all? The question was asked of Giles Rothwell, erstwhile head of retail structured products at JP Morgan; the question was asked by a competing publication to Structured Products magazine. Unfortunately for...

Richard Jory So did he end up working in advertising, after all? The question was asked of Giles Rothwell, erstwhile head of retail structured products at JP Morgan; the question was asked by a competing publication to Structured Products magazine. Unfortunately for the competing publication, which included a full vanity profile on the experienced banker, the question asked in the first line of the profile remains. It was only days after the publication of the article that Rothwell decided he had completed his brief stint at the US investment bank. After detailing Rothwell’s career path and outlining some of his plans for the behemoth, the article concludes – correctly as hindsight would have it – that “all Rothwell needs … is serendipity and the willingness to adapt and change as he forges a common identity”. A fair observation to report, but not sure that the magazine in question quite had the idea that Rothwell’s next move was to pack his bags and leave the US bank. tag:www.structurednotes.co.uk,2008://12.50892 2008-05-16T14:20:29Z 2008-05-16T14:35:35Z

Following on from the songs already written in tribute to the world of structured finance, and all of the losses that have gone with it - both in terms of money and jobs - it appears that this industry continues...

Richard Jory See Subprime presentation (2.29MB, Powerpoint) ]]> tag:www.structurednotes.co.uk,2008://12.50246 2008-03-19T10:26:42Z 2008-03-19T10:48:52Z

Other than coming cap in hand to structured products bankers and inquiring after employment opportunities, what do structured finance professionals - formerly the doyens of the sophisticated end of the finance markets - do now that they have lost most...

Richard Jory Other than coming cap in hand to structured products bankers and inquiring after employment opportunities, what do structured finance professionals - formerly the doyens of the sophisticated end of the finance markets - do now that they have lost most of their market? After exhaustive investigation, we believe we have found the answer. They write songs - not all of them, but enough of them for there to be a selection available to the banking public. While we are not yet at the point of Starz in their Eyes we are hopeful that thsi may be the first of many entries. Read on... So you think you can fund me and spit in my eye? And then margin call me and leave me to die Oh PB – can’t do this to me PB Just gotta get out – just gotta get right outta here Ooh yeah, ooh yeah No price really matters No liquidity Nothing really matters – no price really matters to me Any way the Fed goes.....]]> tag:www.structurednotes.co.uk,2008://12.49944 2008-02-25T11:20:05Z 2008-02-25T11:25:31Z

An advert that has been posted by Additional Resources Limited requesting applications to be Head of Structured Products, Paris, France has drawn some instinctive conclusions. Which banks do structured products and which of those are based in Paris? Hmm. Which...

Richard Jory An advert that has been posted by Additional Resources Limited requesting applications to be Head of Structured Products, Paris, France has drawn some instinctive conclusions. Which banks do structured products and which of those are based in Paris? Hmm. Which one could it be? We fired up our investigative thought process and listed the banks we know that fit this profile. But we couldn’t be certain, so we waded through the stream of detailed requirements and attributes – noting that whoever takes this job will have to do a lot of shaping and must possess a deep understanding of the Structured Products markets across Europe. The details were in a big, thick paragraph written as a wish list but they did not provide us with any more insight. Luckily, the second, four-word long paragraph provided all the information we needed. It asked for a “Strong attention to detail”. Rather smugly, we think we know which bank this is. But do you? Can you think of a bank that bases its Structured Products business in Paris and, for some reason, has decided to big up the need for strong attention to detail? tag:www.structurednotes.co.uk,2008://12.49658 2008-01-25T12:08:18Z 2008-01-25T12:49:44Z

Richard Jory ]]> tag:www.structurednotes.co.uk,2008://12.49655 2008-01-25T10:22:05Z 2008-01-25T12:57:10Z

More than the usual host of smokers occupied the front of Société Générale offices in Paris on Wednesday, presumably meaning that more than a few of them knew what came next. The bank's equity derivatives trading desk appeared to be...

Richard Jory More than the usual host of smokers occupied the front of Société Générale offices in Paris on Wednesday, presumably meaning that more than a few of them knew what came next. The bank's equity derivatives trading desk appeared to be doing business as normal, while unwinding the billions of euros of trades completed by Jérome Kerviel. In short, the SG office was relatively peaceful and showed no real sense of alarm. Considering the scale of the money that has just been lost, what does this mean? The only thing you can conclude is that losing a whole load of money is a regular event on the trading floor and in fact Nick Leeson - the most notorious rogue trader ever - was speaking sense when he said that after you lose the first US$30,000, then it no longer seems like real money. Rather than pore over who has given SG awards for its prowess in equity derivatives - it's ok, we have the Telegraph and FT.com to do that rather pointless archive search for us - everything has to stop while it is worked out how this happened. How does a junior trader take positions well beyond those that a head trader at any other bank can take? And who knew? Is it an accident that SG's most senior employees offered to resign after interrogating their rogue trader last Saturday? What does it mean when the senior management says in a press release issued yesterday that those responsible are now in the firing line? tag:www.structurednotes.co.uk,2007://12.48757 2007-10-02T11:07:26Z 2007-10-02T11:10:39Z

With respects to the creativity of Tim Price, a portfolio manager based in London, we have been alerted to the first signs of Christmas. In true hearty fashion, the alert comes in the form of a song that you will...

Richard Jory The Twelve Days of Crisis On the first day of Crisis the markets sold to me A sub-prime bankruptcy. On the second day of Crisis the markets sold to me Two structured notes and a sub-prime bankruptcy. On the third day of Crisis the markets sold to me Three French funds Two structured notes and a sub-prime bankruptcy. On the fourth day of Crisis the markets sold to me Foreclosure loans Three French funds Two structured notes and a sub-prime bankruptcy. On the fifth day of Crisis the markets sold to me $500 gold calls Foreclosure loans Three French funds Two structured notes and a sub-prime bankruptcy. On the sixth day of Crisis the markets sold to me Six fleeced investors $500 gold calls Foreclosure loans Three French funds Two structured notes and a sub-prime bankruptcy. On the seventh day of Crisis the markets sold to me Seven ‘bonds’ accruing Six fleeced investors $500 gold calls Foreclosure loans Three French funds Two structured notes and a sub-prime bankruptcy. On the eighth day of Crisis the markets sold to me Eight salesmen bilking Seven ‘bonds’ accruing Six fleeced investors $500 gold calls Foreclosure loans Three French funds Two structured notes and a sub-prime bankruptcy. On the ninth day of Crisis the markets sold to me LBO refinancing Eight salesmen bilking Seven ‘bonds’ accruing Six fleeced investors $500 gold calls Foreclosure loans Three French funds Two structured notes and a sub-prime bankruptcy. On the tenth day of Crisis the markets sold to me Hedge fund Boards all leaving LBO refinancing Eight salesmen bilking Seven ‘bonds’ accruing Six fleeced investors $500 gold calls Foreclosure loans Three French funds Two structured notes and a sub-prime bankruptcy. On the eleventh day of Crisis the markets sold to me Over-hyped underwritings Hedge fund Boards all leaving LBO refinancing Eight salesmen bilking Seven ‘bonds’ accruing Six fleeced investors $500 gold calls Foreclosure loans Three French funds Two structured notes and a sub-prime bankruptcy. On the twelfth day of Crisis the markets sold to me Central banks succumbing Over-hyped underwritings Hedge fund Boards all leaving LBO refinancing Eight salesmen bilking Seven ‘bonds’ accruing Six fleeced investors $500 gold calls Foreclosure loans Three French funds Two structured notes and a sub-prime bankruptcy. ]]> tag:www.structurednotes.co.uk,2007://12.48484 2007-08-30T15:54:31Z 2007-08-30T15:55:10Z

In a shameless, but also marvellous piece of promotion, Roger Shashoua has created what will be surely provide the underlying for what will surely be the deal of the decade, give or take a few sizzle sticks and olives. Who...

Richard Jory In a shameless, but also marvellous piece of promotion, Roger Shashoua has created what will be surely provide the underlying for what will surely be the deal of the decade, give or take a few sizzle sticks and olives. Who is Roger Shashoua? He’s the wealthy the Russian specialist you haven’t (quite) yet heard of, and he has written a book – ‘Dancing With The Bear’ – which claims to be the how-to guide to making millions in Russia. And British entrepreneur, Shashoua has come up with the idea of linking the alcohol content of cocktails to the success of Russian companies, with the stated aim of highlighting the importance of Russian business in Britain. To provide this valuable and volatile underlying, Shashoua has teamed up with the Potemkin Vodka Bar in London’s fashionista haunt Clerkenwell. From September 3 – next Monday – you can slurp down such titillating fancies as The OAO Tatneft Shashouroshka, The Rostelecom Communication Communist, The Evraz Steely Dan, The MMC Norilsk Nickel Nickeltini, or the charmingly named Surgutneftegas ‘Surgut’ Sunrise. What happens next? Well, each Monday, the share prices of the companies attached to each cocktail is sought: for those that have gone up, up goes the alcohol content in the drink, and yet the price – a middling £4.95 – remains the same. Booze filled Britain can only prepare to stumble ever more precariously down the street as Russian fever adds the necessary flames to the fire. Shashoua signs off his press release stating that his conclusion is that there are still opportunities to get “seriously rich” in Russia. At least now we know where to spend it. First structurer to create a structured product with this as an underlying will get a pint of Guinness and a packet of Salt ‘n Vinegar, until we can catch up with this latest dose of sound life advice from the sophisticati. tag:www.structurednotes.co.uk,2007://12.29500 2007-08-21T08:48:02Z 2007-08-21T08:48:46Z

As indecision mounts, and we wait for the great and the rested to return from Europe's Summer break, all eyes on on what happens next ... but does the image below tell the story we are all waiting hear? View...

Richard Jory View image ]]> tag:www.structurednotes.co.uk,2007://12.29492 2007-08-20T11:46:41Z 2007-08-20T11:52:41Z

Structured products structurers never sleep, and it has now become obvious why, as the latest brand-spanking new, hot-to-trot product leaves the design table and enters the market. Presuambly, this one will capture the imagination of that great new, indexable subset...

Richard Jory Structured products structurers never sleep, and it has now become obvious why, as the latest brand-spanking new, hot-to-trot product leaves the design table and enters the market. Presuambly, this one will capture the imagination of that great new, indexable subset - the oldies. And it goes like this ... or so says our special hedge fund contact: Investment Dealers are excited to announce the newest structured finance product - Constant Obligation Leveraged Originated Structured Oscillating Money Bridged Asset Guarantees (Colostomy Bags). Designed to accommodate the most sophisticated investment strategies, Colostomy Bags contain the equity tranches of Structured High Interest Taxable Derivatives, or Shit, and are leveraged an infinite amount of times through the innovative use of derivatives. "Its an actively managed, unlimited liability, open ended investment with no maturity date, which pays Libor plus 5,000bp and has no correlation to traditional investments" said a spokesman for the Investment Dealer who engineered the product. "It's based on a CDO structure, but it's designed to default BEFORE the first coupon payment, which you'll agree has no correlation with stodgy traditional investments and is a perfect fit for portable alpha scams, er, strategies." Following the default, each month more leverage is added to the structure to pay for the coupon and the Dealer's fees which are set at 80%. "We feel the fees are reasonable, given the adrenaline rush you'll get each month attempting to mark these." The Colostomy Bags carry a AAAA rating, based on the rating agencies opinion that they are even safer than Treasuries. "You can't use traditional credit analysis to value these babies, no sir-ree" said a spokesman for a rating agency. "Just like Icelandic Banks, we give them the highest rating because you just know that the Fed will bail out all the hedgies who buy these things..remember like Long Term Capital? And the best part is, the beauty of this structure is that the loss given default is NEGATIVE, so by extension we feel that the CDS will trade through Treasuries." Inhaling deeply on a fatty, he continued "We've been tinkering with our model, which served us well for Enron and the Telecoms in '02, and our stress testing shows that the probability of loss in the senior tranche is close to zero." The model, constructed of a wishing well, Joseph Jett's trading blotter, and drawings of Unicorns then collapsed in a heap. "Well, back to the drawing board!" he cackled. A real money investor, huddled on the windowsill outside his office, said he remained optimistic about holding the Colostomy Bags but was a bit concerned with the 95% decline in value on the first day they traded. "We've taken a bit of a haircut on these but I'm waiting to see the first servicer report, which should arrive in a few months. At first I was annoyed that the dealer who sold them to me refused to make a market in them, but that makes my job easier since I'm not tempted to sell." We located a hedge fund manager at a due diligence meeting in the VIP room at Score's. He said he was sceptical of the structure at first but was dared into buying it by a fixed income salesman. "He said to me, 'what's wrong with you, its quadruple A rated, just buy it, what are you a pussy?' He also said it was going into 'an index', although he didn't say which one, but I felt that I had to buy it. And that was good enough for me, bro'." tag:www.structurednotes.co.uk,2007://12.29092 2007-07-05T11:23:00Z 2007-07-09T13:54:04Z

Speculation is a poor basis for an investment strategy, unless the investment vehicle is an ETF. Hmmm. If you want a slightly more informed base for deciding for yourself, take a look at the latest academic debate, as detailed by...

Richard Jory Speculation is a poor basis for an investment strategy, unless the investment vehicle is an ETF. Hmmm. If you want a slightly more informed base for deciding for yourself, take a look at the latest academic debate, as detailed by the FT at: http://www.ft.com/cms/s/81e72800-28c2-11dc-af78-000b5df10621,dwp_uuid=d8e9ac2a-30dc-11da-ac1b-00000e2511c8.html tag:www.structurednotes.co.uk,2007://12.28987 2007-06-22T10:10:06Z 2007-06-22T15:39:35Z

True to form, the naming strategy in the Structured Products market is at the cutting edge of marketing. No sooner had every poster on every bus and every bus stop (in London, at least) lauded the new Spiderman film, than...

Richard Jory True to form, the naming strategy in the Structured Products market is at the cutting edge of marketing. No sooner had every poster on every bus and every bus stop (in London, at least) lauded the new Spiderman film, than we found - from a quick dip into wikipedia - that S&P was there first. Ratings agencies are notoriously reactive by nature, but the SP specialists at S&P are doing their bit to change that perception. And what a good job they have, and thank the lord for acronyms. From the distinctly unpromising start of SPDRs, or Standard & Poor's Depositary Receipts, we have the brief relief of reading that the acronym translates into Spiders. And the Spiderman association is surely no accident, as the wikipedia entry points out: "Spiders are run by State Street" is surely a line from the film. The only uncertainty is whether there is, in fact, a Spiders 1, Spiders 2, and a Spiders 3. Peter Parker should be told.