Taming of the BULL-Crash of 21 Jan 2008

[pkjha30]

Pahchan to meri B koi nahi .....
Pata nahi Q log mujhe pahchante hai
pyar to mujhe bhi unse bahot hai
pata nahi q unke alawa sab jante hai...........

Thanks sudoku1 for this snippet, however I would advise to put it in appropriate thread such as 'chit chat' or 'inspiration and fun' , not here. Hope you understand the logic.

pk

 

[sudoku1]

Thanks sudoku1 for this snippet, however I would advise to put it in appropriate thread such as 'chit chat' or 'inspiration and fun' , not here. Hope you understand the logic.

pk

sorry friend.........had no intention of posting it.....but u see...sometimes it is forced 2 do so when environment becomes much serious ......as garbage recycling is the need of the hour to generate renewed energy resources

 

[praveen taneja]

sorry friend.........had no intention of posting it.....but u see...sometimes it is forced 2 do so when environment becomes much serious ......as garbage recycling is the need of the hour to generate renewed energy resources

sudoku sir u are really.............

 

[pkjha30]

sorry friend.........had no intention of posting it.....but u see...sometimes it is forced 2 do so when environment becomes much serious ......as garbage recycling is the need of the hour to generate renewed energy resources

Exactly, that is the reason I advised you to recycle in those threads.We do visit and get some energy from renewed energy of garbage that you recycle so often.


pk

 

[pkjha30]

Again digressing from the diversion

Oil prices slumped below $34 per barrel in four and half years, down 77& from peak of $147.

The price of New York oil sank under 34 dollars per barrel on Friday for the first time for more than four and a half years, as weak global demand overshadowed a record OPEC output cut, traders said.

"Prices are likely to stabilise between the 35 and 40 dollar levels."

The Organisation of the Petroleum Exporting Countries (OPEC), which produces about 40 percent of the world's crude, agreed on Wednesday to cut output by 2.2 million barrels a day.

But the move failed to prevent oil diving to multi-year low points as traders also questioned whether all members of the 13-nation OPEC cartel would fully enforce the reduction.

Russia would come under crippling financial pressure and may need to raise money externally if oil languishes at an average of $30 a barrel over the next two years, the World Bank predicted Friday.

The bleak scenario would mark a rapid unraveling of Russia's oil-fueled economic gains over the past eight years, during which time the government has paid down most of its foreign debt and built up a vast stockpile of international reserves.

"If oil prices in 2009 and 2010 average $30 a barrel, that would be a nightmare scenario for a global economy," Zeljko Bogetic, the World Bank's chief economist in Russia told investors on Friday. "The pressures on the current account and public finances in Russia would quickly rise to a point where the financing constraint would become so sharp that it's possible even to envisage Russia's return from a creditor to international organisations to (that of) a borrower."

From global slowdown China would also have to suffer as recession in USA would hit chainese exports, which is the main driving force.

Time and again it is pointed out that Indian share in global exim trade is much less ( less than 1%) and contribution of export in total industrial growth as well as GDP is also very less. In fact Indian exim trade is mostly driven by imports. In imports OIL constitute very high percentage,

This weak pricing scenario with continued high prices in domestic market is likely to take much of the forex burden off India's shoulder. Surely among emerging economy, India would be in a better position to jump start economy when this phase ends.

Indian Govt is likely to be less burdened with huge import bill while oil companies would thrive.Prices have to come down sooner or later and that would tell on lot of sector.


pk

 

[kkseal]

Again digressing from the diversion

Oil prices slumped below $34 per barrel in four and half years, down 77& from peak of $147.

From global slowdown China would also have to suffer as recession in USA would hit chainese exports, which is the main driving force.

Time and again it is pointed out that Indian share in global exim trade is much less ( less than 1%) and contribution of export in total industrial growth as well as GDP is also very less. In fact Indian exim trade is mostly driven by imports. In imports OIL constitute very high percentage,

This weak pricing scenario with continued high prices in domestic market is likely to take much of the forex burden off India's shoulder. Surely among emerging economy, India would be in a better position to jump start economy when this phase ends.

Indian Govt is likely to be less burdened with huge import bill while oil companies would thrive.Prices have to come down sooner or later and that would tell on lot of sector.


pk

Righto.

To me the only explanation would lie in a greater-than-expected slowdown in China. Exports slowdown is a given. I'm sure the extent of the hit due to this has already been estimated & factored in. What's not so obvious though is the huge overcapacities (expected after 2 decades of mind boggling growth & multiple capex cycles) that Chinese industry would be saddled with due to a slowdown in domestic consumption (not just exports).
What's more, the edge for Chinese manufacturing lies in it's economies of scale So the more they scale down the blunter this edge is going to get.
China's strength on the other hand lies in the stupendous amount of reserves & surplus in the balance sheets of its companies as well as govt.

Then there's Europe. This is the US with a 6mth lag. So a lot of trouble still lies ahead there. And the policy response has been poor The creation of the EU behemoth while having it's benefits also robs the region of policy nimbleness & flexibility. So while the US is firing all its guns to combat the current crisis the EU is still engaged over academic debate over the right course of action. Europe though is not all consumption driven they do have a better manufacturing base but manufacturing also has a higher cyclical component & take longer to 'turn-up' (same applies to China) And there bnks are no less leveraged than their US counterparts. Till Oct oil consumption had been growing in Europe @ 2.5% Nov might have seen a reversal If not it is highly likely to happen in the nxt 6mths.

Regards

 

[kkseal]

For the mth of Oct Chinese imports (bulk of which is commodities) are down 18% from +15% during the same period last yr - that's a 33% swing for just 1 mth!

 

[pkjha30]

And who would have imagined that Satyam Comp was such a fraud.

Nice way to start the first week of the new year.It is hard to believe that others didn't knew of this.Finally we have bridged the proverbial gap between developed and still developing countries. We have our very Own enron and worldcom.We beat USA hands down. FIIs also couldn't get hint of this.At least Ramalinga Raju had guts to confess, I just shudder to think how many are still out there courtesy PWC and Arther Andersons of CA world.

Corporate ethics and role of self regulating mechanism leaves much to be desired.

Here is the Confession of India's Biggest Natwarlal Mr Ramalinga Raju.
Its shame on you.

To the Board of Directors

Satyam Computer Services Ltd.

From B. Ramalinga Raju

Chairman, Satyam Computer Services Ltd. January 7, 2009

Dear Board Members,

It is with deep regret, and tremendous burden that I am carrying on my conscience, that I would like to bring the following facts to your notice:

1. The Balance Sheet carries as of September 30, 2008

a. Inflated (non-existent) cash and bank balances of 50.40 billion rupees ($1.04 billion) (as against 53.61 billion reflected in the books).

b. An accrued interest of 3.76 billion rupees which is non-existent.

c. An understated liability of 12.30 billion rupees on account of funds arranged by me.

d. An overstated debtors position of 4.90 billion rupees (as against 26.51 billion reflected in the books)

2. For the September quarter (Q2) we reported a revenue of 27.00 billion rupees and an operating margin of 6.49 billion rupees (24 pct of revenues) as against the actual revenues of 21.12 billion rupees and an actual operating margin of 610 million rupees (3 percent of revenues). This has resulted in artificial cash and bank balances going up by 5.88 billion rupees in Q2 alone.

The gap in the Balance Sheet has arisen purely on account of inflated profits over a period of last several years (limited only to Satyam standalone, books of subsidiaries reflecting true performance). What started as a marginal gap between actual operating profit and the one reflected in the books of accounts continued to grow over the years. It has attained unmanageable proportions as the size of company operations grew significantly (annualized revenue run rate of 112.76 billion rupees in the September quarter, 2008, and official reserves of 83.92 billion rupees). The differential in the real profits and the one reflected in the books was further accentuated by the fact that the company had to carry additional resources and assets to justify higher level of operations -- thereby significantly increasing the costs.

Every attempt made to eliminate the gap failed. As the promoters held a small percentage of equity, the concern was that poor performance would result in a take-over, thereby exposing the gap. It was like riding a tiger, not knowing how to get off without being eaten.

The aborted Maytas acquisition deal was the last attempt to fill the fictitious assets with real ones. Maytas' investors were convinced that this is a good divestment opportunity and a strategic fit. Once Satyam's problem was solved, it was hoped that Maytas' payments can be delayed. But that was not to be. What followed in the last several days is common knowledge. I would like the Board to know:

1. That neither myself, nor the Managing Director (including our spouses) sold any shares in the last eight years -- excepting for a small proportion declared and sold for philanthropic purposes.

2. That in the last two years a net amount of 12.30 billion rupees was arranged to Satyam (not reflected in the books of Satyam) to keep the operations going by resorting to pledging all the promoter shares and raising funds from known sources by giving all kinds of assurances (Statement enclosed, only to the members of the board). Significant dividend payments, acquisitions, capital expenditure to provide for growth did not help matters. Every attempt was made to keep the wheel moving and to ensure prompt payment of salaries to the associates. The last straw was the selling of most of the pledged share by the lenders on account of margin triggers.

3. That neither me, nor the Managing Director took even one rupee/dollar from the company and have not benefitted in financial terms on account of the inflated results.

4. None of the board members, past or present, had any knowledge of the situation in which the company is placed. Even business leaders and senior executives in the company, such as, Ram Mynampati, Subu D, T.R. Anand, Keshab Panda, Virender Agarwal, A.S. Murthy, Hari T, S.V. Krishnan, Vijay Prasad, Manish Mehta, Murali V, Sriram Papani, Kiran Kavale, Joe Lagiola, Ravindra Penumetsa; Jayaraman and Prabhakar Gupta are unaware of the real situation as against the books of accounts. None of my or Managing Director's immediate or extended family members has any idea about these issues.

Having put these facts before you, I leave it to the wisdom of the board to take the matters forward. However, I am also taking the liberty to recommend the following steps:

1. A Task Force has been formed in the last few days to address the situation arising out of the failed Maytas acquisition attempt. This consists of some of the most accomplished leaders of Satyam:, Subu D, T.R. Anand, Keshab Panda and Virender Agarwal, representing business functions, and A.S. Murthy, Hari T and Murali V representing support functions. I suggest that Ram Mynampati be made the Chairman of this Task Force to immediately address some of the operational matters on hand. Ram can also act as an interim CEO reporting to the board.

2. Merrill Lynch can be entrusted with the task of quickly exploring some Merger opportunities.

3. You may have a restatement of accounts' prepared by the auditors in light of the facts that I have placed before you.

I have promoted and have been associated with Satyam for well over twenty years now. I have seen it grow from few people to 53,000 people, with 185 Fortune 500 companies as customers and operations in 66 countries. Satyam has established an excellent leadership and competency base at all levels. I sincerely apologize to all Satyamites and stakeholders, who have made Satyam a special organization, for the current situation. I am confident they will stand by the company in this hour of crisis.

In light of the above, I fervently appeal to the board to hold together to take some important steps. Mr. T.R. Prasad is well placed to mobilize support from the government at this crucial time. With the hope that members of the Task Force and the financial advisor, Merrill Lynch (now Bank of America) will stand by the company at this crucial hour, I am marking copies of this statement to them as well.

Under the circumstances, I am tendering my resignation as the chairman of Satyam and shall continue in this position only till such time the current board is expanded. My continuance is just to ensure enhancement of the board over the next several days or as early as possible.

l am now prepared to subject myself to the laws of the land and face consequences thereof.

(B. Ramalinga Raju)

Copies marked to:

1. Chairman SEBI

2. Stock Exchanges

See how he is trying to absolve top management of wrong doings and invokes connections of former Cabinet secretary's links to Govt to save their ass. What a bunch of jokers and criminals they are.Worst than Kasab.Bureaucratic nexus at its ugliest best,we know it all though. At least kasab was our professed enemy. This fellow and his followers are pretending to be friend while sabotaging from within knowingly that it would cause immense harm to rest of corporate world and India.


What analysis would predict this..... Luckily I had no exposure else it was gone with the wind.


whooooof

pk