Where From You Get Your Home Loan? Are You Insured? History of Money Struck by darkest Hour,Fall Sets in with Big Fear and Sub prime Crisis Exploded with the US Tagged Global Economy in, Global Market and Globalisation in Turmoil!

[Palash]

Where From You Get Your Home Loan? Are You Insured? History of Money
Struck by darkest Hour,Fall Sets in with Big Fear and Sub prime Crisis
Exploded with the US Tagged Global Economy in, Global Market and
Globalisation in Turmoil!

Troubled Galaxy Destroyed Dreams: Chapter 66

Palash Biswas
http://troubledgalaxydetroyeddreams.blogspot.com/


Canada.com Re-examine US role in time of financial woes
China Daily, China - 12 hours ago
The US subprime crisis broke out in spring 2007. It led to the Federal
bailout of leading mortgage lenders - Fannie Mae and Freddie Mac -
earlier this month ...
John McCain & Barack Obama both have advisers tied to Wall Street mess
New York Daily News
Crisis challenges McCain and Obama BBC News
Sen. Obama Speaks in Golden, Col. about the Economy Washington Post
FOXNews - ABC Online
all 2,465 news articles »


Subprime mortgage crisis - Wikipedia, the free encyclopedia
The subprime mortgage crisis is an economic problem characterized by
contracted liquidity in the global credit markets and banking
system. ...
en.wikipedia.org/wiki/Subprime_mortgage_crisis - 273k - Cached -
Similar pages - Note this
Subprime lending - Wikipedia, the free encyclopedia
Thus when the crisis hit the subprime mortgage industry, those who
bought into the market .... Will the US subprime crisis cause a UK
property meltdown? ...
en.wikipedia.org/wiki/Subprime_lending - 85k - Cached - Similar pages
- Note this
More results from en.wikipedia.org »


New York Daily News We're all sub-prime
Melbourne Herald Sun, Australia - 16 Sep 2008
With economists predicting that Japan, Europe and the US will all soon
be in recession, one thing's for certain, like it or not, we're all
sub-prime now. ...
Lehman's woes heighten worries about other firms guardian.co.uk
all 552 news articles » LEH

iAfrica.com Cut down in its prime
iAfrica.com, South Africa - 5 hours ago
If you thought it was safe to venture out on the investment seas as
the sub-prime crisis bottoms out, you haven't reckoned on the supra-
prime crisis. ...
Subprime crisis: A timeline CNNMoney.com
Lehman Brothers a victim of US subprime crisis IBNLive.com
Subprime impact snowballs Stuff.co.nz
Economic Times - The Daily Yomiuri
all 5,558 news articles » LEH - MER - BAC


RBI slaps curbs on Lehman’s India arms


Our Bureau


Mumbai, Sept. 16 The Reserve Bank of India has issued a notice placing
restrictions on the activities of the Indian subsidiaries of Lehman
Brothers.

The RBI said on Tuesday it was issuing the instructions “in public
interest and in the interest of financial stability”.

Lehman Brothers Capital Private Ltd, a non-banking financial company,
would need the prior approval of the RBI before contracting any direct
or indirect liability from any institution in or outside India or
before making any foreign currency remittances.

The RBI also said that Lehman Brothers Fixed Income Securities Private
Ltd, a primary dealer, cannot declare any interim dividend or remit
any amount to its holding company or any other group company without
its prior approval.

The RBI has also asked the primary dealer not to undertake
transactions in government securities in the primary market.

According to the Website of the Securities & Exchange Commission, US,
there are eight subsidiaries of Lehman Brothers in India.
http://www.thehindubusinessline.com/2008/09/17/stories/2008091752620100.htm

Where From You Get Your Home Loan?
Are You Insured?
History of Money Struck by darkest Hour!
Fall Sets in with Big Fear and Sub prime Crisis Exploded the US Tagged
Global Economy, Global Market and Globalisation!

Gone are the days while anybody would get a home anywhere on this
planet.

my niece Krishna told me once while she was reading in just class Nine
in a Delhi public school, `We may not hope anything from the land!
every piece of land is occupied!’

She opined,` We may not do anything in the Space either because it is
also colonised!’

Krishna believed, `Hope lies under the deep where the destiny of
Mankind rests’.
I really don`t know!

War against Terror have changed citizenship Act and Immigration Act
worldwide. No one is a Citizen by Birth. You have to acquire
citizenship. Half of the indigenous world population is stranded on
the No Man`s land ejected out of life and livelihood!

It is very tough toe get a home in any part of our earth nowadays.

Explosion of US domestic Sub Prime crisis despite a boom in nuclear
and weapon markets thanks to Indian Comrador Ruling Hegemony and
Strategic Hindu Zionist White reliance, makes it tougher to get a home
in poor third world countries further.

In India, every piece of land, urban, suburban, semi urban or rural is
occupied by Realty Market. majority of the enslaved classes, castes
and communities may not to afford a home nowadays.

In West Bengal, where I base for full seventeen years, I have not been
able to get a piece of land or a home, just because as a professional
my wages does not allow me to get one. But Housing Sector all over
India is blooming by Foreign Investment and Big Global Players have
just jumped in. Resurgence of Indian Middle Class banking on growing
Plastic Money have led the Economy to be limited within the limits of
Durable consumer Goods and Capital Goods. Thus, Sensex indices remain
the heartbeats of Indian Economy. Every attempt is made to expand the
Rural and retail consumer market. Universal education Agenda of
Globalisation is being implemented with diverse multi level schooling
system to create consumers after generation to generation without any
real production. Indigenous production system and indigenous
communities are meant for mass destruction, Agro Sector in India has
been transformed into an infinite Killing Field! Inherited Industries
from the British Colony like heavy Engineering, Jute, Tea and Cotton
have become grave yards!
Fifty Six thousand factories are closed in West Bengal but the ruling
Left runs on the super Highway of Marxist Capitalism!

Closed scores of Cotton and Jute Mill Campuses across Hugli River are
destined for the Builders and Promoters only as every piece of land
on the sides of BT Road, Jassore Road, Kona Expressway, EM Bypaas,
Durgapur Expreesway, kalyani Highway, Belgharia Expressway is captured
or booked already. Closed factories have opened spaces for Housing
Complexes, Multiplexes, Retail chain. Industrialisation demands
indiscriminate land acquisition and displacement and death of the
indigenous communities in West Bengal. We know the updates of Singur
and Nandigram!

We may not get a home in Luxury colonies. We just target the lower
income housing. We may not have the deposit anywhere and we go to
bank. Indian Banks are doing havoc with housing sector. construction
sector is on growth.

On the other hand, Insurance sector being privatised, mandatory
Insurance is quite in vogue. The Plastic Money circulated by Banking
Sector feeds on Insurance!

Yes, this is the genetically modifies seed for Indian Sub prime
Crisis, I am afraid!

Indian Banks dare not to touch the effluents but do everything for
recovery against small customers!

Sub Prime Crisis is going to effect all those common people seeking
Home Loans from the Banks! Never the less, Indian banks are very
selective to handle its customer service and the Private sector banks
have already made a name! Defence, Media, Police and Railway employees
are always at run to get loan from Indian Banks!

Greed and fear factor has taken over the Market.

US tagged Indian economy may not be able to save the interests of the
common people. neither it seems to be interested as it is trying its
best to defend the MNCs, Builders and corporates!

Chines economy depends on its internal strength and is never tagged
with USA. It is self sufficient as it has coined a different
Globalisation unthinkable to third world countries. China is
successful to save its indigenous production system while opening all
avenues for the rest of the World in china.

Thus, china seems to take over with a Big jump!

The Economic super power, on the other hand is as miserable as India
is, because it is also tagged with USA and Japanese Jumbo Companies
depend on heavily on US market!


The Reserve Bank of India (RBI) stepped in this evening to check any
potential adverse impact of the global financial turmoil on the Indian
markets by announcing measures to ease the liquidity crunch and
bolster the weakening rupee.

Tomorrow onwards, as an ad-hoc liquidity-injecting measure, the
central bank will allow banks in dire need of funds to borrow more by
relaxing the statutory liquidity ratio (SLR), or the amount banks must
mandatory invest in government securities.

Although Indian overnight indexed swaps were mostly steady on
Wednesday, helped by lower global oil prices and infusion of fresh
liquidity by the central bank through its repo facility, Bankers in
Mumbai discussed among themselves how to sort out their exposures on
equity, debt and interest rate swaps to Lehman. They are taking legal
opinions on whether a possible non-payment by Lehman could be
construed as a “default” since Lehman India is a separate entity here.
Both Lehman and Merrill’s operations in India will see a substantial
shakeout soon, and there’s a possibility that BankAm may sell
Merrill’s India operations. Market regulator SEBI on Tuesday said it
will allow trading in exchange traded interest rate futures by
December-January, a move which will help banks and FIIs manage
interest rate risks.India's economy is expected to grow by more than 8
per cent in the fiscal year to March despite being hurt by the global
slowdown and soaring oil prices, Prime Minister Manmohan Singh said in
New Delhi, on Wednesday. Singh said annual wholesale price inflation,
which held above 12 per cent in late August, was showing some signs of
moderation and prices were expected to improve further due to steps
taken by the government. The Indian government has cut import duties
and banned exports of food items, while the central bank raised its
key lending rate in both June and July to tame inflation. The repo
rate now stands at a seven-year high of 9 per cent.

Whatever may be the projected Virtual reality of Shining India Sensex
Economy tagged with US War Economy hard facts remain to challenge the
Policy Makers! The Asian Development Bank (ADB) warned on Wednesday,
Asia's high inflation problem is due to lax monetary policy rather
than soaring food and energy prices, and the threat of "lasting
damage" is real!

WTO fame Commerce and industry minister of India Kamal Nath said in
New Delhi on Tuesday,`While the US financial crisis is unlikely to
affect India’s growth story, flow of foreign direct investment (FDI)
may take a hit. “There will be a slow down due to the frenzy
effect.”The impact on FDI flow will be assessed in the next two-three
weeks, the minister said. He, however, added that the FDI target of
$40 billion was likely to be met.

Speaking at an interaction with special economic zone (SEZ)
developers, organised by the export promotion council for EOUs and
SEZs (EPCES), Mr Nath said while the US had been asking India to adopt
best banking practices, it is their banks that have faltered. “Those
who preached us best practices have not helped their own financial
sector,” he said. The minister said the amount of exposure of the
banks going down is small in Asia and smaller in India. “A very small
fraction of that (US economic turmoil) is in Asia. This shows that
best practices have been adhered to in Asia,” he added.

However, he said the economic turmoil in the US is causing concern to
most of the global economies. “It still has to be assessed to what
extent it will affect the economy in Europe,” he said. It would also
affect flow of FDI to India.
The US credit crisis worsened on Monday with Lehman Brothers going
bankrupt and investment bank Merrill Lynch being bought by Bank of
America.


Seated on the financial Atom Bomb right into the Heart Of new
York,Indian Minister of state for Commerce and Industry Ashwani Kumar
has claimed,`The current turmoil in the global financial markets is
unlikely to have an adverse effect on India's healthy growth rate or
on the huge investments it is attracting.’
Admitting the crisis might have slight impact on the functioning of
the Indian economy, Kumar expressed confidence that fiscal management
will insulate it to the maximum possible extent, asserting that the US
and India would continue to be in a "very tight economic embrace."

The American economy is resilient and dynamic and current crisis could
be just cyclic or temporary aberration, he told reporters. Kumar, who
is here to deliver a series of lectures in Harvard University, said,
money flows only to countries whose economies are resilient and give
higher returns, with India fulfilling both qualifications.

The Indian economy is resilient, its economic fundamentals strong and
it has 400 million strong middle class with huge purchasing power, he
said. Besides, India is strengthening its infrastructure at huge
cost.

The Chinese economy on the other hand, Kumar stressed, has reached a
saturation point, while India will continue to be one of the principal
destination.

Replying to a question, he also expressed hope that the Indo-US
Nuclear Deal would clear the Senate by the time Prime Minister
Manmohan Singh holds summit with President George Bush on Sept 25 in
Washington.

He also praised the Bush administration for its "forceful diplomacy"
and time interventions at critical stages during negotiations of
Nuclear Suppliers Group (NSG).
Meanwhile,IT major Wipro Technologies and Gurgaon-based knowledge
process outsourcing firm Copal Partners have expressed interest in
bidding for the Indian back office business of Lehman Brothers
Holdings, the US-based investment banking firm that filed for
bankruptcy protection yesterday.

Lehman is expected to close its captive unit in Powai, a Mumbai
suburb, by the end of this month. The unit’s 1,200 employees, who work
on equity research and analytics support for the mergers and
acquisitions business, have been orally told to quit by September-end.
They have also been informed that they will be paid only for this
month, which will be treated as a severance package.

Investment banking sources said Wipro and Copal have been looking at
buying opportunities in this space for some time. Though the Lehman
BPO unit does not have an anchor client it may help them quickly scale
up the business.

Wipro declined to comment and Rishi Khosla, co-founder and chief
executive officer of Copal, could not be reached.

Copal Partners already has clients in industries such as investment
banking, equity research, credit research, and strategy consultancy.

Unlike employees in Lehman’s investment banking business, who have
been receiving feelers from domestic banks, employees in the captive
BPO are unlikely to find alternative jobs quickly because the IT and
IT-enabled services industries have already begun downsizing, owing to
the global financial crisis.



What is the Objective Cruel realism?

ICICI Bank today said it might need to make an additional provision of
$28 million (Rs 188 crore) on its exposure to bonds issued by
investment bank Lehman Brothers, which has filed for bankruptcy in the
United States.


The country’s second largest bank, which stands to lose the most among
Indian lenders, is yet to decide if the investment would be marked to
market for the second quarter.

Following an analyst report this morning, ICICI Bank issued a
statement saying its UK subsidiary had an exposure of around $80
million to Lehman’s senior bonds. It had already made provisions of
$12 million on these bonds and a further $28 million worth of
provisioning might be required if 50 per cent recovery is assumed, the
bank said.


PTI reports Shares of 16 Indian firms listed on the US bourses have
suffered a loss of over $7 billion in just two days, amid the crisis
which has gripped major investment banks in that country.

Country's largest private sector lender, ICICI Bank suffered the brunt
of the meltdown, receiving a blow of about $2.58 billion in the market
capitalisation of its American Depository Receipts.


ICICI Bank's ADRs listed on the New York Stock Exchange plunged over
15 per cent since Friday last week.

It settled at $25.2, down nearly 4 per cent at the close of trade last
night.

IT firms including Satyam, Infosys and Patni Computers witnessed a
sharp fall with their market cap dropping $968 million, $480 million
and $91 million, respectively.

Vedanta Group firm Sterlite Industries' ADRs also declined over 10 per
cent in two days witnessing a drop of $793 million in its market
value, since Friday last week.

Meanwhile, Tata Communications (formerly known as VSNL) and Rediff.Com
were the only exceptions to the melting markets and managed to stay
afloat.

Tata Communications gained nearly 3 per cent in the past two days on
the NYSE, while Rediff.Com had closed up 0.4 per cent on Tuesday on
the Nasdaq.

Another private lender, HDFC Bank's ADRs also dropped sharply in the
past two days loosing close to $884 million in market capitalisation.



It had settled at $81.25 on Tuesday falling 7.14 per cent from $87.5
on Friday last week.
In the past two day, ADRs of outsourcing firms Genpact, WNS (Holdings)
and EXLService Holdings Inc also witnessed a drop of over 8 per cent,
2.39 per cent and 6.6 per cent, respectivley.



No one knows how markets will pan out over the next few weeks! Blue
chip shares opened sharply lower Wednesday with the market still
weighing the situation after the Federal Reserve bailed out insurance
giant AIG: the Dow was off 1.78 percent and the Nasdaq slid 1.69. The
dollar extended gains against the yen in Asian trade on Wednesday
after the US Federal Reserve announced an unprecedented rescue package
for troubled insurance giant AIG, dealers said.

Speculative buying in the real estate market in leading cities has
declined to 5% from 30-40% earlier and genuine end-users account for
nearly 80% of total property sale, a report on real estate by Ernst &
Young and FICCI has said.

The report said, “The last three to four quarters have witnessed a
significant shift in the buyers’ profile with real estate prices
reaching a level where speculators\investors cannot realise
significant returns.”

Speculators used to account for 30 to 40% of total sales earlier,
according to the report released at a real estate summit.


Market fall continues on fear of global liquidity crunch. Japan,
Australia and India pumped $33 billion into money markets on Wednesday
as US government rescue of insurer AIG failed to soothe frayed nerves
and ease a funding squeeze triggered by the crisis engulfing Wall
Street. Across Asia, which has been largely shielded from the worst of
the credit crisis, central banks were bracing for more market
turmoil.
Singapore shares close 1.71 pc lower
Chinese shares close 2.9 pc lower
Hong Kong shares close down 3.6 pc
Asia greases money markets; AIG deal fails to soothe
Chinese shares close 2.9 per cent lower
London stocks open higher after AIG rescue

Lehman Brothers’ bankruptcy is likely to cost Indian real estate dear.
It may impact the financial major’s existing investments worth $500
million in realty firms, including DLF and Unitech, besides drying up
another $500-million worth of potential investment which was expected
to flow into Unitech’s Mumbai projects.

The news of Lehman’s collapse brought the BSE realty index down by
7.65% on Monday, while the benchmark Sensex declined 3.35%. Both DLF
and Unitech fell 7.5%.

Lehman’s fall signals a deepening of credit crisis for Indian
developers, who have lately been battling falling sales, rising cost
of construction and tightening credit. It is expected that the US-
based firm is likely to go for a fire sale of its assets.

The financial services major was very bullish on India and was among
the active investors in Indian real estate. Early this year, it had
leased out an office space in Mumbai paying Rs 1 crore per month as
rental. This would divert a part of fresh funds seeking to invest in
Indian realty.
This is because global fund houses have country-allocations. And as
they buyout Lehman’s stake in some of the Indian assets, they will end
up diverting some of the fresh funds-in-hand to existing assets rather
than investing in new projects.

“Lehman’s departure will impact future cash flows of real estate
companies. In a market situation like today’s, it will be all the more
difficult for the firms to raise funds,” says Karvy Stock Broking vice-
president Ambareesh Baliga.

Lehman invested $200 million in DLF promoter group company DLF Assets
last year and bought 50% stake in Unitech’s Mumbai project for $175
million a few months ago. It had also invested $80 million in
Bangalore-based SEZ Gandhi City and was likely to hike its share to
$300 million.

Lehman’s other investments include a 40% stake in an IT park project
of Peninsula Land in Hyderabad for an initial investment of Rs 50
crore. It had also teamed up with Mumbai-based developer HDIL to bid
for the redevelopment of Asia’s largest slum Dharavi.

Wherever the developers had received fund, they are safe. But where
the funds are yet to come, the developers could get stuck. Some
analysts say a distress sale by Lehman will impact the valuation of
existing projects.

DLF CFO Ramesh Sanka had earlier told ET that Lehman’s sale of
investments in DAL would not impact DAL’s valuation. Unitech MD Sanjay
Chandra said that his company had already received funds. So, the
company won’t get impacted by Lehman’s bankruptcy.

Some industry executives say that FDI norms of a three-year lock-in
period may prevent Lehman from making an immediate sale. But analysts
argue that the lock-in period in case of bankruptcy may not hold.

High interest rate regime consequent to the monetary tightening
measures initiated by the Reserve Bank along with subdued demand
conditions and high raw materials prices have led to further
moderation in growth momentum, says Dun & Bradstreet India in a
research report.

GDP, for instance, grew merely by 7.92% (y-o-y) during Q1 FY09 as
compared to 8.76% (y-o-y) during Q4 FY08. Industrial production too
slowed down substantially and registered an average growth of 5.70%
during April-July 2008 period from 9.78% during April-July ’07.

Growth in industrial production as measured by the Index of Industrial
Production also moderated to 7.06% during July 2008 vis-à-vis 8.28%
during July 2007. “Although it is higher than the growth witnessed
during the previous three months of the current fiscal, nevertheless,
given the subdued demand conditions to some extent and high raw
material prices, growth in industrial production is expected to remain
moderate. We expect to have grown within the range during August
2008,” the report says.

“In line with D&B expectations, GDP growth moderated to around 8%
during Q1 FY09,” said Kaushal Sampat, COO, Dun & Bradstreet India.
“The oderation in growth is significant, especially when compared with
the 9.24% growth during Q1 FY08. Additionally, the moderation in
growth of Gross Fixed Capital Formation to 8.96% in Q1 FY09 is
indicative of a slowdown in investment activity, and would have a
bearing on industrial production in the future. Going forward, given
the high interest rates and low consumer demand, industrial production
is expected to remain subdued.”

Sampat added, “Although moderation in international crude oil and
edible oil prices have provided some respite to surging inflation in
the last few weeks, headline inflation continues to be double digit
and thus remains an overriding concern for policy makers. With growth
in money supply and bank credit still above RBI's target rates, we
expect further monetary tightening.”


Central banks pumped billions into money markets for a second day on
Tuesday as efforts intensified to stop the demise of Lehman Brothers
turning the year-old credit crunch into a credit freeze.

A day after Lehman Brothers filed for bankruptcy and Merrill Lynch,
another Wall Street titan once considered invincible, was sold,
central banks in Europe and Japan provided a desperately needed 160
billion dollars in liquidity.

Total injections since the weekend are now approaching 300 billion
dollars.

With insurance giant AIG scrambling to prevent its own collapse --
showing that the end of Lehmans is not the end of the crisis -- the
money is needed to keep banks lending to each other and therefore to
firms and individuals.

The Bank of Korea warned that foreign funds would keep flowing out of
the domestic bond market. India added an extra money market operation
to improve banks' access to funds while Taiwan made lending easier by
lowering the ratio of time deposits banks must keep in reserve.

A commentary from a Chinese academic in the official newspaper of
China's ruling Communist Party, went as far as to suggest that the
global financial system was ruptured beyond repair.

"The world urgently needs to create a diversified currency and
financial system and fair and just financial order that is not
dependent on the United States," Shi Jianxun, a professor at
Shanghai's Tongji University said in the overseas edition of The
People's Daily.

Asian stocks and the dollar initially rallied on news that the global
financial system would be spared the collapse of an insurance giant
that operates in 130 countries. But shares gave up their early gains
and cash remained tight in money markets with no end in sight to the
13-month old credit crisis.

Overnight dollar funds changed hands at rates as high as 8.5 percent
in Asia, much above the Federal Reserve's 2 percent target rate,
dealers in Singapore said.

Lending between banks nearly seized up this week after the global
credit crisis pushed Lehman Brothers to seek bankruptcy protection,
Merrill Lynch into the arms of Bank of America and insurer American
International Group Inc to the brink of collapse, all during one
tumultuous weekend.

"There is mistrust among Japanese lenders towards foreign borrowers
because there is no clear policy about which US financial institutions
are rescued and which aren't," said a deputy general treasury manager
at a Japanese bank.

Australia's central bank supplied the banking system with extra cash
for the third day running, more than doubling the previous day's
injection to A$4.285 billion ($3.4 billion), which was nearly twice
the market's estimated cash need.

Bank of Japan pumped 3 trillion yen ($28.58 billion) into the market
in two moves, matching a record from March 31, after overnight rates
jumped above 0.7 percent, 20 basis points higher than the central
bank's target rate.

The Bank of Japan kept its benchmark rate unchanged just as the Fed
did on Tuesday.

The Federal Reserve, which supplied an $85 billion bridge loan to
rescue AIG, disappointed investors who had bet that it would follow
its injection of emergency funds with an interest rate cut.

By staying pat, the Fed would leave the European Central Bank little
choice but to keep pumping cash into the euro zone money market too,
said Suresh Ramanathan, head of currency and rates strategy at CIMB
Investment Bank.

"For the Fed itself, yesterday's non easing will mean another round of
dollar shortage hitting European money markets, forcing the ECB to
continue with its liquidity injection," he said.

The Manila-based lender on Tuesday jacked up its 2008 inflation
forecast for developing Asia to 7.8 per cent from the 5.1 per cent it
predicted in April. Meanwhile it trimmed its economic growth forecast
for the region to 7.5 per cent from 7.6 per cent.

"External food and oil price shocks explain less than 30 per cent of
Asia's CPI (consumer price index) inflation, while excess aggregate
demand and inflationary expectations account for about 60 per cent,"
said a study by ADB economists Juthathip Jongwanich and Park
Donghyun.

The ADB study said the spike in commodity prices has given the
region's policymakers "an excuse for not raising interest rates." The
bank warned that "monetary policy accommodative of the food and oil
price shocks" will only reinforce the problem.

"This truly frightening prospect gives the region's central banks
every reason to wake up to the importance of subduing inflation before
it becomes entrenched and inflicts lasting damage on the economy."

The ADB study said loose monetary policy that encouraged excessive
demand was the result of governments' priority to get their economies
back on their feet after the 1997 Asian financial crisis.

The region did recover swiftly in the past decade in a regime of low
inflation, but the study said this may have "lulled monetary
authorities into complacency." It acknowledged that tightening now was
"not without significant risks" including reinforcing economic
contraction amid falling demand for Asian exports and global economic
slowdown.

"However, it is important not to exaggerate those risks," the study
said. "The loss of output due to anti-inflationary tightening will
somewhat dent the region's growth but is unlikely to push the region
into recession.

"Central banks may come to rue not acting today as a rare missed
opportunity to fight inflation at a manageable cost," it added.


The Lehman effect
17 Sep, 2008, 0000 hrs IST, ET Bureau
http://economictimes.indiatimes.com/Editorials/The_Lehman_effect/articleshow/3491137.cms

India’s outsourcing story has become the unintended victim of the
collapse of some of the most venerable Wall Street firms such as
Lehman Brothers and Merrill Lynch since the subprime crisis began to
unravel. India can no longer claim that BPO/KPO operations will escape
unscathed from troubles of the US financial sector.

Already, hundreds of jobs have been lost following the downsizing of
operations and closing down of back offices in India — the toll of the
collapse of Lehman is reportedly about 2,200 jobs. Several other
global financial services companies too have been forced to cut the
strength of the back office operations in India, laying off people
across various functions as their incomes were hurt by the crash of
the stock markets.

Software majors such as TCS, Infosys, Wipro and Satyam that earn a
significant portion of their revenues from the banking, financial
services and insurance (BFSI) sector would need to be prepared for
loss of business. Needless to say, the loss of several well-paying
jobs would dampen demand in some product-segments as well as the real
estate, which is already suffering due to sluggish sales. Indian
companies which have partnered these institutions for business
collaborations or funds would have to be prepared for a change in
partners and even stake sale by the distressed institutions.

However, that is not to say the collapse of the financial sector would
make the outlook for India and its market more gloomy. There have been
a few positive developments over the past couple of weeks. For
instance, the industrial production for July 2008 looks healthier,
rising 7.1% over the same month last year.

In particular, the robust growth of the capital goods sector (albeit
over a low base in July 2007) and consumer durables (perhaps in
anticipation of the festival season demand) are definitely
encouraging. The decline in global commodity prices, particularly
crude oil now inching close $90 a barrel, should spell good news for
inflation control. Besides, the first quarter GDP growth at 7.9%,
although slowest in three years, reflects that the fundamentals of the
economy is still very strong. That should inspire confidence in the
performance of our stock markets.

Wall Street's acid test
16 Sep, 2008, 0135 hrs IST, ET Bureau
http://economictimes.indiatimes.com/Opinion/Wall_Streets_acid_test/articleshow/3487033.cms
Is this the financial apocalypse the world has been dreading since the
subprime crisis first hit the global economy more than a year ago? Or
is there more to come? That’s the question uppermost on most minds as
nothing the US administration does, including the once-unthinkable
nationalisation of two big financial institutions, Fannie Mae and
Freddie Mac, seems able to stem the slide.

If only we could be sure this is indeed apocalypse then maybe we could
hope the worst is behind us and expect things to improve.
Unfortunately the world has no such luxury — instead there is mind-
numbing uncertainty about how many more financial giants may finally
go down (and drag economies down with them) as the crisis unravels.
Monday’s announcements by Lehman Brothers Holdings, once the bluest of
investment banks, that it would file for Chapter 11 bankruptcy
protection, and by Bank of America that it had agreed to buy Merrill
Lynch in an all-stock deal worth $50 billion only add to the sense of
foreboding.

It remains to be seen whether the sale of Merrill and the controlled
demise of Lehman will be enough to finally turn the tide in the
financial crisis that has crippled Wall Street. Reports that American
International Group, (AIG) the largest US insurer by assets and
Washington Mutual, the largest S&L institution are also seeking Fed
support suggest it might not.

There is also the danger that the winding down of the 158-year-old
investment bank could expose other banks to losses on Lehman’s assets,
risking more bank failures even as the Federal Deposit Insurance
Corporation exhausts its reserves, raising the spectre of a repeat of
the savings and loan meltdown. The only difference is that this time
the rest of the world is hitched on to the US economy in a way that
was not the case earlier.

Inevitably the ripple effects are being felt in markets round the
world. The sensex dropped more than 5% in the first 15 minutes of
trading (the market finally closed 470 points down at 13,531) and the
rupee fell to 46.08 as US financial woes added to fear psychosis
created by bomb attacks in the Capital on Saturday. Fortunately many
Asian markets were closed, else the carnage might have been much
worse. How events will finally pan out is hard to predict but they are
bound to hit the broader US economy and the world, including India,
pretty hard.

Economic times reports:Indian policymakers will now have to face up to
the challenge of slowing capital flows, which could slide further
after the latest developments on Wall Street. The turmoil in the
global financial and credit markets had led to capital flowing out at
a faster pace.

Between April and July this year, foreign portfolio investors have
taken out close to $4.5billion, going by RBI data. According to SEBI
figures, foreign investors have pulled out close to $400 million in
August and September so far. For the full year, foreign portfolio
investors have sold stocks worth over $7 billion.

The slowdown in capital flows this fiscal is in sharp contrast to the
scenario over a year ago when the Indian central bank was struggling
to manage inflows. The new RBI governor D Subbarao now has the
challenge of stemming outflows unlike his predecessor, YV Reddy who
had to manage the copious flow of capital for a good part of his
tenure.

The prime minister’s economic advisory council in its outlook for the
economy for 2008-09 has already warned that policymakers “may have to
be prepared to face a situation of greater volatility in capital
inflows on account of the uncertain external environment”.
http://economictimes.indiatimes.com/Markets/Analysis/Thinning_capital_inflows_spark_new_challenges/articleshow/3491500.cms

REUTERS reports from WASHINGTON: In one $85 billion fell swoop,
Federal Reserve may have wiped out what credibility it won resisting
Lehman Brothers' rescue plea and opened its door to countless other
companies to come calling for cash.
By providing a massive loan to American International Group on
Tuesday, just two days after refusing to use public funds to save
Lehman Brothers from bankruptcy, the central bank also invited tough
questions on how exactly it determined whether a company was too big
to fail.
Between the $29 billion the Fed pledged to swing the Bear Stearns sale
to JPMorgan in March, $100 billion apiece to rescue mortgage finance
firms Fannie Mae and Freddie Mac, up to $300 billion for the Federal
Housing Authority, Tuesday's $85 billion loan to insurer AIG and
various other rescue deals and loans, taxpayers are potentially on the
hook for more than $900 billion.
"They pretended they were drawing a line in the sand with Lehman
Brothers but now two days later they're doing another bailout," said
Nouriel Roubini, a professor at New York University's Stern School of
Business.
"We're essentially continuing a system where profits are privatized
and...losses socialized," Roubini said, adding that auto makers,
airlines and other struggling businesses would no doubt be asking for
government help too.
The government was hard pressed to say no to AIG because of concerns
that its collapse would harm thousands of companies around the world
and cause chaos in the $62 trillion market for credit default swaps,
where it is a big player.
Many on Wall Street were clamouring for a rescue earlier on Tuesday,
and AIG's share price swung wildly throughout the day as rumours
swirled of an on again, off again government rescue.
But Roubini said instead of handing out money to firms that made bad
bets -- which could inadvertently encourage more risky behaviour if
companies think they have a safety net -- the government should be
buying up mortgages and rewriting the terms so that households are not
buried in debt.
Some events leave their mark on the history of money and change the
rules of the game forever. On Monday, when traders watched in shock
and horror at the news tickers, they sensed that history was unfolding
before them. “Lehman failed, Merrill sold and AIG trying to raise $50
billion before the opening bell” — it was surreal. Wall Street will
never be the same again.
In the course of an extraordinary weekend, it’s oldest and the fourth-
largest investment bank Lehman Brothers Holdings Inc filed for
bankruptcy, while Merrill Lynch, famous for its iconic bull statue in
the New York City financial district, sold out before it was too
late.
With stunning speed, two of the most storied investments banks faded
into history, with Lehman headed for the biggest-ever bankruptcy
filing and Bank of America (BankAm) buying Merrill in a $50-billion
stock deal. The world of high finance had turned upside down. At the
time of writing, another world titan, the largest US insurer, American
International Group Inc (AIG) has been given special permission to
access $20 billion of capital in its subsidiaries to free up
liquidity. AIG had asked the US Federal Reserve for a bridge loan.
The enormity of the disaster sparked distrust among high-street banks,
which refused to lend to each other, and panic among investors who
sold fearing the worst, forcing some of the central banks to swing
into action. People’s Bank of China cut interest rate for the first
time in six years and lowered reserve requirements for smaller banks,
while the US Fed made it easier for bond houses to borrow. The greed
and excesses of the market had come home to roost.

In the financial capital of India,mumbai, Call it a repercussion of
the credit turmoil in the US or the unabated negative trend the market
has taken, the banking sector continues to remain in the grips of the
bears.
The BSE Banking Index on Wednesday fell by almost 6 per cent. ICICI
Bank was the worst-hit. The stock fell close to 9 per cent to Rs
544.05 (LTP). HDFC Bank, Axis Bank, and Allahabad Bank fell by 3-4 per
cent.
The rupee rose more than 1 per cent in volatile trade on Wednesday,
boosted by the Reserve Bank of India's (RBI) move to keep selling
dollars and lift deposit rates for non-resident Indians, but stock
market losses remained a weight.
The partially convertible rupee ended at 46.33/35 per dollar, off a
high of 46.25, and 1.2 per cent stronger than 46.89/90 at the close on
Tuesday. It fell to a low of 46.99 on Tuesday, its weakest since July
2006.
On Wednesday the rupee fell as low as 46.75 due to heavy dollar demand
from foreign institutional investors and oil companies, traders said.
They said the RBI commitment on Tuesday to continue intervening to
support the rupee helped it strengthen in early trade.
"The rupee started trimming gains due to dollar demand from custodial
banks, but then around 46.70 the central bank appears to have stepped
in which was followed by aggressive dollar selling by exporters and
banks," a senior dealer with a private bank said.
Dealers said the rupee may rise towards 46 per dollar in the near
term, helped by the central bank's supportive stance.
India's main share index fell 1.9 per cent, taking its losses to more
than 11 per cent over the past seven days. Foreign funds have so far
sold a net $8.7 billion worth of stocks this year, helping push the
rupee down nearly 15 per cent.
Dealers said the dollar's strength versus other currencies overseas
was also weighing on the rupee.
In the currency futures market, the most heavily traded near-term
contract closed at 46.54 per dollar. The total volume in the market
was slightly higher than 52,000 contracts.

In New york, Stocks skidded again Wednesday, with anxieties about the
financial system still running high even after the government bailed
out the insurer American International Group Inc. The Dow Jones
industrial average dropped about 200 points.The Federal Reserve is
giving a two-year, $85 billion loan to AIG in exchange for a nearly 80
percent stake in the company. Wall Street had feared that the insurer,
which has lost billions in the risky business of insuring against bond
defaults, would follow the investment bank Lehman Brothers Holdings
Inc. into bankruptcy.
Lehman, after filing for bankruptcy protection on Monday, sold its
North American investment banking and trading operations to Barclays,
Britain's third-largest bank, on Tuesday for the bargain price of $250
million.
The moves by the Fed and Barclays lift some of the uncertainty
surrounding two of the most precarious pillars of the U.S. financial
system, but investors' worries are far from erased.
Goldman Sachs Group Inc., the world's largest investment bank, said
Tuesday its third-quarter profit plunged 71 percent from a year
earlier, an almost unthinkable drop for a firm widely described as the
smartest on Wall Street.
Goldman's results, its worst slump in profits since it went public in
1999, reflected the continuing damage from the ongoing credit crisis
that has already vanquished three of its rivals. Goldman and Morgan
Stanley, which late Tuesday reported better-than-expected third-
quarter results, remain the only major independent investment banks on
Wall Street after a major shake-up of the investment banking industry.
Lehman Brothers Holdings Inc. filed for bankruptcy Monday after
succumbing to distressed real estate holdings, while Bear Stearns Cos.
and Merrill Lynch & Co. were swallowed by commercial banks in
emergency sales.
After two years of record profits, Chairman and Chief Executive Lloyd
Blankfein has been the only CEO to navigate his firm through the
market dislocation without posting a loss or major write-downs. But he
said "this was a challenging quarter" marred by a "decrease in client
activity and declining asset valuations."
With Merrill Lynch & Co. agreeing to be acquired by Bank of America
Corp., more pressure has come on Goldman to make a similar deal. Many
analysts believe stand-alone investment banks can balance volatile
businesses like investment banking or trading with the relative
stability of deposits held by retail banks.
Meanwhile,after taking over part of the North American operations of
Lehman, British bank Barclays has kicked off talks to buy out the
Asian and European operations of the failed US investment bank.
According to sources close to the deal, the acquisition of the Asian
assets of Lehman is likely to be completed in the next 48 hours.
Barclays is likely to buy out only the investment banking and
brokerage business. The move would help the bank kick-start its equity
capital market business and also beef up its M&A advisory business
substantially.
Barclays Capital, the investment banking division, now offers only
fixed income products. The move would provide the bank access to ready
made infrastructure across the region. It recently added a merger and
acquisition division after picking up senior officials from ABN across
the region.
When contacted, Barclays officials from Singapore said, "We are not in
a position to comment on whether Lehman's Asian and European
operations would be acquired by Barclays."
Lehman officials did not respond to an e-mail questionnaire.
Barclays had on September 16 said it will acquire Lehman's North
American investment banking and capital markets businesses for $250
million in cash. The British bank would also purchase the New York
headquarters and two data centers in New Jersey at their current
market value, which is estimated at $1.5 billion.
Incidentally, Barclays had in a statement post the announcement said
that, "In addition to the agreed transaction, Barclays Capital intends
to immediately commence discussions with the relevant international
regulatory authorities to acquire Lehman Brothers' similar operations
outside North America, although there can be no assurances such
international operations will be acquired."
Barclays now has close to 5,000 employees in 11 countries in Asia.
AP reports from WASHINGTON :Another day, but not just another bailout.
This one's a stunning government takeover.
In the most far-reaching intervention into the private sector ever for
the Federal Reserve, the government stepped in Tuesday to rescue
American International Group Inc. with an $85 billion injection of
taxpayer money. Under the deal, the government will get a 79.9 percent
stake in one of the world's largest insurers and the right to remove
senior management.
AIG's chief executive, Robert Willumstad, is expected to be replaced
by Edward Liddy, the former head of insurer Allstate Corp., according
to The Wall Street Journal, citing a person it did not name.
Willumstad had been at the helm of AIG since June.
A call to AIG to confirm the executive change was not immediately
returned.
It was the second time this month the feds put taxpayer money on the
hook to rescue a private financial company, saying its failure would
further disrupt markets and threaten the already fragile economy.
AIG said it will repay the money in full with proceeds from the sales
of some of its assets. It will be up to the company to decide which
assets to sell and the timing. The government does, however, have veto
power.
Under the deal, the Federal Reserve will provide a two-year $85
billion emergency loan at an interest rate of about 11.5 percent to
AIG, which teetered on the edge of failure because of stresses caused
by the collapse of the subprime mortgage market and the credit crunch
that ensued. In return, the government will get a 79.9 percent stake
in AIG and the right to remove senior management.

AIG shares sank $1.34, or 36 percent, to $2.41 in morning trading
Wednesday. They traded as high as $70.13 in the past year.
The government's move was similar to its bailout of Sept. 7 of
mortgage giants Fannie Mae and Freddie Mac, where the Treasury
Department said it was prepared to put up as much as $100 billion over
time in each of the companies if needed to keep them from going broke.
The Fed said it determined that a disorderly failure of AIG could hurt
the already delicate financial markets and the economy.
It also could "lead to substantially higher borrowing costs, reduced
household wealth and materially weaker economic performance," the Fed
said in a statement.
The decision to help AIG marked a reversal for the government from the
weekend, when it refused to use taxpayer money to bail out Lehman
Brothers Holdings Inc. Lehman, which filed for bankruptcy protection
Monday, collapsed under the weight of mounting losses related to its
real estate holdings.
The White House said it backed the Fed's decision Tuesday.
"These steps are taken in the interest of promoting stability in
financial markets and limiting damage to the broader economy, " White
House spokesman Tony Fratto said.
After meeting with Treasury Secretary Henry Paulson and Fed Chairman
Ben Bernanke in a late-night briefing on Capitol Hill, Congressional
leaders said they understood the need for the bailout.
"The administration is approaching an unprecedented step, but
unfortunately we are living in unprecedented times. Hearing of these
plans, you have to stop to catch your breath. But upon reflection, the
alternatives are much worse," said Sen. Charles Schumer, D-N.Y.
In a statement late Tuesday, AIG's board of directors said the loan
will protect all AIG policy holders, address concerns of rating
agencies and buy the company time to sell off assets.
"We expect that the proceeds of these sales will be sufficient to
repay the loan in full and enable AIG's businesses to continue as
substantial participants in their respective markets," the statement
said. "In return for providing this essential support, American
taxpayers will receive a substantial majority ownership interest in
AIG."
New York officials said the deal helps stave off a fiscal crisis for
the state. AIG is based in New York.
"Policy holders will be protected, jobs will be saved," New York Gov.
David Paterson said Tuesday night.
In an interview on ABC's "Good Morning America" program Wednesday,
former longtime AIG CEO Maurice "Hank" Greenberg was asked whether
critics are being fair who say the situation at AIG and the financial
markets generally happened because of greed, bad business practices
and corruption.
"No, I think it's an unfair appraisal," said Greenberg, who was
replaced as CEO three years ago as part of an accounting probe. "You
know, there are many things that contributed to this unfortunate
episode. after I left the company, all the risk management procedures
that we had in place were obviously dismantled. I can't explain that.
There's a new board of directors. One should be asking that board of
directors what they did and why."
Greenberg said he has lost "my entire net worth. Literally, my entire
net worth.'
"Worked 40 years building the greatest insurance company in history,
one that everyone in the world envied who was in this industry. I'll
get by, but my heart goes out for the thousands and thousands of
employees and their families who shareholders and not only in the
united states but worldwide. That is a tragedy," he said.
The Fed's move was part of a concerted push to help calm jittery
markets and investors around the world.
On Tuesday, the Fed decided to keep its key interest rate steady at 2
percent, but acknowledged stresses in financial markets have grown and
hinted it stood ready to lower rates if needed.
The central bank also pumped $70 billion into the nation's financial
system to help ease credit stresses. In emergency sessions over the
weekend, the Fed expanded its loan programs to Wall Street firms, part
of an ongoing effort to get credit flowing more freely.
The stock market, which Monday posted its largest point loss session
since the Sept. 11 attacks, recovered Tuesday after the Fed's decision
on interest rates. The Dow Jones industrials rose 141 points after
losing 500 points on Monday.
AIG's shares swung violently, though, as rumors of potential deals
involving the government or private parties emerged and were dashed.
By late Tuesday, its shares had closed down 20 percent - and another
45 percent after hours.
The problems at AIG stemmed from its insurance of mortgage-backed
securities and other risky debt against default. If AIG couldn't make
good on its promise to pay back soured debt, investors feared the
consequences would pose a greater threat to the U.S. financial system
than this week's collapse of the investment bank Lehman Brothers.
The worries were heightened Monday after Moody's Investor Service,
Standard and Poor's and Fitch Ratings lowered AIG's credit ratings,
forcing AIG to seek more money for collateral against its insurance
contracts. Without that money, AIG would have defaulted on its
obligations and the buyers of its insurance - such as banks and other
financial companies - would have found themselves without protection
against losses on the debt they hold.
Another report by AP from New york:
Stocks skidded again Wednesday, with anxieties about the financial
system still running high even after the government bailed out the
insurer American International Group Inc. The Dow Jones industrial
average dropped about 200 points.
The Federal Reserve is giving a two-year, $85 billion loan to AIG in
exchange for a nearly 80 percent stake in the company. Wall Street had
feared that the insurer, which has lost billions in the risky business
of insuring against bond defaults, would follow the investment bank
Lehman Brothers Holdings Inc. into bankruptcy.
Lehman, after filing for bankruptcy protection on Monday, sold its
North American investment banking and trading operations to Barclays,
Britain's third-largest bank, on Tuesday for the bargain price of $250
million.
The moves by the Fed and Barclays lift some of the uncertainty
surrounding two of the most precarious pillars of the U.S. financial
system, but investors' worries are far from erased.
The two independent Wall Street investment banks left standing -
Goldman Sachs Group Inc. and Morgan Stanley - remain under scrutiny.
Morgan Stanley revealed its quarterly earnings early late Tuesday,
posting a better-than-expected 7 percent slide in fiscal third-quarter
profit and insisting that it is surviving the credit crisis that has
ravaged many of its peers.
Over the weekend, Merrill Lynch, the world's largest brokerage, sold
itself in a last-ditch effort to avoid failure to Bank of America
Corp.
Furthermore, the troubles in the financial sector could exacerbate the
problems facing the weak U.S. economy. The Commerce Department
reported Wednesday that new home construction fell by 6.2 percent in
August to 895,000 units, the slowest building pace since January 1991.
Slumping demand for houses, sinking home prices and mortgage defaults
have been the catalysts behind Wall Street's turmoil - and the risky
mortgage-backed assets held by the nation's banks are not apt to
regain in value until the housing market turns around.
A day after Wall Street regained some of Monday's nosedive, the Dow
fell 200.54, or 1.81 percent, to 10,858.48 in early trading.
Broader stock indicators also tumbled. The Standard & Poor's 500 index
fell 21.38, or 1.76 percent, to 1,192.22. The Nasdaq composite index
fell 44.21, or 1.76 percent, to 1,192.22.
---
Anatomy of a global credit crisis
17 Sep, 2008, 0208 hrs IST,Sugata Ghosh, ET Bureau
http://economictimes.indiatimes.com/Markets/Analysis/Anatomy_of_a_global_credit_crisis/articleshow/3491632.cms
How can a bank like Lehman go down so fast?
Financial markets can be punishing and reversal of fortunes can be
dramatic. More so, if an institution is overleveraged — when loan and
investment books are much, much bigger than its capital. What
compounds problems are strange accounting practice and high-risk
nature of the loans and investments. There are also disclosure issues:
Lehman, in its last conference call with investors, gave no clue that
it was actually on the brink.
How did the crisis build up?
An investment bank uses its proprietary book (own money) to lend
others and invest. It started with the subprime crisis. Banks like
Lehman, buy mortgage loans from other banks, and then package them to
sell bonds against the loan pool. Often they add cash to make the loan
pool more attractive, so that the bonds can be sold at a higher price.
Suppose mortgage was earning 6%, these bonds are sold at 4%. The
difference is the spread which the investment bank earns. By selling
these structured bonds, it raises money and frees capital. But when
homebuyers started defaulting, these bonds lost their value. It all
began like this, and then the virus spreads across markets.
But don’t investment banks play advisory role?
They do, but slowly over the years, their prop books have multiplied.
Investment banks also organise big loans for their clients for funding
acquisitions. At times, investment banks take positions, only to palm
off the securities to other clients and banks. In a crisis, they may
not get the opportunity to down-sell such positions. This adds to the
panic.
Can’t central banks step in to stem the crisis?
Well, they can and they have, to an extent. It’s precisely to
discourage banks and bond houses from selling securities to generate
liquidity, Fed has relaxed the rules under which it lends to
institutions against securities. Moreover, if there’s a financial
chaos of this magnitude, banks refrain from lending each other,
fearing that the money would get stuck. A liquidity window from the
central bank thus comes handy.
How does the domino effect play out?
Suppose Lehman faces a redemption and has to repay another bank it has
borrowed from. If it sells the mortgage-backed bonds, whose prices
have fallen, it will not raise as much as was earlier expected. So, it
sells some of the other good assets or bonds which may have nothing to
do with mortgages. But since the bank starts dumping these assets,
prices of these bonds also dip. This is when the crisis spreads from
subprime to prime.
How does it impact the balance-sheet?
Herein lies the strange accounting of bonds and derivatives like
mortgage-backed securities. All banks are required to mark-to-market
(MTM) their investments. So, if the price of an instrument falls, the
difference between the price at which it was bought and the current
market price has to be provided — meaning, it has to be deducted from
the earnings. So, a drop in price leads to the MTM loss. But there’s a
bigger problem which really has deepened the crisis. An MTM loss can
be provided only if there’s a ‘market’. How do you provide when there
is no market?
But aren’t these instruments traded? How can the market suddenly
vanish?
Remember, it’s very different from checking the price of a stock from
a stock exchange website. Many of the instruments are over-the-counter
derivatives, which are struck on a one-to-one basis between two
parties. Suppose, a derivative is linked to variables like the yen-
dollar rate, and may be prices of other actively-traded assets, say
gold price and US Treasury bill. What the bank does is construct a
model, feeds the available market price of these variables in the
computer, to arrive at what the market price of the derivatives could
or should be. This is an artificial model-generated price. This is
called the mark-to-model against mark-to-market.
So, what’s wrong in that?
The trouble is when the bank actually goes out to sell the
derivatives, it discovers that there are no takers. And, even if there
are buyers, they are willing to pay just a fraction. In other words,
there is a sea of difference between the price that is being offered
in the market and the high artificially-generated price thrown up by
the model. So, when the bank ends up selling the instrument or
unwinding derivatives, the loss suffered is far in excess of the mark-
to-model loss. Such extra losses on thousands of securities and
multiple portfolios can wipe out the capital of the bank.
What is the nature of the instruments?
There are collateralised debt obligation (CDOs), credit default swaps
(CDSs) and all kinds of derivatives. CDOs are asset (or loan)-backed
securities, while CDSs are like a guarantee. Say Bank A lends to a
corporate but is unwilling to take the full credit risk. So, Bank A
enters into a CDS deal with Bank B; under this, Bank B promises to pay
Bank A if the corporate defaults. The money that Bank B earns for this
is the CDS premium, which is similar to an insurance premium. Now, if
markets turn choppy, risks go up and so does the CDS premium. So, Bank
B, which is earning a lower premium has to promote a mark-to-market
loss against the CDS position.
How does one minimise such turmoil?
No easy answer to that. Maybe, some of the accounting norms need to be
changed, so that the definition of MTM gets narrowed down. Besides, to
stop banks from going overboard, capital requirement may have to be
raised for derivatives position. But all this may be easier said than
done.
Managing the crisis: Stay focused on fundamentals
17 Sep, 2008, 0636 hrs IST,Aditya Puri,
http://economictimes.indiatimes.com/Markets/Analysis/Managing_the_crisis_Stay_focused_on_fundamentals/articleshow/3491599.cms
Financial crises are terrifying when underlying economic fundamentals
are out of line with established theory, leading to bursts of
unjustified optimism and/or pessimism. It is the responsibility of the
powers that be to bring sense to the market. Every financial crisis is
different, but they do all end. The Lehman Brothers bankruptcy and
Merrill Lynch’s acquisition by Bank of America is yet another stage in
the progression of the financial crisis that had its roots in the US
sub-prime mortgage market.
The initial stage of the crisis took a toll on direct mortgage lenders
like Countrywide Financial. In a subsequent stage, guarantors of
mortgage-backed securities like Freddie Mac and Fannie Mae came under
attack.
This culminated in their going into US government
‘receivership’ (effectively nationalisation) a few weeks ago. Lehman’s
demise marks the stage where banks with indirect but large exposures
to the US mortgage market, principally through derivative instruments,
bear the brunt. This is not necessarily the final stage and the worst
is perhaps not over.
A key feature of this crisis that started in the middle of 2007 has
been the lack of clarity on both the nature and number of financial
institutions that have indirect exposure to subprime assets, as well
as, cross-product problems involving movement from subprime to prime
mortgages with final spillover into derivatives, structured products
and counterparty risks.
We could see another set of intermediaries coming under severe
pressure. The decision by the US Treasury and the Fed not to guarantee
Lehman’s financial liabilities is a clear signal to the market that
they believe that no institution is ‘too big to fail’. Going forward,
a government-funded bailout is likely to be the exception, not the
norm. Besides, with Lehman’s bankruptcy, the fate of its
counterparties hangs in balance.
It is not clear whether a fire-sale of Lehman’s assets will be
adequate to pay off its creditors. Besides, apprehensions of other
banks meeting Lehman’s fate will keep inter-bank lenders on edge. This
could lead to a huge squeeze on inter-bank liquidity and trigger
another bout of turbulence in credit markets. Finally, the Lehman
episode has ramped up the level of risk-aversion in the global
financial system.
These are days of extreme and often irrational pessimism. The way to
survive this crisis is to stay focused on the fundamentals. From a
fundamental perspective, India’s financial system has a lot going for
it. Indian banks have no direct exposure to G-7 mortgage markets and
their indirect exposure is minuscule relative to the size of their
balance sheet. This has protected us in the past and will continue to
insulate us to a significant degree from the turmoil in global
markets. As this phase of extreme pessimism abates a bit, global
investors are likely to reward India for the robustness of its
system.
(The author is managing director of HDFC Bank)

India going through classic cyclical slowdown
17 Sep, 2008, 0151 hrs IST,Narayan Ramachandran,
http://economictimes.indiatimes.com/Markets/Analysis/India_going_through_classic_cyclical_slowdown/articleshow/3491583.cms
A 158-year-old firm that has weathered the great Depression, the junk
bond crisis and the Asian flu, has filed for bankruptcy. Another Wall
Street firm with a bull for mascot has agreed to a take-over by a
commercial bank. Investors everywhere are legitimately nervous.
So what’s the prognosis for the Indian economy and markets?
The Indian economy has been gradually slowing down over the last
couple of quarters. This has so far been an industrial production and
investment lead slowdown. The tempering of growth has been complicated
by record high food and oil prices and a cooling of FII interest in
India.
Of course, this has abated a bit since mid-July, but like a few
Ajantha Mendis middle overs in cricket, has left the stock-market
reeling. The rupee is touching a two-year low versus the dollar.
Corporate earnings expectations are probably a shade too robust still,
given the slowdown in the economy.
Is there anything else to say other than to suggest buying a few more
mattresses to slip your savings under?

Also Read
? Thinning capital inflows spark new challenges
? History repeats for JP Morgan
? IFRS: Are Indian banks ready?
? The immediate fallout of the US crisis

In contrast to the balance sheet recession in the Anglo-Saxon
economies, India is going through a classic cyclical slowdown. By and
large, balance sheets in India are not impaired (both corporates and
households) and companies have in-built operating leverage that will
come into play when the cycle turns. And turn it will, sooner or
later.
Financial markets are funny beasts. At precisely the moment of maximum
despair, is born the seed of a new cycle. In addition to the action
that the Fed is expected to take tonight, Central Banks from Australia
to China have begun to ease policy.
In the not-too-distant future, expect the ECB, BOJ, a myriad other
central banks and RBI to do the same. For long-term investors in
India, there are bargains to be had on the stock market. Perhaps not
dirt cheap questionable quality assets, but reasonable value-growth
quality assets.
Most investment conversations in India obsess about precisely picking
the bottom. While this may be a worthwhile past-time for a few
professional investors, for most others, it exposes the risk of the
exact opposite — which is to say they remain under-invested when
things begin to work again. I
India never did shine as brightly as people thought in 2006, nor is as
dull as people are thinking now. The truth is in the middle, and there
is money to be had for the long-term investor in recognising that.
(The author is Country Head of Morgan Stanley in India)
Print this page on

ICICI Bank: Wall Street woes
http://www.business-standard.com/india/storypage.php?autono=334609
THE COMPASS
Shobhana Subramanian & Varun Sharma / Mumbai September 17, 2008, 4:52
IST
The $80-mn exposure to Lehman bonds isn’t large in itself but there
could be more to come.
The Street is understandably getting increasingly nervous given the
growing crisis in the US financial markets. That’s probably why the
ICICI Bank stock crashed 10 per cent in intra-day trades on Tuesday.
It’s probably not just the $80 million exposure to Lehman Brothers in
the form of senior bonds that’s worrying investors.
That ‘s not reason enough to shave off around $1.5 billion of market
capitalisation. It has more to do with the worsening credit
environment and a feeling that similar exposures to other banks could
turn bad. Had business in the home market been brisk, the market would
not have been so worried. But it’s not really been great going for the
bank with credit growth tapering off and delinquencies on the rise.
The June 2008 quarter saw the bank post decent numbers: the shift from
growth to profitability is paying off in many ways. For instance, the
net interest margin improved by 45 basis points to 2.4 per cent and
fee income grew by a smart 37 per cent.
But growth will obviously taper off this year and moreover,
delinquencies increased by about Rs 200 crore sequentially.
In some ways it’s probably a good thing that the bank is not lending
aggressively in today’s challenging credit environment—the
consolidated loan book grew by just 20 per cent y-o-y in the June
quarter. With a weighted cost of funds that is nearly 200 basis points
higher than that of its peers, the bank would find it hard to compete
and would end up attracting the worst kind of credit risk.
What ICICI Bank is doing is attempting a structural shift in its
resources base by moving away from high cost wholesale deposits to
cheaper CASA (current account and savings accounts). That would make
it less vulnerable to an increase in funding costs especially in a
rising interest rate scenario.
If it can increase the proportion of CASA from the current levels of
around 28 per cent, a higher portion of incremental lending would earn
better spreads. At the current price of Rs 565, the stock trades at
just one time FY09 price to adjusted book value and is cheap. However,
it may be a while before the market believes that the worst is over.
Govt acquires 2,000 hectares for renewable energy SEZ
Press Trust Of India / New Delhi September 17, 2008, 18:45 IST
http://www.business-standard.com/india/storypage.php?tp=on&autono=46706
Government today said it has acquired 2,000 hectares of land to
develop a special economic zone (SEZ) for renewable energy in Nagpur,
which would become operational within 2-3 years.

"2,000 hectares of land has been acquired for the Renewable Energy SEZ
in Maharashtra and it would become operational in 2-3 years time,"
Union Minister for New and Renewable Energy Vilas Muttemwar told
reporters here.
This SEZ is being developed by the Maharastra Industrial Development
Corporation (MIDC) and Indian Renewable Energy Development Agency
(IREDA).
A European firm is understood to have committed investment worth 3.71
billion euros (Rs 22,000 crore) in the SEZ.
Government is focussing on non-conventional energy sources, including
wind and solar power. Various tax benefits have been given for
investments in the renewable energy area.
India has emerged as a major supplier of equipment for wind power, led
by Pune-based Suzlon Energy.
N-deal with Russia likely in October
Bs Reporter / New Delhi September 17, 2008, 0:51 IST

In a move that is likely to put further pressure on the US Congress,
India is putting finishing touches on a civil nuclear agreement with
Russia during Russian Foreign Minister Sergei Lavrov’s visit to India
on October 20.
This agreement was first set to be signed during Prime Minister
Manmohan Singh’s visit to Russia in 2007. The Russian establishment,
keen to leverage its historical connection with India’s atomic energy
programme, had offered to build four more reactors in Kudankulam for
civilian nuclear energy.
While accepting that offer, the Indian PM had told the Russian
government that India would prefer to wait until the paperwork,
especially the Nuclear Suppliers’ Group clearance, was completed.
Now, ironically, although the US has pulled out of its nuclear deal
with Russia, citing Russian intervention in Georgia as the reason,
India is going ahead with the Russian deal.
The Russian civil nuclear industry is enthusiastic about the opening
of India’s nuclear business and hopes to get the first-mover advantage
after the NSG approved rule change India’s favour.
Prime Minister Manmohan Singh is expected to sign a nuclear deal with
France in the last week of this month.


Centre announces Rs 2,518 cr debt relief to farmers in Kerala
Press Trust Of India / Kottayam September 17, 2008, 18:51 IST

Centre has announced a debt relief of Rs 2518.12 crore to the farmers
in Kerala during the current year.


Out of the amount, the farmers who failed to repay their loans in the
district will get Rs 239 crore, an official release said today.
The total investment extended by various banks in the district
amounted to Rs 8990 crore for the three month period ended June 30,
2008 while the amount of loan stood at Rs 5,948 crore. The loan
investment ratio was 66.16 per cent.
State Bank groups have disbursed Rs 3,710 crore in the form of
investment and loans of Rs 2,684 crore.
The investment by private nationalised banks was to the tune of Rs
4,416 crore while that of loans Rs 2,484 crore.
The contribution of co-operative banks in the form of investment was
Rs 863 crore and of loans Rs 779 crore.
As per the estimate of district credit plan 2008-09 loans of Rs 248
crore distributed in agricultural sector.
A sum of Rs 18 crore were distributed in the form of 549 educational
loans from April to June, 2008 in the district, it said.


Arvind Subramanian: Fixing American Finance
Arvind Subramanian / New Delhi September 17, 2008, 5:59 IST
http://www.business-standard.com/india/storypage.php?autono=334621
It is worth pondering Robert Shiller’s perspective: imaginative,
radical but not implausible.

First, Bear Stearns, Freddie and Fannie, now Merrill Lynch and Lehman
Brothers, and possibly the American insurance giant AIG soon to come.
American finance is having a great fall. The President’s men are
trying to put it together again. And, on occasion, the Sheikhs’ men
have ridden to the rescue too. Who could have guessed that the
departing, lasting legacy of George W Bush’s conservative
administration would be the divvying up of the icons of American
financial capitalism between Uncle Sam and foreign, mostly autocratic,
governments?
The tragedy, of course, is that tragedy was not inevitable. The fall
of finance did not sneak up on the world, under cover of darkness. It
was predictable and predicted. Among the many who did so, the most
analytical Cassandra was Robert Shiller of Yale University. His
“beware the bubble in the housing market” sounding was prescient
strike two. Strike one was his early warning about the outrageous
stock market valuations that led to the bursting of the tech bubble in
2000. That warning and its memorable translation into euphemism —
“irrational exuberance” — were embraced, even appropriated, by Alan
Greenspan, even as he did little to prevent the bubble from inflating
as Fed Chairman.
But a flawless record in dire prediction is the lesser of Shiller’s
achievements. What sets Shiller apart — brilliantly apart — from other
analyses of the housing bubble are the sharpness of his diagnosis and
the creativity of his solutions. These are the core of his excellent
new book, The Subprime Solution: How Today’s Global Financial Crisis
Happened and What to Do about It.
Why did house prices get so out of whack? The litany of explanations
and the associated cast of culprits are long and familiar. Aggressive
and sometimes unscrupulous lenders pushed mortgage loans out to
complacent, gullible, and often uncreditworthy (subprime) borrowers,
on terms that seemed enticingly low upfront. When the real estate-
backed loans were repackaged and sold to investors as securities,
rating agencies routinely and irresponsibly graded them as high
quality. Regulators looked away. This binge of borrowing and re-
borrowing was facilitated by cheap money at home and plentiful money
abroad. And Americans were in collective denial that wealth cannot be
created by selling the same asset-homes-to each other in part because
the whole business had the conscience-assuaging egalitarian veneer of
promoting homeownership, especially for low-income blacks. Life,
liberty and the pursuit of happiness in the new millennium required
not just the SUV but also a home, preferably a McMansion.
Shiller’s contribution here is to view all these elements as important
but not the real deal. The ultimate cause, according to him, was
simply bubble psychology, the collective belief that had taken hold
that house prices could only head in one direction, a belief
reinforced by the observable reality that house prices were indeed
steadily accelerating for several years. Why is this diagnosis
appealing? Because all the culpable actions — lazy home appraisals,
regulatory neglect, dubious ratings and even the Greenspan “put” —
were ultimately sustainable only because of the “social contagion,” as
Shiller aptly puts it, that house prices would not come down.
Shiller’s focus on the fundamentals then naturally leads to his
creative and original remedies. Caught up in the tangled web of
proximate causes and multiple suspects, most mainstream analysts see
the remedy largely in terms of better regulation. Leave aside how this
is achieved in practice, history shows with depressing regularity that
regulation alone is unable to prevent speculative bubbles in assets
whether they are tulips, art, stocks, or land. Bubbles, alas, spring
from some deep human hard-wiring that produces greed, avarice, denial,
and complacency. Along comes Shiller, whose goal is nothing short of
addressing this hard-wiring, and whose preferred method is to create a
financial democracy, so that all financial consumers are empowered and
educated to make sound financial decisions, reducing their key and
inherent vulnerability — and hence that of the financial system — to
bubble psychology.
To Shiller the solution is not a choice between markets and regulation
but more of both in order to harness the true potential of finance
while minimising its vulnerability. Trust should finally be reposed
not just in regulators or markets but in financially literate and
discerning consumers. Some of the more innovative ideas include
providing subsidised financial advice to customers, and setting up a
financial product safety commission that would oversee financial
product quality just like its consumer safety counterpart.
Two proposals are particularly appealing. Borrowing from the insights
of behavioural finance, Shiller suggests the creation of default
options for mortgages. These would be simple and geared for the
average consumer to prevent him from succumbing to enticing but bad
choices involving teaser interest rates, zero interest financing and
other fancy financing arrangements whose complexity would elude most
customers. Defaults can be over-ridden but that would require a much
greater degree of understanding that only the most sophisticated would
possess. The creation of default options has acquired broader appeal
in recent years and is in the spirit of the apparently oxymoronic
principle of “libertarian paternalism”: the paternalism arises because
people have to be nudged away from making bad and self-defeating
choices which they tend to out of myopia, inertia, or laziness. But
the arrangement is libertarian because people retain the right not to
chose the default option if they so wish.
Another suggestion is to create and popularise units of account called
“baskets” so that all consumers can distinguish changes in the real
values of assets from changes that merely reflect inflation. Even more
radical ideas call for creating new financial markets for home equity
insurance and insurance against occupational loss.
Finance is a problem, Shiller seems to acknowledge, but stresses that
the problem is finance as we know it, and asserts that more finance,
more innovative finance, and finance under an improved institutional
setting is definitely the way forward.
As cries of Armageddon echo through Wall Street, cries that no longer
sound unduly alarmist, it is worth pondering Robert Shiller’s
offering: a brilliant and radical but not implausible perspective on
putting the Humpty Dumpty that is American finance together again.
The author is Senior Fellow, Peterson Institute for International
Economics and Center for Global Development, and Senior Research
Professor, Johns Hopkins University. A version of this article first
appeared on Forbes.com.
M J Antony: Free hand for acquisition
OUT OF COURT
M J Antony / New Delhi September 17, 2008, 3:30 IST
http://www.business-standard.com/india/storypage.php?autono=334575

The more the Supreme Court writes, the more the land owners seem to
lose.
Every political or economic question leaves an impression on the
courts. The present concern is land acquisition for private companies.
So the number and size of judgments on this problem seem to be getting
bigger. In last week’s judgment of 130 pages, Sooraram vs Dist
Collector, the Supreme Court dealt elaborately with ticklish subjects
like the meaning of ‘public purpose’, the extent of sovereign power to
take over private property and the validity of the procedure for
acquisition when the land is meant to be given to a private
corporation.
Land owners seem to have lost all possible legal arguments for the
future after this well-considered judgment. This is what the judges
say: “Prima facie the government is the best judge as to whether
public purpose is served by the acquisition; the courts are not
entitled to go behind the declaration of the government regarding
public purpose; if the acquisition is through a statutory authority,
the court would presume that it is for public purpose; even if the
authority makes losses in the process, this presumption would not be
rebutted; if the government makes even a ‘trifling’ sum for the
acquisition on behalf of an industry, the private purpose could be
turned into public purpose; the special procedure for acquisition for
a company would come into play only if it bears the entire cost; the
take-over proceedings could be initiated even before the planning
project.”
The court deals with three main sore points of land acquisition law.
The first, ‘public purpose’, has been unsatisfactorily defined in
Section 3(f) of the Land Acquisition Act. It has also been
exhaustively dealt with in a number of judgments. The court has
admitted that “the expression is incapable of precise definition”. The
tenth Law Commission report stated that if an exact definition is
enacted, it would become rigid and leave no room for alteration “in
the light of changed circumstances”.
Though the section specifically says that public purpose “does not
include acquisition of land for companies”, that is exactly what the
state governments are indirectly doing now, “in the light of changed
circumstances”. The Supreme Court also says that “public purpose
should be liberally interpreted, not whittled down by logomachy[sic]”.
It emphasised that the mere fact that the immediate use is to benefit
a particular individual would not prevent the purpose being a public
one, if in the result it is conducive to the welfare of the community.
Secondly, the court also swore by the theory of eminent domain, which
in essence is the state’s power to acquire private property for public
use, without the owner’s consent, upon payment of a reasonable sum.
Here again, the boundary between public and private purposes is
blurred. Economic and political necessity justifies the take-over. The
modern and more liberal view, according to the court, is that the
acquired property need not be transferred to public ownership or for
public use; “it is sufficient that the public derives advantage from
the scheme”. Thus, even indirect benefits like roads, employment and
markets would justify the compulsory takeover of land.
The third decisive declaration is that “if the intended project, taken
as whole, is an attempt in the direction of bringing foreign exchange,
generating employment and securing economic benefits to the state and
the public at large, it will serve public purpose”. The consequence is
that private land can be compulsorily acquired and given to an
industry if it benefits the people at large.
According to the court, Section 6(3) of the Act makes it clear that
once the government declares that the takeover is for public purpose,
it shall be conclusive. The acquisition could be either for public
purpose or for a company. In the latter case, there is a special
procedure. But the border between these two objects has become hazy as
every industry is bound to confer benefits on the local community and
the nation at large. Therefore, the special procedure laid down in
Part VII of the Act for acquisition for companies could be bypassed.
This is so despite the fact that the definition of public purpose has
categorically excluded acquisition of land for companies.
A bill to make changes in the 19th century Act is still on the anvil
and may not materialise till a new government settles down after next
the general election. One reported change is to make the benefiting
industry pay 70 per cent of costs. Some other improvements are
necessary. The computation of compensation should be more liberal. The
definition of public purpose should be more specific. The area of
public notice, public hearing and land owner negotiations should be
fortified and local government should be actively involved.


INDUSTRY & ECONOMY
http://www.thehindubusinessline.com/2008/09/17/03hdline.htm
PETROLEUM: Are LPG variant cars losing cost advantage?
LUKEWARM OFFTAKE. New Delhi, Sept. 16 Car makers’ efforts to boost the
sale of liquefied petroleum gas (LPG) variants may just become more
challenging, with the LPG price rising nearly in the same proportion
as that of petrol. Auto ...

AUTOMOBILE COMPONENTS: Mamata softens stand on ancillary units in
Singur
Kolkata, Sept. 16 The future of the Tata Motors small car project in
Singur continues to remain uncertain even as Trinamool Congress leader
Ms Mamata Banerjee conceded on Tuesday that she would have no
objection to ancillary units being set ...

STEEL: Fall in industrial metal prices to help steel, construction
industry
Base metals under pressure on Lehman collapse. Mumbai, Sept. 16 The
fall in prices of industrial metals such as copper, zinc, aluminium,
lead and nickel is likely to benefit steel, construction, electrical
equipment, cable and battery ...

POWER: India-France nuclear ties may get a boost
Both countries likely to sign pact in civilian nuke energy. The Indo-
French nuclear cooperation would get a shot in the arm when the Prime
Minister, Dr Manmohan Singh, goes to France at the end of this month
for a bilateral meeting, with both ...

ECONOMY: ‘States will submit joint memo to finance panel’
General demands will be listed out, says Kerala Minister. Kochi, Sept.
16 The Kerala Finance Minister, Dr T.M. Thomas Issac, has said that a
joint memorandum by various States listing general demands will be
submitted to the 13th Union Finance ...

PETROLEUM: Deora rules out any fuel price cut now
‘Will be considered if Indian crude basket goes below $67’. New Delhi,
Sept. 16 Fuel consumers may have to wait for some time before there is
any cut in retail selling prices of these ...

REAL ESTATE & CONSTRUCTION: ‘Cluster model’ to redevelop Mumbai’s old
buildings
State to constitute committee of experts to identify them. The
Maharashtra Government has decided to further facilitate the ‘cluster
model’ of redevelopment for the 19,000-old and dilapidated buildings
in ...

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...

COAL: Regional clean coal partnership
...

MINERALS: Iron ore exporting cos to go in for a higher price from
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country, MMTC and the National Mineral Development Corporation (NMDC),
would go in for a higher realisation from ...

URBAN DEVELOPMENT: Vizag corpn to float bonds soon
Visakhapatnam, Sept. 16 The Greater Visakhapatnam Municipal
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end of the month to finance some of its projects taken under the
Jawaharlal Nehru National Urban Renewal ...

TAXATION: HC sets aside CST assessment orders for not allowing
personal hearing of assessee
Chennai, Sept. 16 Two Central sales tax assessment orders of the
Commercial Tax Officer (CTO), Srirangam Assessment Circle, in respect
of a Tiruchi steel unit, were set aside by the Madurai Bench of Madras
High Court as the CTO had refused ...

DISINVESTMENT: Andrew Yule to complete jt venture divestment by March
Plans re-launch of packet tea brands. Kolkata, Sept. 16 Andrew Yule
and Co Ltd, a central PSU, hopes to complete divestment of its belting
joint venture, Phoenix Yule Ltd, and power utility, DPSC Ltd, by
March, 2009. The disinvestment process is ...

TRADE & LABOUR UNIONS: Trade union moots scrapping income ceiling on
bonus
Visakhapatnam, Sept. 16 The Indian National Trade Union Congress
(INTUC) wants the Union Government to amend the Bonus Act to remove
the income ceiling and is hopeful of a positive response from the
Government in a few months, before the ...

SCIENCE & TECHNOLOGY: ‘Work on to transmit data via quantum mechanics’
Hyderabad, Sept. 16 Scientists across the world are working on
developing a system to transmit information in a secure way by using
quantum mechanics, according to Prof Claude Cohen-Tannoudji, the 1997
Nobel Laureate in ...

ECONOMY: ‘Indian SEZ schemes offer best competitive package’
The Union Commerce and Industry Minister, Mr Kamal Nath, today said
that as India is one of the engines of the global economy and emerging
as a major investor destination, India’s special economic zone (SEZ)
schemes offer the ...

PETROLEUM: Airline body seeks DGFT nod to import turbine fuel
New Delhi, Sept 16 In a move that will allow airlines to get aviation
turbine fuel (ATF) at lower prices, the Federation of Indian Airlines
has approached the Directorate-General of Foreign Trade (DGFT) to
import fuel for domestic airlines, ...

INFRASTRUCTURE: ‘Global crisis may not impact infrastructure growth’
Hyderabad, Sept. 16 The global financial crisis, which resulted in the
collapse of giants such as Lehman Brothers, may not have an immediate
impact on the Indian infrastructure sector, according to experts at
the infrastructure summit ...

EVENTS: Industrial expo in Hyderabd from tomorrow
Hyderabad, Sept. 16 The Micro, Small and Medium Enterprises
Development Institute (MSME-DI), in association with the Andhra
Pradesh Department of Industries and Commerce, is organising a four-
day National Industrial ...

REAL ESTATE & CONSTRUCTION: Pan Atlantic invests $10 m more in Sobha
Developers’ SPV
Bangalore, Sept 16 The Dubai-based Pan Atlantic LLC has invested an
additional $10 million to increase its stake by 30 per cent to 70 per
cent in the special purpose vehicle floated by Sobha Developers for
its residential project in ...

CEMENT: Cost pressure to ease for cement manufacturers
Falling coal price to improve operating margins. The recent fall in
coal prices may bring some relief to the margins of cement companies,
compared to the preceding quarters. Having taken cues from falling oil
prices, global coal prices have ...

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The Reserve Bank of India (RBI) has sprung regularly to the rupee’’s
defense, buying it in the currency market and exacerbating a shortage
of local currency ...LEH
India copper weak on financial market worries
Reuters India, India - 16 Sep 2008
MUMBAI, Sept 16 (Reuters) - Indian copper futures extended losses on
Tuesday as investors continued to pull money out of risky assets
fearing a slowdown in ...

Strategies to Resurrect Rural Credit Delivery System in India
9 Jul 2007 ... Downloadable! The RFIs operating in Maharashtra have
not only shown slower growth in their loan advances and other
operational indicators ...
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SSRN-Strategies to Resurrect Rural Credit Delivery System in India ...
SSRN-Strategies to Resurrect Rural Credit Delivery System in India by
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Taxation System in India - tax structure - India tax reforms laws ...
Taxation System in India. India has a well-developed tax structure
with clearly .... Domestic corporations are granted credit on foreign
tax paid by them, ...
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BANGLAPEDIA: Informal Credit
In course of time, the cash credit system, though limited, started to
evolve ... The Dutch east india company's debt to Kasimbazar
merchants, computed with ...
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Making Money Spending Money: CIBIL-TransUnion Credit Scoring ...
CIBIL-TransUnion Credit Scoring System Launched in India ... Credit
score is new system in India, launched on Thursday, November 29,
jointly by Credit ...
b-biz.blogspot.com/2007/12/cibil-transunion-credit-scoring-system.html
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The Hindu : `Choice-based credit system helpful in meeting demand ...
A choice-based credit system — a fast-evolving system of delivering
degree ... A key issue in India was how higher education related to
employment needs. ...
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Strategies to Resurrect Rural Credit Delivery System in India ...
Strategies to Resurrect Rural Credit Delivery System in India. Shah,
Deepak (2007): Strategies to Resurrect Rural Credit Delivery System in
India. ...
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by D Shah - 2007 - Related articles - All 4 versions
Microfinance Gateway: Site Content: Rural Financial System in ...
Rural Financial System in India : Directed Credit & Subsidized
Interest Policy Need Fresh Look. Patel, A. & Kalkoti, G. Publication
Date: 2007 ...
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Do we have a credit rating system in INDIA? - Yahoo! Answers India
1 Yahoo! Answers - Do we have a credit rating system in INDIA? –
Discover the answer for this question and Earn more points for the
best answer on Yahoo!
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Business Analyst Credit Risk Management System in India : TechJobs ...
Vinirma Consulting Pvt Ltd looking for Business Analyst Credit Risk
Management System to work in India.
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Home Loans, Housing Loans, Home Loans in India - HDFC.com
Housing Development Finance Corporation Limited (HDFC) - Offering
range of services like Home Loans, Housing Loans and Home Loans in
India.


Show stock quote for 500010

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STATE BANK OF INDIA :: INDIA's LARGEST BANK
SBI Home Loans come to you on the solid foundation of trust and
transparency built in the tradition of State Bank of India. Best
Practices followed in SBI ...
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Home Loans India: Housing Loans, Home Insurance, Housing Finance ...
Apply for Home Loans, Home Insurance, Housing Loan through various
Home Loan Providers as well as Home Insurance Providers which include
Banks like Bank of ...
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Home Loans in India
Tools, Interviews, Views on News, Special Reports, Tutorials. On
Loans.
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India Property Loans. Cheap home loans, NRI loans, home finance ...
Low interest rate Home loans, home finance in India, NRI home loan,
EMI calculator, Mumbai, Delhi, Pune, Bangalore, Chennai,Hyderabad,
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NRIs can easily get home loans in India - The Financial Express
NRIs can easily get home loans in India. Posted: Feb 17, 2008 at 2206
hrs IST Updated: Feb 16, 2008 at 2225 hrs IST. Font Size ...
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Home Loans India. Apply for a home loan online | HSBC Bank India
Whether you are buying a first home, switching bank loans, or looking
for a mortgage loan, see what HSBC can do to make it happen faster.
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IDBI BANK Ltd.
NRI Services. India Remit. Online money transfer from U.S.A. ... IDBI
pares Home Loan floating interest rate loans by 50 bps to 10.50% ...


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EMI nightmare: Home loan set to go up again - Express India
25 Jun 2008 ... Going forward, we do not see further measures by the
RBI,” said T Narayansami, Chairman and Managing Director, Bank of
India. Home loan ...
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ApnaLoan: Car Home Personal Loans & Credit Cards in India
Get information on home loans, car loans & personal loans in India and
apply for a loan online. Compare popular credit cards from ICICI,
Citibank, ...
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Hindu Business Line Securitisation rules prove critics wrong, saves
pain for India - 19 hours ago

MUMBAI: In 2005-06, when the Reserve Bank of India (RBI) first issued
guidelines on ... In hindsight, considering the size of default in
home loans, ...

Economic Times - 24 related articles »



India set to ride consumer credit boom, growth seen at 24%
India set to ride consumer credit boom, growth seen at 24%. The
Economic Times: September 01, 2004. A global equity research report by
Morgan Stanley has ...
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The Hindu Business Line : Credit boom, but where are the profits?
29 Nov 2005 ... Money & Banking - Credit Market Credit boom, but where
are the profits? ... Banks in India 2004-05 published by the Reserve
Bank of India, ...
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26k - Cached - Similar pages - Note this
The Hindu : Open Page : Consumer credit boom and its pitfalls
YOUR EDITORIAL "Consumer credit: boon or bane?" (The Hindu, December
31) was ... And even if the boom continues in India, not all companies
will do well. ...
www.hindu.com/op/2005/01/25/stories/2005012500111700.htm - 19k -
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Editorial & Publication : Journal (Issue 73) : Balancing India’s ...
Balancing India’s credit boom. Chetan Modi. "The Indian banking system
may need to double its capital base over the next five years" ...
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Is another interest rate hike justified?
What is relevant for identifying a credit boom is not the trend in the
level of ... The Reserve Bank of India has increased the policy rate
four times since ...
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pages - Note this
BBC NEWS | Business | India escapes global credit crunch - for now
20 Sep 2007 ... Unless there is a huge global slowdown the credit boom
in India is set to continue for a very long time. Akhilesh Tilotia,
Parks Financial ...
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EDITORIAL: The coming credit boom. | Economic Times (New Delhi ...
EDITORIAL: The coming credit boom. from Economic Times (New Delhi,
India) in Business provided by Find Articles.
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Quantum Asset Management Company Private Limited
Using the aforementioned IMF criteria of identifying a Credit Boom in
India, the current credit expansion can be defined as a credit
boom. ...
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EDITORIAL: The coming credit boom. | The Economic Times (New Delhi ...
EDITORIAL: The coming credit boom. Publication: The Economic Times
(New Delhi, India) (via Knight Ridder/Tribune Business News).
Publication Date: 17-AUG-05 ...
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EDITORIAL: The coming credit boom. | Article from Economic Times ...
EDITORIAL: The coming credit boom. ...find Economic Times (New Delhi,
India) articles. Aug. 17--CONDITIONS IDEAL TO RAMP UP DEBT: Belying
the consensus that ...
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The money market is a mechanism that deals with the lending and
borrowing of short term funds.
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[PDF]
Indian Money Market: Market Structure, Covered Parity and Term ...
File Format: PDF/Adobe Acrobat - View as HTML
in the Indian money market despite a plethora of interest rates of ...
A well defined yield curve does not exist in the Indian money market
because domestic ...
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by JR Varma - Cited by 2 - Related articles - All 2 versions
Indian Money Market : Structure, Operation and Developments/M.S. ...
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4. ...
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Emerging Money Market in India/edited by Alak Ghosh
Emerging money market in India/M.G. Bhide. 2. Functioning of money
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Sify Market slips after firm start, Ranbaxy tumbles - 9 hours ago

India’s largest private sector firm in terms of market capitalization
and oil ... to almost 47 against the dollar — and supply cash in the
money market. ...

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Money & The Money Market In India, 1100-1700 (themes In Indian ...
Money & The Money Market In India, 1100-1700 (themes In Indian
History) : Subrahmanyam, Sanjay (Ed.), Price US$ 5.63.
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The Hindu Business Line : Templeton India Money Market Account: Invest
T EMPLETON India Money Market Account (TIMMA) is a short-term fund
that invests in money market instruments. Those looking to increase
their returns on the ...
www.thehindubusinessline.com/iw/2003/08/03/stories/2003080300621000.htm
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The Hindu Business Line : Templeton India Money Market Account: Invest
TEMPLETON India Money Market Account offers good returns for those
with short-term investment horizon. As of November 30, the fund had 91
per cent of its ...
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[PDF]
GLOBAL INTEGRATION OF INDIA’S MONEY MARKET: INTEREST RATE PARITY ...
File Format: PDF/Adobe Acrobat - View as HTML
the World, by focussing on the degree of integration of the Indian
money market with. global markets. Frenkel (1992) in his review of
Capital Mobility ...
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by V Bhatt - Related articles
Money Control
Provides news, views, and analysis of stock market.
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Statebank Of India
While there is no minimum deposit required for opening Money Market
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