Tuesday, October 21, 2008
India defeats Australia comprehensively
Friday, October 17, 2008
A Dummy's Guide To US Sub-Prime Crisis
Sub-Prime means "which is Below Prime" or "Less Than Credit-Worthy", in the context of a loan or borrowing.
In US, many banks have disbursed loans to borrowers who are not credit worthy or disbursed loans of value worth several times the value of the security against which the loan was given. Many intermediaries, like Investment Banks or Private Equity Funds, have purchased these loans in what is known as Derivatives, by paying still higher value to the banks, on the assumption that the underlying securities i.e. the house or land, will appreciate & they can sell them & book profits. That is how the Loan Bubble was formed in the US about two or three years back. But, when finally the time came for repayment and most buyers of these properties, who have been granted these loans by the banks in the first place, could not repay the loan and the banks tried to sell-off the underlying assets to adjust the loan amount, they found, to their horror, that the asset has not appreciated to the level they anticipated and THE BUBBLE BURST WITHIN NO TIME.
Let us try and see how chronologically the above would have happened, step by step, with some fictional examples.
FOUNDATION
Let us say there is a guy called Karunai Illa Nidhi (KIN, for short), who holds vast tracts of land. But, unfortunately most of his land is situated in remote areas (like, say, Ramnad district - Pottal Kaadu) and hence there are no takers. KIN gets into contact with a greedy bank called CICIC Bank. The bank somehow wants to become the top bank & hence is willing to give loans left, right & centre, without any due diligence. Their only aim is to get business - by hook or by crook.
Thus, CICIC Bank gets hooked to the crook called KIN and they jointly prepare a survey report on KIN's land. Obviously, the survey report predicts the market value of KIN's land to go up substantially within a couple of years. Armed with the survey report, they hunt for a borrower & a guy called Podhu Janam comes into their radar. KIN convinces Podhu Janam to buy his land by showing the survey report & promising him that if he buys the land, within a couple of years he will become a billionaire. Podhu Janam expresses his inability to buy due to his poor financial conditions. KIN then assures him not to worry & brings CICIC Bank on to the scene.
CICIC Bank assures Podhu Janam that if he buys the land of KIN for Rs. 10 crore, within a couple of years, it will be worth Rs. 20 crore due to rapid appreciation happening in land prices. It also assures Podhu Janam that CICIC Bnak will give him the entire money as loan and he need not repay even a single rupee for the first three years and his repayment will start only after 3 years. By that time, since the land value also would have multiplied several times, Podhu Janam can even sell the land for at least double its current value and pay back the loan to the bank & keep the balance cash with himself (All this for a land, which is worth only Rs. 1 crore now).
Podhu Janam finds it too tempting to reject the offer and he signs on the dotted line to get the loan for buying the land. CICIC Bank pays Rs. 10 crore to KIN, on behalf of Podhu Janam and KIN transfers the title of the land to Podhu Janam, but the same is kept in mortgage with CICIC Bank as the underlying security for the loan.
Podhu Janam is happy that he has become the owner of huge tract of land though he doesn't even know where it is located or whether it is worth so much. KIN is very happy that he has made a cool profit of Rs. 9 crore on a land in a remote area which did not even have a taker till the other day. CICIC Bank is happy that it concluded a huge business (loan) worth Rs. 10 crore, which it can leverage (re-sell) in the market. All are happy.
BUILDING BLOCKS
On such a flimsy and fradulent foundation, a basic mortgage loan has been concluded. Now, CICIC Bank does similar types of deals with the help of so many other KINs of this world and there are enough Podhu Janams to fall a prey to these kind of enticements. Like this, CICIC Bank builds a huge portfolio of loan assets.
For banks, lending is the main business and money lent becomes their asset. Even though Podhu Janam need not repay the loan or pay any interest for the first three years, as per accounting norms, banks have to recognise interest due to them from Day 1 in their books as Income. Thus, even though not a single paisa has been paid or received, CICIC Bank accrues interest on the loan amount of Rs. 10 crore paid to Podhu Janam as also on all other similar loans disbursed to its borrowers. Based on such a huge income, the CICIC Bank shows a hefty profit in its books and rewards its officials through hefty bonuses. Its shareholders also take huge dividends.
GLASS FACADES
Simultaneously, CICIC Bank also approaches some reputed Credit Rating Agencies (like S & P or Moody's) and appoints one such reputed credit rating agency called Mody Mastans to rate their assets. Mody Mastans rates the Loan Assets of CICIC Bank based on the papers of various borrowers like Podhu Janam given by CICIC Bank by assigning them appropriate ratings like AAA+ (For Very Highly Credit Worthy), AAA, AA+, AA, A+, A, B+, B, A-, B- (Low Credit Worthy).
Armed with its Loan Assets rated by a Reputed Credit Agency, CICIC Bank also approaches an Insurance Company to insure against any depreciation in any of its asset class. An Insurance company, which is a behemoth in the industry, called A. Iyaiyo. G. Insurance, finds that CICIC Bank has got huge Loan Assets & they have all been rated well by a reputed credit rating firm of Mody Mastans. So, it also wants to enjoy a piece of the cake by agreeing to insure those assets that, if, any of the underlying securities of these Loan Assets depreciate in their value & goes down below the loan disbursed, A. Iyaiyo. G. Insurance will reimburse the difference between the loan amount & underlying security's market value.
THE BUBBLE a.k.a MARKET DERIVATIVES
Now, CICIC Bank has got a mammoth business and is ranked among the Top 10 banks of the country. Similarly, Mody Mastans & A. Iyaiyo. G. Insurance are also figuring in the Top 10 or Top 5 Lists of their respective industries. All these have become the envy of every other competitor. Every other company worth its salt also want to reach such heights and they also start doing the Sub-Prime Mortgage business in the same unscrupulous ways.
Now, CICIC Bank, which has set the trend by doing the Sub-Prime Mortgage Business on an unprecedented scale, and buoyed by its success, wants to go one step further by altogether selling its Loan Assets as a Derivative Product to other Investment Banks or Private Equity Funds, who are called as Intermediaries.
For this purpose, CICIC Bank divides its Loan Assets into different classses, based on their assigned Credit Ratings, and bundling together each class as the underlying asset, it sells them to buyers as Derivative Bonds. A reputed Investment Banker called Layman Cousins, negotiates with CICIC Bank and agrees to subscribe to its Derivative Bonds as per agreed rates. CICIC Bank thus makes a cool profit by selling the loan asset of Rs. 10 crore (given to Podhu Janam) to Layman Cousins at Rs. 15 Crore. Layman Cousins is willing to pay that amount because it is satisfied that Mody Mastans have rated it and A. Iyaiyo. G. Insurance has under-written it. Moreover, it is convinced that the land's market value is likely to soar in a couple of years & hence there are no worries. Thus, Layman Cousins and others of its ilk, ends up with huge amounts of Derivatives running into several hundred billions of dollars by purchasing from the market several such derivative products issued by all such loan/mortgage institutions.
All has been hunky-dory so far.
KIN has sold-off his land for a hefty profit.
CICIC Bank has sold-off its huge Loan Assets as a Derivative Product and made a fat profit.
Layman Cousins has purchased huge Derivative Assets, whose market value is growing & is likely to soar to phenomenal heights. It is already booking profits in its books due to the appreciating value of these assets in the Bond Market as there are huge demands to buy these assets. Hefty bonuses are received by its Managers, who are all Ivy League Business Graduates and who are looked at with envy by the whole nation for their innovative business acumen.
PAY-BACK TIME a.k.a BURSTING OF THE BUBBLE
Everything was going fine for the first three years i.e. till the time when the repayment of the original loan was due. When that time came, Podhu Janam, obviously, could not repay the loan amount due, because he simply doesn't have the money to repay.
So, the underlying asset i.e. KIN's land parcel at the remote place had to be put on the block. But, alas, the land parcel, which was originally bought for Rs. 1 crore, is now worth only Rs. 2 crore (and not Rs. 10 or Rs. 15 crore, which was promised). The moment it is known that the underlying mortgage asset's value has come down drastically from its perceived value, all hell breaks lose.
FINANCIAL TSUNAMI
Layman Cousins' asset (Bond Investments) base erodes drastically from Rs. 15 crore to Rs. 2 crore - less than 14% of its book value. Due to the huge value erosion in its assets, it makes a huge loss, which has the effect of eroding its entire net worth accumulated over several years, in a single stroke of imprudence. Layman Cousins tries frantically to salvage the situation by looking for capital infusion to stem the tide. It tries from various possible suitors but none of then are willing to pay the price it wants. Finally, it even approaches the Government to take a stake in its apital but the Govt. refuses to bail out Layman. Ultimately, Layman Cousins has to file for bankruptcy proceedings as it has no way of surviving the financial tsunami which has befallen it.
Similarly, A. Iyaiyo. G. Insurance is also comes under enormous financial pressure due to erosion in the value of its insured assets. Because of its huge exposure to such kinds of inflated value assets, A.Iyaiyo. G. Insurance faces the prospect of bankruptcy. But, the Government, fortunately, comes to its rescue by agreeing to take it over by bringing in 80% of equity.
All such intermediaries like Layman Cousins, A. Iyaiyo. G. Insurance, etc., as also mortgage lenders like CICIC Bank, who too are tied up with other unsold Loan Assets, are, thus, finding themselves in deep hot water, which is of their own making. Now, all of them are crying for help from the Government.
TSUNAMI EFFECT ACROSS CONTINENTS
The effect of this financial imprudence and mis-adventure has been felt across continents. In Europe, it is predicted that, similar deals are likely to come out very soon, once the repayment time comes up.
In order to salvage whatever little cash they could, these Financial Institutions, who also invest in many markets across the world, have started liquidating their investments & repatriates that money to US. This has created a huge ripple effect in all those countries. For eg. whatever investment Layman Cousins might have done in Indian stock market, they would have sold-off overnight & repatriated to US. This act would result in huge selling pressure in the stock market resulting in Nifty/Sensex tumbling several hundred points in a single trading session. Also, because of its repatriation of the proceeds from its sold-off invesments, there would have been huge demand for & resultant shortage of. US Dollar in India. This will depreciate the value of Indian Rupee against the US Dollar.
Similar fate awaited all other major currencies too, like Japanese Yen, Aus/Sing Dollar, British Pound Sterling, Euro, etc. US Dollar gained strength against all these currencies. This crisis has not yet seen its end; and many more such skeletons are expected to roll out of the US & other cup-boards in the days to come.
CONCLUSION
All this indicate only this: greed and fraud. These are the underlying traits which, in the first place, made KIN & CICIC Bank to entice a reluctant Podhu Janam into signing on the dotted line for a loan to purchase a land which is NOT AT ALL worth that price. They both did it knowingly and defrauded the entire system based on that basic transaction. This is possible in western societies like the US where morality is given the go-by in their day-to-day lifestyle.
If people try to learn some lessons out of the crisis and sets their respective countries' financial systems in order, we can say with relief that, like in the movie Dasavataram, here too, the Financial Tsunami has befallen the humanoids, to prevent a much greater damage in future.
Thursday, October 16, 2008
தமிழ் சினிமா - எனக்கு நானே
1 - அ. எந்த வயதில் சினிமா பார்க்க ஆரம்பித்தீர்கள்?
மறந்து போச்சு.
1 - ஆ, நினைவுதெரிந்து கண்ட முதல் சினிமா?
மறந்து போச்சு.
1 - இ. என்ன உணர்ந்தீர்கள்?
மறந்து போச்சு.
2. கடைசியாக அரங்கில் அமர்ந்து பார்த்த தமிழ் சினிமா?
குசேலன். மூன்றாவது முறை.
3. கடைசியாக அரங்கிலன்றிப் பார்த்த தமிழ் சினிமா எது,எங்கே, என்ன உணர்ந்தீர்கள்?
சந்தோஷ் சுப்ரமணியன். வீட்டில். மிகவும் பிடித்திருந்தது.
அந்த வாரமே குடும்பத்துடன் சென்று அதே படத்தை அரங்கத்தில் பார்த்து ரசித்தோம்.
4. மிகவும் தாக்கிய தமிழ் சினிமா?
பல உண்டு. சமீபமாக அந்நியன். படத்தை பார்த்துவிட்டு வந்து இணையத்தில் கருட புராணத்தை தேடி பிடித்து பாவ செயல்களும் அதற்கு உரிய தண்டனைகளும் பற்றி படித்து அறிந்து கொண்ட பிறகுதான் ஒரு நிலைக்கு வந்தேன்.
அந்நியன் "Tell Me your Dreams" கதையின் கருவை சாமர்த்தியமாக காப்பி அடித்து எடுக்க பட்ட ஒரு படம் என்றாலும், ஒரு தீவிரமான மற்றும் பயங்கரமான மூளை வியாதியினால் சிலசமயம் நன்மை கூட விளையலாம் என்று நம்பிக்கை கொடுத்த படம்.
5-அ. உங்களை மிகவும் தாக்கிய தமிழ் சினிமா-அரசியல்சம்பவம்?
பாபா படத்தை பா. ம. க. கட்சி ரவுடிகள் மக்கள் பார்க்க விடாமல் ரவுடித்தனம் செய்தது. என் ரத்தத்தை மிகவும் கொதிக்க வைத்து. அதன் தாக்கம் இரண்டே மாதங்களில் வெளிப்பட்டது. எனக்கு அதிக ரத்த கொதிப்பு இருப்பதாக மருத்துவர் கண்டுபிடித்து தெரிவித்தார்.
5-ஆ. உங்களை மிகவும் தாக்கிய தமிழ்ச்சினிமா -தொழில்நுட்ப சம்பவம்?
முதல்முறை சிகப்பு ரோஜாக்கள் படத்தில் கமல் ஸ்ரீதேவி உடன் காரில் அவர் வீட்டிற்கு வரும்போது தெரு மரங்களின் நிழல் கார் கண்ணாடியில் நகரும் அழகில் மயங்கினேன். நிவாஸ் அவர்களின் கேமரா பதிவு. பின்பு முள்ளும் மலரும் பாலு மகேந்திரா அவர்களின் கேமரா ஜாலம். நெஞ்சத்தை கிள்ளாதே வில் அசோக் குமார் அவர்களின் சூப்பர் கேமரா வேலை.
சிக்கு புக்கு ரயிலே மற்றும் முக்காலா முக்காபுலா பாடல்களுக்கு ஷங்கர் அமைத்த கிராபிக்ஸ் சித்து விளையாட்டுக்கள். ஜீன்ஸ் படத்தில் இரண்டு பிரஷாந்த் மற்றும் இரண்டு நாசர் பாத்திரங்களை வெவ்வேறு பாத்திரங்கள் என்றே நம்ப வைத்த இரட்டை வேடப்படங்களின் உச்சகட்ட கிராபிக்ஸ் கலக்கல்.
6. தமிழ்ச்சினிமா பற்றி வாசிப்பதுண்டா?
உண்டு. வலை தளங்களில்.
7. தமிழ்ச்சினிமா இசை?
மெருகேறிக்கொண்டே இருக்கிறது. எம். எஸ். வீ. அவர்களின் ரசிகன். A.R.ரஹ்மான் அவர்களின் இசையும் பிடிக்கும். ஒரே குறை - இன்றைய இசையில் மெலடி குறைந்து கொண்டே போகிறது.
8. தமிழ் தவிர வேறு இந்திய, உலக மொழி சினிமாபார்ப்பதுண்டா? அதிகம்தாக்கிய படங்கள்?
முன்பு இல்லை. லகான்க்கு பிறகு ஹிந்தி படங்களின் மீது ஒரு மரியாதை வந்தது. ஆமிர் கான் பிடித்த நடிகர். அவரின் Tare Zameen Par என்னை மிகவும் கவர்ந்த படம். அவ்வப்போது தெலுங்கு படங்களும் பார்பதுண்டு. வெங்கடேஷ் பிடித்த நடிகர். ஆங்கிலத்தில் ஆக்ஷன் மற்றும் சஸ்பென்ஸ் படங்கள் பிடிக்கும்.
9. தமிழ்ச்சினிமா உலகுடன் நேரடித்தொடர்பு உண்டா?என்ன செய்தீர்கள்? பிடித்ததா? அதை மீண்டும்செய்வீர்களா? தமிழ்ச்சினிமா மேம்பட அது உதவுமா?
இல்லை. என் தந்தை மற்றும் பெரியப்பா அவர்களுக்கு தொடர்பு இருந்தது. அவர்கள் மறைவுக்கு பிறகு அது விட்டு போனது.
10. தமிழ் சினிமாவின் எதிர்காலம் பற்றி என்னநினைக்கிறீர்கள்?
இந்திய சினிமாவுக்கே மிகவும் பிரகாசமான எதிர்காலம் உள்ளது.
11. அடுத்த ஓராண்டு தமிழில் சினிமா கிடையாது, மற்றும்சினிமா பற்றிய சமாசாரங்கள், செய்திகள் எதுவுமேபத்திரிகைகள், தொலைக்காட்சி, இணையம் உள்ளிட்டஊடகங்களில் கிடையாது என்று வைத்துக்கொள்வோம்?உங்களுக்கு எப்படியிருக்கும்? தமிழர்களுக்கு என்ன ஆகும்என்று நினைக்கிறீர்கள்?
தலைவர் ரஜினி படத்தை மட்டும் தான் நான் எப்பொழுதும் ஆர்வத்துடன் எதிர் பார்க்கிறேன் என்பதனால் எனக்கு ஒரு வருடம் போவதே தெரியாது.
திருட்டு VCD தமிழர்களின் முழு நேர பொழுது போக்காக மாறி விடும். டிவி யில் அழுகை தொடர்களும் பெருகி விடும்.
என் வலைத்தளத்துக்கு வருகை தரும் அனைவரையும் இதனை தொடருமாறு கேட்டுக்கொள்ளுகிறேன்.
Tuesday, October 14, 2008
மீடியா திரித்த மணல் கயிறு
Super Star has taken a very correct decision NOW going by the above statement released to the press.
In his statement, Rajini has clealry told that he is at present focussing on Yendhiran - The Robot, a mega budget movie. So, if any of his fans want to join politics they are free to join any party of their choice. The statement ends with a typical Rajini punch "Nobody can force me to come to politics; nor anybody can stop me, if I decide to come to politics".
Without stopping there, Rajini has continued the statement with a last sentence "In such a situation (when I decide to come to politics), I will welcome all my fans from whichever party they are from". This shows his intent and as and when he starts a party those fans who want to join with Rajini can do so.
Following is my take on Rajini 's above statement:
I think Rajini has issued a Statement of Intent for the future. After his off-the cuff answer to NDTV Reporter's question in the presence of PM during last year, when he said that if God wishes, he will don the role of a politician, this statement goes one step further with his intention. Good augury for the future.
I have been of the opinion that NOTHING POLITICALLY HEAD-GOING HAS HAPPENED RECENTLY to start this "Rajini should come to politics" campaign in the first place. All these Tamasha are the handiwork of (First) Dinamalar news in Sep'08, (Second) fanned later by Jaundice Vikatan with an interview with Sathyanarayana and (Third) sustained by Yellow Reporter with its own screen-play subsequently. The "so-called" fans voluntarily fell victim to this sinister business strategy of these monstrous media.
When there was no political or people-related event or disaster has happened or Rajini himself has not expressed any desire or ambition, what exactly triggered this whole tamasha is a million dollar question. So, according to me, this campaign was DEAD FROM THE BEGINNING ITSELF. If anyone seriously believed that Rajini will come to politics at this juncture based on the above campaign, THEY WERE LIVING IN FOOLS PARADISE.
4. UNREALISITIC EXPECTATION AT THIS JUNCTURE
5. EXCEPT RAJINI EVERYBODY ELSE WERE TALKING ABOUT HIS POLITICAL ENTRY
6. BIGGER PICTURE WAS NOT SEEN
7. MEDIA'S GAME PLAN
8. COOKED-UP STORIES
9. OVER-ZEALOUSNESS CAN COST DEARLY
Like some of the Coimbatore fans who started a party, some Chennai fans met secretly & demanded nothing short of a political party from Rajini. All this looked like "digging their own grave". It looked to me as though all these so-called fans were hell-bent on spoiling Rajini's image in public by such indisciplined acts without waiting or giving Rajini an opportunity.
10. BLACK-MAIL & ITS EFFECT
11. MEDIA-FORCED CONVERSION OF FANS
2. Another vomitter's gem: Rajini has confused again & there is no clarity. Either the vomitter doesn't know English or he doesn't want to understand. When Rajini says that he is at present focussing on Yendhiran, what more clarity you want? He is also categorical in saying that I CAN'T BE EITHER FORCED TO START A PARTY OR STOPPED FROM STARTING A PARTY, IF I DECIDE TO DO SO. He has made it very clear that he can't be forced into making any decision. Which is quite understandable.
If only it was some other actor, they would have made use of the frenzy of the past month & started jumping up & down by now by starting a party without any rhyme or reason. But, Rajini is not just another actor but a responsible citizen of India. He knows that politics is a serious profession & unless one is able to give more than 100% of his time, you can't expect people's support. Therefore, since his present focus is only on Yendhiran, which is mega budget movie of Rs. 125 to Rs. 150 crore worth, he doesn't want to do injustice to the producer & director of that movie. Hence, Rajini has clearly told that as long as he is working on Yendhiran, he will not be doing anything else.
3. One more gem from another vomitter says that "like Kamal said he is not interested in politics,why can't Rajini also say so?"
It is a good joke. Now, I, Arunachalam, hereby declare that I am NOT interested in coming to politics & I will concentrate on my job only.
Whatever weightage my above statement carries, Kamal's statement will also carry the same. Who cares if Kamal is interested in politics or not? Mudavan Kombu Thenukku Aasaipada Koodaathu. Don't ever compare Rajini's political entry with Kamal or any other joker because if Rajini decides to come to politics, he will do it uniquely with well thought out policies & well laid out plans to ensure people benefit if they vote for his party. All other actors are in politics only to convert their black money into white & enjoy the power with their families.
CONCLUSION
So, whatever has happened in the past month are the handiwork of TN Media and Rajini fans are willing victims & Rajini has NOTHING TO DO WITH IT. Monstrous media of TN reaped a rich financial reward by increasing their circulation with all false & bull shit stories to increase fans frenzy. Rajini's only contribution in the whole episode is to PUT A FULL STOP TO THE TAMAHA OF PAST MONTH.
Therefore, there is no point in blaming Rajini for this Tamasha, which is self-inflicted by foolish fans themselves. One can sympathise with poor people; but, can one sympathise with fools?
Wednesday, October 8, 2008
இதுதாண்டா அரசாங்கம்
Tuesday, October 7, 2008
உண்மையான உலக நாயகன் ரஜினிதான்
I read about this function in Economic Times in 1999. The important point to note is that it is not some Indian or Tamilian who praised about Rajini. This was told by an American, who are, generally, not enamored of non-Hollywood actors & have a condecsending attitude towards anything Indian or Eastern part of the World. Moreover, they normally encounter a Hollywood actor or star in his day-to-day life, but no way about an actor from India.
That is the Power of Super Star. He has single-handedly taken Tamil Cinema to worldwide markets & it has continued till Kuselan. Yendhiran - The Robot has the potential to catapult him to the ranks of Hollywood Heroes.