MARKETSEQUITYBONDSCOMMODITIESBank Loans??? DERIVATIVES

EQUITY(SIZE-INFORMATION-TRUST)

Trading and origination of stock Truly global operation – move the

book. NYSE/NASDAQ/TOYKO/SINGAPORE/

LONDON/ETC.-NEW EMERGING Technology is changing the face of

the equity markets. Algorithms, nanosecond trading, etc.

may be scaring away the individual investor. Big boy market…..

Remember equity is traded…doesn’t mature so markets needed strongly.

BONDS Origination, sales and trading of debt

instruments of all kinds. (corporate, municipal, mortgage, etc.)

While conducted globally most demand remains country or region specific. (Euro supports euro……now part of the problem !!!) Who owns most of the Greek debt? Who owns stakes in the European banks?

Mortgage bond contagion from 2008 became a global problem…even Iceland was taken in….

Several types of bonds are bought and held until maturity…not really traded so needs of the market are different than with equity.

Long term nature of the product requires higher level of expertise in analysis. Difficult for individuals to manage on their own.

Government debt of all types is a big part of this market so is not likely to go away. Right now it is a troubling part of the market that must be solved because it is affecting all other markets.

COMMODITIES Important market for agriculture

community especially growers. Opportunity to hedge risks of weather, etc.

Important market for businesses such as airlines who have high percentage of costs exposed to global price swings in necessary supplies.(fuel)

Very vulnerable to demand changes by large users such as China, Russia and India. And any changes brought about by weather events in growing areas. (cotton in 2010-11)

BANK LOANS Major source of funding for small

and mid-sized businesses globally. Higher capital requirements while

favorable to some are a negative to others. Not enough money to go around. (capital, dividends, loans)

Ultimately who will regulate and how much regulation is too much?

DERIVATIVES(swaps,caps,etc.)

For the most part there is no “market” per se. One off trades between market makers and users.

For the most part is unregulated today. “Sins” of the recent past have created an outcry for some form of market to be formed and then regulated. (municipalities burned by swaps causing bankruptcies)

Could the $6 billion loss at JPMorgan have been avoided if there had been

regs in place? Who was the victim anyway?

Regs now being written that will regulate something….stay tuned.

Sources of Funds for

Non-Financial Businesses

U.S GER. JAPAN CAN.

32% Bonds 7% 9% 15%

11% Equity 8% 5% 12%

38% NB.Lns 10% 8% 18%

18% Bank Lns.76% 78% 56%

(NB Lns. Or Non-Bank loans come primarily from pension funds and insurance companies.)