Financial Instruments

6 Months Ended

Jun. 30, 2012

Financial Instruments [Abstract]

FINANCIAL INSTRUMENTS

5. FINANCIAL INSTRUMENTS

Investments - Trading

The following table displays the carrying value of all investments classified as investments-trading as of the periods indicated:

INVESTMENTS - TRADING

(Dollars in Thousands)

Security Type	June 30, 2012		December 31, 2011
U.S. government agency MBS and CMOs (1)	$	30,685	$	7,563
U.S. government agency debt securities		34,452		14,600
RMBS		1,178		7,108
CMBS		—		1,587
U.S. Treasury securities		7,473		8,524
Interests in securitizations (2)		259		608
SBA loans		4,382		9,049
Corporate bonds and redeemable preferred stock		55,226		65,445
Foreign government bonds		99		67
Municipal bonds		18,895		9,225
Exchange traded funds		9,377		—
Certificates of deposit		4,079		710
Equity securities		87		60
Investments-trading	$	166,192	$	124,546

(1) Includes TBAs. See note 7.

(2) Primarily comprised of CDOs, CLOs, and ABS.

Trading Securities Sold, Not Yet Purchased

The following table displays the carrying value of all trading securities sold, not yet purchased as of the periods indicated:

TRADING SECURITIES SOLD, NOT YET PURCHASED

(Dollars in Thousands)

Security Type	June 30, 2012		December 31, 2011
U.S. government agency MBS (1)	$	47	$	16
U.S. Treasury securities		10,811		11,755
Corporate bonds and redeemable preferred stock		64,651		87,537
Foreign government bonds		23		158
Municipal bonds		122		143
Exchange traded funds		1,636		—
Certificates of deposit		6,829		4
Total	$	84,119	$	99,613

(1) Represents TBAs. See note 7.

The Company tries to manage its exposure to changes in interest rates for the interest rate sensitive securities it holds by entering into offsetting short positions for similar fixed rate securities.

The Company included the change in unrealized losses in the amount of $432 for the six months ended June 30, 2012 and the change in unrealized gains in the amount $1,248 for the six months ended June 30, 2011 in net trading revenue in the Company’s consolidated statements of operations.

Other Investments, at fair value

The following table provides detail of the investments included within other investments, at fair value:

OTHER INVESTMENTS, AT FAIR VALUE

(Dollars in Thousands)

	June 30, 2012
Security Type	Cost		Carrying Value		Unrealized Gain /  (Loss)
Interests in securitizations (1)	$	217	$	97	$	(120	)
Equity Securities:
EuroDekania		7,792		2,103		(5,689	)
Star Asia		23,219		32,299		9,080
Tiptree Financial Partners, L.P.		5,561		2,703		(2,858	)
Other securities		232		112		(120	)
Total equity securities		36,804		37,217		413
Residential loans		240		229		(11	)
Foreign currency forward contracts		—		66		66
Other investments, at fair value	$	37,261	$	37,609	$	348

	December 31, 2011
Security Type	Cost		Carrying Value		Unrealized Gain /  (Loss)
Interests in securitizations (1)	$	217	$	88	$	(129	)
Equity Securities:
EuroDekania		7,792		2,370		(5,422	)
Star Asia		23,219		37,358		14,139
Tiptree Financial Partners, L.P.		5,561		2,533		(3,028	)
Other securities		232		156		(76	)
Total equity securities		36,804		42,417		5,613
Residential loans		278		267		(11	)
Other investments, at fair value	$	37,299	$	42,772	$	5,473

(1) Represents an interest in a CDO.