The Bald and The Bountiful

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pkatre	The Bald and The Bountiful	Lead	[-]
Posts: 132 (10/07/08 23:51:31) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Tags : None It is rather intriguing to note that the now famous 'bailouters' of the Financial world: Henry Paulson, US Tearsury Secretary and his acolyte Neel Kashkari are both splendidly bald. No doubt, they have come up with this 'Hair-raising' plan which is going to cost $700 b. From a traditional Hindu perspective a shaved head symbolises a ceremonial mourning. It appears that both the protagonists are mourning the demise of the famed Investment Bankers who populated the Wall Street before it crumbled crushing all of them and wiped out the assets of 'Laymen' and their 'Brothers'. Parag.
subbu98		#1	[-]
Posts: 163 (10/08/08 04:03:24) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Awwww. It has finally come from the horse's mouth.
scmitra	Capitalism or Capitualism?	#2	[-]
Posts: 578 (10/08/08 05:42:50) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Capitalism= Privatisation of Profit and Nationalisation of Loss! scm
pkatre		#3	[-]
Posts: 133 (10/09/08 20:56:23) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Dear Subbu and Saurabh, My post was meant to provoke both of u. It did have desired effect but not to the extent I or IRAS netizens expect from U2. Come on, one line posts are not enough on such a juicy topic. Parag.
baburaja	conflict	#4	[-]
Posts: 74 (10/10/08 02:00:48) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	the bald hero, mr. paulson is former head honcho of goldman sachs and now he has put taxpayers money to bail out his former brethren from the fiasco that they themselves have created!!! (we are also proud followers of such monumental conflicts of intersts, just look at the IAAS guys manning financial advisers posts in executive departments!!!) my personal take would be to put some of these guys into jail pending trial, everything will sort itself out super-fast.
karticc	bald and the bashful?	#5	[-]
Posts: 108 (10/11/08 03:52:18) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	I see that the traditional commie/socialist/government bashers are not commenting on this bailout of the so called Temples of wisdom, like Layman bothers, Goldman sucks, Ouchovia, Madman Stanley, Bear stunts, Freddie mad, Fannie lay, EGG etc. And keeping a bashful silence. The free world is no so free or can survive without Government bailing them out, it seems. And I hear that this $ 700 Billion bailout is just the first installment. Plenty more infusions required, of tax payers money, to keep the capitalists afloat and million dollar bonuses going. Kartic Chauhan
ananth	Bald saviours!	#6	[-]
Posts: 901 (10/12/08 20:43:50) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Leave aside the saviours in the US, even the ones in India are bald. Y.V.Reddy (whose father, a tahsildar, was my grandfather' tenant in the 50's) and his successor, D.Subba Rao, the first IAS topper from AP of the 1970 exam, are also bald. I remember Mr.Subba Rao giving us a lecture in Hyderabad while preparing for the exams. He was a Secretary (Finance) in AP at that time, known for his incisive mind and holding as well as expressing views independent of the establishment. Ananth Sr.DFM/BSP
baburaja		#7	[-]
Posts: 76 (10/15/08 09:35:19) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	is it that simple, rob peter to pay paul(son)? actually, it also has- peter, peter pumpkin eater pumpkin = kaddu peter = public all in favour for prosecuting alan greenspan as criminal of this century (he will end up indirectly causing millions of premature deaths, globally) will be allowed free lunches, courtesy the u.s. treasury.
malikapm	WHERE IS BUDDHA?	#8	[-]
Posts: 7 (10/16/08 02:54:05) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	The unenlightened freefall of the IRAS continues unabated which would surely lead to loss of all pride without matching gain in ham. Having hounded out the poor Buddha, socialists are having a field day with their mediocre one liners with big names thrown in for the effect. Freddie -Fannie were constituted expressly to provide low cost housing to the poor and carried implicit sovereign guarantee much like our LIC. A perfectly socialist endeavour. Now the poor being the poor and bleeding heart socialists always at hand, housing loans were disbursed to them without any down payments, they being able to pay no down payments. Socialists then discovered that they being poor, they can not give any collateral to secure the mortgages so that draconian capitalist provision was also waived. Further, since houses take two years to construct, so repayment was to start after two years. Enter some fly by night investment bankers. They bundle these mortgages and then chop them into bonds tradable in the stock markets. Greed being greed people fall for them and make huge profits by trading in them. Then reality takes over. The poor being the poor, when they discover that housing prices are falling, they stop paying installments. A perfectly socialist cure. Scene till now closely resembles our loan melas in which loans are disbursed over the counter and after few years are written off. Now the mortgage companies are left holding their mortgages on houses for which there are no takers and whose real worth has gone down. But they have no recourse against those who have stopped paying installments and have walked away. And remember those who have walked away have lost nothing in the bargain. So the bond markets collapse taking with them the Street and the fancy investment bankers. Enter socialists once more. They blame entire crisis on the ills of capitalism though it is all the result of a grand socialist project- housing for all. And force the govt to go in for another grand socialist bailout for 'stability' instead of letting the inefficient fail and letting the greedy have their just desserts. I remember when once the enlightened Buddha had mentioned that socialism had seeped deep into the US polity many colleagues in the IRAS had threatened to go in for the sex change. Failure of businesses is a perfectly normal occurrence in a free market economy. Some fail because of new technology, some because of inefficient management and some because of force majeure. And they should be allowed to fail. That is how the efficient ones surge ahead and people learn to control greed and learn to value hard work. USSR businesses were very stable, they never failed. Where is USSR today? We had a very stable society because of our caste system. Each from his/her birth knew what profession he was to undertake. There never was any competition, no struggle. What did that give us? A thousand years of abject slavery. As for retrenchment of the Jet employees ( I am not going to remark on rumoured one in AI/IA because trade unions would never allow that to happen), what does MNS and CITU want? That Jet should pay people without having any work for them? How long they expect Jet to continue in this fashion, as a charity? When Jet would finally sink because of this charity they would demand its nationalization. The sacked employees had a five star lifestyle, blowing money in night clubs. They never thought of saving for such an eventuality. And CITU would get us poor taxpayers pay for somebody's five star hotel lives. LONG LIVE SOCIALISM. It is not that socialists do not understand all this. But lies and deception are their chief weapons. All above is readily available in news papers and on internet but colleagues in the IRAS have not thought it fit to present a correct picture. After all, those who have stopped reading anything except "returned unvetted" and signing above their designations, can not suddenly discover the virtues of properly studying something before commenting on it. I expect something better from my Financial Advisors. A P MALIK DyCE/C/II/CCG PS: from the depressing silence on the revered Buddha blog, it seems we have lost him/her for good. Colleagues in the IRAS who are in touch with him/her are requested to convey to me his/her contact details. My CUG no is 9004490261. I don't want to get deprived of those great sermons.
subbu98		#9	[-]
Posts: 165 (10/16/08 04:24:43) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Ignorance - including in form of being within 'beyond returned unvetted' - is a bliss. Presumption is better. Candy is dandy, but liquor is quicker.
baburaja		#10	[-]
Posts: 77 (10/16/08 04:29:59) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	and what about sheer verbiage/verbosity?
pkatre		#11	[-]
Posts: 136 (10/16/08 04:31:09) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	A very innovative Analysis from Mr. Malik, probably being in construction allows one to have ones creative juices flowing unhindered by any realty check. The bailout package is for the Investment Bankers by another erstwhile Investment Banker. Where does socialism come in here. It is pure crony capitalism.The crisis is only a confirmation of the failed business model of stand-alone Investment Banks with minimal regulation. The old fashioned Brick and Mortar Banks with strong regulatory framework have proved to be far more robust. There are no Basel norms for Investment Banks. Hopefully the bursting of bubble will make the world economy more rooted to fundamentals i.e. achieveing growth through real production and productivity gains instead to speculative deals. Parag.
subbu98		#12	[-]
Posts: 166 (10/16/08 10:09:48) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	bingo. "achieveing growth through real production and productivity gains" is the thing. call me a bloody socialist, mr mallick, if you may please. life is much simpler. i've not had the time to read beyond 'returned unvetted.' i might be muddling up the basic economics that i might have incidentally read ages ago. but the fact remains that i bleed when i pay the rent. some property that was available for 5 lakhs not too long ago is going for fifty. it's not that the demand in the free market economy had gone up all of a sudden because all those that were living on rent decided one fine morning at the same time to start living under their own roof, which induced my fellow socialists to induce spurning of housing projects for por fellows like me. someone else had induced it in the free market. that someone else decided to pick up the mortgage and to speculate on that. which further perpetuated the vicious cycle. a poor fellow like me was always at the bottom of the food chain. i was bleeding already while paying the rent. the chit fund eventually collapses some day. when it does, why should i bleed more and continue paying the instalment? the demand had no link whatsoever with real growth (please read the papers still more diligently one more time; the fact stares at you). i didn't make any profit when profit was being made left and right. a socialist is never profit-oriented anyway, no? now we have a bail out package for a profit-monger by an ex-profit-monger. i uphold my right as a terribly ill-read fellow to be presumptuous. so i call it murder what my friend, parag katre politely stated as crony capitalism. please spare us bloody socialists, mr mallick. we had no role to play in any way for a change. Last Edited By: subbu98 10/16/08 10:18:12. Edited 1 times.
freefall		#13	[-]
Posts: 178 (10/18/08 03:51:06) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	I believe that the righteous smugness on our part on the US debacle is hardly justified. It obscures the fact of enormous living standard gap between the two countries. Before the debacle US per capita annual income was ~$40K. Now the economists are estimating that the current debacle will wipe out about 10% of the earning of an average American in one stroke. No doubt that is an astronomical figure. However from our point of view, even that adjusted level of living would be a dream of the century. Heck, barring the top creamy layer, for everyone else in India, the lifestyle of even an unemployed US citizen would be a dream. Food Stamps, Medic-Aid, access to a centrally heated shelter, unemployment allowance and a car, that an unemployed US citizen takes for granted could well be a middle class dream for us. Only sometime back (coincidentally just before the debacle), we had a discussion on this very forum that financial instruments are meant to cover financial risk. They should not be viewed or treated as a source of profit. Profit flows from the fundamentals of the business: increase your revenue and reduce your cost. In theory everyone accepts it. However, under the day-to-day pressures of quarterly targets imposed by the street, business managers often give in to the temptation of the easier course to meet the target. Part of the prosperity of the US came via such easier routes, however, that is still only a small part. Rest of the wealth has flowed to them from the fundamentals of their free market business, which is built on a culture of innovation. If you doubt this, just look around you. Almost every convenience of modern living that you have in your house or on the road carries a "invented in the US" tag. US financial market is so huge and complex that we cannot even imagine in India. Every complex system will occasionally break down. Does it justify rubbishing the system? Given the alternatives of this system, others are hardly in a position to preach or feel smug. Least of all India. Only this week, a UN released report on world hunger placed India at 66th place (worse than Pakistan and Nepal in combatting hunger). Are we really in a position to offer our advice and economic prescriptions for curing American model? As railwaymen we all know the perfect remedy of eliminating all derailments - stop all trains and there will not be any derailments! Now that there is derailment in free market economy, should we start seeing virtues in the socialist alternative of eliminating all derailments by stopping all trains?
baburaja		#14	[-]
Posts: 78 (10/18/08 11:06:01) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	well said, freefall. i think that generally speaking, private initiative outdoes government intervention/enterprise. but that does not mean that business or the marketplace is the panacea of each and every economic issue that faces society. the present crisis is of untrammelled greed and lax regulation. what galls me is that while this untrammelled greed of the few will go unpunished, the rest of us (many of us are already feeling the heat due to the floating housing loan rate being substantially up) will subsidise these greedy pigs due to criminal negligence of one man, alan greenspan. hindsight bias notwithstanding, could these regulators miss out on something so blatantly obvious as to where the (recent) excessive money earned by oil producers was going? silver lining: as a country we are definitely lucky. imagine that worthy, rakesh mohan (who wrote off the railways) as the governor of rbi!!! (by the way, has anyone recently sounded him on his 'worthy' report?)
baburaja		#15	[-]
Posts: 79 (10/18/08 11:08:52) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	"US financial market is so huge and complex that we cannot even imagine in India. Every complex system will occasionally break down. Does it justify rubbishing the system?" of sorry, i missed out on this one. some guys say that the banking industry has probably lost all the money that it ever made in its' history, repeat ever. if this does not justify rubbishing, what does?
freefall		#16	[-]
Posts: 179 (10/18/08 15:05:41) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	"some guys say that the banking industry has probably lost all the money that it ever made in its' history, repeat ever. if this does not justify rubbishing, what does?" I don't understand why accountants have to go by what other guys say. 10-K filing of all public companies are mandatory in the US and available on the web. Take any one investment bank, look at their financial statements and draw your own conclusion. For the record following is the link for last 10-K filing of Goldman Sachs (Lehman's biggest competitor): http://www2.goldmansachs....nt/10k/2007-form-10-k.pdf Go to page 109 and look at their consolidated statement of earnings. Their revenues for past three years add up to over $100 billion. And it is just one bank! There are 2000 investment banks in the US. Whatever happens in the US, happens on an unprecedented scale. $700 billion is also an unprecedented amount but hello! we are talking here of a $65 trillion economy. Failures in a free market are good since they bring system errors in public glare and force necessary changes. While we may continue to pat our backs unmindful of the grinding poverty that we have brought upon ourselves, the financial system back there will be alive and kicking again in a year. At least till the next failure! Last Edited By: freefall 10/18/08 15:59:17. Edited 2 times.
baburaja		#17	[-]
Posts: 80 (10/18/08 21:22:33) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	sorry, but you confuse the u.s. banking industry with u.s. economy, and confuse company valuation with revenue re accountants and figures, the other variety is preferable!
freefall		#18	[-]
Posts: 180 (10/19/08 03:54:58) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	"sorry, but you confuse the u.s. banking industry with u.s. economy, and confuse company valuation with revenue" Babu. I quoted US economy size just to put the losses in perspective. I apologize if I confused you with this. As regard to your other point, let me restate that $100 billion is REVENUE for 3 years. It is NOT company valuation. Please re-read line 7 on consolidated statement of earnings (p.109). It is REVENUES NET OF INTEREST EXPENSE, which is $45.9 billion, $37.6 billion and $25.2 billion for past three years. You made an objection about IB industry loosing all the money that it has made ever. What I am arguing is that just one out of the 2000 banks has made $100 billion in past 3 years. Then how can we say that all IB industry put together has made just $700 billion ever? Last Edited By: freefall 10/19/08 04:24:25. Edited 3 times.
karticc	Some points for consideration....	#19	[-]
Posts: 109 (10/21/08 22:04:25) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	I have tried to set the record straight and thought I should just bring some points to the notice of the readers of this web site, and this is especially in response to A P Malik's post. He's certainly entitled to have his opinion just as I mine. However no one should cast aspersions only because the points of view don't match so here goes: Freddie Mac: The Federal Home Loan Mortgage Corporation , commonly known as Freddie Mac, is a government sponsored enterprise (GSE) of the United States federal government. The FHLMC was created in 1970 to expand the secondary market for mortgages in the US. Along with other GSEs, Freddie Mac buys mortgages on the secondary market, pools them, and sells them as mortgage-backed securities to investors on the open market. This secondary mortgage market increases the supply of money available for mortgages lending and increases the money available for new home purchases. (Wikipedia) Sub prime crisis (The root of current economic crisis) : The crisis began with the bursting of the United States housing bubble and high default rates on "subprime" and adjustable rate mortgages (ARM), beginning in approximately 2005-2006. For a number of years prior to that, declining lending standards, an increase in loan incentives such as easy initial terms, and a long-term trend of rising housing prices had encouraged borrowers to assume difficult mortgages in the belief they would be able to quickly refinance at more favorable terms. However, once interest rates began to rise and housing prices started to drop moderately in 2006-2007 in many parts of the U.S., refinancing became more difficult. Defaults and foreclosure activity increased dramatically as easy initial terms expired, home prices failed to go up as anticipated, and ARM interest rates reset higher. Foreclosures accelerated in the United States in late 2006 and triggered a global financial crisis through 2007 and 2008. During 2007, nearly 1.3 million U.S. housing properties were subject to foreclosure activity, up 79% from 2006. (Wikipedia) So pray where does the poor "socialistic" Govt. of USA come in, Malik? USA socialist? Come again man. Malik says that the people who did not repay their mortgages lost nothing. Well, to again quote the wikipedia post, Foreclosures accelerated in the United States in late 2006 and triggered a global financial crisis through 2007 and 2008. During 2007, nearly 1.3 million U.S. housing properties were subject to foreclosure activity, up 79% from 2006. Foreclosure is when bank takes away your home or car for which you have defaulted on payment of installments of the loan.These seized properties are then auctioned by the banks at ridiculous prices, which are picked up by fat cat capitalists to be sold later when the market for housing again turns good, and the poor fellow, who's home and hearth was so cruelly snatched away, his loan comes down by that little amount. So now he has no house but still has a loan on his head. Which to most people might come as a big calamity, perhaps not to a capitalistic Dy CE. Who was the biggest backer of the bail out package, Malik? A certain George W Bush! And yet you say the socialists have forced the bailout of these banks which were reeling under the crisis! You better watch out, as Bush might sue you for slander, calling him a socialist! And since when have Lehman Brothers, AIG, Morgan Stanley and the like become fly by night operators? I wonder what kind of "correct picture" you are trying to portray, and invoking poor buddhu buddha's name in vain? Kartic Chauhan Last Edited By: karticc 10/21/08 23:37:03. Edited 1 times.
baburaja	last word?	#20	[-]
Posts: 81 (10/22/08 09:31:30) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	barclay price from edinburgh: "can it really be a coincidence that within weeks of the large hadron collider being switched on for the first time a financial black hole has appeared in the universe?" beat this, folks!

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