contagion what ails the system

Since: Oct 08

Mumbai, India

#24 Nov 6, 2008
Oct 7 part I
As the summit approaches one does need an introspection why we have allowed this to happen:
If the premise of the genesis of the situation we are in is not fundamental (i.e. the ‘real economy’ is not a direct contributory to the crash and the contagion)
Then the operatives are the financial world, the i-banks (or the banks which previously operated as i-banks, the treasury/investment desks of banks, the Hedge funds et al)
Then is the premise that CDS market is the root cause of the present scenario.
Lets factor the sub-prime loans for housing in USA, loans granted to individual who could have never repaid on their income, the loan were structured on ‘x/y’ basis where x was the time factor when effectively the repayments/installments were not due, then after the x period y was the repayment spread over in years at ‘usurious’ rates all over 18 percent (it was contracted away from the usurious enactments where applicable) which on back of envelope could never have repaid, the premise on which the loan was sold was that in the x period the property prices would expand and the mortgage would be cancelable at a profit, the probalility of this not happening was very high as US properties had reached extreme bubble zone.(this largely did not exist in the high proportion world wide, though at high prices the speculators were people with ability- though to default to cut losses earning or wealth are not a criteria).
These were securitized and packed with other securitized and other debts and marketed.
Then along for protection against defaults as CDS was conceptualized, it then morphed an security on its own right, with the attendant problems if it was not an insurance policy, CDS market ballooned.
The end of x factor started to kick in thus raising the factor that subprime mortgage is due for default if not restructured. The structure of the securitized instruments not being segregable tanked on probability, thus the CDS spreads zoomed
This triggered the scenario of feedback strategy and largely based on noise,(one can evidently see that in the play of the crude as it happened in this period).
Further Accounting structure were weak what happened in core of Enron was not rectified then, an reversal of SIV and other such designated vehicles were terminated and M2M factor were triggered to see write downs and pending bankruptcy- this resulted in fascinating events in the CDS market.
It is given that there existed a high leverage, bases the factor that breakdown would create a systemic risk leading to aggrandized play, historically LTCM played as a precedent (notwithstanding that post LTCM disbanding the spreads of Russian bonds narrowed due to fundamental reasons in Russia-OIL thus it was an investment which played off post disbanding of LTCM).
Liquidity play triggered to assuage the scenario created, including recapitalizing the banks and soverign gauarantees against the bank failing, but the credit then did not flow to the real economy, but was plainly used by the banks to assuage the subprime and/or CDS in conjunction or in one in anticipating it would effect the other.
All liquidity created for intermediation was sapped away from its intent, as the financial intermediaries had a different play in mind, the financial architecture had a platform for the same, a platform created by systemic dilution in regulation.
Thus the problem on a birds eye view seems simple but needs effective steps.

Since: Oct 08

Mumbai, India

#25 Nov 6, 2008
Oct 7 part II
The liquidity flush created eventually got transferred as US t-bills subscription thus effectively a factor which ought to have assuaged the problem created problem world wide, saving yen which had a carry trade play currencies collapsed/ deteriorated world wide creating a huge profits in stockmarkets for funds emanating from dollar currencies, considering the growth seen therein, this further went into t-bills for two reasons one profits(relative) and deleveraging (of course this noise created huge shorts in equity on the similiar noise story earlier created in oil markets)
So much for the period but then bulk of the issue reverts to US the genesis of CDS emanating in US and then reverse flow of funds to US, by financial intermediaries who have abandoned financial intermediation.
Such being the scenario where data is obscured one can hypothesize in hope that factors are checked, hopefully not on statistical instruments which are not designed to test such non normal events.
One does need to test how real is the problem, whether there exists cartelization to benefit a faction, to what extent should the credit for real economy be priced, not based on indicators from CDS, what spreads should he intermediaries be permitted, or do we need a different disjunctive financial intermediaries on the premises that they do not function as such.
Further one needs to understand the moving target the state of economy and the factors why it has started to look as being hunted, yes in stress scenario the last man standing survives, the structurally week without any fundamental basis gets weeded out and business created only for valuation needs to exit first (though one needs to be discerning as to the innovative businesses which are the need of the hour, as it has always been).
All this is applicable when applicable architecture is in place, rules adhered to, an architecture which is flexible and appreciates its fallacies and is self correcting, albeit morphing to adjust outliers.
One does not contemplate an universal regulating body but near universal rules have precedents in this world and this is the need of the hour atleast as a band-aid for the economy dehors the ‘present financial intermediation who are presumably no longer intermediating’, as ramification of these financial intermediaries are reflective in the economy as they are structured to be a part of the economy.
The need may be disruptive disruptive disruptive in the financial intermediation, and hope the animal called CDS is laid down for the needs it was created for.
One really also need to undertake in todays world how much of a role should housing market be a play

Since: Oct 08

Mumbai, India

#26 Nov 6, 2008
Oct 7 part I (Pls read it as Nov 7 part 1 same for part II)
As the summit approaches one does need an introspection why we have allowed this to happen:
If the premise of the genesis of the situation we are in is not fundamental (i.e. the ‘real economy’ is not a direct contributory to the crash and the contagion)
Then the operatives are the financial world, the i-banks (or the banks which previously operated as i-banks, the treasury/investment desks of banks, the Hedge funds et al)
Then is the premise that CDS market is the root cause of the present scenario.
Lets factor the sub-prime loans for housing in USA, loans granted to individual who could have never repaid on their income, the loan were structured on ‘x/y’ basis where x was the time factor when effectively the repayments/installments were not due, then after the x period y was the repayment spread over in years at ‘usurious’ rates all over 18 percent (it was contracted away from the usurious enactments where applicable) which on back of envelope could never have repaid, the premise on which the loan was sold was that in the x period the property prices would expand and the mortgage would be cancelable at a profit, the probalility of this not happening was very high as US properties had reached extreme bubble zone.(this largely did not exist in the high proportion world wide, though at high prices the speculators were people with ability- though to default to cut losses earning or wealth are not a criteria).
These were securitized and packed with other securitized and other debts and marketed.
Then along for protection against defaults as CDS was conceptualized, it then morphed an security on its own right, with the attendant problems if it was not an insurance policy, CDS market ballooned.
The end of x factor started to kick in thus raising the factor that subprime mortgage is due for default if not restructured. The structure of the securitized instruments not being segregable tanked on probability, thus the CDS spreads zoomed
This triggered the scenario of feedback strategy and largely based on noise,(one can evidently see that in the play of the crude as it happened in this period).
Further Accounting structure were weak what happened in core of Enron was not rectified then, an reversal of SIV and other such designated vehicles were terminated and M2M factor were triggered to see write downs and pending bankruptcy- this resulted in fascinating events in the CDS market.
It is given that there existed a high leverage, bases the factor that breakdown would create a systemic risk leading to aggrandized play, historically LTCM played as a precedent (notwithstanding that post LTCM disbanding the spreads of Russian bonds narrowed due to fundamental reasons in Russia-OIL thus it was an investment which played off post disbanding of LTCM).
Liquidity play triggered to assuage the scenario created, including recapitalizing the banks and soverign gauarantees against the bank failing, but the credit then did not flow to the real economy, but was plainly used by the banks to assuage the subprime and/or CDS in conjunction or in one in anticipating it would effect the other.
All liquidity created for intermediation was sapped away from its intent, as the financial intermediaries had a different play in mind, the financial architecture had a platform for the same, a platform created by systemic dilution in regulation.
Thus the problem on a birds eye view seems simple but needs effective steps.

Since: Oct 08

Mumbai, India

#28 Nov 12, 2008
Well as to the G20 meet and the reaction in the 'markets' post Paulson's address is startling premising on the fact that countries did meet earlier at Beijing and Sao Paulo and the fact that Sarkozy address statement that Europe was united. One just needs to await the decision/discussions. The G20 summit shall happen this weekend, the outcomes of which are awaited it’s a political process, one can pray that senses shall prevail but ofcourse seeing the 'markets' it would be not what the 'markets' want.
Then one needs to fathom what is the 'market'.
Paulson address was startling as to the reasons for the crises, as Europe having structural issues and developing countries have huge savings!!!!
Reverting to 'markets'
Thought had a need to write, country as Russia is being rated that it is worth nothing other than its oil and gas receipts and that it plummeted (plummeting is against dollar denominated terms not in the currency of its buyers-viz. Europe and at levels 15 months ago), so it then reverts to Oil, Russia and Iran.
Till such time the world needs to move on, albeit maybe on a primitive note for transacting- all currencies have weakened vis a vis the USD(saving yen), but interse amongst the currencies the differences do exists but largely evens out amongst each other, may be the world should resign when trade needs to be done, the seller ought to quote what the price in his own currencies, the buyers then decide whether the trade is tradeable in his own currencies, the central banks then would resolve how to make the money exchange happen(hope so or else we shall then need to revert to barter system). That leaves to the future cover for the currencies, that being a moving target and presuming that interse the spread do not differenciate and may not as it is the world other then USA which is seeing its currency “depreciate”.
That is what money is what does as it is a exchange medium-school text book stuff.
It does seem people like me are ganging up against USD, are we or are we seeking to bring back sense to our financial system. Or is the US banking industry forwarding a message to G20,
That leaves the state of economic conditions for the world, its a predicted mess-is it?

Since: Oct 08

Sewri, India

#30 Nov 19, 2008
Nov20 2008
Two issues on historical front as S&P hit ‘lows’
On two previous cataclysmic events, first post WWII in Japan the sogoshosha’s were broken down to non monopolistic sizes to bring economic sense, prevent economic concentration and to avoid the markets being skewed, post 1997 the Asian crises chaebols were dismantled for similar reasons (of course corruption was a factor too). Such events were from external agencies. Are we in need to break effective monopolies and concerted efforts in the financial markets, Is there an Agency ‘monopoly’ emanating from the ranks of PE/I-Bank and Hedge fund world.
The factor of chartists in the chatter of today’s world, chartists presumably work on mathematical statistics black box, the black box being structured to give statistically meaningful output premised on set of conditions, the primordial question now being has the set of condition violated, for the black box which is worked upon, now to generate garbage.

Historically after the housing bubble bust in Japan topix chugged down from 44000 to present below 9000*, Japan was (and is) an economic power to contend with, other than the immediate upheaval the world systems worked well, Is it possible that the world may survive the breakdown of the American markets
*(if one believes that markets prices are not the perfect indicators of real value prices and can never ever be in the state of models presently existing )
As to G20 meet ‘picture khatam nahin hua dost’
We do have a problem, a need to understand the contagion (not positively due to a post facto of a resource destruction/sapping as a world war the cause of 1930 contagion, if not so then, what caused the present contagion)

Since: Oct 08

Mumbai, India

#31 Nov 20, 2008
Nov21 2008
Lets see the bailout sought by the car industry, recall that US legislature had mandated the need to curtail oil consumption and go green by phased use of ethanol blends, a model successfully worked in Brazil. The market skewed to create a huge rise in corn prices and thus the spike in food, the prime beneficiary if scuttled were oil.
The hand in glove of oil and big cars in USA is legendary, albeit the cars were a driver for oil, world car industry went ecologically friendly by building small cars for the masses , a direction towards greener cars.
Thus now that USA car trio has a cash problem they ought to look to oil industry for support other than public fund, Public transport is woefully inadequate, and public transport are a necessity to all countries albeit even the economically advanced countries, and this has been on the backburner, infrastructure for transport in USA always meant the highways and superways, yes they are needed but not in absence of full connectivity of MRT/public transport, case and point is California,
TARP for the auto trio, when crysler is run/managed by a PE fund, the smart people who did not anticipate happenings the smart people who raided VW.
Yes the auto industry is a legacy industry that probably needs to survive by realigning but do the board need to survive, what are the then responsibility of the board(Agency) to have brought this to the companies. Ch11 prima facie looks nice but it maintains debtor in control thus the agency in control, the industry needs fresh thoughts and fresh management, which Ch 11 shall not bring in, this then brings forth the bankruptcy norms and fresh look as to how LLSV paper originally constituted and the papers then written, an comparative on the bankruptcy norms to effectuate the solution to the structural problems the car industry trio faces albeit a thought as bankruptcy norms per se do not solve structural problems.
Many a events happened last couple of years which is unfolding now unwittingly (one can only hope that its unwittingly otherwise it’s a criminal conspiracy to cause illegal gain to oneself by loss to other, a basic tenet of criminal jurisprudence)

Since: Oct 08

Mumbai, India

#32 Nov 22, 2008
why the need for a financial architecture:
perusing papers as -The Redesign of the International Financial Architecture from a Latin American Perspective: Who Pays the Bill?
By
Eduardo Fernández-Arias AND Ricardo Hausmann-Inter-American Development Bank & Harvard University
December 2000 (SSRN)
one would clearly opine that industrialise country as USA could never be ground zero are the premises of writings, the present thinking are premised on this, thus as US is the ground zero we need newer ideas and solutions, may we now strive for this diligently at G20 summits for a more durable finacial architecture and propose an synthetic 'gold' standards in lieu od USD(not gold as the disadvantages are known and else the gold producing countries stand to an unfair advantage)this is in contradistinction to the much needed fire fighting mode the world is in.
Con

San Pedro, CA

#33 Nov 22, 2008
I disagree.

Since: Nov 08

Location hidden

#34 Nov 23, 2008
I hold a branch from the all powerful tree of life that grows unmolested in the wilds of central africa. This tree controls all in the universe except me and my branch. With this branch I can raise the dead, turn deserts green, stop wars...instead I prefer to control the outcomes of coin tosses at the start of professional football games. I see not the big picture.

Since: Oct 08

Mumbai, India

#35 Nov 23, 2008
Lets do some noise analysis to see the world we have given ourselves, a while back an analyst predicted that the Indian market P/E should align with the GDP rate and as the GDP rate is expected at below 7% the PE should align to that level,
Does then one presume that economies which are in officially in recession and have shown near zero growth on quarterly basis the companies therein should have negative PE and near zero PE implying that earnings therein are to be zero/negative across on average- that’s not what happens in recession I guess if my basics serves me right otherwise all industry on an average over few quarters would be destined to bankruptcy as per the norms set in under any existing models .
One should really question such analysis and the intelligence level of such operatives, the collarary of such prediction is that markets are decoupled and have aligned itself to figures purely based on GDP of countries OR that marauders are on prowl- need one write on Citi.
Then that brings to sound bites of regulator in India which stated that there are no indiscriminate selling and would try to ascertain as to why FII’s are selling ever wonder what tools they are using, till sometime back they worked only on excel sheets as tools.
One needs to understand this in the background that SEBI never ever believed in the efficient market theories thus why the volte face, i.e. there exists two set of regulation for change of control, one through preferential issues(yes this is a tool for friendly change of control) wherein strict norms for shareholder approval exists, but if the rampup exists triggering threshold of takeover code (which is lower on international standards) then the takeover code is triggered, on permutation with percentage of shares issued it tends to absurdity.
Wonder if the analyst/markets do consider cost of production thus as OIL is stated to hit below USD 40 (as against when the prediction was over USD 200- the turn did happen at USD 147), on the same premise iphone should be 1USD and mcrosoft windows should be 1cent!!!(sorry for the stretch), but then are prices reaching levels to hamper production and shut down of facilities(better shut down then sell below cost)-steel has done auto as trucking production have done will all production facility follow, do the world need to key in to production costs(dehors the artificial highs and inflated services input to the industry).
One sincerely hope that when the new architecture is written it does not swing from one absurdity on regulation(no regulation is regulation by interests involved) and absurdity would also be regulations by interests involved. Hope the credit for the belief that in country representing dream team may falter( not a comment on US team building but on the touted dream teams including India- Indian dream team exists at a level and not across the country, the property state in Mumbai would really amplify inefficiencies, vested interest not willing to lose control.
Till then the markets can meander as it likes on the legacy it created

Since: Oct 08

Mumbai, India

#36 Nov 23, 2008
Con wrote:
I disagree.
thanks for the disagreement but may i have the reasons

Since: Oct 08

Mumbai, India

#37 Nov 23, 2008
this1then wrote:
I hold a branch from the all powerful tree of life that grows unmolested in the wilds of central africa. This tree controls all in the universe except me and my branch. With this branch I can raise the dead, turn deserts green, stop wars...instead I prefer to control the outcomes of coin tosses at the start of professional football games. I see not the big picture.
apt,ok do u understand black scholes in its pure sense, and the conditions if so would love some comments

Since: Nov 08

Location hidden

#38 Nov 23, 2008
uttam hathi wrote:
<quoted text>
apt,ok do u understand black scholes in its pure sense, and the conditions if so would love some comments
Of course, a black schole is the path that a grapefruit with a seven inch diameter takes, heading westward down the candy aisle, after being kicked by the left foot of a bare footed dentist in an ionized Ralphs supermarket.

Since: Nov 08

Location hidden

#39 Nov 25, 2008
Hey uttam, what do you take for Rheumatism? Not that I'm affected mind you, I just feel like taking something to prepare for the coming deflationary period. Your gold will be worthless as day old chutney. Bowling balls wouldn't make the best currency, not because they have holes in them, but because production would be slow and people wouldn't have enough change for things...like those pay toilets that seem to be cropping up more and more. I just read that they may have detected a source of Dark Matter...energized particles without a clear standard model origin. They call it a whisper. Lost souls maybe? Do you think that Ringo will be the last surviving beatle. I think he could take Mick Jagger in back alley brawl. If you're asleep while you're reading this, it will probably need to be explained and translated later. Rave on.

Since: Oct 08

Mumbai, India

#40 Nov 25, 2008
i did keep writing about marauders, citi fell on friday and rose on monday ineed not state the percentage, is that the functioning of efficent markets if so we do need a fresh defination of efficent markets, a better word is cartelisation which is what probably happening, one cant think otherwise and thats apparent across the globe, select shares if CDS exist premise it on that to move prices and make money, only trap which happened was the blunder in VW in germany, first it was the financials then it moved to autos and it meanders across.
wonder how many nero's the world will see and for what

Since: Oct 08

Mumbai, India

#41 Nov 25, 2008
this1then wrote:
Hey uttam, what do you take for Rheumatism? Not that I'm affected mind you, I just feel like taking something to prepare for the coming deflationary period. Your gold will be worthless as day old chutney. Bowling balls wouldn't make the best currency, not because they have holes in them, but because production would be slow and people wouldn't have enough change for things...like those pay toilets that seem to be cropping up more and more. I just read that they may have detected a source of Dark Matter...energized particles without a clear standard model origin. They call it a whisper. Lost souls maybe? Do you think that Ringo will be the last surviving beatle. I think he could take Mick Jagger in back alley brawl. If you're asleep while you're reading this, it will probably need to be explained and translated later. Rave on.
Just wiat for the movies to be released say a year from now, what has happened is the biggest hot air on earth and how it moved all to protect some interests, the ingenuity of creating and solving problems just wait and watch as all theories and models have been tossed across, just watch in 1979 the hunt brothers did not succeed neither will the protagonist now (only thing the protaganist must have fulfilled their objectives and must be laughing their heads off now)

Since: Oct 08

Mumbai, India

#42 Nov 25, 2008
I shall continue again and shall continue raving:
IS there fall out of the financial contagion on the real economy other than the seizing up of the credit market, or is it that various factors across the world collapsed at the same time, presuming the ground zero to be USA and the poisoning of the CDO's with ratings therein of AAA when it plausibly did not deserve that rating and then the CDS play due to M2M accounting norms to start with. Europe slow down of economy, the various metrics used to compute GDP across the world having then entered the black hole of financial contagion, did and as recorded in other contagion has an effect on the economies across the world, and this coupled with the defacto exchange currency being USD the ground zero.
As each parts of the world had different issues to address post the co-ordinated firefighting each have started to address according to its needs, as china addressed its stimulus package to address the infrastructure needs of parts of china which relatively did not participate the economic surge, UK now addresses it with their package of addressing the tax structure as stimulus, Japan being against moving to zero interest rate regime but addressing through monetary policy, these are actions for the economy to address what resulted from the cascade caused by the financial contagion, US presenting a team sans the wall street a team if it performs may as well be a dream team(on economic front)
The factor one needs to bear is the factor of property, many a financial contagion occurred wherein the causative factor being property/ property bubble. Property/housing being an inflexion point of the state of economy, but in the changed environment should it be an inflexion point in evaluating factors, or do we need a relook therein.
Realm which maybe deserves some thought

Since: Nov 08

Location hidden

#43 Nov 25, 2008
uttam hathi wrote:
I shall continue again and shall continue raving:
IS there fall out of the financial contagion on the real economy other than the seizing up of the credit market, or is it that various factors across the world collapsed at the same time, presuming the ground zero to be USA and the poisoning of the CDO's with ratings therein of AAA when it plausibly did not deserve that rating and then the CDS play due to M2M accounting norms to start with. Europe slow down of economy, the various metrics used to compute GDP across the world having then entered the black hole of financial contagion, did and as recorded in other contagion has an effect on the economies across the world, and this coupled with the defacto exchange currency being USD the ground zero.
As each parts of the world had different issues to address post the co-ordinated firefighting each have started to address according to its needs, as china addressed its stimulus package to address the infrastructure needs of parts of china which relatively did not participate the economic surge, UK now addresses it with their package of addressing the tax structure as stimulus, Japan being against moving to zero interest rate regime but addressing through monetary policy, these are actions for the economy to address what resulted from the cascade caused by the financial contagion, US presenting a team sans the wall street a team if it performs may as well be a dream team(on economic front)
The factor one needs to bear is the factor of property, many a financial contagion occurred wherein the causative factor being property/ property bubble. Property/housing being an inflexion point of the state of economy, but in the changed environment should it be an inflexion point in evaluating factors, or do we need a relook therein.
Realm which maybe deserves some thought
I cannot describe the feeling I had when I read that. Of course Manson was a Scientologist, but he strayed from the fold, settled down, and started a family. And when the persecuted masses realize that polonium 210 is also a diuretic we'll all be skinny again...real real skinny. Are Vladimir Putin and Daniel Craig related, they have the same emotions. If you mix the genome of the now invincible laboratory rat with a walnut, will there be a sewer in every shell? Remember, the sky isn't really the limit after all. Reality has replaced reality and will again and again and again. Rant on.

Since: Oct 08

Mumbai, India

#44 Nov 30, 2008
well i am from mumbai and not n elite who wine and dine at the key starred hotels(thus my opinion hereafter is biased), well it seems that life there is more valuable than the hoi polloi, the same squeals we heard at the when regulation in the I- banks and the hedge funds was suggested by the poeple there are being heard,(wonder where were they when delhi, banglore, ahmedabad, North east was attacked)
But that is India getting for elections by the opposition hear the spokeperson of BJP, it says all.
Failure of course has happened, i do believe that we will not take to war as suggested through the media by certain section, Pakistan which is reeling and have just recieved grants from WB, terrorist exists across so do they in Pakistan yes ISI is questionable, but give a hope for the ever nascent democracy in pakistan (which is doomed for failure without dismantling of the zamindari, but economically neither can we, WE ARE NOT A SUPERPOWER NEITHER SHOULD WE ACT AS ONE then many would succeed what they want, the probable change of axis of power to trickle down may be there(its not there yet but probably may).
Lets await the name for the finance minister thats what is relevant now.
This is temperory, anguish is not and will pass only media will feed on it(media is relevant till its impartial not otherwise as for TRP).
BY THE WAY IT IS AN TERRORIST ATTCK AND NOT A WAR AS THE MEDIA KEEPS REPEATING.
our pandus are clueless but still humane at worst of time, thats all we want albeit some training other than bandobast training

Since: Oct 08

Mumbai, India

#45 Dec 4, 2008
Dec 5, 2008
In an integrated world where eventually everyone trades with another, hearings are on to infuse money to trio in the auto world of US where the cashflow/free cash is less than a month.
Has it entered a black scholes scenario the platform on which the world is based, if so then the equity holders ought to acquiesce to the debt holder, surrender and vacate for the debt holder to decide.
The structural reason for arriving at such scenario should be common across markets thus market analogue should be that all autos ought to be in the hands of debt providers(wonder how the pricing is done for a debt free corporates and wonder if this is the model why tax breaks exists for debt to.
Now if this facet is right is it then that the auto giants ought to windup in the hands of the debt providers or in the hands of the equity providers (which presumably failed to have reached this scenario yes it’s the equity providers, they deserve the management they elect and provide golden parachutes to them for them to have defacto control, if equity cannot remove the board they elect without paying a premium for their non performance they deserve the same).
Template this with the two contrasting bankruptcy norms under the common law or its derivative the US bankruptcy code and the bankruptcy law in UK, in US under ch11 the management still stays in control, under UK laws it goes to the hands of consultancy firms, god alone knows which is better(since Crysler is in control of an PE firm which should be knowledgeable in managing).
If legacy is the valuation model than the premium to the 3 autos are huge, but if the way forward is maintaining the companies with the existing management, then one wonders why as an aftermath Korean cheobols /auto giants were trimmed (Daewoo truck divisions I know of is presently owned by Tata motors), that leaves the supply and distribution chain, wonder if cars don’t sell if its worth the money (that’s plain speak- otherwise Toyota and other car plants in north America should be shutting off too)
The radical question is if the legacy is due to the labor unions let the company be given a lifeline, then the labor then should manage,(oops but that may be a way forward(if professional firms as law and accounting firms run that way why not test it here) to destroy the redundant legacy unless they perform let it have a product line, priceline and costing which is sellable) otherwise wonder why the non unionized tax payers ought to be subsidizing them.
In alternate if every legacy in US needs to be saved to save US thus the world, the time is ripe for destruction to rebuild,
Guess what I heard in TV that fall in Oil prices are a tax cut, may the world have some tax cuts from the goods and services from the countries benefiting Oil price tax cuts,‘merril lynch’ predicts Oil to be at 25$/barrel the Indian stock markets are due for 25%-30% cut. We did hear this story when OIL was to go over 200$ and Indian stock markets would hit 45000 (when they at 20/21K-presently at 9K-sensex).
Let the chatter continue as all fundamental has caved (or will work with a long lag, the prediction of rate cut in fed rate is an enigma as apparently the liquidity created moves to t-bills in US, at least at zero it will stop the arbitrage as then the t-bill value will stagnate and thus lose the efficacy of arbitrage-or here its free lunch)

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