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October 3, 2008

Spooky CDS Exposure of US $ 54.6 Trillion…yes, Trillion !

How would you like to Bet on other People’s Debts !? ….Will they Pay or will they not !?…USA has this great Gambling Product that goes by the terminology of CREDIT DEBT SWAPS or CDS for short

Just read the frightening revelation that the  Exposure currently on CDS is US $ 54.6 Trillion…that’s over three and a half times the Country’s GDP and a scary 85% of the Aggregate GDP of the world ! 

The assumption was that House Prices will continue moving up and refinance opportunities will become available…With House Prices crashing and this assumption going bust there have been a spate of Defaults and ‘D’ Fault has to be pinned top down from the President and Regulators downwards

Methinks for the first time in US Presidential Elections History,both prime candidates must be praying that the other wins ! 

‘Playboy’ planning ‘Women of Wall Street’…How about ‘Damsels of Dalal Street’ !?

Came across an entertaining news release by ‘Playboy’.They are planning for their February 2009 issue to feature around 20 Wall Street Women in the buff in  a feature ‘Women of Wall Street’.They have done features on’ Women of Enron’ and the likes before

Hey Playboy ! We’ve already seen these Women being laid Financialy Bare by Wall Street….and now you’re going to Bare it All ! 

How about ‘Debonair’ (Is it yet around !?) doing a similar feature on the ‘ Damsels of Dalal Street ‘ ?Nah !…But how about doing one on those seducing ‘Mannequins of the Stock Media’?…Now that’s a wider and more attractive choice to choose from ! 

FY 2000/1 Being Repeated….Huge Erosion in Equity in 2008 till Date

Our Sensex Reached an intra-day high of 21206.77 on January 10,2008 this year,but had registered ahighest closing of 20873.33 just two days earlier on January 8,2008

To gauge the Erosion in Equity on the Bombay Stock Exchange from January 8,2008  to September 30,2008 just have a look at the Indices Table Below…Buffett just commented that USA is “Flat on the Floor” and it’s time to be Greedy..see an earlier blog today…India is not far behind !

Wealth Destroyers in 2008

January 8 to September 30

 

Indices

Sep 30

 

%  Wiped Off

 

Sensex

12860.4

-38.4

Nifty

3921.2

-37.6

BSE Mid Cap

4798.3

-52.0

BSE Small Cap

5577.5

-59.0

BSE 500

4897.6

-44.3

Sector Indices

 

 

Realty

3508.8

-74.0

Consumer Durables

2929.2

-55.4

Metal

8992.1

-54.0

Power

2260.3

-53.0

Capital  Goods

10581.1

-47.7

Banks

6478.9

-46.4

Oil & Gas

9039.3

-35.7

Auto

3675.0

-34.3

Information Tech

3095.1

-27.1

Healthcare

3672.2

-14.5

FMCG

2160.8

-13.8

 As I Blog this we are closing this week on the BSE in even more negative territory despite the Indo -US Nuclear Treaty and the US Financial Bail-out Plan having been passed on October 1,2008…yesterday BSE was closed on account of Gandhi Jayanti and Eid…The Sensex,which had closed at 13056 the day before is down over 570 points and has slid below 12500 and should close at the lowest so far in 2008 

As I have said in recent blogs…look for Vulture Opportunities

Fed Chairman,Ben Bernanke scares all !

On Thursday,September 18,2008 in a hastily and urgently convened meeting in the Conference Room of the House Speaker,Nancy Pelosi,both the Federal Reserve Chairman,Ben Bernanke and the Treasury Secretary ,Henry Paulson presented the Proposed US $ 700 Billion Financial Bail-out Plan for the First Time to Congressional Leaders

Some Participants leaked out that Ben Bernanke starkly warned that “If we don’t do this we may not have an Economy on Monday ” !

OoooooooooooooF ! What is he saying ! ? BBC was flashing what he was saying a year ago that the Mortgage Crisis was manageable and there was nothing to worry about ! and the Fire Alarm that he is now raising

Indo US Nuclear Deal ratified by the USA President,Bush on Gandhi Jayanti

Stark Reality this !…..The US Senate passed the Indo Nuclear Deal by a resounding 86 to 13 Vote on October 1,2008 …..Next Day was Gandhi Jayanti and the USA President,George Bush ratified the Deal….Mahatma Gandhi stood for Ahimsa and Non Violence…was it just a stark coincidence or was it what James Redfield,a modern day thinker, termed as “Synchronicity” in his book “Celestine Prophecy” or was it ” Secrets of Shambala” ?

The contrast of “Nuclear” and “Non Violence” was meant to be juxtaposed like this!

Time to get greedy says Investment Guru, Warren Buffett

Living Investment Legend,Warren Buffett has just committed US $ 8 Billion to the Two Big ‘G’s”,Goldman Sachs and General Electric (GE)

Hey Mr Buffett ! I’m also a “G” !

Buffett has been a fan of General Electric for decades…Interestingly the Indo US Nuclear Deal too has just been passed and GE is expected to get orders from India for over US $ 10 Billion to begin with  for Nuclear Power Equipment !

It’s time to be Greedy says Buffett when the US Economy is “Flat on the Floor”…reminds me of  a joke…A student was asked by his teacher as to why he was doing his Mathematics on the floor….”You told us not to use Tables” replied the Student !…Buffett ,it’s these Big Fat Financial Cats that did not know their Maths and indulged in skullduggery to knock USA off the Chairs and Tables and “Flat on the Floor”…I can understand you have no real option here but to be a Patriot…you have J P Morgan’s precedent here…He bailed out  the Government and Wall Street in 1885 and 1907….Wish You Well but I fear a lot more pain ahead before USA can even Sit,let alone Stand!   

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