Wednesday, April 21, 2010
The key description of the deal as per the SEC charge:
Saturday, March 20, 2010
Sunday, February 07, 2010
Wednesday, December 09, 2009
Wednesday, December 02, 2009
Sunday, November 15, 2009
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It is a good move by the legislators to break up the TBTF institutions and combined with a re-introduction of the repealed provisions of Glass-Steagall Act, they would make sure that Banks confine themselves to the business of taking deposits and lending for productive and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
Saturday, September 26, 2009
Saturday, September 12, 2009
Monday, August 17, 2009
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.
Thursday, July 30, 2009
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 SEshttp://www.bing-vs-google.
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
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
Sunday, July 12, 2009
Wednesday, June 03, 2009
Obama and the Muslims.
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 ?
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 ?
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 ?
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
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