The Bullfighters


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What's the real meaning of discloser transparency these days?

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The Bullfighters

  1. 1. How transparent is “transparent”? Our Governments, Banks and others
  2. 2. Sometime last year, after the first round of the subprime housing finance crisis had hit Wall Street banks, there was a meeting of central bank chiefs from major economies.
  3. 3. ..discussing the potential impact of the collapse of the US housing finance market, the meeting focused on a question: Whether the whole truth about this crises should be told at one go or revealed in smaller installments.
  4. 4. It was finally decided that the truth was perhaps too enormous for the global financial and economic systems to be able to digest in one single shot. We do accounting discloser norms, laws for compliances and corporate social responsibilities well laid out
  5. 5. A pretence of letting markets work their way out of the crisis gripping the global financial sector was jettisoned on Wednesday with central banks of various countries putting up about $300 billion to help tide over the situation and governments in several countries publicly stating their commitment to help. From where this money is coming up? Deposits? Fresh borrowings, bonds or… ? Inflation through book entries? Diversion from other productive uses? Who is going bear impact of all this? Are these banks & governments transparent on this?
  6. 6. the collapse of Bear Stearns, Freddie Mac, Fannie Mae, Lehman Brothers, American International Group (AIG) — together with a balance sheet size of well over a trillion dollars (the size of India’s GDP) — had occurred in one fell swoop. The global economy might have got shaken to its roots……..
  7. 7. European central banker who strongly argued that the truth about the sheer fragility of Wall Street biggies must be told in digestible bits. There are also disclosure issues: Lehman, in its last conference call with investors, gave no clue that it was actually on the brink.
  8. 8. point is that Wall Street finance has clearly lost its link with the real economy, was threatening to do the same for developing economies… If all the hedge fund money, which is in some way or the other driven by the Wall Street biggies had been allowed into these countries – they would have been sitting on the bombs – greater than ever known….
  9. 9. Wall Street allowed finance to run away, leaving the real economy way behind. Perhaps the it had a compulsion to do so. When economies become inherently sluggish, finance capitalism is used as a steroid to add muscle. But that does not always work. It can even become counterproductive.
  10. 10. Excessive finances on Wall Street led to funds desperately seeking higher returns in commodity speculation, especially after the housing collapse and fall in equity markets. To see how it works (?) look into this link
  11. 11. hedge fund investments in oil, metals and other soft commodities went up over four times…. Making things costly for everybody – companies, and consumers and economies Hundreds of thousands are loosing jobs US Auto majors lost about US$ 50 billion You know how much you have paid more for gas and other utilities And Most of all what your money is going to do for your future
  12. 12. .. the very collapse of some of the Wall Street biggies and withdrawals from hedge funds has brought down the crude and steel prices down recently.. So you know what was a major cause for rise in prices recently. …. funding for hedging, speculating may give high returns for some times and certainly not for all the times. A vicious circle is the most probable result…
  13. 13. the price mechanism in many asset classes — whether oil, metals, equities or real estate — has become too funding based – a new term is coined here ‘Wall Street-centric.’ If speculator finds funding at rate lesser than the prices one can push real market prices by short selling commodities and waiting for more rise. So whenever something funny happens try to learn beyond the frenzy…..
  14. 14. <ul><li>Why the Americans ignore what Buffett says about ‘Intrinsic value” of the stock? </li></ul><ul><li>If George Orwell comes back, he will say… </li></ul><ul><li>‘ all investors are equal, but their money managers are more equal’ </li></ul><ul><li>What do you feel, let me know. </li></ul><ul><li>“ Stop trying to predict the direction of the stock market, the economy, interest rates, or elections.” </li></ul><ul><li>Warren E. Buffett </li></ul><ul><li>Thank him, at least is transparent in saying so </li></ul><ul><li>Better try to understand these phenomena - especially the habitual players – who are supposed to be trustees of the people who provide them resources, but act as if they own it all….. </li></ul>
  15. 15. Ask any bullfighter - how much sanity the bull demonstrates in this state of mind? Excuse me for less pictures, frankly I do not know how to paint madness.
  16. 16. The Real Market As the traders sees and shows it to us. Based on news analysis and reporting by leading newspaper studies.
  17. 17. Many a times we come across such people Who are powered by their view of righteousness We saw one in 1939 and then in 2001, Both caused irreparable harms to unknown people for long years. We do not know how many are around. This is misuse of free will and other ‘freedoms’. As it is people have more worries than they can handle and this adds more to it. dil·i·gence  n. 1. Earnest and persistent application to an undertaking; steady effort; assiduity. 2. Attentive care; heedfulness Where is the diligence?