Wednesday, April 21, 2010

Trouble comes in two - Paulsons that is.

The first was the ex-Goldman Sachs chief and ex-Treasury Hank Paulson who used his influence as a smart and astute investment banker to lobby for deregulation particularly in diluting the leveraging norms and got the Congress to allow his investment banking firm to lend 30 times its capital. His firm used it to ramp up all kinds of toxic assets and spread a culture of mercenary banking.

And then as Treasury Secretary he saw to it that the competition to Goldman is wiped out, first by helping JP Morgan Chase to buy Bear Stearns at a cheap price (with Government help underwritten by the Treasury and Federal Reserve) and then in September 2008 forcing Lehman Bros to declare bankruptcy, by refusing to extend the same helping hand.

Hank Paulson was also in the thick of scheming (along with Geithner of Federal Reserve then) to make sure Goldman and Morgan Stanley convert themselves into Banks to qualify for Government rescue. He thus effectively slayed the opposition in a series of wise moves.

Goldman became one of the two remaining Superpowers of Wall Street, which gave it a nice position to write the rules to make more money. It is a legend that Goldman started shorting its own clients and played all sides of a deal to keep making money.

Now comes the other Paulson, John whose scheming along with Goldman to create and short toxic bonds is the news of the day, as revealed by the SEC suit.

Below is a very concise description of what SEC’s suit is all about.

Wonder what ethics Goldman has if it ventured to bundle toxic assets into a synthetic or hybrid CDO tranche to sell to other 'sophisticated
’ investors who were managing the funds of pension funds, churches, schools, municipalities, etc. And which other investment bankers did similar deals with deliberate intent to make money on toxic sub-prime loans ?

The key description of the deal as per the SEC charge:

Quote: So they seek out a reputable third party to, as internal Goldman memos state, put its “name at risk…on a weak quality portfolio.” Unquote

They were ‘Too big to be sued' till now.

Let us see whether this opens the floodgates of more such suits.

But wait, Goldman and its top management could escape making its Vice President,Fabrice Tourre, the fall guy. It appears that Goldman was aware much earlier that a suit like this might be laid. It is not unthinkable that they used their influence with SEC to name Fabulous Fab as an accused so he could become the fall guy. They have already issued press statements saying that the deal and its aftermath was the result of action of a single employee. They are obviously playing to distance themselves from Fabrice Tourre's action even though he worked in the firm, painting him as a 'rogue dealer'.

Who knows they may get away with it and carry on their merry dealings through more such 'rogue dealers'.

But again, the political reality of mid-term elections may work against Goldman getting off so easily. Obama and the Democrats are spoiling for a fight to push their reforms of the financial sector and may be using this as a test case or pressure to bring the titans into line. They have to convince the American public that they are working in their interests and not on the side of the fat cats and what better way than to get a win over the biggest titan, Goldman.

Gordon Brown, the British PM, who is also facing elections has nicely picked the opportunity to rail against the titans in UK.

So it is all becoming very political too. Witness the current bill in the Senate 'Restoring American Financial Stability Act' being upstaged by 'The SAFE Banking Act'. The former is not supposed to go far enough to brak the 'Too Big to Fail Banks' so the latter has prescribed some quantitative restrictions.

The question is - Will Obama do a Teddy Roosevelt and take on the Titans to break them up ?
He may well do, because this is an election year, after all.

Saturday, March 20, 2010

To disclose or not to disclose-Transparency of the Bailout in USA.

An interesting court battle is being waged in the USA regarding the Freedom of Information Act.

Huge sums of money were disbursed by the Federal Reserve during the Global Financial Crisis in the latter half of 2008 to banks, companies and other financial firms to stem the tide of deteriorating markets and to prevent the US economy from going belly-up.

Apart from the debate about whether this massive rescue effort was undertaken to save a few preferred Wall Street banks (which had its own ex-executives, including the Treasury Secretary, Hank Paulson at key places), there is a tussle going on to find out how exactly the funds were disbursed and who were the recipients of these rescue bailouts.

Bloomberg has filed the case under FOIA. Naturally the Federal Reserve is opposing the release of information. The arguments for release of information is that public money was used and public has a right to know. The opponents say release of such sensitive information will undermine the status of the recipients and there could be negative effect (even a run on them) on the prospects of these firms.

Both arguments are very valid.

Public money was spent so quickly in those turbulent times, even Congress baulked at authorising it at first. There is a story that Paulson went with just a one page proposal to Congress to throw $700 billion at the problem and not enough details were given to make an informed decision. It was pure scare-mongering that got the funds released.

After nearly 18 months of the rescue being in effect, it is still not clear who was saved and whether they were worth saving, because the ground position has not changed much, with the Wall Street bankers (those that are remaining that is) going about their secretive business and controlling the markets as they used to before.

On the other hand, the Fed is right in arguing that it has to conduct its business not in the glare of public light and certain decisions and acts are too sensitive to be released in a volatile market and such release may screw the market further, even risking the bailout money itself.

My view is the Fed was right to keep things secret at that time, but now after so much time has passed, it is not a bad idea to release it. The bailout has worked to the extent it was hoped for and the bankers don'e need continued protection for an indefinite time.

Also many stories are already coming out regularly about the events and players. Lehman's auditors are in the soup for signing off on a fictitious balance sheet and the firm is going the way of Enron with possible criminal charges against the then management.
Books and articles are being released regularly detailing what went on inside these famed institutions, including the Government then.

I recommend reading the book Too Big to Fail by Andrew Ross Sorkin. It is interesting to read about how Lehman was raped individually and in group by the Treasury, Federal Reserve and all the other bankers like Goldman, JPMorganChase, Morgan Stanley etc leading up to its final bankruptcy.

With so much information coming on, it would not be too damaging if the Federal Reserve is asked to release full details of the rescue it undertook along with the Treasury Department then.
In that light, I applaud the latest ruling by the US Court of Appeals in Manhattan authorising the release of the information.

The Public has a right to know, sometimes a little belatedly, because releasing the information as the events are developing may be harmful but that can't be the case forever.

But wait, the battle is not over yet. I expect the case to go to the US Supreme Court and it will be then interesting to see how the whole thing pans out in the next few months.

May be the Congress will legislate a holding period for such information before they are released.

Sunday, February 07, 2010

Is the Love Affair between US and China over ?

The increasing differences of opinions/stand between the two great Superpowers is being talked about more and more now.

To summarise the recent points of differences:

1. US is selling heaps of arms again to Taiwan, stoking Chinese fears and worries that US is again stirring up trouble in its backyard
2. US President Obama is going to meet Dalai Lama, always an issue of prestige and face for China.
3. US has been exhorting China to revalue its currency and give relief to the crisis US is facing at home due to job losses, slowing economy and myriad other ills afflicting US.
4. China is not supporting US stand against Iran and is also silent on North Korea
5. China is expanding influence across the Globe by buying up companies and even nations (with its money power) to ensure the supply of resources it needs to keep ticking.
6. The US manufactured GFC has been a WMD slicing off a big chunk of China's wealth and slowing China's growth.

So there it is. The balance of power has shifted and continues to shift and US is not comfortable with the loss of its status.

Obama, being so inexperienced, is not able to keep China close or in line. He has not charmed the Chinese with his silky tongue like he did his own countrymen. In fact he could not even woo the Muslim world which is also becoming more and more disillussioned with his policies on Afghanistan and Palestine. Obama's team have not really focussed on strengthening the relationship/partnership with China. Their focus has been all over and not getting any result on any issue.

China on the other hand, is not averse to playing its hand overtly and covertly especially now when the US is seen to be down and out on all fronts, economic and political.

The only link that is sustaining the relationship may be the huge investment China has made in the US Treasury bonds and other money-market instruments. China is seeing the value of this supposedly $2 trillion dollar investment not giving a good return and may even be losing a bit of capital too. But China is not able to make break away because of the trade with US.

But what if China one day awakens to the power it has over US and decides to do something about it.

One out of the box scenario.

How about China and US come to an agreement by which US withdraws its commitment to Taiwan and lets China absorb Taiwan if China writes off say $1 trillion of US's debt. In a manner US would be selling off Taiwan to China.

Similar scenarios can be thought of in the matter of N Korea.

Seems like more interesting times ahead for the world as the US and China try to force each other down.

Wednesday, December 09, 2009

Russia trumps US in cozying upto India.

This will be a short one.

President Obama recently hosted Manmohan Singh, PM of India to a gala dinner with much fanfare (and some uninvited guests as well), but there was no meat on the burger.
No agreements were signed and the much-touted nuclear deal has not progressed either.

Contrast this to the recent visit of Manmohan Singh to Russia.
A very low-key affair with much meat delivered.
Several agreements signed, the most important being the agreement by which Russia will support India in its nuclear developments, no questions asked.
And there was the deal to continue arms supply with fighter jets, etc on the table.
Russia has once again proved that it is a better, long-term friend of India.
Obama and his team are paying lip-service to friendship with India, but their hearts and purse are with Pakistan.
Russia did not say that China has a role in resolving the Kashmir dispute, unlike the US.
Seems like US has a long way to go to believe in India or taking some real action to improve the relationship.

While Obama delivered a dinner, it was Russia which added spice to the meal.
I am sure the Indians lapped it up.

Wednesday, December 02, 2009

Obama to Afghanistan- We have no money to save you.

Just now listened to Obama's speech outlining the strategy for the war in Afghanistan.

Obama has told Afghanistan in no uncertain terms that the US is not capable of funding a long struggle there to restore stability in that country.

Obama has outlined his most important goal to be to get out of Afghanistan within the next 18/24 months and the surge he is authorising by sending additional troops is with the sole aim of getting the Afghans to take over the war soon, so the US troops can get out. Winning the war in Afghanistan is not a primary goal anymore.

There was no mention of eradicating Al Qaeda or capturing Osama bin Laden or putting an end to the insurgency. At the end of 18/24 months it is very much possible that the Al Qaeda and the insurgency may still be troubling the Government/people of Afghanistan, but then it is their own problem. America would be out by then.

It is implied that the surge in troops is to get the conditions ready for retreat.
The goal therefore is not defeat of the enemy but a honourable retreat of American forces.
And to effect that successfully, America will be involved in micro-managing Afghanistan for the next few months, by supervising the Afghan Government.

And the main reason for this is that the US has no money or resources to prolong the efforts to eradicate Al Qaeda/insurgency.

America has been affected greatly by the Global Financial Crisis brought on by the Wall Street Wizards and it has to focus on rebuilding its own economy.

Sorry, they have no money to spend on Afghanistan. They have lost all their money in playing the market.

May be Pakistan, which will still be receiving some of America's aid money, will come to the aid of Afghanistan by closing its border/safe haven for the insurgents/Al Qaeda. But that prospect is up in the air, given the past misuse of American funds by the Pakistan Government and Army.

So watch out Afghanistan. The insurgents have to hang on for just another 2 years at the most.
You will be soon on your own with your own corrupt government and inefficient forces to take on the insurgents.

Best of Luck.

Sunday, November 15, 2009

Too Big to Break

After nominating (though not publicly) several Banks and institutions as ‘Too Big to Fail’, America is now caught up in a dilemma of how to manage/regulate these behemoths. The Federal Government is not disclosing which Banks/Institutions have been deemed as such, because that would give a signal to the Public that these institutions are basically unsafe and are being propped up with the Treasury money only. Though any one who is a regular reader of financial press can easily guess as to the identities of these institutions. But how long can they be treated as TBTF ? There are already rumblings of discontent and even a Boycott movement against these TBTF Banks.

Now the US Congress/Senate is attempting to redraw the rules and is working on a law which will give the authorities the power to break up these behemoths, so in future they will be less of a risk and can be allowed to die if they get into tricky situations without pulling down the whole nation. The first step would be to re-introduce some law akin to the Glass-Steagall Act which during the Depression split the Banks’ business into regular banking and investment banking and prevented any cross over.

As many know some of the provisions of the original Glass-Steagal Act were diluted in 1999 by the Gramm-Leach, Biley Act allowed Banks to do investment banking too and which has over the last few years enabled regular banking groups to take on other paper-based business and run up huge risk, which resulted in the Financial Crisis of 2008. Firms like Goldman Sachs and Morgan Stanley cleverly changed themselves into Banks during the height of the Crisis to qualify for the TBTF label and now they are flourishing not because of their Banking business but because of their trading actitivities.

It is a good move by the legislators to break up the TBTF institutions and combined with a re-introduction of the repealed provisions of Glass-Steagall Act, they would make sure that Banks confine themselves to the business of taking deposits and lending for productive and non-speculative real estate business and thus bring a semblance of normalcy to the Banking world. The Investment Banks should be left to live or die on their own efficiencies and merits and people who invest in them or avail of their services would be taking their own risks. Not like the average depositor or borrower who will deal with Banks.

But the Financial Services Lobby is a very powerful group in the US and it has opposed these moves. With key players of the Obama Administration sympathetic to the Big Institutions it appears the Lobby may win and may thwart all attempts to have meaningful regulations in place. The Federal Reserve is also not exhibiting any support for these changes.

May be America is still thinking that it is better to not regulate too much. But as Government is now a substantial owner in many of these TBTF institutions, it has a responsibility more towards the citizens than the Bankers. And long term health of the Nation will be better maintained if some hard decisions are taken now so the Crisis is not built up again. This may be the best chance to re-introduce meaningful and effective regulation and this may be more important than other initiatives of the Government.

Let not these Too Big to Fail institutions continue life as Too Big to Break too.

It will be interesting to see how this thing plays out.

An Update (21 Nov 09):

A bubble is a bubble is a bubble, whatever the cause. And it will burst.

US is exporting its trouble around the world. Money traders and speculators are making hay while the dollar dulls. This may push back many countries to adopt more controls and undermine Capitalism some more. It is now every nation for itself to protect itself. China is way deep into the US economy and can’t decouple easily without damage to itself.

Fundamentals have not changed much in any country (excepting may be Australia) to warrant irrational exhuberance again in the stock markets.

In the US they are re-thinking the ‘checks and balances’ between the Congress and the Administration, but as long as Lobbying is on, no benefit will come to the citizens.

Interesting times indeed.

Saturday, October 10, 2009

Nobel not Noble anymore

Difficult to understand how Obama got the Nobel Peace Prize, unless they want to influence him to withdraw from Afghanistan, but that is grasping at straws.

Too much accolade for one man who has not yet proved himself in anything, except that he has continued many of George Bush's policies/practices, including the support to the fat cat money bags like Goldman Sucks, etc. US is still not out-of-the woods in the unemployment and long-term growth aspects of economic recovery.

In Afghanistan, the US is supporting a corrupt Government which had hijacked the election and committed fraud on the citizens. Obama may very well increase troop levels leading to more deaths in the months to come. He is also supporting Pakistan with money which is being siphoned off by the Armed forces and the citizens of Pakistan are still paying the price of the US connection.

He has not solved the Palestine problem, on the contrary Israel is playing hardball and not stopping settlement. Where is peace in the Middle East ?

He has not come to any terms with Iran yet.

And he has not yet got even talks going on Climate.

He has even postponed meeting Dalai Lama under pressure from the Chinese.

Except that he won the election as President without unleashing a backlash from the Whites in US, there is no achievement yet.

Nobel Committee has degraded the value of this Peace Prize.

They should have put a condition that the Prize would be withdrawn if there is no peace in the Middle East and Afghanistan within a year. That would be a precedent.

Nobel is not noble any more.

Update (11/12/09):

Obama in his speech accepting the Prize at Oslo has told the Nobel Committee that they erred in giving the award to a "Head of State' especially of USA, because he is bound to wage wars.

Saturday, September 26, 2009

Talkfest at New York/Pittsburgh

The annual talkfest at United Nations this year brought a new Star, Barack Obama. The world leaders lined up to shake his hands and get their photos with Barack and Michelle and it was all a big Picnic and Vacation for the leaders.
But some good seems to be coming out of these talks now that US under Obama has recognised the importance of consensus-building again and drop its unilateralism which was the policy mantra under George Bush.
It was nice to hear Obama speak about the necessity of all nations pulling together to get out of the climate and economic mess. I specially liked his exhortation that countries which castigated US earlier for acting alone cannot now ask US to act alone to pull the world out of these messes. Good point. Obama seems to be getting the right vibes and responses and let us see what he can make out of this new honeymoon with the world.
The counter points to Obama were the speeches by Gaddaffi and Ahmedinijad. Gaddaffi in his rambling speech however highlighted the hypocrisy of United Nations being controlled by the Security Council which is a small club not really representing the world as it is today. His point about shifting UN itself to a more accessible place on the Globe needs some consideration. May be US would also be happy to be rid of UN at New York. I am sure the residents of New York would support such a move for UN, because then they would have less traffic/security hassles and could have the city streets for themselves.
Ahmedinijad's tirade against Israel could be dismissed but not his defence of Iran's right to develop nuclear technology. The US and a few Western countries should not have the monopoloy on nuclear technology and if any other country like Brazil or Iran wishes to develop nuclear technology then they should be allowed to do so. It is double-standard for US, Russia and China (even India and Israel) which have nuclear weapons (some developed overtly and some covertly as in the case of Isreal) to speak against other countries wishing to develop that technology for peaceful uses. Unless one approaches this with a degree of trust no agreement is possible. Isolation of any country will not work.
The other super meeting of the G20 at Pittsburg has decided that G20 would be the forum responsible for managing the world economy instead of the G8 (comprising of mostly West). Smart move, when the losses are now being socialised, to expand the responsibility for recovery and throw a smoke-screen over the culpability of the West for the economic mess they have brought to the world in the recent past. Hope it works fast.
Still the Bankers are a different, uncontrollable Beasts altogether and with so many ex-bankers in position of responsibility at Governmental level (especially in the US) the outcome is not very certain.
Why not integrate the G20 countries into an expanded UN Security Council which could be renamed Supreme Council with no veto rights for any one country, but 75% majority ruling required to pass all resolutions/actions ?

A lighter side-show to these meetings was the New Zealand Prime Minister John Key's appearance on the David Letterman Show where key plugged New Zealand unashamedly. Good on you mate.

Watch this at

Saturday, September 12, 2009

September-The Crisis Anniversary Month- 9/11 and 9/15 - Osama and Lehman

September is the Crisis Anniversary month for the world. Two events that shook the world this decade happened in September, both in New York. Both changed the world in political and economic terms and both had created more uncertainties and destabilised the world.

The 9/11 World Trade Center attacks by Al Qaeda instigated a massive retaliation by US in Iraq and Afganisthan, the effects of which are being felt even today and will continue in future. The US has spent trillions to avenge the 9/11 attack and has sacrificed many of its citizens in both wars. Iraq has been scarred forever and the US has put countless Iraqi citizens out of their homes and even out of their lives.

These wars have generated their own scandals, Abu Graib, Gitmo, torture, water-boarding (such an innocuous word sounding like a sport akin to snow-boarding), rendition (sounds biblical but very dangerous in practice) and similar exotic practices/phrases. The US is trying to slowly wind down from Iraq, but at the same time increasing the involvment in Afganisthan, much against the wishes of its own citizens. There seems to be no exit strategy from war abroad.

Similar is the story with the other Anniversary, 9/15, the day the financial chiefs let Lehman Brothers collapse, bringing on a Tsunami in the money world, which swept aside and destroyed the wealth of countless individuals and organisations.

It has been proved by the latest revealings in many financial magazines that the top-players in USA at that time did everything with a selfish interest to save their own firms and even some of them were brow-beaten into the scheme, with the Bush Administration having no clue as to what was happening or was going to happen.

It was Paulson all the way designing and implementing the recovery at a very rapid pace to save Goldman and his cronies. The world will continue to pay the price for this for many more years.

'Too Big to Fail' and 'Too Smart to be thrown out' have entered the Capitalistic vocabulary and are once again the underpinnings of the recovery/rebuilding.

And the ultimate 'Too big to fail' is the US itself and the whole world is sustaining what is unsustainable for long. So watch out for a similar scenario happening sometime in next few years. The Bankers are consolidating with the help of public money ready to unleash the next catastrophe on the world. It could come in the form of commerical property collapse, more securitisation may be of carbon/emissions trading, insurance scams (what with Obama feeding the insurance companies with his own Grand Plan), dollar crisis, inflation, and many such unforeseen events. The cost of picking up the pieces then will be more severe.

The exit strategy from this so-called stimulus is still not being thought of.

Two events from which the US and the World are trying to exit without much more damage, but the prognosis is not very good at the moment.

I am not being excessively gloomy, in the face of the nascent recovery and the 'green shoots' that is out there. I am just looking at the countless individuals/instititutions that lost wealth in the collapse as against the very few, bankers and stock holders, who are now benefitting from the small recovery that is happening now. The collapse was broadbased but the present recovey is too narrow to help those who lost everything in the collapse.

Monday, August 17, 2009

Need for rethinking Afghan Strategy

The association with US and the assistance they are getting from US in comabting terrorism seem to be the kiss of death for Pakistan and Afghanistan and it is proving to be a slow death.
In the meantime, US and allies will get more and more mired in the Afghan imbroglio and will turn that into another Vietnam, with force escalations, despotic government installed by US and the same old stuff.
It was expected that President Obama would change George Bush's policy but he is repeating Bush's mistakes in Iraq with troop surge, etc.
The British public have already seen the folly of such moves and are pressuring their government to stop sinking deeper in Afganistan.
But in US they are pre-occupied with economic and healthcare crises and have no time to see how the Afgan and Pakistan policies are hurting the US politically and militarily.
In Pakistan and Afghanistan they rightfully hate the US for the carnage it has brought to them.
The US went into the region to avenge the 9/11 and the perpetrators needed to be punished.
But in Afghanistan, after engaging the enemy for so many years, they are nowhere near a solution.
The initial objective of capturing Osama has now become so many things that the US is continuously risking the lives of everyone involved, most of all the innocent civilians.
Just imagine if every county that was the victim of a terror attack started a war against the country that housed the perps. For example, is India allowed to start a war (like the US against Afganistan) against Pakistan to avenge the Bombay massacres ?
The US wrongly invaded Iraq after 9/11 and spent all its energies, money and many soldiers and civilians died in the process.
Now the same thing is happening in Afganistan.
My concern is US on the one hand has lost the wealth of the world by its financial shenanigans and now they are destroying the human wealth in other countries on an imaginary threat which is not going to go away by such wars.
Why not the US step back from Afghanistan, withdraw the forces and work out a more effective way to capture Osama, instead of just throwing men and arms against everyone in Afghanistan and Pakistan ? They are not succeeding with the military option they have embraced.
May be the US should give an ultimatum and task Pakistan to capture Osama and his top deputies within 6 months are so, failing which they would lose all the aid/funds they are getting from US now. This would give Pakistan a deadline and an incentive to work harder to fight terrorism.
A respite in the war may win more friends for US than what is happening now.

Thursday, July 30, 2009

If you have $5000 would you invest in shares of Google or Microsoft ?

I just read about the deal between Microsoft and Yahoo agreeing to combine their search engines as competition to Google. Started wondering what would be the long term outlook for both Microsoft and Google.

Microsoft is really getting soft with not many useful innovations or upgrades coming out. Their presence on the internet market is practically zero. Now their Operating System Windows is also under threat of rival Google which is going to introduce Chrome OS soon. Google has already introduced Chrome browser which has received critical acclaim by techies. Chrome does not crash as often as Windows and successive upgrades in Windows have not stabilized it and have in fact confused users.

Microsoft wanted to get in the Search Engine market dominated by Google (I understand Google has more than 80% market internationally and more than 65% in US) and its child Bing is too young to pose a threat to Google. So the move to acquire some bling by getting Yahoo engine so Bing can be marketed as a robust version. May work , but will take time.

Google has become a generic product and it will be difficult to wean away customers from that.

To add to its luster, Google is going after Apple’s share in the smart phone market with its Magic handset, which I understand integrates well several applications.

It is not a stretch to think that Google’s next project (or may be it already has a secret one under development) is in the music scene to compete with I Pod.

So Google seems to be looking to several innovations/applications whereas Microsoft is kind of floundering in the wild and does not know what to do with Windows and where to go next.

And remember Bill Gates has effectively moved away from Microsoft, pursuing his philanthropy. He is out to make a gentler image for himself in the world. So it seems the hunger to do business may be dimming at Microsoft.

Google on the other hand is readying its weapons on several fronts and it seems that it could expand its presence in several fields. The old adage that nothing succeeds like success may work for Google as it succeeds in new products/services.

Granted Google has an image problem, being the giant it is, just like Walmart, I would guess.

Still it is working smartly and it looks like the choice for investment would be Google.

Am I right ? Can Microsoft be dismissed too quickly and easily ?

Mighty interesting to watch.

PS: I just stumbled upon a website which allows one to simultaneously use Bing and Google SEs

Clever but at this rate we may have to increase the monitor size to accommodate everything. May be we can buy a 50'' LCD TV, put it up on the living room and play 'Search Game' for parties.

Sunday, July 26, 2009

Time to make India a Permanent Member of UN Security Council

The UN Security Council has only 5 permanent members since inception.

Which is not really reflective of present day geo-political situation of the World. The world has moved on from the war years. Economic expansion and population increase in other countires dictates that the present 5 permanent members, viz, US, UK, France, Russia and China do not adequately reflect or represent the World in UN. This can no more be the very exclusive club it has been so far.

Economically UK, France and even US have had major crises/collapses in the recent past and their currencies do not command the value they have done in the past. Russia is a broken state after the disintegration of USSR and the Russian economy is not robust or healthy. Only China has improved its economic and political clout in the last several decades.

There are other countries which have now come to the fore-front in world affairs. India being the principal of these newly emerged countries. With the large population, stable democracy, improved economic situation and the expected role India is likely to play in world affairs in the next few years, it is the right time to expand the permanent membership to include India. India and China have to be co-opted into the Global Environmental Scene and what better way than to give India the importance it deserves in the world affairs.

Granted in the past India has not taken any sides and has gone the non-aligned way, but things are changing. India and Us are co-operating in the energy (nuclear) field and US is considering India as very important for security and anti-terrorism matters. Indian economy has grown to commanding heights and the market in India cannot be ignored either. In fact they say India is a better bet than China in the economic field. And technolgy absorption and development is increasing in India. The Silicon Valley is said to be powered by ICs (Indians and Chinese).

While that is being considered and done there are a few other countries which qualify as well, notably Brazil, Saudi Arabia, Australia and even South Africa and Nigeria.

It would be a better world and a better UN if proper and just representation is given to all geographical areas and more members are included from a resurgent Asia and Africa.
It might be even a good idea to merge the permanent and elected members into one single group with say 12 important members from all continents.

My choice for such a revampled uber-council would be US, UK, Germany, France, Russia, Turkey, Saudi Arabia, India, China, Nigeria, South Africa and Australia.

Update on 27/9/09

Or as an alternative how about the following

The G20 countries have agreed at Pittsburgh that this forum (with following members) would become the main economic forum to manage the world economy.

The G20 countries are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, U.S., U.K.

Why not integrate these countries into an expanded UN Security Council which could be renamed UN Supreme Council with no veto rights but 75% majority requiring to pass resolutions.

Thursday, July 16, 2009

Iran better watch out for an attack.

The drum rolls are beating strong.
Joe Biden has stated that Isreal is best capable of deciding its threat and taking action.
Though Obama has played the Good guy to Biden's Bad guy, he is under pressure to get results from Iran for his soft approach.
And Israel has to do something to get back the US support.
So what better way than to do the hard job for US and take out Iran's nuclear facilities and get US in its debt for the next few decades.
Obama is painting himself into a corner, the latest being the September deadline for Iran to dial back on its nuclear development.
Clinton has sent the message that time is running out for Iran and military options are not ruled out.
And the US is drumming up support from Europe and Russia for some sort of action.
Sanctions have not worked in the past and will not be effective again.
All this with no clear sign that Iran is pursuing nuclear weaponry.
With Afganistan turning into another Iraq (what with troop surge, getting UK deeper in, increasing casualties), the US may soon need some victory on another front.
The recent elections in Iran did not go the way the West expected and now they are stuck with the hardliners Ahmedinijad and the Ayotollahs for some more years.
Could be that Israel is being encouraged to up the ante slowly for a final assault.
Will this strategy of intimidation fly ?
Not sure. US and Israel may have to deliver on their threats soon.
Where is the UN ? Sleepy and silent as always.
And the Arabs ? They don't really have a clue and are not able to exert any influence, notwithstanding the Oil they own.

Sunday, July 12, 2009

Public right to comment on a Murder trial

There is a case going on in New Zealand about a murder of an University student by her Tutor, who stabbed her several times to death, then mutilated her body. His main defence is that she provoked him with her tirade and angry words and he is claiming 'manslaughter' instead of 'murder'.

There is a Facebook group against him, where comments are being posted which is disturbing the judiciary here.

The link is

It is rather interesting to see the postings on the Facebook which question the defence for taking any available means under the law to get the sentence they want and at the same time to see the judiciary trying to suppress free speech.

I think both sides are entitled to their actions. It is foolish and impractical to expect the public to keep quite when a trial is going on and the proceedings are detailed in the media daily. People will have their reactions and in Facebook they have found an immediate way to describe their reactions. If the judiciary is alarmed about the effect of reading this may have on the jurors and their final decision, then the only way that can be avoided in this technological age is the sequester any jury (at least in capital crime trials) without any access to media reporting or the net. If the authorities move to shut down such discussions either directly or indirectly, then what is the difference between New Zealand and Iran or China which regularly try to control the contents on the net. The Public voice should not be suppressed. That is what Democracy is all about.

As for the defence, they should have the freedom to wriggle out using whatever legal means are possible, because that is what a 'Defence' is all about. Otherwise the Defence Attorney is not doing his job. That is also why cross-examinations and defence presentations are allowed in a trial. Even with an overwhelming evidence and sometimes even with an admission of guilt, the defence is allowed to proceed, so they can atleast argue for a lenient sentence. If in any case the Defence gets away with something which is not acceptable to the Public, then the only course is to close the loophole in future by legislative action. This defence has also called for such action in New Zealand, that is to remove the defence of provocation. But how that will pan out is another story. For the latest on that, follow the link below :

Democracy and Fair Judiciary have to work for everyone, even the accused.

In the meantime it is interesting reading for people like me.

Update on 22/7/09

The jury has returned a verdict of Guilty. The provocation and temporary insanity pleas did not succeed. Jury proved they are wise. Otherwise it would have established a precedent that if you kill with one stab or bullet it is murder, but if you kill with multiple stabs or bullets then it is temporary insanity. Murderers would have taken to more stabbings or more bullets. Sanity prevails with the jury verdict.

Wednesday, June 03, 2009

Some random thoughts

Obama and the Muslims.

I think President Obama has to first develop a consensus among Americans as to what should be the approach to the Muslims of the World. He cannot claim to speak for a majority of Americans or even a majority of his own Democratic party on this important issue. Whatever he says if it is not backed by his country-men and women would be just rhetoric and will risk the failure due to lack of action afterwards. President Obama seems to be on a mission to collect brownie points from various corners of the world, but his support among Americans is becoming shaky, because of his economic policies and flip-flops on a few issues like releasing the photos of Army abuse of prisoners. He is trying to do too many things and is losing focus and support. So he has to be careful about what he promises by way of actions on behalf of all Americans.

More so when Benjamin Netanyahu is not playing along with the American demands to give more concessions and stop/dismantle the settlements. Netanyahu is not even ready to look at the two-state solution to the Israeli-Palestinian issue. This has made Obama’s task of wooing the Arabs more difficult. They will be looking up to him to solve the Palestinian issue or at the least to come out with a workable policy which he will have to sell to Israel.

Without building a consensus in USA, President Obama will only issue more sound-bites which may come back to bite him later.

Sri Lanka What now ?

The tragedy in Sri Lanka is not over yet and will not be over for a few more years. The Government has won the war, but not the minds of the Tamils. They have for now gathered the Tamils in refugee camps with no stated plans for their return and rehabilitation. The world had let the Government prosecute the war with no rules or mercy. There had been no great condemnation of the Army’s policy of not allowing any journalists or outsiders to report on the progress of the war and its effect on the innocents. Even now they are not sure as to how many Tamils died during the end period of the war. The US and other Western countries were pre-occupied with their economic troubles and India had its attention on Pakistan and election. It is a surprise that the Sri Lanakan Tamil issue did not play out in the recent election campaign in India , especially Tamilnadu. That must make the Tamils in Sri Lanka more despondent about their future.

Now that the war is over, there is an urgent need for an International initiative may be lead by India to make Sri Lanka accountable for the future of the Tamils there. The government must be made to come out with a timeline for resettling the refugees and return of their land and properties and help them in rehabilitation. Aid to Sri Lanka for this must be channeled by an International Group overseen by efficient administrators. Otherwise the refugee problem will fester and the Tamils may become the next Palestinians. It is not clear whether the seriousness of this has been realized by the world leaders and the UN yet.

General Motors – Who cares ?

I read recently that the folks of Detroit are angry that Americans elsewhere did not really care as to what happened to General Motors. An Icon of American industrial supremacy has fallen and is being dragged through unseemly forums to survive in a truncated form. I really do not understand the Bankruptcy move. Why did not the Federal Government simply take over the company and get concessions from the creditors, union and others to sell off assets ? The Bankruptcy and rebirth as a majority Government-owned new entity seems to be waste of resources and precious judicial time. May be Obama and his team had no idea as to how to effectively nationalize and run a troubled company. They should have taken lessons from India, which successfully averted a crisis in Satyam by immediately taking over the management and getting a new team in place which quickly found a willing buyer for the Company. The Indian stock market has absorbed this shock well and is coming back well.

May be the Detroit folks are right. No one cares about General Motors.

Free online news- How long will it last ?

We are seeing the death of newspapers and magazines which put all their wares for free on the net, banking only on the advertisement revenue. They thought they had a good business model going there. But the Economic Crisis has put paid to their future plans of delivering news and making money from the net. Now they have started talking about charging readers on online news like Itunes or some such thing. Will the net surfers bite ? I don’t think this is the right time for asking readers to pay for service which they have taken for granted. The economic crisis is putting many out of jobs and spending on inessentials is down. Is news very essential to the common man or woman ? I think we will see more of these bankruptcies and in the future Television news channels becoming more popular once again. CNN and Fox news and even Al Jazeera may cash in where NY Times and Washington Post lose readers and revenue.

Green shoots and Toxic Assets

Now we have a new phrase 'green shoots' to rival 'toxic assets'. What recovery exactly are we expecting ? Is it going back to the world economy as it was pre-2007, with US consuming, China exporting and Banks and Investment Bankers and Hedge Funds making money for themselves. I don't think that kind of recovery would do any good. The American auto industry is out and the infrastructure there needs trillions to repair and restore. The next recovery should focus on manufacturing, eradicating poverty, destroying arms, stopping warfare and improving health care for everyone. It should not be based on spending on consumer goods. How about a real estate boom in the third world giving everyone there an opportunity to have a shelter of their own ? This is the kind of recovery we should be working for.

Saturday, April 18, 2009

USA vist

I had a great trip to USA recently

Some of my impressions recorded on a daily basis, copied from my Facebook page, because I am lazy to re-write.
However I might add more.

Off to US tomorrow to boost US economy by spending time and money there, hope Obama gives me some of those bailout $$, even 50% would do

I am here in Washington DC, having a good time, weather co-operating well, saw the Georgetown Yuppies yesterday, they are still at their mocha, so life is good

Kumar's Lexus Hybrid is great, the navigator lady got wild when he would not take the turns she suggested, so she shut herself off, how about wives do the same

Got on the famous Washington beltway and off, how about they put a conveyor belt underneath, so cars can save on petrol, (this is called Kadi Joke in Tamil)

Update on Kumar's navigator. We are talking to the company to change her to a HE, because I thought it was sexist of the company to have the default a female

In the Big Apple now, met with Lady Liberty, Saw One Fifth Ave, wondering where the rest 4 fifth has gone, Empire State Bldg view from top was great minus Kong

Started at Ground Zero yesterday and stayed on the ground for the whole day, walking nearly 100 blocks from UN Plaza to Central Park and back to 3rd street. Tried to revive the Bull of Wall St, but it had gone to deep sleep, no luck there. Waldorf Astoria needs a coat of paint. De Beers and Van Cleef have some fantastic diamond necklaces on display. Unfortunately Liz Taylor was not with me to buy me some diamonds.

Went to Philadelphia and trod on Ground Holy there, Liberty Bell on the ground was not so awe-inspiring, but the Independence Hall and the Park Rangers' comentaries were really great.Learnt that New York was the capital for just a few days before Philly took that over for a few months before Washington DC was purpose-built as the Capital. Had my first American cup cake, but found it very treackly and sticky.

Yesterday I developed a new cocktail and am dedicating to Americans. It is called 'Peace of Mind' (can also be called Vodka and Blackberry) and goes like this. Fill a tall glass of Vodka and put the Blackberry in it and go to sleep. Guaranteed to give you good night sleep and peace of mind. Americans need it. Visited Princeton Uni yesterday, great architecture and nice grounds with squirrels and rabbits running. I am sure they get their own degrees. There are a few nice sculptures on the ground, whoever figures out what they mean will get a PhD from Mohan University. I am in Providence now, catching up with the in-laws, so it is all legal for 2 days.

Went to Boston today, visited Harvard campus, this trip is turning into a Uni trip. I am hoping something will rub off on me from those brainy youngsters floating around these great learning institutions. Harvard is all Red whereas Princeton is all greay and black ( I mean the architecture). Wish I can go to Yale too, not going to happen, May be I will go to Uni of Chicago.

What if Osama Bin Laden declares Peace on America ? I am just wondering what if Osama Bin Laden declares- My dream has come true, America is down and has come to a standstil, what I attempted to do when I sent in those planes to hit the Twin Towers, thanks to the Wall Street Wizards. I am now declaring my Mission Accomplished and am putting an end to the Jihad. All my followers, please note, the Jihad is over, go and love the Americans. Will Obama still pursue Osama ?

Yesterday was the visit to Newport where we checked out the mansions of super-rich, like the railroad baron on early 20th century, the Van Der Bilts. Great stuff, marbles, paintings, artifacts, gold and silver, etc. Came back and bought a Powerball ticket. Had to see Brown Uni at night, so could not be sure it is really Brown. The cliff walk on Newport during the typical New England mini-stormy weather was surreal.

Spent the day in the Windy City (Chicago) which also turned out to be the wet city today. Dug into a sumptuous deep stuffed pizza, the specialty of Chicago. Really unique. The shore drive on Lake Michigan was very nice. They have very impressive tall, double decker trains here, very sleep with steel cladding, etc. Heard Obama has started a car mechanical and servicing company to service all cars sold previously by GM and Ford. Hope they do something like that in NZ too. But if it means we have to go into a deep recession, then no thanks. Saw a Bank in Chicago called Fifth Third Bank. Trying to work out what it means.

I heard there was a BankOne, and then the other Banks started calling themselves Bank Half, Bank One third etc. But Bank Fifth Third still beats me. Unless it was because the Bank was started at the intersection of Fifth Ave and Third Street.

Today was Miller Time , no, make it Miller Day. Visited the Miller Brewery at Milwaukee, Wisconsin (2 hrs train ride from Chicago) and went ont he Brewery tour and sampling, all free. Can't go better than that. Weather was good, sunny and blue skies. Reminded me of Auckland in Summer. It is still snowing there in Milwaukee and they are making sculptures out of unmelted snow.

Walked the beautiful city of Chicago today, thier own Central park is called Millennium Park, Anish Kapoor cleverly has put a mirror in the Park, shaped like a doughnut and now everyone is having fun seeing the skyscrapers reflected on it. Tried to take money from ATM, Bank of America had no cash to give, Citi wanted to charge me a fee, but JP Morgan Chase gave the cash quickly with no fuss. No wonder they are no 1 here.

Came back to Washington for a gorgeous steak dinner, ate the juiciest steak at Logan's-thank you Kumar. Yesterday was smack in the middle of Cherry Blossom Festival in DC. Heaps of crowd straining the metro system whihc is not designed to that much crowd. The monuments walk and White House phot-op were fantastic. DC Rocks. Go Obama.

Took a long drive to Raleigh, NC. It became greener as we travelled south from DC, but not as green as NZ, which I would say is unique. Yesterday was at DC, taking in the Capitol and walking the Mall. They have a Chevy Chase Bank here, I am looking for the George Cloony Bank. Had a fabulous Japanese Food. So all going well and on track.

Saw a few Smithsonian museums today, need another week to see them all, but unfortunately no time for that. It was cold and windy, equalling Chicago. Windy Washington may be wants me to get out. Had a good pasta meal, freshly prepared at a quaint little place. Good value for money. I wonder why Smithsonian does not have a section for Asia in its Mammals display.

Now that Illinois has given two Presidents to USA, why don't they call themselves the "The Presidential State'

Last day in Washington DC. Went to Hooters for lunch, the lovely girl asked to see my ID before serving me a beer. I felt very flattered. Went to Teddy Roosevelt's memorial. It is hidden and forgotten by DC. Even FDR's memorial needs cleaning up. Why have the Roosevelts falln from grace ? The Iwo Jima memorial was great. Good bye DC.

Back home after the last leg of 2 days in Vegas, which is a magic fantasy land, glowing more after sunset. Liked the NY, NY themed hotel the best, with a roller coaster ride and duplicate Liberty statue. Vegas at dusk is at its best. Caught a show 'Crazy Girls' at Riviera. Do you know these girls have their own statues (of their backside only) at the entrance of the Hotel and punters rub their bottoms for luck before going to play in the Casino. Just like hte Bronze Bull on Wall Street in NY. But the luck is very elusive and not long-lasting as recent events have proved.

Here is the link to some of the photos of the trip. Enjoy. Thanks