South Korea suffered because it followed western definition of Capitalism in a blind manner and shot herself in foot many times.Abhijeet wrote:India needs a few decades at least of strongly pro-business, pro-free-market legislation before we can even think of increasing regulation or rolling back whatever little reform has been done. I'd much rather that India be like South Korea, which suffered both in the 1997 Asian crisis and seems like it's badly hit again, but has expanded vigorously in the last few decades, than continue with the Indian method of doing as little as possible and plodding along.
There is an article in Newsweek which calls for a global bank which can forestall crises and coordinate policy:Neshant wrote:Some change or another is going to be proposed in november during the global summit so watch for it. EU/China/Japan..et. al will push for the change while US will resist it.
My guess is that the former nations want an international governing body that oversees currency and financial operations of all nations. The SDR makes sense in that aspect as you don't need gold or USD to anchor the currencies, just responsible govts with transparent book keeping and accounting and some global entity to check on all member nations.
I do not think its in India's interest to follow this plan just yet as we are not big hoarders of dollars, unlike the east asians. It benefits us a lot less than others.
San Francisco Federal Reserve President, Janet Yellen remarked as well, long after it had become clear that the US Administration’s decision to let Lehman Brothers go bankrupt without Government assistance, had been a horrible miscalculation.
That Lehman Bros. bankruptcy on September 15, was the ‘shock heard round the world,’ which precipitated a global crisis in banking confidence resulting in the present situation. Whether Paulson and friends calculated the collapse would provide the basis to demand a US-crafted solution to the crisis remains unclear. What is clear, one of the chosen ‘winners’ in the present US banking reorganization, JP Morgan Chase, played a nasty role in the final push of Lehman Bros. into insolvency the Friday prior to Lehman’s Monday declaration of insolvency. JP Morgan Chase had ‘mysteriously’ withheld a $19 billion transfer that Friday which would have averted the collapse of Lehman Bros. It was an eerie echo of the nasty role played in 1931 by the House of Morgan in relation, then, to the German and European banking crisis.
After 1931 the House of Morgan never again rose to the prominent role it had held. It is looking increasingly likely that the successor to the bank, JP Morgan, despite the pretensions of its head, Jamie Dimon, to invincibility, may be far more modest.
"Simplifying how it makes devices" is polite wording for "we'll sell rebranded Chinese designed and built phones and hope to make profit off the Motorola brandname".Reuters.com wrote: Wed Oct 29, 2008 9:47am EDT
NEW YORK (Reuters) - Motorola Inc's co-chief executive, Sanjay Jha, plans to make more job cuts and simplify how it makes devices, the Wall Street Journal reported on its website on Tuesday.
Details of the plan, which could include thousands of layoffs, could be announced Thursday, when the company reports its results, the paper said.
Jha, who heads the mobile devices business, has decided to focus on Google Inc Android software as the operating system for many new phones, the Journal reported, citing unnamed sources.
The paper said Motorola will build mid-tier devices, which account for most of its sales, around Android, while business-focused devices will be based on Microsoft Corp's Windows Mobile. The company will use its own platform, P2K, for low-end phones, the paper reported.
The company is also seeking to outsource production of some Windows Mobile phones, the paper said.
Motorola declined to comment.
(Reporting by Paritosh Bansal; Editing by Gary Hill)
Even average Irish or Burmese leads better life than average Indian. So we should emulate them? Lets keep India out of monkey business. Indians have the freedom to build its own system. Saying that only Western version of Capitalism is a path to prosperity, is as hypocritical as Pope saying that only Jesus can take you to heaven.Abhijeet wrote:Vishwakarmaa, I wouldn't be so quick to dismiss South Korea or call other countries as poodles. The average South Korean leads a far better life than the average Indian, and there is nothing unsustainable or dishonourable (as the word poodle-like suggests) about their growth.
Ugly face of Western Capitalism.vina wrote:A must read in my opinion on the world of structured finance and investment banking in general. Most of those idiots upstairs are simply clueless and you have reckless 30 something kids oh an "math whiz" from a major "Economics school" (from a former soviet state.. this reeks something like DSE and could have very well been an Indian kid) , see how he goes and sinks a major japanese bank.
Mizhuo $7b loss turned on toxic Aadvark Made in America
CNN Money wrote: Largest U.S. oil company surges past analyst estimates to post net income of $14.83 billion.
By Aaron Smith, CNNMoney.com staff writer
Last Updated: October 30, 2008: 10:30 AM ET
NEW YORK (CNNMoney.com) -- Exxon Mobil Corp. set a quarterly profit record for a U.S. company Thursday, surging past analyst estimates.
Exxon Mobil (XOM, Fortune 500), the leading U.S. oil company, said its third-quarter net profit was $14.83 billion, or $2.86 per share, up from $9.41 billion, or $1.70, a year earlier. That profit included $1.45 billion in special items.
The company's prior record was $11.68 billion in the second quarter of 2008.
The latest quarter's net income equaled $1,865.69 per second, nearly $400 a second more than the prior mark.
The company said its revenue totaled $137.7 billion in the third quarter.
Analysts had expected Exxon to report a 40% jump in earnings to $2.38 per share, or net income of $12.2 billion, and a 28% surge in revenue to $131.13 billion, according to a consensus of estimates compiled by Thomson Reuters.
Exxon's stock price slipped by nearly 1% in morning trading.
The company's earnings were buoyed by oil prices, which reached record highs in the quarter before declining. Oil prices were trading at $140.97 a barrel at the beginning of the third quarter, and had fallen to $100.64 at the end.
Compare that to 2007, when prices traded at $71.09 a barrel at the beginning of the third quarter, and rose to $81.66 by the end.
Exxon's special charges include the gain of $1.62 billion from the sale of a German natural gas company. It also includes the $170 million charge in interest related to punitive damages from the Valdez oil spill off the Alaskan coast in 1989.
The Irving, Texas-based company said it lost $50 million, before taxes, in oil revenue because of Hurricanes Gustav and Ike. The company expects damages related to these hurricanes to reduce fourth-quarter earnings by $500 million.
Despite the surge in profit, Exxon said oil production was down 8% in the third quarter, compared to the same period last year.
The company also said it is spending more money to locate new sources of oil. Exxon said it spent $6.9 billion on oil exploration in the third quarter, a jump of 26% from the same period last year.
Phil Weiss, analyst for Argus Research, said he doesn't expect Exxon to break any more profit records in future quarters.
"I don't expect the fourth quarter to be nearly as good as the third because of lower oil prices," said Weiss.
He also said that demand for gasoline is falling, which could impact Exxon and other oil companies.
Earlier Thursday, Europe's leading oil company, Royal Dutch Shell PLC (RDSA), reported a 22% gain in net profit for the third quarter, to $8.45 billion. The company said sales rose 45% to $132 billion.
Exxon is the second-largest company in the Fortune 500 in terms of annual sales, behind Wal-Mart Stores (WMT, Fortune 500).
Exxon's stock price has fallen about 20% so far this year, The S&P 500, of which it is a member, has fallen about 36%
Reuters.com wrote: Thu Oct 30, 2008 9:44am EDT
NEW YORK (Reuters) - Exxon Mobil Corp posted the highest ever U.S. quarterly operating profit and Royal Dutch Shell Plc beat market forecasts on Thursday, helped by high oil prices and fatter refinery margins.
Exxon's earnings reached $14.8 billion, shattering the company's previous profit record and rising 58 percent from the year-ago quarter.
But both Exxon and Shell said their oil production declined in the quarter, hurt by the hurricanes that swept through the Gulf of Mexico during the quarter.
U.S. oil prices had peaked above a record $147 per barrel in early July before turning and falling by nearly 60 percent over the next three months.
Still, prices averaged about $118 barrel during the quarter, more than $40 higher than a year-ago period.
Irving, Texas-based Exxon said excluding extraordinary items, it earned $13.39 billion, or $2.59 per share, topping analysts' forecasts of $2.38 per share, according to Reuters Estimates.
Shell's profit rose 71 percent to $10.9 billion, topping analysts' forecasts, but its shares slipped as investors focused on the company's 7 percent drop in oil and gas production.
Shell, which announced Chief Financial Officer Peter Voser would take over from Jeroen van der Veer as chief executive officer in July 2009, said hurricanes that swept through the Gulf of Mexico and a dearth of new project start-ups pulled its production down to 2.93 million barrels of oil equivalent per day.
Exxon's production fell 8 percent, hurt by the hurricanes and higher maintenance activity at its fields.
Both Exxon and Shell recorded strong performance by their refining arms as the decline in crude prices during the quarter helped profit margins.
Shell also said strong sales of jet fuel and diesel in Europe boosted its profits, offsetting declines in gasoline demand.
In India, Oil and Natural Gas Corp (ONGC) reported a 5.7 percent drop in quarterly net profit on Thursday, missing market expectations as its subsidy burden climbed.
ONGC, which accounts for over 78 percent of the country's oil and gas production, has to sell oil from its domestic output at mandated discounts to state-run refiners to keep retail prices low.
Exxon's shares rose 1.4 percent to $75.72 per share in premarket trade, while Shell's shares slipped 2.5 percent in London.
(Reporting by Matt Daily and Euan Rocha in New York, Anna Driver in Houston and Tom Bergin in London, editing by Dave Zimmerman)
Like the above quote and making fun of all the new MBA students. etc. are knee jerk reaction in my honest opinion.A smart guy who knows whats good for us rather than blindly following Western Capitalism which is based on feeding the greed of few at common's cost.
Co-operative society model is probably the best way to uplift indian grassroots while still remaining economically sustainable. That's why I don't buy into this grouping on the lines of capitalism and communism, right left. Why do we need to ape and model our intellectual groups on the lines of western models only.vishwakarmaa wrote:Even average Irish or Burmese leads better life than average Indian. So we should emulate them? Lets keep India out of monkey business. Indians have the freedom to build its own system. Saying that only Western version of Capitalism is a path to prosperity, is as hypocritical as Pope saying that only Jesus can take you to heaven.Abhijeet wrote:Vishwakarmaa, I wouldn't be so quick to dismiss South Korea or call other countries as poodles. The average South Korean leads a far better life than the average Indian, and there is nothing unsustainable or dishonourable (as the word poodle-like suggests) about their growth.
I have faith in my fellow men and they know the difference between Western Capitalism and healthy Capitalism which suits our interests. I am sure, they will follow own path without giving attention to cries of Western puppets in Media.
Reminds me of the term "Creative Destruction" used by Swaminathan S Ayer. Those in this MBA business are aware that any gains in this business are transitory and one must CREATE - HYPE - SELL - DESTROY Concepts and terminologies. Just as there is a product life cycle(plc) there is a Concept Life Cycle(CLC). Towards the end of the cycle when a concept doesn't sell more courses and self-help books, the gurus destroy the concept to make way for new concepts and start milking the people again.Muppalla wrote:The MBAs will come with some other duping schemes and the average greedy person on the street will fall for it. Life goes on here.
Agreed. Another variance of this is the repeated "re-organizations" that happen in any medium - large sized company. From being centralized to being de-centralized to back to centralized, from being product oriented to customer oriented to technology oriented re-organizations... all this is maayaa onlee.Singha wrote:Towards the end of the cycle when a concept doesn't sell more courses and self-help books, the gurus destroy the concept to make way for new concepts and start milking the people again
I think you are right - going by the ever changing books on concepts
like 'fostering innovation' 'lateral thinking' 'strategic management' and so on. gurus and thought leaders flit around the world giving
high priced seminars in 5* hotels and 'coaching CEOs'
Economic Myths and Facts - BizRadio Network
As you've learned from listening to him every day on the BizRadio Network, Mike Norman is consistently six months ahead of the market. Mike will teach you how to truly break from the herd and focus on true value and company performance rather than falling victim to the stock market's popularity contest.
Listen in to BizRadio's Economic Contrarian, Mike Norman, as he debunks the common myths and misconceptions concerning debt, deficits, taxation, government finance, the Fed, money supply and all things that cause confusion and lost capital for investors. This 30 year veteran of Wall Street is one of BizRadio's and Fox Business News’ most popular and entertaining contributors.
Oct 31 - Upsetting the Global Order
Friday, October 31, 2008 9:04 AM
Oct 31 - Upsetting the Global Order
Media files
20081031.mp3 (MP3 Format Sound, 5.8 MB)
You have misinterpreted my post. I don't know why you took my post as an insult to MBA guys.Muppalla wrote:Like the above quote and making fun of all the new MBA students. etc. are knee jerk reaction in my honest opinion.
Maybe or may not be. Time will decide. But it is good for West to co-operate with rising players rather than getting isolated in changing world landscape.Muppalla wrote:It is just the downfall of the current economies and not yet thier power. West can/will use the power to get back to where they were. The MBAs will come with some other duping schemes and the average greedy person on the street will fall for it. Life goes on here.
It will fall only when the actual asset (not the stupid market values) and POWER falls. That is a long way to go.
I was not taking swipe at you or anyone. All I am saying is we are just writing off the folks with MBAs and also the entire western economy as though they are near their end. The MBAs just did what they are expected to do. The western governments are confident that they can pull a fast one on the globe and can survive. We have to wait and see how correct they are.vishwakarmaa wrote:You have misinterpreted my post. I don't know why you took my post as an insult to MBA guys.Muppalla wrote:Like the above quote and making fun of all the new MBA students. etc. are knee jerk reaction in my honest opinion.
I don't think having MBA degree would have made Dhirubai Ambani any more smarter. In fact, despite not having one, he knew how to build a business. But, that doesn't mean we should laugh on those who think they can make instant money after doing MBA.
MBA is basically a waste of time in my personal opinion. If you have "common sense"(which MBA teaches you how to use. funny! if you had any, then you would know how to use it!!) and if you are street-smart(which MBA doesn't teach you) then you are in business.
MarketWatch's top stories of the week
By MarketWatch
When in doubt, cut rates. That's pretty much what the Federal Reserve has done for most of the past 10 or 15 years. A piece in Newsweek earlier this month by Fareed Zakaria points out that whatever problems we faced during that time, the Fed's solution was always to cut rates, keep the money flowing and try to boost the economy.
A few examples from Zakaria's article: The Russian debt default, worries about Y2K, the tech bust, the attacks of Sept. 11, 2001. In each case the Fed made it easier to borrow.
Now, we face the greatest financial debacle since the Depression, brought on at least in part by low interest rates and excessive debt. What does the Fed do? You guessed it. It didn't really solve our problems all those other times, it just kept the wheels spinning so the country could continue to rack up unreasonable debts and fool itself about its long-term economic prospects. It seems fair to ask whether it will work this time either.
Look Ahead: Election and More
After a scary month, most investors will be grateful to see the arrival of November. The Dow Jones Industrial Average (.DJI:
Dow Jones Industrial Average
.DJI 9,325.01, +144.32, +1.6%) rose 144.32 points, or 1.6%, to close at 9,325.01 on Friday, a weekly gain of 11.3%. The Standard & Poor's 500 Index (.SPX:
.COMP, , ) rose 22.43 points, or 1.3%, to close at 1,720.95 for a weekly gain of 10.9%.
Interest Rates, Earnings In Focus
Stay tuned to MarketWatch over the weekend for all the news that's important to you. We're offering up a series of analyses and other stories about the election, including a look at the latest polls and policies as we head into the final stretch of the 2008 presidential campaign. On Monday be sure to check out our monthly Trading Strategies, which looks at what an investor should do in these turbulent times.
Christopher Noble, assistant managing editor.
Another rate cut
The Federal Reserve, battling the worst economic and financial crisis to strike the Western world since the Depression, cut interest rates again this week, bringing its key lending rate to 1%. Many observers said that while the central bank was probably right to slice rates again, they also said they did not expect the reduction to have much impact on the real economy any time soon. See full story.
We are Japan
It's official, we are Japan, says MarketWatch Editor In Chief David Callaway. At least when it comes to monetary policy. The Fed's rate cut, which puts on a path that could end with central bank rates at zero, won't save the economy, he says. See full story.
`Panic' Strikes East Europe Borrowers as Banks Cut Franc Loans
By Ben Holland, Laura Cochrane and Balazs Penz
More Photos/Details
Oct. 31 (Bloomberg) -- Imre Apostagi says the hospital upgrade he's overseeing has stalled because his employer in Budapest can't get a foreign-currency loan.
The company borrows in foreign currencies to avoid domestic interest rates as much as double those linked to dollars, euros and Swiss francs. Now banks are curtailing the loans as investors pull money out of eastern Europe's developing markets and local currencies plunge.
``There's no money out there,'' said Apostagi, a project manager who asked that the medical-equipment seller he works for not be identified to avoid alarming international backers. ``We won't collapse, but everything's slowing to a crawl. The whole world is scared and everyone's going a bit mad.''
Foreign-denominated loans helped fuel eastern European economies including Poland, Romania and Ukraine, funding home purchases and entrepreneurship after the region emerged from communism. The elimination of such lending is magnifying the global credit crunch and threatening to stall the expansion of some of Europe's fastest-growing economies.
``What has been a factor of strength in recent years has now become a social weakness,'' said Tom Fallon, emerging-markets head in Paris at La Francaise des Placements, which manages $11 billion.
Plunging Currencies
Since the end of August, the forint has fallen 16 percent against the Swiss franc, the currency of choice for Hungarian homebuyers, and more than 8 percent versus the euro. Foreign- currency loans make up 62 percent of all household debt in the country, up from 33 percent three years ago.
Romania's leu dropped more than 14 percent against the dollar and 3.2 percent against the euro. Poland's zloty declined more than 17 percent against the dollar and 6.8 percent versus the euro, and Ukraine's hryvnia plunged 22 percent to the dollar and 11.5 percent to the euro.
That's even after a boost this week from an International Monetary Fund emergency loan program for emerging markets and the U.S. Federal Reserve's decision to pump as much as $120 billion into Brazil, Mexico, South Korea and Singapore. The Fed said yesterday that it aims to ``mitigate the spread of difficulties in obtaining U.S. dollar funding.''
Plunging domestic currencies mean higher monthly payments for businesses and households repaying foreign-denominated loans, forcing them to scale back spending.
In Kiev, Ukraine, Yuriy Voloshyn, who works at a real-estate company, says he's forgoing a new television because of his dollar-based mortgage. His monthly payments have risen by 18 percent, or 1,000 hryvnias ($167), since he took out the loan seven months ago.
No More Dreaming
``I only have money to pay for food and my monthly fee to the bank,'' Voloshyn, 25, said. ``I can't even dream about anything else.''
Rafal Mrowka, a driver from Ostrow Wielkopolski in western Poland, says he became addicted to checking foreign-currency rates as monthly installments on his Swiss-franc mortgage jumped 25 percent.
``I've even stopped getting nervous, now I can only laugh,'' the 32-year-old, first-time property owner said.
The bulk of eastern Europe's credit boom was denominated in foreign currencies because they provided for cheaper financing.
Before the current financial turmoil, Romanian banks typically charged 7 percent interest on a euro loan, compared with about 9.5 percent for those in leu. Romanians had about $36 billion of foreign-currency loans at the end of September, almost triple the figure two years earlier.
In Hungary, rates on Swiss franc loans were about half the forint rates. Consumers borrowed five times as much in foreign currencies as in forint in the three months through June.
`Serious Problems'
Now banks including Munich-based Bayerische Landesbank and Austria's Raiffeisen International Bank Holding AG are curbing foreign-currency loans in Hungary. In Poland, where 80 percent of mortgages are denominated in Swiss francs, Bank Millennium SA, Getin Bank SA and PKO Bank Polski SA have either boosted fees or stopped lending in the currency.
The extra burden on borrowers is making a bad economic outlook worse, said Matthias Siller, who focuses on emerging markets at Baring Asset Management in London, where he manages about $4 billion.
If borrowers believe local interest rates are prohibitive and foreign currency lending dries up, it means ``a sharp deceleration in consumer spending,'' Siller said. ``That will bring serious problems for the economy.''
The east has been the fastest-growing part of Europe, with Romania's economy expanding 9.3 percent in the year through June, Ukraine 6.5 percent and Poland 5.8 percent. The combined economy of the countries sharing the euro grew 1.4 percent in the period.
IMF Help
Governments are seeking to ease the pain as recession concerns sweep across eastern Europe's emerging markets.
Ukraine, facing financial meltdown as the hryvnia drops and prices for exports such as steel tumble, on Oct. 26 agreed to a $16.5 billion loan from the IMF.
Hungary on Oct. 28 secured $26 billion in loans from the IMF, the EU and the World Bank. The government forecast a 1 percent economic contraction next year, the first since 1993.
The Hungarian central bank raised its benchmark interest rate by 3 percentage points to 11.5 percent on Oct. 22 to defend the forint.
The same day, Prime Minister Ferenc Gyurcsany said the government was seeking an accord with banks to ``prevent the burdens of debtors from reaching the sky.'' It's considering granting borrowers extended payment periods or the ability to convert foreign-exchange debts into forint.
Panicked Customers
``Panicked customers are calling to say they're afraid the interest on their mortgages will go up or that they won't be able to secure mortgages,'' said Nikolett Gurubi, director of lending at Otthon Centrum Belvaros, the downtown Budapest branch of a real estate agency.
Project manager Apostagi, 58, said he hopes the crisis will be over in a few months, blaming U.S. banks for creating such distrust between lenders. For now, ``it looks like our signed contracts were for naught,'' he said.
Romanian central bank Governor Mugur Isarescu sounded the alarm in June, saying the growth of foreign-currency loans was ``excessively high and risky,'' especially because Romanians with their communist past aren't used to the discipline of debt.
``It's not that we're bad,'' Isarescu said. ``It's that, culturally, we need to prepare for the moment of repayment.''
At the other end of the spectrum, Turkish consumers have proved more cautious after living through their own currency crises in 2001 and 1994. The government, the IMF's biggest customer in recent years, is resisting new loans from the fund, arguing that its economy can weather the credit crunch and a 22 percent slump in the lira since the start of September.
`Cheaper, Riskier'
Turkish savings in foreign currencies exceeded loans by about 30 percent as of the end of 2007, according to a January Fitch report. In Poland foreign exchange loans were double deposits, and in Hungary they were triple.
Mert Sevinc borrowed the equivalent of $100,000 in Turkish liras to buy an Istanbul apartment in 2006, paying an annual rate of 13.5 percent. The marketing consultant didn't even look at the foreign exchange loans at less than half that price.
``Of course it would have been cheaper to borrow in dollars or euros, but it's a fairly basic principle of finance: Things that are cheaper are riskier,'' he said.
That reasoning may soon be part of the eastern European psyche too.
``We've been observing a return to a good old banking rule to lend in a currency in which people earn,'' said Jan Krzysztof Bielecki, chief executive officer of Poland's biggest lender, Bank Pekao SA. It stopped non-zloty lending in 2003. ``Earlier, banks competed on the Swiss franc market watching only sales levels and not looking at keeping an acceptable risk level.''
The problem is a ``good lesson to all of us,'' Polish President Lech Kaczynski said at an Oct. 24 press conference in Warsaw, where he urged Poles to stick to zloty lending.
To contact the reporter on this story: Ben Holland in Istanbul at [email protected]. Laura Cochrane in London at [email protected]; Balazs Penz in Budapest at [email protected].
Last Updated: October 30, 2008 20:35 EDT