Category: turmoil

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Economy subscriptions thoughts

Transfer of Debts.


Banking regulations did not allow for trading in debt. This is the Gujarat High court  judgement.

Banks cannot  trade transfer or purchase a pool of non performing asset or bad debt.Thus securitisation loses its meaning. Debt cannot be transferred without the borrower  being  party of the transaction.The court has researched in depth and found out that under section 6 trading in debt is not within the purview of banking company.  The impact is wholesome . The banks cannot ,hereafter simply shed their debt box as dry leaves fall from the tree. They have to carry the bag with them.

Is a loan item of the borrower an asset of a bank or debt of a bank?This has to be studied carefully. From a layman’s point of view the loan of a borrower is a debt not an asset. But the bank’s term the faltering companies as Non performing asset. The situation is little peculiar . How can the banks address a loan as an asset?. So far we have blindly followed the bank’s regulations, The judgement of the Gujarat High court is an eye opener. This will have a retrospective effect too.

Selling a debt to Asset Reconstruction Company will also have a similar reference . The ARCIL is a company formemed by different banks, Its regulations and rules ,as found in their Memorandum ,will also definitely reflect the distinctions as found in Bank’s strictures.

The Supreme court can set aside the judgement, but the ruling of the Gujarat High court is an evolution of a thorough analysis of the laws and formulas that govern the financial institutions.

If the judgement is upheld by the Supreme Court of India, then the entire scenario of Non performing Assets under the DRT, under Securitisation (SARFESI ACT)  wil produce a remarkable challenge to the banks autocratic behaviour. It will a stimulate the depressed industrial dogma , and rejuvenate the dishevelled manufacturing premium .

Times change.  Rules get modified. Profiles undergo moderation. Perceptions get altered. But  true Judgements provide a certainity and a memorable requisite and a required respite.

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subscriptions thoughts turmoil

Divorces So Quick.


I happen to be in my native place for a couple of days , last week.It was a pleasant get together, meeting young and old, exchanging niceties and enquiring about their health.

It was a hectic schedule  dotted by interesting  information. One peculiar thing , I found during this sojourn was cases of divorce. My place is  known for its conservative ideologies and is steeped in traditional customs. In this modern age , a place like my own ,will stand out for its regulations and discipline. To hear about divorce ,in such a place sounded sacrilegious to me. Yet ,there were many incidents of the legal separation.

Dissolving the marriage , once regarded as a transgression, has become an accepted form now. The reasons for severance, looked appaling  in certain cases, appeared deep in others, but most exhibited flimsy and frivolous sentiments ,that could have been well avoided , if little measure of endurance was pushed in.

Th firm attributes for dissolution is impotency and behavioural tendency. The impotency factor  if found true, the marriage will not be able to go further. But , if it is listed falsely ,then strong counselling has to be activated and unity should be advised. The behavioural factor of excessive smoking, consuming spurious drinks, and addiction to drugs are also cited as causes for separation. The excess could be minimised by tending the eccentricity in a plausible manner and exploring possible ways to stop the practice.

Other minor  evidences of coming late after work, looking after parents, living in a joint family, spending time with friends and taking life easily are simple disturbance ,which should be discussed by the concerned . A way out , or a remedy could be easily tracked and adjustments can be accommodated suitably.

I came home with the usual well being , which I develop when I visit my people, but this time , I felt , the pride ,of my homeland ,as a class apart from the rest of the world,  has been lost. It has also got diffused with the multitude,totally vanished in the fumes.

I feel sad , and am extremely pained to be a silent spectator in this narrow world od envy, deceit ,self conceit, greed and prejudice.

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Economy subscriptions thoughts

Admire The Taxpayer


Bankers are the heroes of capitalism.Taxpayers are the saviours of the same concept.

The banks collapse has become a weekly event. Every Friday ,we hear about a failure. Fridays can be termed as Collapse Friday ,similar to Ash Wednesday.

This trend of failures and gloom have haunted the world for a period of  a year and a half.To supplement the immense losses made by the Banking geniuses, the taxpayers are entrapped..The government is pushing out a bail out plan to rescue the privately run financial institutions. So public money goes into private equities but without any ownership, without any control, without any regulation.

Does it not sound odd? Does it not appear ridiculous? Does it not look out of context?Does it not indirectly hint that the administration is favouring the private bosses?

Well, we have to as a  tax payer, put up with all these irregularities, endure the seemingly fair proposition which is virtually a drab on our finance.The subsidy, as shown,  by the government in the form of  valuation models,not as market price will fetch the stockholder and the tax payer  virtusllynothing, exactly a zero in value.

Obama’s outrage over the subject of bonus, also is  an apparent mis guided tempo. His stern voice is taken as  whimper by the Wall Street bourgeoise.It  is not a serious call, but a pretentious announcement.A suuccessful banker wants to share the profits,  likes to get a percentage for his hard work. It is a valid desire.The same banker, when his institution makes loss, does not want to accept the failure. If he volunteers to share in the loss and gives back a percentage for non performance, he should be sanctified.Will any of the high ranked officials offer to do so? The burden falls on the tax payer’s shoulder.

The Tax payer’s tolerance ,stoicism. and mental maturity has to be eulogised

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Economy subscriptions thoughts

Satyam In Troubled Waters


Satyam Shivam  Sundaram.

Truth is God , God is beautiful.The truth, the conscious and the beauty are essence of  Divinity.

“Satyameva Jayte naanritam”

“Truth alone triumphs , not falsehood “-the origin is from Mundaka Upanishad.

Satyam( meaning Truth) computers ,has lost its name , both literally and metaphorically.

 1.6 billion  was to be deployed in a buy out of his Mayatas Infrastructure and Mayatas properties . this move triggered  the investors to protest.

Mayatas is an angaram of Satyam. A reversal of letters has reversed the credential of the Company.

Ramalinga Raju is in a soup. His family has 8.6% share in the company.His two sons are inthe Board , in the capacity of Vice Chairmen.The Board . comprising of Krishna Pelapu, T.R. Prasad former cabinet secretary’and am Mohan Rao , Dean of Indian Business school.

The Board passed the resolution and did not bother to get the consent of the shareholder.The investors were provoked, and old the shares in a quick motion.Raju was shell shocked. He sent signals of rapprochement ,but it was too late.

Four of the Directors have resigned from the Board., thus ditching the interest of the shareholders.It looks a though they are running away from  crucial decision. The Board meeting on the 10/01/2009 . is going to be a farce.

The World Bank has already barred Satyam from further contracts.

Ramaling Raju has brought disgrace too the business fraternity.

The company has to find a new team , to take care of its  cash rich ,factor about 5000 crores surplus .Will Raju actually quit such a flourishing company?If so , will he keep away from the management?

He may fix up a proxy team to take control of the management. The financial companies, like Aberdeen,Fidelity etc have 20-25 %, can convince the investor and usher in a new management.

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Economy subscriptions thoughts

Expanding Debt.


A petty shopkeeper got completely broke. Instead of bringing down the shutters, he reinforced his shop with high value goodies and catchy snacks.

I was shocked. What on earth the man is doing?Is he in his senses?How did he muster money to  give a face lift to his shop? As curiosity kills the cat, I made discreet inquiries,which revealed that he has borrowed money for high interest. I was muffled.

Can we term this economy as “Progressive economy”?

Well  the same dogma is followed by the U.S., in a gigantic scale.The doctrine of debt , has been put into force. Borrow more, spend more, keep the economy booming.

Printing paper money against thin air, and circulating it, will move the  stagnant economy is the Fed’s prscription.

U. S President elect Obama has drawn out plans to 700 billion$ to build roads and classrooms ,thus creating jobs.

The Fed has extended its balance sheet from about 900billion$to more than 2.2 trillion . The 1.3 trillion is a cooked up figure, which in reality does not exist.

Overborrowing has led to the present mess.Borrowing further ,with the aim to get out of debt trap ,is ignominous. It is a foolhardy attempt.

Postponing soberity and austerity will lead to great crisis

U.S. has to trim its expenses, practise frugality,and make amends for its reckless consumption and extravagant spending.It is a bitter medicine hard to swallow, but has to be pushed through the gullet ,to save the nation from disaster.

If not it has to go back to  the days of misery.

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Economy subscriptions thoughts

2008 – A year Not To Be.


Human tendency is to rave about the past.

Recapturing the past deeds, getting excited about the meritorious experiences, revelling on the glory of yore , has been practically followed by each individual. All rules have exception , but this one has none.

The year 2008 , has spelt disaster and dismal occurrences, that we dare not think about it for once.

As we break rules and conventions , for convenience , this retrospective theory has to be moderated.

What  year it was?hmmm— till a few more days to go.!

What a sudden shrivelling melt down, economy in shatters, finances in tatters,wages  in displacement, jobs in devastation .

The bruise has to be assuaged gently, has to be tended with care ,and smothered with gentle rub .

Too much caressing will lead to negation. Too much pampering will spoil the sport. Too much attention will render an irrelevant direction.

The world  economy is at the vertex, a slight  jerk will create a furore too deep to be appeased, a vigorous push will  proceed a tumble, too serious to be retrieved.

A gentle pat , a cordial gesture, a mild approval and a kind compliment will restore economy .

I mean these words both literally and figuratively.

2008 has come to a pass.

The next year 2009, should bring in lot of cheer, sense of joy , pride of well being.

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Economy subscriptions thoughts

Remainder Reminder


Remainder usually remminds us of the original.

The  remainder of the financial gallery is a ghostly reminder.The reminder  is the pale skeleton of the original.There is virtually nothing,. That which cannot be destroyed has been annihilated, has been exhumed.

I go back to my school days, when my Maths teacher would din subtraction and division into our heads.

What is the remainder you derived , when you  divided 66 by 5 ?

We answered  the reminder is 1.

Now what will be the reminder , if you divide 66 by 6?

We shouted , it is 0  (zero.)

Recent economic digressions remind us of this remainder.

The financials  show a net remainder of zero.

No value can be attributed to stocks and products.

Depletion of stock value have cost many a life.

Disappearance of  money invested in hedge funds have led to loss of lives.

Job losses have directed  death.

Wage displacement have moved towards ending life.

The economy melt down has swiftly effaced prosperity and eluded mental equanimity.

The downturn is driving us mad, is provoking us , is presenting a gloom , is spreading despair and forcing us to writhe in anguish.

Life becomes a hallucination, a perception void of stimulus, and transcription devoid of growth.

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Economy subscriptions thoughts

State Bank Of India -The Lion and The Mouse.


The lion and the mouse, is a  short allegorical narrative  by Aesop.

State Bank of India  is a lion in stature., but  with the smallest heart.It has grown enormously, but the stimulus is negative.It talks much and does little. It boasts of being genuine, but in terms it is pretentious. It expresses affability,but it practises animosity. It reveals that it goes by principles, but  in shadow it  breaks all norms.

Its balance sheet propounds  details  of companies that have not repaid their loans. They amount to billions. The accounts of these companies propel  enormous irregularities. The  sanction of loans had been effectively  prompted. The repayment schedule has been purposefully adjusted. The aberration in settlement of dues have been cleverly camouflaged. These propositions have been voluntarily facilitated , as they belong to the elite, who are  running the bank and the finance ministry , in defacto.

Meanwhile, an entrepreneur, of modest means and sincere records, fails in his procedure of payment, the officials catch hold of his collar, prod and incite his equanimity,and render him  pshycologically irrelevant.

The broken man ,  after great struggle,makes the payment as called for.

The Bank’s hunger is not appeased, it wants more. The officials , once again start their merciless drive.This time,they  intend to kill him both physically and morally

The entrepreneur rises up  and seeks legal remedy.

There is a saying in Tamil.

“sadhu mirandal kadu kolladhu”, meaning,”if a genial person is provoked , the entire forest will be set ablaze”

Like the mouse, this man  is sure to come out of the entanglement , by using his prudence and goodwill.

The Lion, here metaphorically ,the great Stae Bank ,will be entrapped by its so called VIP constituents . It has  to be  pulled  out from the maze  by the  genuine entrepreneur.
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Economy subscriptions thoughts

An Old Lady’s Economy.


Economy is a study of human behaviour as a relationship between ends and scarce means which have alternate uses.

I came across an Old Lady whose  economic policy was astounding  .She had no scarcity and she found alternate uses to available resources.

Her bank was her metal box. Her resources were the revenue she got from selling flowers , fenugreek leaves,that grew in her garden. She had cows at home. She did not sell milk, but sold butter milk and ghee.

She kept her sale proceeds of her goods in tiny baskets with covered lids.Each basket had a different colour, so she could easily identify them. The flower sale proceeds were put in a pink basket, the fenugreek leaves money  in a green one , the buttermilk income in a yellow kottan, the name given to the baskets  in her village.

Everyday , she counted her accruals, The expenses were met out from the revenue. She had a host of staff around her. They had to tend the cattle, take care of her garden and had to guard her sprawling bungalow.

She also drew income from her paddy fields. She collected the revenue., without any delay.

Her practice was to buy gold ,say about 250 grams  and 2  kilos of silver,every month. The balance of her profit was deployed in the upkeep of her properties.This she followed meticulously ,no matter the rise in prices of the precious metals.It was cash and carry system she adopted.

Her hard work yielded wonderful results. She had no calculator, no software programmes to compute her accounts, no auditor to compile details.

She was her own self proclaimed manager,accountant and banker.

She had the  safe room key in her small cloth bag and the metal box key adjoined to her chain round her neck.

 Her economy was robust, healthy and strong.She had acquired enormous wealth.

Her investment acumen calls for attention.The simple economics ,she professed  was an ideal model to be adopted .

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Economy thoughts

GM envisages bankruptcy


GM board  is reported to apply for bankruptcy.

It is a rude shock.

The board feels that it is the only viable solution.

It is an extreme step and a drastic move.

Throwing up in exasperation is disenchanting.

Deep analysis ,changing the pattern of administration, revamping the company, and cutting the expenditure, cessation of sops,a real pragmatism,and efficiency will work wonders.

The  affliction  caused by the union should be eradicated.

The wage structure should be implemented.

Modifying their work plan on the models of Honda and Toyota will surely usher profitability.

Wagoner has to apply his mind and has to work on  a significant treatise.