The War of Czars-II: When the Czars fight July 19, 2008
Posted by Soham Das in Uncategorized.Tags: ADAG, Airtel, Ambani, Anil, Bharti+Mittal, Infocomm, Mittal, MTN, Mukesh, RCOM, RIL
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Continued from The War of Czars-I
This entire situation may look a tight rope walk, but has its own story to tell.
Ambani brothers and Mittal go a long way together in the past. Though not often in happy memories.
Reliance Group, in fact had Mittal strung by its nose, back in 2004-2005, with the swift,clinical and almost cold blooded execution of the INFOCOMM rollout.
Trust me, Bharti didn’t see it coming and on the back of INFOCOMM’s’cheaper-than-postcard’ rates and almost flawless distribution model, BattlesShip Bharti was almost preparing its elegy. In a short time, INFOCOMM lodged Mittal from the top position. The war had begun.
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The War of Czars: What does Mittal has to gain from Ambani feud? July 19, 2008
Posted by Soham Das in Business.Tags: Airtel, Ambani, Anil, Bharti, India, Infocomm, Mittal, MTN, Mukesh, RCOM, RIL, Sunil
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In May, I wrote a post about Mittals interest in acquiring the African telecom behemoth, MTN. [see: Season of Mergers] Discussing the financial and strategic nitty gritties of this deal had never been easy. In the past, MTN has proved to be quite a charming temptress, luring many a suitor to its den only to send them back home, with a hangover and throbbing head. Vodafone was one of them, FYI.
US on a Credit Death Row -II July 15, 2008
Posted by Soham Das in Economy.Tags: US, RELIANCE, debt, Gold, Oil, Soham+Das, 'AAA', Fennie+Mae, Freddie+Mac, red, credit+rating, downgrade
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God, how I love sequels. I think this is going to go down in the history of Jump Up!, for starting the trend of Part Twos and Part Threes.
Okay first of all, the last post seems to be inching closer and closer to reality. Oh that shucks!
Almost like a thrilling end. But its sort of a beginning of the end![Almost!]
WSJ on Saturday reported, that Government of USA has decided to pocket the debts of Freddie Mac and Fennie Mae….
Wow! That literally put the DOW on scorched rally isn’t it? Well, it was nothing more than a deadcat bounce.
You know what is that?
A short term, whiplash or shortlived rally which “flatters to deceive”! That is, leading to a huger crash.
Okay quoting a particular disturbing paragraph,
Treasury Secretary Hank Paulson swatted back reports of government nationalization of Fannie and Freddie, which would mean making explicit what, has long been an implicit taxpayer guarantee of their liabilities. This would instantly add $5 trillion in liabilities to the federal balance sheet, doubling the U.S. public debt burden and putting America’s AAA credit rating at risk. This is a nightmare scenario for taxpayers.
You know what does that mean, US Government has just decided it has fallen in love with the very colour of Marxism. Literally and Figuratively. The color red, on their ledgerbooks!
Although, this gracious pocketing of red ink, has lead the market to some positive upside, but this is just the beginning of the end. As told earlier in the post, US government has outstanding writeoffs of the order of some $400 billion. Yeah ‘b’ as in billion. And on that, it has decided to actually clean the mess, Freddie Mac and Fannie Mae-d.
Come on, accept it, they were no poster boys of corporate ethical practices. They were crooked to their bones in their practices and ethics. But when US government decides to save them, certain things are worth looking:
- Fed is not playing by the books. Where is its advocacy of free market and sworn allegiance to Adam Smith’s invisble hand?
- This writeoff has just deepened the wound. This means a weak dollar
- A weak dollar means strong oil [bad], strong gold [neutral], weak bourses[bad],rising commodity[bad], strong yen[not so good] and instability overall.
- A strong rupee and a stronger short term euro. “RBI let the rupee loose!”
- And it strongly means US is becoming an increasingly risky investment preposition. Possibly a loss of AAA???
A lot remains to be seen. A lot of them above is a specultation. Many of them would lead to an apocalypse sort of situation. And as for oil, it seems only Murphy’s law is holding. First the highly mismatched supply demand situation, now a weak dollar.
But, in the midst of this, there is yet another silver lining.
Gold!
Gold has not shown that “jalwa” when we look in the same lens as that of oil. Hope the situation changes now.
My bet would be to invest in companies which has anything (even remotely) to do with oil infrastructure [Reliance] or anything to do with gold, like futures, or etfs.
With valuable insights from Chris Ciovacco from his article GSEs: Raw Deal for Tax Payers & Investors
‘AAA’ != ‘S.A.F.E’ Is US on the credit death row July 13, 2008
Posted by Soham Das in Economy.Tags: US, Soham+Das, Credit+Ratings, 'AAA', Mediclaim, Enron
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After the disastrous news of Freddie Mac and Fannie Mae’s fall from grace and a very weak rumor of a USD 15billion bailout, perhaps every investor somewhere in the back of his mind is asking one question: Is US going to lose its AAA credit ratings?
Fat Chance, you might say. Possible, as Hollywood movies like to quote, “the last bastion of the free world” cannot fall. But, if a certain perspective is added to the entire situation, life might become a lot easier to decipher.
Salvo 1: An estimate of around 400billion USD has been given in this housing collapse bailout. Thats a huge amount.
Salvo 2: If you consider the national debt, including the Mediclaim, then the total US debt raises to around, USD 53 trillion [you know how much is that? Go figure the zeros in that]
Salvo 3: Remember, Remember, the Fifth of November? Okay not quite the fifth but the thirtieth of November. The day, when Enron shares plummeted from $99 to under $1. Four days later it filed for the largest bankruptcy in US history. You know what the icing on the cake is: Enron was considered the boat which can never sink [a la Titanic], “World’s Most Innovative Company” [in what? swindling people?] and hold on [drums please!!!] AAA rating.
So? does ‘AAA’ rating also mean ‘SAFE’. I bet my $2 on it, but ‘AAA’ ratings not necessarily mean a safe haven for you to invest your money.
Robin Hood Tax July 11, 2008
Posted by Soham Das in Economy.Tags: Barack+Obama, Common+Man, EU, Left, Oil, Robin+Hood+Tax, Soham+Das, SP, Subsidy, Tax
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There is a general consensus among politicos when it comes to populist action steps. Sometimes to appear heroic and sympathetic to national concerns, sometimes to act as a saviour, to highlight the action of previous authority. Manifestos, Promises, Development blah blah blah. All are cronies or sonnies of dear ol’ grandpa, populist measures.
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