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Since: Oct 08

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#1
Oct 6, 2008
 

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Well its being acknowledged that the world has been hit by contagion albeit with traits of second generation contagion (traits as all factors of second generation contagion have triggered other than a currency run on ground zero-USA. This raises a moot question as to do we need Bretton woods II(later)as against USD being the 'currency' of international transactions, this would be aggravated if Iceland collapses and S. Korea takes a big hit due to currency.
I will bring my previous comments in this later to avoid duplication.
what do you say??

Since: Oct 08

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#2
Oct 6, 2008
 
I adding my recent comments but the main one i have not been able to locate will search and uplaod it
all this has been said on the recent run in the stockmarket pertaining to ICICI bank

idiot in india bank branches do not go bankrupt,icici donot have seperate co for southern india(bank of madura is integrated in??) so what bankruptcy. high time the world follows a unified bankruptcy law read any paper on LLSV to understand better!, marauder are having a field day-i.e hedge funds, wonder why RBI does not open swap lins with euro and neutralise the arbitrage with EURO thus reducing the field day earnings of the foreign shorts, its completely artificial, REPEAT INDIAn CHINA are not ground zero for the second generation contagion happening

Yeah agree lets be professionals and if am from the hedge fund world ask the world to back off or the hedge fund shall bring the world to its knees, have the world seen how much liquidity the central banks have pumped yet not succeeded, they will not if we the hedge funds start shorting in a concerted manner, stop the hedge fund from shorting financials the industrials shall be shorted, forgot thats how we make moneies albiet unregulated, dont forget if hedge funds go short they also go long, so what if the systems and processess fail, as long as they have the money funding to ruin the some economies (sorry about the collateral damage) its ok as long as the hedge fund make the money.
But that requires funding wonder who is funding this, why CDS which tecnically is an insurance, novation therein is another insurance and with sovereign guarantees why still the spread.
one need to really get back to the basics with forensic accounting to appreciate whats happening

hell someone is again having a field day, imagine not being able to think out of the box and realine to market needs and trends to grow and seize opportunities, only icici maybe is showing the trend, well its a scrip for long haul unless the world caves in,then so will hdfcbank and hdfc cave in as they are the ones exposed to indian housing way beyond the international affordibility index, thats and interesting place to watch, ever wondered who can afford house/flat at a crore in distant mumbai suburbs what are the earnings of such purchasers one really needs to ponder such issues

Since: Oct 08

Mumbai, India

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#3
Oct 7, 2008
 
Furhert thoughts on the contagion
well lets got back to recent history came a Basel II norms for prudence, whos effect was suspended to a later date, this was a deemed metrics for the global banking system and a factor contained therein was counterparty risk, thats statistics based on normalised statistics ans not stressed statistics which infact is practically unproven.

All banks needed to shore up but none did as the world was all concerned with housing and housing considered as an inflexion point in economics, lets go back to our text books in light of the data as to if houses were for pure investment, for scond and third houses, purchased to let(albeit on mortgage)at al is it still an inflexion point. how the metrics for basel II to be given on rating agencies rating which is corrupted and today reflects to be very shallow, thats where the problem lies and the metrics are based on proprietory knowledge of the banks viz JP morgon chase has its metrics for predicting bankruptcy.
well its credit crises(was it) which balloned to money market crises, and now to stock market crises. Well then lets do the maths, lets total the amount injected in the name of liquidity, then add the numbers injected to bailout. well then the factor is who sapped the monies from the banking system, where did it all go, why did a 'soverign commodity' spike and who made monies there.
well there are lot of accepted disguised nationalisation, thats good but to restore confifidence nationisation of the bad banks alone may be harsh, one needs to nationalise the whole sector-the banking sector( India did it when required), with that the problem will(may) be solved and bankruptcy with french norms where for having gone bankrupt the executives are penalised and do not get a golden parachute.
Lets revisit the world.
In the technology world the seamlessly deal with disruptive technology other then where entrenched monopolies exists, even there they evolve. Sadly this never happened as very good mathematical therories were corrupted for the markets the caveats for the theory were ignored and here we stand,
Lets stand and not accept being mice and the banking industry as the pipe piper, we shall not go over the cliff.

Since: Oct 08

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#4
Oct 8, 2008
 
well now morgan stanley is predicting a deep recession. Only then one needs to understand that these I-banks have no clue or have vested interest in their statements issued, did their team analyse it to second generation contagion or are they still templating to akin of technical analysis which brokerage house does ( completely irrelevant).
The only hope is that the world stops following the USA where eventually its run by people with I-bank background, one cannot hope a solution fromthem considering the quantum of baying they had done against the french system, Lets revisit all papers of LLSV tounderstand the nuances- ONLY IN USA HAS CH11 WHICH IS DEBTORS IN CONTROL!!!!!
looking for sanity but still wonder whether it willbe from a torch brearer or a pallbrearer, any which way as long as it gets the sanity back- its sanity confidence has nothing to do with fundamentals.
wonder how melamine got mixed in milk then its not milk but poison, same with subprime morgage on securitising which was mixed with AAA grade securities, that was poisoning and it needs serious investigation, will it be done, wonder if FBI will be in position to take control against the I-bankers (henry paulson) included.

Since: Oct 08

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#5
Oct 15, 2008
 
well i do have a need to revisit this post.
We hear a great deal of the recession word, recession in USA, Euro zone, UK AND the WORLD.these statement are given in the media by people who profess to be expert.(An MBA is not an expert, neither is some one with a basic qualification in Economics, nor an accountant).
World Bank have recently stated that USA will have zero growth, world will have 3.0% growth as against predicted 3.9%, thus all such statement make the world bank irrelevant,or is it otherwise.
Serious stand needs to be taken on such statements being issued without revealing the basis of the research or the data being used to make such statement. Imagine making a callto the airport and stating that there is a bomb in a plane(thats a crime/felony), what about such statements. One needs togive a thought, Yes we value free speech, BUT such statements.
Further for vested interest various statements are given, as ex finance minister of India mr Yeshwant sinha makes a statement that indian economy has been mismanaged, India having such high CRR has killed growth,great but why does he not state(I am sure he his not aware of the succesful chilean model on CRR and its effectiveness to create liqudity- when chile escaped contagion while latin america was sucked in 1996-1997) It was sad to hear such statements in telling time to the world.
well so long i ve a thought to the statements one hear in the press. it should be caveated but the speakers interest and understanding,for god sake a broker is a broker and not an expert to comment on such things. same applies to a hedge fund operators.
welcometothe worldf 24 hours financial reporting.

Since: Oct 08

Mumbai, India

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#7
Oct 17, 2008
 
Lets ponder on a possibility of new financial architecture for the world, or an band aid now (guess much more than a band aid has been given, the world did under go a critical lifesaving surgery and now the only hope that the medications do not fail for vested interest- this is premised on the existing financial architecture).
World has grappled with disruptive technologies and till date emerged better, stumbling only at times to ‘monopolies’ but the monopolies then which emerged from disruptive technologies. That framed what the Architecture the world devolving around technologies would be. Then is the architecture a blueprint conceptualized around which a building is built or is it an idea whose time has arrived, pilot tested , standards built through evolution for competing platforms and accepted by the ‘consumers’.
Premising on the above paragraph, do we need a completely new architecture to build a new building, or do we accept the learnings, forgive the misgivings, punish the mis demeanor and criminality, redine pilot testing, evolve the standards which are not partisian to the world and above class creed caste religion….and build platforms for which the time has come, build platforms to avoid killer “melamine in milk”.
Likes of Enron and Worldcom reflected what SIV could hide that a creation of US GAAP, banks reversed the SIV’s and brought it in their books, CDO/CDS are illiquid animals more so the ones who were rated as investment grade by the premier rating agencies. Well how about reinventing that SIV animal for good if the papers have collapsed catastrophically and m2m is an accounting entry transfer them in the SIV and bury it for a while backed by regulation as required. We need radical thinking.
Lets see radical thinking, Mumbai recently announced that no new water connection for new construction till 2011, is that radical or is that vested interest, here too prices on funds and artificial demand from the same animals which took the prices up. That is great for city where prices for a 200sq. feet (just one room)in middle class residential areas are transferred for 12-10,000Rs way beyond salaries of people who earn 6-10000 Rs a month and where only mortgage companies and real estate developers make monies. THUS they have cut supplies to hold prices instead of generating supplies to stabiles prices, FSI and FAR are technically around 1.5 and absurd level considering that Mumbai is an island city and the need of housing for the existing population(230 sq feet apartments/houses and below with more than 4 people staying in that area look appalling under any standards – but historically that’s what Indians lived in and call their home.
Lets see the other radical thinking SEBI (Indian equivalent of SEC) when the holders of a future are desperately holding on their positions in a hope that maybe this is the end and would recover some losses or in hope that positions would be rolled over till the liquidity disruption is over and the world in “sane leverage- an ambigious defination” positions, move to double margin thus a complete loss for the long, shorts of course have created their cash flow to provision for the margin, thus who gains.( well welcome to India with a dream team without an support team) This is not new on 22Jan 2008 when we saw the catastrophic acts only to kill the small investor on the last leg, thas the reason for huge drop, once the existing longs gets killed the shorts in future would have made their money without the fear of their losses in the reversal if any.
Is that radical non partisian thinking
WE need a new architecture which is not partisian and we need a system which will allow people to breathe in the environment and allow them to dream.

Since: Oct 08

Mumbai, India

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#8
Oct 17, 2008
 
I need to make disclosures about my self to proceed to write
I am from India, a professional (not connected to financial services) and am a double graduate and double post graduate-all from premier institution in India, presently registered for my Ph.D on a topic on bankruptcy from a premier institution.
Basically a person without any drives who believes in karm
I do have investments in stocks and two lot of siemens futures acquired @820 and 590 and one lot of Ashok Leyland. Being a person who thought that equity is a place which on long run has an upward bias, equity is necessary for the capital development of the engines of development. Shorting is something for which my gumption is very low.
I have faced scenario on on 22nd January 2008 when rules of the game were changed margin were above the lot held as on 21 january 2008 without any early warning, my broker where I have my account is HDFC securities ltd a group wherein JP morgan has a tactical investment (and their group bank openly represents to their foreign clients who come to India under FDI that they are a part of JP Morgan group).on 22nd January they have closed out my outstanding future position for which I had complained to the exchange and then found that the exchange acted only as a post office forwarding the complaints and the reply thus hoped for no redressal and left the matter as such( welcome to India), In the Indian press articles have started being printed that margin moneys would be increased but on enquiry with my broker they fail to let me know how much I need to provision for, presently I am surviving on my position by liquidating shares borrowings from relatives and liquidating my fixed deposits tilldate have not defaulted on M2M calls. Iguess there would be similar knowledgeable and rookies as in my postion who feel that many things have been done using taxpayers moneys to stabise the world. I am sure an obscure message would be posted with an hour or two notice positions would be liquidated with a very sharp intra day fall.the positions would be liquidated at the nadir and from there it would start rising at least to reach the earlier days position, that day margins calculation would be skewed against the ordinary investor, for every seller there would be a buyer and that buyer would make the killing. Yes I still do agree we do have a dream team in India but nothing below a level. This would be below that level.
That was personal
Let me go back to the world, warren buffet stood to commit his personal monies in the stock market, a last market standing which is liquid, other markets have literally frozen, pairing positions is suicidal for the operators/funds. Do the ordinary people now needs to believe that withdrawing from the market is fool hardy and would be prudent to remain invested as such or withdraw completely so that some one profits from these prices, holding power not withstanding

Since: Oct 08

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#9
Oct 17, 2008
 
Some collections of mine I think would be a good reading;
Part I
Both the theoretical and empirical literature on currency crisis and contagion has ballooned over the past few years. A recent comprehensive summary of the literature is provided, for instance, by Dornbusch, Park, and Claessens (1999) or by Wolf (1999). This section gives only a brief overview of the main channels of contagion that have been suggested and in some cases also tested empirically. It greatly clarifies the exposition to classify contagion in two categories, following Masson (1998), namely SPILLOVERS, and PURE CONTAGION.
SPILLOVERS, where a crisis in a "ground zero" country (the first country to experience a balance of payments crisis) spills over into deterioration of fundamentals in other countries, arise from a number of factors, including through reduced competitiveness, lower commodity prices, or loss of liquidity.
Spillovers through trade links have been prominent in the discussion about contagion. The most direct form of link is through bilateral trade. With high levels of bilateral trade, a financial crisis in one country will negatively affect all trading partners, both through losses in competitiveness (see e.g. Gerlach and Smets, 1995) and through the fall in demand in the country experiencing the financial crisis. Obviously, for emerging markets this link is not very significant because trade with other emerging markets typically represents only a small share of total exports. The second trade link is through competition in third markets. In this case, a financial crisis (and the associated depreciation of the exchange rate) in one country affects other countries that export to the same markets. The role of trade competition in explaining contagion has been documented by Eichengreen, Rose, and Wyplosz (1996) for industrial countries and by Glick and Rose (1999) worldwide and for emerging markets in particular. The latter conclude that "trade is an important channel for contagion, above and beyond macroeconomic influences. Countries who trade and compete with the targets of speculative attacks are themselves likely to be attacked.[...] This linkage is intuitive, statistically robust, and important in understanding the regional nature of speculative attacks." (pp. 604-5).

Since: Oct 08

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#10
Oct 17, 2008
 
Part II
Financial market linkages may also be an important source of spillovers. There are several, possibly simultaneous, mechanisms at work that can cause cross-border spillovers. Losses in one country could lead banks to sell off assets in other countries in an attempt to restore their capital-adequacy ratios. A similar mechanism is at work if investors upon receiving a margin call based on the decline in price in one asset decide to sell assets in other countries (Calvo, 1999).
Importantly, if banks are confronted with losses on their securities portfolio or a rise of non performing loans in one country they are likely to try to reduce their overall value at risk. Risk management techniques may then dictate a reduction in exposure in the riskiest markets or in credit lines in historically correlated markets (Folkerts-Landau and Garber, 1998). To the extent that investors allocate fixed proportions of their assets to (individual) emerging markets, changes in the weight given to the emerging market asset class as a whole affect all countries equally (Buckberg, 1996). Asymmetric information can amplify the effects of portfolio rebalancing (Kodres and Pritsker, 1999). Lack of liquidity is a further reason why a crisis in one market may lead financial intermediaries to liquidate other emerging market assets (Goldfajn and Valdes, 1997). Finally, regulations involving ratings, such as regulations which disallow holdings of non-investment grade securities, or link capital requirements to them, may also play a role. To the extent that downgrades are implemented more frequently in emerging markets after a crisis, this may well add to the sell dynamics in a crisis. PURE CONTAGION, refers to those crises triggered by a crisis elsewhere but which cannot be explained by changes in fundamentals or by any sort of the rather "mechanical" spillovers discussed above, but are possibly caused by shifts in market sentiments (increased risk aversion) or changes in interpretation given to existing information (an increased perception of risk or a "wake-up call").

Since: Oct 08

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#11
Oct 17, 2008
 
Part III
Further currency and banking crises (sometimes called the “twin crises”) tend to be associated with each other and often take place together. There are several possible links between banking and currency crises (Kaminsky and Reinhart, 1999).
• Currency crises can cause banking crises. A rapid depletion of foreign exchange reserves under a fixed exchange rate regime typically forces the central bank to contract high powered money, thereby reducing monetary aggregates, increasing bankruptcies, and thus inducing banking crises.
• Banking crises can cause currency crises. When investors believe that serious banking crises are imminent, they will reshuffle their portfolios away from domestic assets and toward foreign assets. When central banks inject liquidity into the financial market to bail out the troubled banks, excessive money creation can lead to currency speculation and a run on foreign exchange reserves.
• Currency and banking crises can result from common factors. When an economic boom is financed by a surge both in large capital inflows and in bank credit, the end of the boom tends to be accompanied by both currency and banking crises. See McKinnon and Pill (1996) and Krugman (1998a).

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#12
Oct 17, 2008
 
Part IV
Before the episodes of the 1990s, financial crises were, in principle, considered as events occurring in individual countries. But the Mexican crisis of 1994–95, the East Asian crisis of 1997–98, and the Russian crisis of 1998 had strong contagion (or spillover) effects in other countries; that is a crisis in one country was rapidly transmitted to the rest of the world. The global extent of the recent crises agitated the debate on the causes of the crises and contagion. Some authors argue that the crisis which originated in Thailand was transmitted to other countries owing to fundamental linkages and channels. This view was expressed by, among others, Krugman (1998a), the IMF (1998a, 1998b), Summers (1999), and Corsetti et al.(1998). These authors argue that the East Asian countries financed unproductive investments because of implicit government guarantees and a “crony capitalism.” Such unproductive investment generated vulnerabilities both in the real and financial sectors of the economies. At the same time, the governments accumulated large contingent liabilities because of the need to protect depositors of banks and other financial institutions. The strong trade linkages among these economies helped to propagate the crisis throughout the region.
On the other hand, other authors, such as Radelet and Sachs (1998a, 1998b), Krugman (1999), and Furman and Stiglitz (1998), emphasize weaknesses in the international financial markets as the major source of a crisis and contagion. Their views argue that the economic prospect in East Asia was sustainable and that these countries were not bound to a crisis. However, once a crisis started in Thailand, whether because of its fundamental weaknesses or out of self-fulfilling expectations, investors’ panic transmitted the crisis to other markets. Uninformed investors reevaluated the risks associated with Indonesia, Malaysia, and Korea when they saw problems arising in Thailand, and decided to pull their investments out of these neighboring countries. In a world of self-fulfilling investor expectations, there exist multiple equilibria. An integrated global economy transmitted investors’ pessimistic expectations across borders, causing contagion and eventual crises.

the above are scratch collections for my paper which i need to publish

Since: Oct 08

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#13
Oct 17, 2008
 
Part II
Financial market linkages may also be an important source of spillovers. There are several, possibly simultaneous, mechanisms at work that can cause cross-border spillovers. Losses in one country could lead banks to sell off assets in other countries in an attempt to restore their capital-adequacy ratios. A similar mechanism is at work if investors upon receiving a margin call based on the decline in price in one asset decide to sell assets in other countries (Calvo, 1999).
Importantly, if banks are confronted with losses on their securities portfolio or a rise of non performing loans in one country they are likely to try to reduce their overall value at risk. Risk management techniques may then dictate a reduction in exposure in the riskiest markets or in credit lines in historically correlated markets (Folkerts-Landau and Garber, 1998). To the extent that investors allocate fixed proportions of their assets to (individual) emerging markets, changes in the weight given to the emerging market asset class as a whole affect all countries equally (Buckberg, 1996). Asymmetric information can amplify the effects of portfolio rebalancing (Kodres and Pritsker, 1999). Lack of liquidity is a further reason why a crisis in one market may lead financial intermediaries to liquidate other emerging market assets (Goldfajn and Valdes, 1997). Finally, regulations involving ratings, such as regulations which disallow holdings of non-investment grade securities, or link capital requirements to them, may also play a role. To the extent that downgrades are implemented more frequently in emerging markets after a crisis, this may well add to the sell dynamics in a crisis. PURE CONTAGION, refers to those crises triggered by a crisis elsewhere but which cannot be explained by changes in fundamentals or by any sort of the rather "mechanical" spillovers discussed above, but are possibly caused by shifts in market sentiments (increased risk aversion) or changes in interpretation given to existing information (an increased perception of risk or a "wake-up call").
(part I &II may be repeatition as i did not see the posts)

Since: Oct 08

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#14
Oct 17, 2008
 
I think that in this sceanario we need to take a call to resolve to solve the crises ourselves democratically. I do admit that I have a asymmetric information flow as with any individual, but it seems that the purging and liquidation for redemption and to move capital is nearly over, in its process it has capitulated the markets and individual networth, would it be worth considering that ordinary populace rise to the occasion and entering the market to purchase shares( i guess no individual is at this level pulling money out of the market, may be reshuffling portfolio), yes its possible that the markets may fall further but an collective action might stop the systemic haemorrhage. In return even if the markets fall further marginally an collective action might do good and the downside do really seem capped and such collective action would result in our good moreso in countries where directly and indirectly savings are linked to the stack markets.
IS THIS WORTH A THOUGHT
I think we owe this to our selves

Since: Oct 08

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#15
Oct 21, 2008
 
Ok lets see about the market speak and template it to contagion theories, contagion theories has two variants till date first generation and second generation, first generation being on fundamental economic reasons (housing valuation not being a fundamental economic reasons, but housing perse being an inflexion indicator), second generation being basically on confidence.
No denial that second generation do impact the fundamental economic condition but is not caused by fundamental economic conditions.
Now are we seeing a variant of the contagion theory, as the first factor which is hit is currency and USD is still relatively strong, thus what is the reason. Well USD being a defacto reference currency created by Bretton Wood which prices the “world”(Wonder why S Korea, India and others ran short of USD and not other currencies.)
.Now we have scenario wherein the for reasons known or unknown the center of gravitation factor has changed, thus it needs a recalibration, or being a alarmist its akin to the poles having switched.
Are the people who matter and who have caused it aware, I believe to say yes and almost scream to say yes, why do you think a lame duck president need to be so humble, work consensually with the world and thus have fixes and solution.
Well gravitational factors have changed or maybe centre of gravitation has changed or that “uni” centre ought not to be applicable. Well heads have scheduled to meet and talk, process has started rolling, of course people will have views, only wish it is not akin to Camp David for which is better known for.
That leaves us for ‘today’ in the world of tectonic shifts lot of rumbling is heard but one needs to see what structures were built as earthquake proof, the epicenter will have its destruction, which is nearly done or guaranteed not to fail, earthquake proof structures built on strong foundation as the trees shrubs will stand only the world of exotic algorithms in the world where it does not stand/belong will be axed, the premise of the original concept scrutinized.
Wonder how the epicenter banks stand to “BSM –prob” by Hillegiest (check it out in SSRN), one do seriously needs to evaluate how this theory work if one integrate it back and check where it leads, how much were these in the algorithms of the exotic and the rating agencies, mainly the conditions where such theory would not be applied.

Since: Oct 08

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#16
Oct 24, 2008
 
for those reading this post,its baffling how the world suddenly feels that earnings have evaporated from the real world. The real world needs to really understand the fact of 'deleveraging" of the world, the need to keep USD at such high price when US is really the ground zero, further that if there is a credit crises then it means that the banks are not in business thus have no earnings other than earnings on treasuries denominated in USD, WHAT happens if someone then seek to capitulate USD thats scary, the only hope is that aleast USD kept at the level at a certain level till heads of g20 meet to at the least recallibrate the payment systemfor the world, well if one sees the corporate results (i follow at least USA and India) not major difference from last few quarters other than businesses which are fundamentally bad-oil-large personal vehicle combination, yet the liquidation/capitulation, the reason then is is someone saving the wrong things for vested interest.
One seriously needs to put heads together to understand the vested interests as fundamentally nothing fits,
We need to revisit to see the tectonic shifts, the tectonic shifts in the financial intermediation- this is being forced upon by the financial world.
One needs to revisit basics as "why is equity capital a liability on b/s-hope its not that drastic"
Fundamental (not market fundamental but fundamental logic)

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#18
Oct 25, 2008
 
Lets see how do we deal with the factor of stakeholders interest, the primordial one being the ones who benefit with the present environment.
Thus interalia there appears two facets -free economy and regulations.
Perse in a flawless world they are one, if all stakeholders of the environment gain equally they are mirror image, but for an microcosm, microcosm for their only gain (conjecturally did Lehman had to go as they were the death knell to LCTM- how very perfect!!!).
Lets see regulation in the “free world”, if it exists. The pharmaceutical industry; it survives without any regulation but only the FDA(amongst other bodies) exists, it only exists to say that a product can be marketed with certain variables met (including that it does not result in mass killing), it only exists to assure that products are rigorously tested at various stages- of course that’s not regulation in free world, if FDA approved products needs to be sold in ‘its’ jurisdiction the production facility needs to be approved though not in its jurisdiction that’s not regulation.(No arguments on the IPR regime and permission for evergreening, the health care system pays for this).
Lets hope the new financial architecture being ‘written’ do not fall victim of an ‘now’ the perceived crises, an microcosm needs to create the crises for it to have its ‘free world’

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#19
Oct 27, 2008
 
Being an Indian lets see some clarion call as an Warren Buffet makes for America to bring American capital back to America, till the time financial architecture is rewritten each country needs to fend albeit collectively to reign in the madness created ( madness as its too much on doomsday prediction as the world cannot survive without American consumerism, the earnings of all non American companies will rest at naught- this quarter earnings reflect otherwise).

A step that SEBI took is to permit Indian promoters (yes India is like European country corporates where it is largely promoter held driven and managed unlike American companies where it is owned by funds which have no allegiance refer to follow up papers on LLSV as papers by Jérôme SGARD) by creeping acquisitions upto 75%@5% a year largely, that’s great, but we have had investors which has a purported need to exit, so be it, exit has not been stopped and hope not, but once on exit happens thus the FII limits fall that should be the benchmark and should be held as FII limit, this will seriously address the short sell trade factor which is vicious and protect the market, so will the warehousing stem (warehousing stems on the cheap prices). The domestic institution and players do have the capacity to absorb. Then the need for FII which needs to make fresh investments, such institutions ought to out of the FII limit thus created on existing FII exits as long as it maintains investments for the period till which the new financial architecture is in place or say 2 months

This can be extrapolated in other markets which is in similar situation or largely driven by FII as Russia, china, to an extent korea, Taiwan, Singapore being another animal as it’s a tax heaven with a major stock market.

Such out of the box situation needs a serious consideration to stem the contagion and its without a direct cost on intervention, if signaling needs intervention

As to the Fed meet lets see what Mr.Bernanke says

Since: Oct 08

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#20
Oct 29, 2008
 
since fire fighting is nearly done and the flames doused the cooling do need to continue more so as the fire was due to an arson.
One now wishes when architecture for rebuilding is being done may we have some steps toward definative nomenclature for the economical accounting and financial world akin to IUPAC nomenclature.

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#21
Nov 5, 2008
 
The markets capyures value thus after Obama getting elected reflects the mood of the market, i.e. the fate of the i bankers and the hedge funds, lets see the summit, its political but when the need arose world got Bretton Wood, we will know who the operatives are when the objection to bretton wood II appears, researchers can only watch to see where the path for the new financial architecture and see a fresh view of "free world".
As to free world if a bank(i bank included) have on metrics collapsed (since it cannot be wound up as it possesses a systemic risk) ought to be taken over in lieu of it being declared bankruptcy(to avoid the systemic risk).
As to recapitalising if it does do not work, Agency facets as in Barclay bank ought to be snipped in bud.
If we are to live in an unregulated world then as per the logic of the fund managers the central bank ought to be debunked first,regulated stock market dismantled,lots can be said but lets leave it to sane heads when then meet, only one can wish what happens behind the closed doors are made available to researchers for them to analyse and write their papers

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#22
Nov 5, 2008
 
Writing on the efficacy of CDS,
assuming its not an insurance and freely tradeable, wonder if a CDS is available on Mr Obama on his living wonder then if the cds is large enough if there would be an event when it would be profitable if he "dies accidently". that is the world on which CDS operated and seeks to continue to operate unregulated, what is the fact that corresponding trades are being cancelled-'torn up' thats great but destruction of evidence, hope its recorded with the ISDA or any other body which which represents participants in the privately negotiated derivatives industry.
lets watch the happenings JP morgan recenly issued statements that the fund are neutral or short wonder short for what, as a show of strength that world can be decimated at will, does that sound fimiliar,or is it that now in the variant of second generation contagion(actually ought to be classed as 3rd generation contagion) the ground zero will come unscathed except minor bruises andother collapses as Bretton wood had defacto created that USD would be the referenced currency for world trade, thus the safest currency thus investment in that curreny t bills are the most sensible thing, thus ground zero shall never fail, on lighter note the world should rotate the reference currency to the economically weakest country thus it will shore their economy and after a time there would be no economic laggard countries in this world, strong economic countries are good for the world and devolpment of the population.:)

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