The World In Pictures

This is how the american middle class (not the John McCain five million types) looks like. Bitter, bewildered and helpless.

(*picture taken from trip to thousand islands last week)


This is how the US financial market looks like. Hell of a way for Bush to complete his eight years in office. Hell of a way to go.

(*picture taken from trip to thousand islands last week)


well, ain't dreaming world peace or hunger-free world. I guess I am a little more selfish for those things now. I would like an island home like the one above and the bliss that accompanies with its lonely abandon even if it borders on ignorance.

(*picture taken from trip to thousand islands last week)

2008 American Credit Crisis

Thou' speak when the damage is already done. Alan Greenspan & his take on the deepening credit crisis

The news is getting increasingly ominous here, some are already hinting that this crisis in american financial markets could easily be the most gravest since the great depression, I am no expert on such a fancy subject but even the talk of comparing these two events makes you realize that things are maybe unravelling a bit too too fast. Maybe its all hoax, but then how could a company like Bear Stearn's be worth 2 bucks a piece just in matter of a fortnight. Being devalued 99% in fifteen days is something. There is more to it then meets the normal eye, and the way fed intervened [ Remember when satara-based UWB, that was sold lock,stock & barrel in three days by RBI ] to save it from going under suggests that its failure is maybe incomprehensible and could trigger a cascading set of failures. It means that there are other pressure points in the system that are under a lot of strain & are possibly waiting to rupture. I am surprised by the inherent flaws that this 'small' credit crunch has exposed in the glitzy american financial markets and its domino effect around the world. The seemingly hard and tinted glass building hides a lot of skeletons inside.

Its the return of the Karma in the financial markets these days, finally we are seeing that gigantic de-leverage-ing of the entire financial muddle that has been created over the years. Frankly, do we need so many financial instruments just to manage risk? All this risk based default swaps, where the risk can be quantified. It's good that some sanity is getting back into the system, but at a heavy cost. Somehow, how did not anybody saw this coming, how come those blue-blooded analysts were caught unaware. Over the years, Greenspan's low interest rate regime boomed these fancy paper and the housing market. Caution was the first thing that everybody threw to the winds, I guess if you keep good times for too long, then complacency sets in. But then some day the cookie had to crumble, and look the way it crumbled.

2008 Crisis : My Take On Coming Full Circle

Yesterday it was Carlyle capital, today its Bears Sterns & Co and rumors are hot that Lehman Brothers is also in a bit of trouble. The story keeps getting better or morbid whatever way you call it. Are there any lessons to be learned from so much deadwood floating around. Yes, Obviously for one greed is bad, it always has been bad, two convenience (i am not sure if its the right word) is not always such a good thing, making it possible for sub prime credit rating people to own homes was not probably the brightest of ideas. Attempting to build castles that has its foundations of sand is always a risky proposition, but then greed took care of pragmatism. Third, such moderation is maybe good or even necessary every decade to remove the complacency that builds up into the system. Fourth, this recession could lead to cooling of commodity prices worldwide that have been on the roll for quite some time now, last seen Brent was at $111 a barrel, I can still recall when the basket was ruling at sub-10 levels (around 1997). Every central bank worldwide is having a tightrope to walk between recession & inflation and Last this could be a clarion call to the US that its no longer the centre of the economic & industrial activity that it had been till now, the balance of power has started to move towards Asia and US can not continue hoping that it can be the richest borrower for all its life and not keep its own house in order.

Are there any lessons to be learned from this for India, Yes, one there is nothing like decoupling, we will not go into negative growth, but yes we will feel the pain,see ICICI Bank sub prime write-offs. second, avoid excesses in investments of any kind as you could be holding on to an assets for a long amount of time as market moves possibly sideways. Third, the India growth story is intact but the exuberance could wear of a little, so no more of hefty jumps on job hopping, Fourth growth would now have to be created as world economy has slowed, earlier we were on a gravy train that built the our growth rate with its own momentum, no since the train is de-accelerating India must push its engine harder to keep the train going faster. To take growth to the next level we needs reforms, solid reforms & with the election just around the corner, I am not putting my buck on reforms.

My Take On American Politics

An open letter from Iranian intelligence. Note the subtle satire of the editorial & the latest release of the NIE report on Iran has reinforced that the intelligence (and ground reality) is hopelessly out of sync with the perceptions of the administration. This is a silent political earthquake that has been delivered to the neo-con lobby led by Dick Cheney that has fully disturbed the pawns on the Great chessboard. This is not new, not now not after that Iraqi disaster. There is a certain air of cynicism that has gripped the American mainstream media since the Bush's second term. Everybody on TV talks of the nation that has lost its way, even though you don't feel it that way when you talk to people or interact with them. Maybe I was never with people that really mattered. After spending a decent time in American liberal heartland, I have realized that Bush has neither the support of liberals nor conservatives. He is like a whipping post that everybody likes to whip religiously. But there is the catch, I don't he is the main problem, he may be a polarizing figure in the centre at best, but he is not dictating the American politics.

Instead it is that the conservatives & liberals are tied around there extremes so tightly that there is no middle ground, & neither any hope of it. Nobody talks of sub-prime or health care or immigration, instead the whole energy is being spend on creation, evolution, abortion & debating who is the biggest tax liberal. I used to think earlier who are these people who have such utter faith in creationism or anti-choice or anti-stem cell research, but having lived there I have come to know that an average white American living in rural America is church going, does not seem to like gays, republican, creationist, pro-life & fiscally conservative & is against immigrants or American jobs being outsourced. And with such a large population feeling marginalized by successive liberal regimes & the democratic penchant for big business & outsourcing, its payback time. Therefore even with so much knee jerk reaction to Bush's presidency, it won't be easy for democrats to take the Oval office back. But in all this confusion & stalemate one thing is clear, that conservatism is in & on TV it is big business. Every evening on CNN there is a conservative show - Lou Dobbs Show, even though I don't like the fear-mongering tone of the show or the anchor, but the show whole raison d'etre is to provoke fear about everything & anything, about oil money buying US ports/NASDAQ/highways, about outsourcing, about immigration, about Chinese imports, about Iran. He seems to have lot of audience though. I guess conservatism is a safe bet, always, at least the onus of change is no longer there.