Monday, June 16, 2008

The News: What's up with it?

I wonder what has happened to the time when there used to be “good news” on the News. These days it’s all doom and gloom: Oil prices rising, dollar falling, stock markets bleeding, companies going belly up, ManU winning the Champions League… Where has all the good news gone? Pretty much any person, entity, corporation, clique or any other collection of people in the news these days evokes savage anger in me. But try as I might, I don’t turn into a mean, green, fighting machine with the ability to transform assorted military hardware into confetti. –sigh- . Some people have no luck at all!! Anyways, here’s a list of some of the top irritants in the news these days. I don’t know if you agree with me, but then, this is my blog, and “I have the power”… Man, I didn’t even turn into He-Man. This sucks!!!

“Dr.” Robert Mugabe: The ultimate proof of the old adage that “Power corrupts and absolute power corrupts absolutely.” Once a hero in Zimbabwe and Africa for overthrowing the white-minority government in the erstwhile Rhodesia, the man today is no more than a tinpot dictator desperately hanging on to power that he has no legitimate claim to. An embarrassment to the whole continent and a prime example of what happens when leaders hang on after their “use by” date…

George “Dubya” Bush: It is said that people deserve their leader, but I really doubt the Americans deserved Bush… for two terms, no less. No country deserves that. And to think that there was a time when I supported Bush’s “war on terror”. Of course that was well before the claims of “weapons of mass destruction” turned out to be untrue and unfounded at best, and outright lies at worst. Add that to his climate policy, big-oil bias, muddled middle-east diplomacy and a tendency to put his foot firmly in his mouth, repeatedly, and you have the most incompetent American president since… ever. The one good thing about Bush, though, is that he isn’t Robert Mugabe. Thank God for small mercies…

Wall Street Bankers: If there is one club of nefarious charlatans I would absolutely love to join, it is that of the high street bankers. These financial fiends are an excellent example of the “perfect hedge”. During the post-2001 housing boom, the US financial services industry made an absolute killing, extending loans to all and sundry, packaging them into products that nobody really understood, got them stamped with AAA ratings and passed this junk to investors who wanted in on the action at a handsome profit. This scam continued for a few years during which the financial services firms raked in the dough in spades and executives earned unheard of bonuses for essentially extending record loans to people who everybody knew were not going to repay them. Then, the law of gravity - “That which goes up very fast comes down equally fast, fool!!“ - caught up with them. The housing bubble exploded spectacularly, and banks which had until then, greedily accosted and lent to any Joe Schmo that they came across, were suddenly left with Gazillions of dollars worth of loans that they had not yet passed on to greedy (and stupid) investors. Accounting regulations required banks to recognize this “toxic” goop on their books, and by extension recognize massive losses, freaking out investors, share holders, customers, the Fed & ECB, the man on the street… pretty much the whole world. So, what did they do? They followed the standard, well-defined three-step “when in crisis do this” process:
(a) Fire the Chief Executives who presided over this madness paying them millions in severance packages.
(b) Fire thousands of employees to satisfy the angry mob of pitchfork wielding share holders.
(c) Run to the markets and the Fed for emergency cash injection, invoking the specter of “systemic failure” and apocalypse if the bank were allowed to fail.

A classic "heads I win, tails you lose" scenario. During the boom you get paid millions for engaging in acts of unimaginable stupidity, and when the bubble bursts, you get fired for many more millions for your earlier stupidity with the Fed stepping in to clean your mess. I so want to part of this stupidity!!!

Well, that’s about as much anger as I can legally spill into one blog post. Until later.. cheers.. 8-)

Tuesday, June 10, 2008

Food for Thought!!

A few days ago, as I contemplated an article to resurrect my nearly dead and buried blog, I was almost sure that the post would steer clear of any political/social/religious or any other contentious issues. In other words the post would be very much like most of the posts on my blog are… a light and wholly inconsequential piece. But as hard as I tried, I couldn’t get my self to write one. The only issues I felt motivated to write about were topics that were sure to generate very polar and deeply divided views. Finally, today morning I thought to myself, “What the heck… let me post some that I feel strongly about and be done with the dilemma” So, here it is...

The news these days is all about soaring oil prices and global food inflation… and banks announcing write offs as if they were gifts Santa handed out at Christmas. But the latter is not really the subject of this post and will be dealt with at a later time. Recently, President Bush was at the centre of a controversy for suggesting that the rising standard of living in the developing world was a reason behind the current food crisis. While the statement is factually true, the lack of tact with which the statement was made elicited angry responses from much of the developing world, which interpreted the words as implying that only the west was entitled to the privileges of development.

The incident serves as a reminder of how tenuous the relations between the developing and developed worlds are on the issue, especially with US and the EU not fully acknowledging the role of the bio-fuels in the current crisis. Add to that the fact that after the housing and financial bubbles burst, speculators have rushed en-masse into the commodities markets pushing prices of pretty much all the commodities through the roof. The derivatives markets, which were initially conceived with the intention of allowing businesses to hedge their risks in currency, interest rates and other exposure, are now a speculator’s paradise, defeating the entire purpose of existence of derivative instruments. Warren Buffett was not wrong when he referred to derivatives as Weapons of Financial Mass Destruction. It is about time regulators the world over stepped in to clear the derivatives market of speculators…

Finally, there is the little question of the current US administration. Every time they take a step forward they seem to take ten steps back. The most recent instance was when, a few days back, President Bush acknowledged that there was a need to look at the role of speculators in pushing oil prices to the record levels they are currently at. The Republicans then promptly followed it by blocking the Democrat motion in the senate to tax Big Oil for the windfall profits they’ve been making as customers all over the world suffered at the pump. [Well, a little bit of suffering might actually be a good thing if it can change the habits of consumers] While levying a Windfall tax would not help reduce the price at the pumps, it would have helped support the tax breaks being given to Solar, Wind and other alternate producers of energy. By extending the tax breaks for Big Oil while refusing to extend the tax breaks for alternate energy, the Bush administration has shown in no uncertain terms where it stands on the Kyoto Protocol and global warming…

I’ve never been a big Bush fan, but each passing day a news article reminds me of just how desperately the world needs a change in the Oval Office. McCain makes plenty of effort to remind everyone of the fact that he is not Bush, and for sure he isn’t. But the truth is that Bush isn’t really the issue, Republican policies are. And there is no way McCain can undo the fact that he is a Republican. So, come November, you know who I’ll be cheering for… Until later... cheers… 8-)