Another tumultuous week for global financial markets and the asset management industry.

The US still leads the world in many ways, but some things are scary to watch. The week hit a low point with the second Republican debate – no pun intended. Last week the tea party audience cheered loudly when the anchor asked Rick Perry about the 234 executions he oversaw thus far as governor (#sad). This week they started out by cheering for Ron Paul when he said it’s fine for a 30 year old employed healthy man to choose not to get $200 a month health insurance (#very#sad) – but just when you thought it could not get worse the audience cheered again loudly when the anchor asked Paul whether society should let that same man die were he to get sick and fall into a coma (#nowords).

Compared to those horror scenarios of political gladiator games, financial markets look outright rational and calm.

The big media stories this week of course were the continued debt crisis in Europe, the volatility of financial markets, and, towards the end of the week, the UBS rogue trade.

Tonight Strategic Insight senior analysts Jamie Maak, based in London, and Bryan Liu, based in Hong Kong, will publish the monthly fund flow results for July & August: despite all market uncertainties, net cash flows ytd through July neared $375 billion. However, August outflows over debt concerns totaled $75 billion (local Asia was the only region with inflows).

Short-term profitability will be impacted for the industry at large (as recently pointed out by Blackrock’s Larry Fink), but we continue to see many bright spots in the industry. Our report discusses the leading managers, and themes such as commodities, alternatives and multi-asset income as areas of investor demand – along with an in-depth global product review.

Short-term profitability will also be impacted for UBS, where a Delta One desk trader last week created index future trading losses of $2.3 billion for the group. While UBS reiterated that no client positions were affected, the group brand now again is in the limelight and will have to act quickly to reassure clients and business partners (similar to SGAM in 2008 after the Kiervel rogue trades). However, as in other past scandals, asset management if anything might actually again benefit from investment banking troubles in financial markets.

Of late, many larger groups have pointed towards wealth and asset management as growth and profit centers thus far in 2011. Interestingly, revenues increasingly are also coming from emerging market regions, such as Asia and Latin America, as discussed in prior blogs.

Another set of branding challenges recently came from Chile, where regulators disapproved Dublin-based funds from being invested into by pension funds over Ireland debt concerns. This places 155 funds at immediate risk of cash outflows and at least in the short-term could be an opportunity for Luxembourg and other competing hubs. The news will directly impact business development strategies for fund managers creating cross border fund lines for international expansion.

However, the bigger picture and concerns are now around how to preserve and strengthen the UCITS brand, especially with institutional investors and global financial institutions. Clearly, the UCITS brand is not (yet) in jeopardy, but continuous talks of Asia passports, alternative UCITS and now disapproval of UCITS in emerging markets puts greater urgency around industry thought leadership.

Speaking of thought leadership: John Gorman hailed outgoing Morgan Stanley chairman John “The Knife” Mack for his extraordinary leadership skills in 30 years with the firm overall. Mack is going to write a book about leaders and the industry, and will probably join other boards. Mack among many other things brought in Mitsubishi UFJ to help Morgan Stanley survive the crisis.

The Strategic Insight book on the industry (“The State of the Global Asset Management Industry“) just came out, and I will be traveling extensively for the rest of the year: confirmed stops thus far are… Abu Dhabi, Dubai, Sao Paulo, Tokyo, Hong Kong, Sydney, Melbourne, Caracas, Las Vegas, London, Zurich and Frankfurt.