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Click here for more pics of Bush with US Olympic teams form NBC News.

Our President is good at impersonating a duck face. Or, is he a duck face? :-)


]]> http://mohanblog.teluguoneradio.com/index.php?entry=entry080805-222216 Willie Horton Ad by Bush 41 against his opponent Dukakis. This ad changed the dynamics of entire presidential race. Before the ad, Dukakis was leading in the polls. In the end, Bush won with big majority. The ad itself has no factual basis. Nobody cared to verify the facts. It sent chills among the voters in America. Why? The GOP's message was that if elected, Dukakis will let go all the violent (subliminally black) prisoners free from jails and the safety of the public will be in danger.

There are more such examples of attack ads produced by other GOP candidates against their opponents.

In order to counter the popularity enjoyed by Barak Obama, John McCain cameup with this ad in which McCain tried to trivialize Obama's charisma by comparing him to two infamous 'less than intellectual' celebrities. When asked about the ad, John McCain said that he is proud of that ad. This ad seems to have worked for a week or so. McCain started gaining in the polls.


In the last two days Obama has been giving strong rebuttals to McCain. And then, another ad came from an unexpected source. Paris Hilton herself produced this counter ad against McCain. Did I mention it is damn funny?

I seriously wonder if, by now, McCain doesn't regret running the ad in the first place. ]]> http://mohanblog.teluguoneradio.com/index.php?entry=entry080731-095207 I consider Knoxville, TN as my hometown in USA. Knoxville is where I first landed in US and lived there nearly 5 years before moving to MA. That's why I am so moved by the most recent shooting incident at the Unitarian Church in Knoxville.

The killer is a right-wing nut who is full of intolerance and hate for things he doesn't like. His hatred was nurtured by the writings of TV/Radio right wing nut-jobs like Michael Savage, Sean Hannity and Bill O'Rielly. From Knoxville News Sentinel:

Inside the house, officers found "Liberalism is a Mental Health Disorder" by radio talk show host Michael Savage, "Let Freedom Ring" by talk show host Sean Hannity, and "The O'Reilly Factor," by television talk show host Bill O'Reilly.

Click here for more and a video from Knoxville News Sentinel.]]> http://mohanblog.teluguoneradio.com/index.php?entry=entry080730-213333
]]> http://mohanblog.teluguoneradio.com/index.php?entry=entry080730-183544

Today the President signed into law the Housing Bill which gves unlimited authority to the Department of Treasury to 'help' home owners who are at the risk of losing their homes to foreclosures. The bill also gives a blank check to the Treasury Dept which is intended to shore-up the balance sheets of mortgage giants, Freddie Mac and Fannie Mae.

This reminds me of a saying on the Main Street. Wall Street wants their profits to be privatized and their losses to be socialized. That is what we are witnessing with this Housing Bill. Neither the regulators nor the Congress did anything when unscrupulous lenders were prying on non-credit worthy borrowers. In fact, the powers that be protected these lenders while they were peddling exotic not easy to understand loans to the borrowers.

If I am losing you with all this jargon, watch this easy to understand video: BILL MOYERS JOURNAL | Mortgage Mess | PBS

In my March 25, 2008 Entry [$1.2 Trillion Screw-up] I mentioned the following:

2004-2007: In the wake of booming real estate market, investment bankers found a new cash-cow in writing insurance on mortgages and mortgage backed securities. that too on very liberal terms with very little risk premiums. Many credit analysts made one simple and stupid assumption. Real estate prices will continue to go up. The prices didn't go up. They didn't stay flat. They went down, and down and more down. Every banker and his naive grandson who wrote these credit risk policies caught with their pants down. Big investment banks like Bear Sterns have extensive exposure to such credit swaps. Problems at CitiGroup are similar.

2008: Credit woes at many investment bankers was getting worse with no turn around in RE market in sight. No wonder Bear Sterns went under. Thanks to the overly simplified assumption: "real estate prices don't go down."

Four months later, the credit problems at major investment banks are still unraveling. The problems with CDOs [collateralized debt obligations] are so severe that major wall street firms have written off more than $400 bil of assets. Several reports are suggesting that the write-offs can exceed $1 trillion. Even scarier reports suggest that if the problem spreads to CDS (credit default swaps] market and the levered instruments associated with CDS, there is no telling how much severe the damage can be.

On Friday of last week, National Australia Bank (NAB) threw a bombshell across the Pacific [See NAB will shock Wall Street by Business Spectator]. They wrote down their CDO investments as 10 cents on the dollar. That is like giving somebody $100 loan and expecting only $10 from them. The write off was to the tune of $1 billion. Even though you might not have heard this news on US news outlets, this NAB news sent shock-waves around the world.

On Monday evening, after the market closed, Merrill Lynch announced a major 'sale' of their CDOs [bond assets] to Lone Star fund in Texas: 22 cents on the dollar. The face value of these CDOs was about $31 bil. Markets rallied on Tuesday seemingly dire news. The thinking was "now we know the extend of the losses at major houses."

This means that value of the paper assets sold by Freddie and Fannie, to the tune of 100s of billions of dollars to such foreign investors as the Japanese and the Chinese could be worth much less than what they paid for. How can this not be bad for US economy and US dollar? One might argue, if the housing prices recover, things can change quickly. When is the last time housing price turn on a dime? Besides, no matter what the Govt is trying to do with the new housing bill, the environment is creating more credit crunch, which mean that fewer qualified buyers which means that housing prices will further drop.

I think that the pain is not yet over. Keep your eyes and ears open. Protect your capital. These are tough economic times.

Caveat Emptor. I am not an investment pro. I just happen to read a lot. With sheer luck, in the past I have had some decent success with investing. However, I too, like many, got burned badly by the recent turn of events in the market. For the time being I am swimming with the sharks on Wall Streets. As of this writing, I am long financials. That can change on a dime. ]]> http://mohanblog.teluguoneradio.com/index.php?entry=entry080727-215409
Back in 2002, when Wall Street Journal was still a reputable new paper WSJ editorial page wrote a critical piece on Freedi Mac and Fannie Mae and the systemic risk they pose to the US and World economy. Remember Enron? The energy trading firm which not only illegally cooked book but manipulated energy futures market to cause brownouts and blackouts in California back in the late 90s? Well, WSJ piece compared Freddie and Fannie to Enron. The CEO of Fannie went ballistic on WSJ. He retorted with the following piece:

Don't Tar Us With an Enron Brush
February 25, 2002

Shame on you. The Wall Street Journal, of all publications, has the opportunity and responsibility to provide leadership and shed light on the Enron debacle. At the very least, markets jittery about Enron need calm, trustworthy, responsible voices to clarify complex issues, get the facts, get them right, and put them in the proper context.

Unfortunately, in your Feb. 20 editorial about Fannie Mae, you only fan fears with your glib, disingenuous, contorted, even irresponsible attempt to tar our company with the Enron brush. At best, the editorial betrays a complete lack of knowledge or understanding about our business. At worst, you chose the thrill of a good smear job over the hard work of reporting or writing opinion pieces grounded in facts.

After asking whether readers are "shaking in your boots yet," the editorial claims "we don't want to scare readers here." The editorial page is trying to have it both ways. The innocent victims are the capital markets, the holders of our stock and bonds, and homebuyers. For two years they have suffered the financial consequences of "headline" risk created by the Journal.

Leverage and capital. Your editorial suggests that leverage is inherently dangerous when in fact most mortgages are held by leveraged investors. The real issue is whether the institution holds capital appropriate to the risk of the assets it holds. You fail to mention that Fannie Mae and Freddie Mac are the only large financial institutions in America that operate under a risk-based capital rule with a stress test, meaning we always have to hold enough capital to survive an economic "nuclear winter." Indeed, our capital standard is regarded by some as downright draconian. Former FDIC Chairman William Seidman said it "could be devastatingly stringent if applied to most other financial institutions." The editorial also fails to note that -- in sharp contrast with Enron -- Fannie Mae manages only one asset, in one country -- U.S. residential mortgages -- and it is among the safest, best collateralized assets in the world. [My comment insert:

Debt. Debt is crucial to free market and private enterprise. Consumers use debt to finance cars. Private companies issue corporate paper to finance their operations. Americans take out mortgages to become homeowners. The nation's largest banks have billions, even trillions of dollars in debt, much of it government guaranteed deposits. Beyond overstating Fannie Mae and Freddie Mac's debt by more than $1 trillion and misstating that our debt is government-backed (it explicitly is not), your editorial somehow suggests that companies that issue debt are a problem. Fannie Mae's debt finances homes for millions of families. That makes it some of the most secure private debt in the world.

Auditors. In your editorial, you quip, "Their financial statements are audited, for whatever that's worth." What is that supposed to mean? That all auditing is a sham? (The editorial also misstates that we paid $6.6 million in consulting fees to our auditor; in fact, 85% of that was for tax services, and validation fees related to issuing REMIC and other securities.)

Transparency. Good information is the lifeblood of efficient markets; bad information disrupts markets. Moody's calls the financial disclosures Fannie Mae adopted in October 2000 "a new standard . . . for the global financial marketplace could usher in a wave of enhanced financial risk disclosure." You call our financial disclosures "terrible." Who to believe? Consider that your editorial, in addition to overstating the amount of our debt, also grossly overstated our leverage; stated that we cut back on our credit insurance (wrong); grossly mischaracterized the effect of the new Federal Accounting Standard 133 on our shareholder equity when our regulatory capital rose by $4.3 billion; and suggested that congressional hearings were overdue when we had 11 in the past two years. All of the information was available in our monthly, quarterly and annual financial disclosures, on our Web site.

Derivatives. Your editorial mentions in ominous tones Fannie Mae's use of financial tools known popularly as derivatives. But for our business, derivatives reduce risk. Fannie Mae uses the most straightforward types of options, swaptions, caps and floors. We do not speculate in derivatives or engage in derivative trading. We use derivatives to hedge and reduce interest rate risk. We go to great lengths to ensure our derivative counterparties are highly rated, and our derivative contracts are well collateralized. Your focus on the notional amount of derivative contracts was sensational at best. If all our derivative counterparties failed to perform, it would cost Fannie Mae about two weeks of earnings. [My comment insert: It will cost them two weeks' of earning only? These idiots at FRE, FNM and the WS Bankers brought the whole world financial system to its knees with their uncontrolled greed and recklessness.]

Risk. Your editorial rings alarm bells about risk. Risk is a necessary part of daily life and central to the creation of wealth and prosperity. Instead of helping to understand the risk question you chose to be "shocked" that Fannie Mae's business involves the management of credit and interest rate risk. Meanwhile you failed to explain our successes in doing so over many years or that we have posted double-digit operating earnings growth 15 years in a row through all interest rate and economic scenarios. [My comment insert: Way to brag about the risk management when no real risk knocked at the door. What happened now?]

There are many lessons to be learned from the Enron debacle. One is the importance of careful fundamental analysis of major companies. Fannie Mae welcomes and, indeed, we seek out, that type of analysis.

Another lesson from Enron is that corporate behavior is fundamentally a product of the culture of the company. At Fannie Mae we take pride in the tone we set at the top, in our risk management focus, in our commitment to integrity and intellectual honesty and in the values of our people.

We are well aware that you disapprove of our public mission to direct additional capital to the housing market. Rather than hide behind a fog of accusations about riskiness, why not come right out and debate whether we have too much invested in housing and homeownership in America?

Franklin D. Raines
Chairman and CEO
Fannie Mae
Washington
]]> http://mohanblog.teluguoneradio.com/index.php?entry=entry080724-051215 The US House of Representatives passed a housing bill just yesterday which was primarily aimed at bailing out two troubled mortgage giants, Freddie Mac and Fannie Mae. What it essentially does is to give a blank check or unlimited authority to the US Treasury Department to monitize the debt issues by these two government sponsored entities (GSEs). Of course, they also would have you believe that there is something for the little guy in this bill. And they would be right. From now on, all your credit card transactions should be reported by your credit card company to the IRS. Sounds outrageous and almost made-up, correct? Watch this video by Representative Ron Paul (one of my favorite congressmen, who was my primary choice for the President.)]]> http://mohanblog.teluguoneradio.com/index.php?entry=entry080723-200047 fascinating article which summarizes the panic that engulfed US/world financial markets in the recent months. It is a summary of events that happened, especially in the last two weeks.

25 Ways to Tell a Banking System Is Unsound
by Michael Shedlock

1. Paulson appears on Face The Nation and says "Our banking system is a safe and a sound one." If the banking system was safe and sound, everyone would know it (or at least think it). There would be no need to say it.

2. Paulson says the list of troubled banks "is a very manageable situation". The reality is there are 90 banks on the list of problem banks. Indymac was not one of them until a month before it collapsed. How many other banks will magically appear on the list a month before they collapse?

3. In a Northern Rock moment, depositors at Indymac pull out their cash. Police had to be called in to ensure order.

4. Washington Mutual (WM), another troubled bank, refused to honor Indymac cashier's checks. The irony is it makes no sense for customers to pull insured deposits out of Indymac after it went into receivership. The second irony is the last place one would want to put those funds would be Washington Mutual. Eventually Washington Mutual decided it would take those checks, but with an 8- week hold. Will Washington Mutual even be around 8 weeks from now?

5. Paulson asked for "Congressional authority to buy unlimited stakes in and lend to Fannie Mae (FNM) and Freddie Mac (FRE)" just days after he said "Financial Institutions Must Be Allowed To Fail". Obviously Paulson is reporting from the 5th dimension. In some alternate universe, his statements just might make sense.

6. Former Fed Governor William Poole says "Fannie Mae, Freddie Losses Makes Them Insolvent".

7. Paulson says Fannie Mae and Freddie Mac are "essential" because they represent the only "functioning" part of the home loan market. The firms own or guarantee about half of the $12 trillion in U.S. mortgages. Is it possible to have a sound banking system when the only "functioning" part of the mortgage market is insolvent?

8. Bernanke testified before Congress on monetary policy but did not comment on either money supply or interest rates. The word "money" did not appear at all in his testimony. The only time "interest rate" appeared in his testimony was in relation to consumer credit card rates. How can you have any reasonable economic policy when the Fed chairman is scared half to death to discuss interest rates and money supply?

9. The SEC issued a protective order to protect those most responsible for naked short selling. As long as the investment banks and brokers were making money engaging in naked shorting of stocks, there was no problem. However, when the bears began using the tactic against the big financials, it became time to selectively enforce the existing regulation.

10. The Fed takes emergency actions twice during options expirations week in regards to the discount window and rate cuts.

11. The SEC takes emergency action during options expirations week regarding short sales.

12. The Fed has implemented an alphabet soup of pawn shop lending facilities whereby the Fed accepts garbage as collateral in exchange for treasuries. Those new Fed lending facilities are called the Term Auction Facility [TAF], the Term Security Lending Facility [TSLF], and the Primary Dealer Credit Facility [PDCF].

13. Citigroup (C), Lehman (LEH), Morgan Stanley (MS), Goldman Sachs (GS) and Merrill Lynch (MER) all have a huge percentage of level 3 assets. Level 3 assets are commonly known as "marked to fantasy" assets. In other words, the value of those assets is significantly if not ridiculously overvalued in comparison to what those assets would fetch on the open market. It is debatable if any of the above firms survive in their present firm. Some may not survive in any form.

14. Bernanke openly solicits private equity firms to invest in banks. Is this even close to a remotely normal action for Fed chairman to take?

15. Bear Stearns was taken over by JPMorgan (JPM) days after insuring investors it had plenty of capital. Fears are high that Lehman will suffer the same fate. Worse yet, the Fed had to guarantee the shotgun marriage between Bear Stearns and JP Morgan by providing as much as $30 billion in capital. JPMorgan is responsible for only the first 1/2 billion. Taxpayers are on the hook for all the rest. Was this a legal action for the Fed to take? Does the Fed care?

16. Citigroup needed a cash injection from Abu Dhabi and a second one elsewhere. Then after announcing it would not need more capital, it is raising still more. The latest news is Citigroup will sell $500 billion in assets. To who? At what price?

17. Merrill Lynch raised $6.6 billion in capital from Kuwait Mizuho, announced it did not need to raise more capital, then raised more capital a few week later.

18. Morgan Stanley sold a 9.9% equity stake to China International Corp. CEO John Mack compensated by not taking his bonus. How generous. Morgan Stanley fell from $72 to $37. Did CEO John Mack deserve a paycheck at all?

19. Bank of America (BAC) agreed to take over Countywide Financial (CFC) and twice announced Countrywide will add profits to B of A. Inquiring minds were asking "How the hell can Countrywide add to Bank of America earnings?" Here's how. Bank of America just announced it will not guarantee $38.1 billion in Countrywide debt. Questions over "Fraudulent Conveyance" are now surfacing.

20. Washington Mutual (WM) agreed to a death spiral cash infusion of $7 billion accepting an offer at $7.85 when the stock was over $13 at the time. Washington Mutual has since fallen in waterfall fashion from $40 and is now trading near $5.00 after a huge rally.

21. Shares of Ambac (ABK) fell from $90 to $2.50. Shared of MBIA (MBI) fell from $70 to $5. Sadly, the top three rating agencies kept their rating on the pair at AAA nearly all the way down. No one can believe anything the government sponsored rating agencies say.

22. In a panic set of moves, the Fed slashed interest rates from 5.25% to 2%. This was the fastest, steepest drop on record. Ironically, the Fed chairman spoke of inflation concerns the entire drop down. Bernanke clearly cannot tell the truth. He does not have to. Actions speak louder than words.

23. FDIC Chairman Sheila Bair said the FDIC is looking for ways to shore up its depleted deposit fund, including charging higher premiums on riskier brokered deposits.

24. There is roughly $6.84 Trillion in bank deposits. $2.60 Trillion of that is uninsured. There is only $53 billion in FDIC insurance to cover $6.84 Trillion in bank deposits. Indymac will eat up roughly $8 billion of that.

25. Of the $6.84 Trillion in bank deposits, the total cash on hand at banks is a mere $273.7 Billion. Where is the rest of the loot? The answer is in off balance sheet SIVs, imploding commercial real estate deals, Alt-A liar loans, Fannie Mae and Freddie Mac bonds, toggle bonds where debt is amazingly paid back with more debt, and all sorts of other silly (and arguably fraudulent) financial wizardry schemes that have bank and brokerage firms leveraged at 30-1 or more. Those loans cannot be paid back.

What cannot be paid back will be defaulted on. If you did not know it before, you do now. The entire US banking system is insolvent. In my opinion.
]]> http://mohanblog.teluguoneradio.com/index.php?entry=entry080720-113214 this Yahoo piece and watch this Yahoo video before reading my entry.

In my August 07 piece I tried to outline ensuing credit problems in easy to understand terms. Now it is a full-blown credit crisis. I said in that “I will be darned if I know” if the worst was over. In my Jan 27th piece titled, Investing and the Herd, I said, “I am willing to go out on the limb and say January 16th would be a short-term bottom (say, 12 months) in the world markets.” Obviously, I knew Jack. I didn’t know the extent of the problems, nor did I spend as much time as I used to in following financial news. Trust me, I paid a hefty price for being ignorant.

In this update I try to put things in perspective. Take it for what its worth.

The Credit Crisis – Status Quo

The root cause: High gas prices and inflation are other reasons that are affecting the real economy. Mortgage defaults and as a result drop in real estate prices is the biggest of all reasons for current stress in financial markets. Florida, Nevada are the hardest hit. In June 08, the median Southern California home price plummeted 29.3% to $355,000 from a year ago, when the median price was at a near peak of $502,000. (The SoCal record price stands at $505,000 reached in the spring of 2007.) [From LA Times]. RE prices in most reasons are still going down. It is hard for me to believe that all this continued weakness is reflected in the earnings (and thus the stock prices) of major financial companies.

Blame the shorts. Rather than understanding what is happening, the public wants to know who is doing it to them. Enter the politicians to tell the public what they want to hear and deceive them. Last week the Feds and regulators came to the rescue of Wall Street. Former Republican Congressman from Ohio, Christopher Cox, now the chairman of the Securities and Exchange Commission, attacked the short sellers for recent downturn in the financial shares. The SEC devised an emergency rule change for traders wishing to sell short the shares of 19 financial companies, including Lehman Brothers, Merrill Lynch, Fannie Mae, Bank of America and Citigroup. The rule states that if you haven’t borrowed the shares you intend to sell short, you can’t make the trade. It extends until July 29. Even though they publicly said that only naked short selling is banned, indications are that they recalled as many shorted shares as they can during the week. This blatant market manipulative attempt has worked. Shorts got crushed. My question is, what happens when things get worse and no shorts left in the likes of Citi, Freddie, Fannie etc. Unfolding of the proverbial “sell to whom” scenario?

Who deserves a bailout and who does not? Back in the go-go years of the tech book, the Press didn’t do its part in giving a reality check to the masses (For example, CNBC became a cheerleader to the stock market and unscrupulous companies and analysts used CNBC to peddle stock in worthless companies. Few financial reporters did real reporting. One among them is Gretchen Morgenson, who writes for the New York Times Business section and she rightly painted the meteoric rise in stock prices as nothing more than a bubble. In fact, I used to have an intellectual crush on her. :-)

In her July 20 piece for NY Times, Gretchen writes:

Borrowers who are in trouble on their mortgages have seen their government move slowly — or not all — to help them. But banks and the executives who ran them are quickly deemed worthy of taxpayer bailouts.

Taxpayers, meanwhile, are asked to stand by with money to inject into Fannie Mae and Freddie Mac, the government-sponsored mortgage finance giants, should they need propping up if loan losses balloon.
The message in this disconnect couldn’t be clearer. Borrowers should shoulder the consequences of signing loan documents they didn’t understand, but with punishing terms that quickly made the loans unaffordable. But for executives and directors of the big companies who financed these loans, who grew wealthy while the getting was good, the taxpayer is coming to the rescue.

There is a quote in this article, which I will never forget. “The banks are too big to fail and the man in the street is too small to bail,” said John C. Bogle.

Is the worst over? What next?

As mortgage defaults started, credit crisis started unraveling in late 2006. We are now into July 2008. Still no end in sight to write offs and losses from bad loans at investment banks. Example: CitiGroup asset write-offs in the last 3 quarters exceeded $100 billion; Citi CEO Pandit say the write offs could reach $500 billion in the next few years; Layoffs at Citi alone to exceed 20,000.

Investment banks are selling assets to raise capital. Example: Citi sold its European credit card portfolio. Merrill sold its stake in Bloomberg and hinting at possibly selling stake in Black Rock.

More troubles ahead. Treasury Secretary Paulson is preparing the public for more troubles at more Banks. Paulson said the number of troubled banks will increase as they struggle to cope with big losses on bad mortgages. The government this month took over IndyMac after a run led it to become the largest regulated thrift to fail.

Watch inflation and interest rates. Thanks to record high gas prices, inflation is a big worry. The Fed is doomed if they raise rates and doomed if they don’t. The financial companies need low rates to raise more capital. Housing could use lower rates, but stricter lending practices have actually kept the rates high even after the recent interest rate cuts. Some Fed governors are getting antsy about inflation and want to raise rates sooner than later.

Watch for those dividend cuts. Last week Wells Fargo boldly raised its dividend presumably aimed at bolstering confidence. If you know how dividends tell you the real story, read this WSJ article. It says:

Standard & Poor's recently said that 97 of about 7,000 publicly owned companies it follows cut dividends in the second quarter, the highest number in 18 years. Dividend cuts on preferred shares - hybrid securities that partly resemble both stocks and bonds - are rarer, a move that some analysts liken to defaulting on bonds. Still, at least one well-known company, recently collapsed IndyMac Bancorp Inc., took the step in May when it was struggling to stay afloat.

While some of the earliest dividend cuts were by giants like Citigroup, a wave of midsize and regional companies could be next, says Howard Silverblatt, an analyst at Standard & Poor's. He's waiting to for second-quarter earnings to be released before he makes a forecast for the rest of the year. A big wild card: Bank of America Corp. The Charlotte-based financial-services giant is the second-largest dividend payer overall, after General Electric Co., and has raised its dividend every year for 30 years.

But some analysts think recent losses could change that. Bank of America's stock price has fallen so low that its yield, or its dividend as a percentage of its stock price, is an outsize 11.3%. Chief Executive Ken Lewis said recently he didn't see a need to cut the firm's dividend. A Bank of America spokesman declined to comment further. Because cutting the dividend usually angers investors, companies don't take the step lightly.

"Dividends are usually the last thing to go," says Silverblatt. "You might as well put a big sign on your lawn saying you have liquidity problems."

Here is the caveat; don’t base your decisions on dividends alone. Dividends would never have given you any indications about the imminent collapse of Bear Sterns.

Watch for the falling dollar in the next few weeks: Going back 10-11 years, when Asian Tiger economies collapsed, this is about the stage in financial crisis where a run on currencies happened. Look at the dollar index. It is within one point away from its all time low (71). If it sets a quick new low, you will see a collapse in financial markets. If DX is recovers from here and keeps going higher, I am fairly confident that the worst is over.

Then again, what do I know? I have been wrong several times before.]]> http://mohanblog.teluguoneradio.com/index.php?entry=entry080719-164439
I am sure I don't need to give any introduction to what is going on in the financial markets. For the time being, I want to link to an article I wrote about housing trouble back in August 07. I will follow-up with another article summarizing a lot of stuff I have been reading in the last few weeks. I promise.
]]> http://mohanblog.teluguoneradio.com/index.php?entry=entry080604-144555
MMV
06/03/08]]> http://mohanblog.teluguoneradio.com/index.php?entry=entry080430-182353 http://mohanblog.teluguoneradio.com/index.php?entry=entry080423-104202
In a USA TODAY/Gallup Poll taken Friday through Sunday, 28% of Americans approve of the job Bush is doing; 69% disapprove. The approval rating matches the low point of his presidency, and the disapproval sets a new high for any president since Franklin Roosevelt.

The previous record of 67% was reached by Harry Truman in January 1952, when the United States was enmeshed in the Korean War.

Bush's rating has worsened amid "collapsing optimism about the economy," says Charles Franklin, a political scientist at the University of Wisconsin-Madison who studies presidential approval. Record gas prices and a wave of home foreclosures have fueled voter angst.

Bush also holds the record for the other extreme: the highest approval rating of any president in Gallup's history. In September 2001, in the days after the 9/11 attacks, Bush's approval spiked to 90%. In another record, the percentage of Americans who say the invasion of Iraq was a mistake reached a new high, 63%, in the latest poll.

Assessments of Bush's presidency are harsh. By 69%-27%, those polled say Bush's tenure in general has been a failure, not a success.

Click here for full article from USA Today.
]]> http://mohanblog.teluguoneradio.com/index.php?entry=entry080414-095149 Barak Obama's recent speech at a fund-raiser in Pennsylvania drew intense criticism - not only from the camps of Hillary Clinton and John McCain - but also from the Republican main brass, Republican mouth pieces Fix News and The Wall Street Journal. Here is what he said:

"You go into these small towns in Pennsylvania and, like a lot of small towns in the Midwest, the jobs have been gone now for 25 years and nothing's replaced them. And they fell through the Clinton Administration, and the Bush Administration, and each successive Administration has said that somehow these communities are gonna regenerate and they have not. And it's not surprising then they get bitter, they cling to guns or religion or antipathy to people who aren't like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations."

The WSJ editorial today commented:

As political psychoanalysis, this is what they believe in Cambridge and Hyde Park. Guns and God are the opiate of the masses, who are being gulled by Karl Rove and rich Republicans. If only they embraced their true economic self-interest, these pure saps wouldn't need religion and they wouldn't dislike non-white immigrants.

It is irrelevant what they believed in Cambridge or Hyde Park. It is 100% true. Most Republican party voters - from the southern states to the plains to the northeast - have one thing in common. They vote for a party which doesn't represents their economic best interest. Republicans are good at throwing debate bones on guns, abortion, religion, and gay rights to win these voters.

Read the book, "What's wrong with Kansas." by Thomas Frank. It is a fascinating book that reveals the true nature of this Republican strategy.]]> http://mohanblog.teluguoneradio.com/index.php?entry=entry080409-170253

Prof Randy Paush is fighting Pancreatic Cancer. The doctors gave him only a few months to live. In September 07 he gave his last lecture at Carnegie Mellon University. The video of that lecture has become quite a sensation on the internet. He appeared on the Oprah Show and gave a condensed version of the same lecture. It is inspiring and he definitely wants to be heard. If you have 70+ minutes, just watch. Or, if you want the condensed version on Oprah, click here.]]> http://mohanblog.teluguoneradio.com/index.php?entry=entry080407-154631

Recall my earlier story about Don Siegelman? Now Don Siegelman is free, pending appeal, and challenges Rove to testify under oath. Click on the image to see CBS 60 min update.



Click here for Dan Abrams Coverage of this case on MSNBC ]]> http://mohanblog.teluguoneradio.com/index.php?entry=entry080325-165101 are estimated to be as much as $1.2 trillion. There is an old saying on the Street - you don't need the brokers when the market goes up and you don't need the brokers when the market goes down. Investment banking is vital to economy and it supplies much needed capital and credit, and spreads risk. However, many a times these bankers and/or major players in the markets always come-up with new ways to screw things up. Here are some examples

1994: Mexican Peso crisis nearly threatened to take CitiGroup belly-up. the Feds bailed them out by loaning billions of dollars to Mexico on very liberal terms. In placing their bets, the gurus at various investment banks made one simple assumption - Peso would not lose its value. Yes, they were surprised to see the reality!

1998: Longterm Capital Management (LTCM) Crisis: One of the main partners of LTCM is none other than Dr. Scholes, the Nobel Memorial Prize winner for Economics [Note the emphasis on 'memorial.' There is no such thing as Nobel Prize for Economics. The economists loosely call it "Nobel Prize" just to enhance their image. Alfred Nobel never intended to give a prize to economists. The REAL five Nobel Prizes are only in the fields of medicine, chemistry, physics, literature and peace.] One of the simplified assumptions LTCM traders made is that when they want to sell, there will be buyers. When they turned around to close the trades that turned sour in the wake of Russian Ruble crisis, there were no buyers. Consequently, financial markets around the world were frozen. Then came a fed bailout after the OEX futures markets were closed on a Thursday which turned things around.

2004-2007: In the wake of booming real estate market, investment bankers found a new cash-cow in writing insurance on mortgages and mortgage backed securities. that too on very liberal terms with very little risk premiums. Many credit analysts made one simple and stupid assumption. Real estate prices will continue to go up. The prices didn't go up. They didn't stay flat. They went down, and down and more down. Every banker and his naive grandson who wrote these credit risk policies caught with their pants down. Big investment banks like Bear Stearns have extensive exposure to such credit swaps. Problems at CitiGroup are similar.

2008: Credit woes at many investment bankers was getting worse with no turn around in RE market in sight. No wonder Bear Stearns went under. Thanks to the overly simplified assumption: "real estate prices don't go down."

Of course, this analysis itself is an oversimplification of the complex problems in financial markets. What next? Conventional wisdom is that it is time to buy when a high profile company goes under. By that measure, I think that the worst in financial markets is over.
]]> http://mohanblog.teluguoneradio.com/index.php?entry=entry080324-094900 The overall U.S. death toll in Iraq rose to 4,000 after four soldiers were killed in a roadside bombing in Baghdad, a grim milestone that is likely to fuel calls for the withdrawal of American forces as the war enters its sixth year.

While 4000 is just one more than 3999, the number has a psychological impact. When will this ill-conceived, poorly executed human and economic tragedy called Iraq war end?

More from MSNBC....]]> http://mohanblog.teluguoneradio.com/index.php?entry=entry080323-091813
Stay tuned.]]> http://mohanblog.teluguoneradio.com/index.php?entry=entry080317-141541

What a difference one year makes!! just one year ago Bear Stearns stock was hovering above $150 per share. Today, after the Fed's intervention, the stock was taken over by JP Morgan for a mere $2.00. To top this, Feds cut interest rates by another 25 basis points. The question everybody is asking today is, "how many Bear Stearns are out there to be bailed out?" I don't know the answer to this question. But the carnage in the market is much worse than what the indices are indicating. Many major stocks are down more than 60%.

But back in August 07 just after a massive rally in reaction to the first 50 basis point cut by the Feds, I remember warning listeners on my show "caveat emptor." Well, I wish I took my own advice. In a sense I did. Expecting a major downturn in US markets, I went into China stocks. Chinese stocks got hit just as bad as the US stocks.]]> http://mohanblog.teluguoneradio.com/index.php?entry=entry080306-065946
The price of gasoline when Bush invaded Iraq was about $36/barrel. Yesterday it closed above $104. This Iraq adventure, just like every other simple venture Bush tried, is an utter failure. When his investment in oil exploration ventures soured in Texas, only a handful of people were hurt. Now, his decisions as the president are hurting billions of people around the world. Yeah, right. Who says one person cannot make a difference?

A typical owner of Hummer probably doesn't care about the environment and probably voted for Bush - both times. Those Hummer drivers could care less if the whole world went to hell in a hand basket as long as they have their freedom to pollute. The following photograph posted at crooksandliars.com caught my attention. The photo was taken at Homewood, Alabama March 5, 2008 by Bluegal. The Hummer drove off just as she was pulling in and she took a quick photo. Sh asks, "Is it fun to drive, sucker?"

]]> http://mohanblog.teluguoneradio.com/index.php?entry=entry080225-141323 Indict and Win. That's the way Karl Rove's political machinery operates. When some prosecutors didn't indict democrats before elections, as per the wishes of Rove and the White House, the prosecutors were fired. You may recall the scandal about firing US attorneys. Here is an example of how they operate to win elections. Indict a prominent Democrat just before the election. In this case, it was former Alabama Governor Siegelman. CBS 60 minutes ran a story about this bizzare case. The White House, the Justice Department are refusing to cooperate with congress on how this case was prosecuted. I am totall utterly disgusted with these Republigoons.

See the following two 60 minutes videos to see how the former Governor of Alabama was victimized by the Republican operatives:

CBS 60 minutes video (Part 1 of 2)
CBS 60 minutes video (Part 2 of 2)


The following video gives an explanation of the reason for the "grudge" in Governor's own words.

Why Rove hates Siegelman?
]]> http://mohanblog.teluguoneradio.com/index.php?entry=entry080225-123648 So, Obama wore a Turban and part of a traditional Muslim dress. - Big Deal!! Clinton released itt trying to appeal for some bigots in the populace. She will get some, no many, on-board the hate-train. I am sure that this picture will get a lot of airtime for the remainder of the campaign.

Excerpts from an article on CNN.com about this issue:

(CNN) — Barack Obama’s campaign accused Hillary Clinton’s team Monday of circulating a photo of the Illinois senator donning traditional Somali attire – clothing worn by area Muslims – as a goodwill gesture during an overseas trip.

In a statement, the Clinton campaign called the charge “an obvious and transparent attempt to distract” voters from serious issues – but did not issue a denial.

The picture, which appeared on the Drudge Report this morning, was attributed to sources within the Clinton campaign – although the Web site did not reveal how many, or who, might have received the photo.

In a statement, Obama’s campaign manager, David Plouffe, said Clinton’s campaign was engaged in “shameful, offensive fear-mongering,” though he did not point to any proof beyond the original item that appeared on Matt Drudge’s blog.

For any Republicrook trying to make this a big issue, please show the following picture of Laura Bush wearing a veil in Middle East.

]]> http://mohanblog.teluguoneradio.com/index.php?entry=entry080224-111100 To all the Indian women who are waiting for the perfect man, here comes Mills and Boon. To all the men out there, would you like to know how to attract a mate? Simple! Just be like the "perfect" male lead characters in any Mills and Boon Novels. The mate you attract herself may not be perfect, but you will appeal to her. :) Anyway, BBC.com reports that publishers of romantic fiction, Mills and Boon, was launched in India recently.

The company hopes that its amorous storylines will eventually seduce the country and become their biggest market.

So what does an all-female reading group in Delhi think of romantic novels where the dark and brooding hero almost invariably ends up wooing and winning the fair maiden?

[More...]

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This is funny. Click here and here for more political caricatures like these. ]]> http://mohanblog.teluguoneradio.com/index.php?entry=entry080219-152648
On an unrelated note, a year ago if you bought a home your realtor probably told you that this is the best time to by home. [You get my drift.]

Seriously, I am not saying that a US recession will not benefit outsourcing companies in India. They may or may not. If a possible US recession is short and shallow, India might not be adversely affected that much. If the recession is deep and prolonged, it will hurt India more than it will hurt US. But I don't think a recession of any scale here will help India.

Excerpts from the article:

PC World
Monday, February 18, 2008; 12:13 AM

Close on the heels of the appreciation of the Indian rupee against the dollar, Indian outsourcing companies are grappling with a new problem -- uncertainty among U.S. companies about a recession has made these companies delay finalizing their IT budgets.

As a result many large deals between U.S. clients and Indian outsourcers will not be finalized in the first half of this year, said Sudin Apte, senior analyst and country head for India at Forrester Research.

Business will, however, pick up for Indian outsourcers by the fourth quarter, particularly if the U.S. economy is in mild recession, Apte said.

"Our experience is that if the IT budgets of U.S. customers are marginally impacted in a recession, then there is an increase in business offshore, to cut costs," Apte said. If the cuts are too large, whole projects can however get canned, he warned.

The U.S. is the largest market for Indian outsourcers.

"We believe that the recessionary nature of today's economic climate will promote the adoption of increased outsourcing," said Siddharth Pai, a partner at outsourcing consultancy firm, Technology Partners International Inc (TPI) in Houston, Texas.

TPI does not as yet see a cut in either discretionary or non-discretionary spending on IT by companies.

Forrester said Monday that the IT services and outsourcing market will increase by 4 percent this year to US$162 billion from a growth rate of 6 percent a year earlier. The research firm forecast slowing growth this year for purchases of IT products and services in the U.S.

[Click here for more...]]]> http://mohanblog.teluguoneradio.com/index.php?entry=entry080219-151119
A Bush appointed federal judge in New Hampshire quits after pleading guilty to drunk driving.

From WBZTV.com (A CBS affiliate)

BOSTON (WBZ) ― A federal bankruptcy judge based in Boston has resigned after pleading guilty to drunk driving.

Judge Robert Somma will step down April 1 after already being on leave.

He is accused of rear-ending a pick-up truck in Manchester, N.H. last week.

Under the plea deal, Somma agreed to have his driver's license suspended for a year.

But he could get it back sooner if he successfully completes an alcohol awareness program.

The second case involves a state GOP lawmaker from Maryland.

Robert A. McKee, a long-serving Republican delegate from Western Maryland, announced his resignation yesterday after authorities, who say they are conducting a child pornography investigation, seized two computers, videotapes and printed materials from his Hagerstown home.

First elected to the House of Delegates in 1994, McKee was chairman of the Western Maryland delegation and sponsored legislation to protect minors from sexual predators. McKee, 58, also resigned yesterday from his post as executive director of Big Brothers Big Sisters of Washington County, a child mentorship program where he has worked for 29 years.

"For me, this is deeply embarrassing," McKee said in a statement. "It reflects poorly on my service to the community."

The FBI's cyber-crimes unit and the county sheriff's office are reviewing the materials seized from McKee's home Jan. 31, federal and local authorities said.
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God and Politics. This is a MUST see documentary from PBS. ]]> http://mohanblog.teluguoneradio.com/index.php?entry=entry080207-163537 It has been 60 years since Gandhi was assassinated by Naduram Vinayak Godse. Regardless of how you view Gandhi's politics and his role in India's struggle for independence, the undeniable truth is that Godse is a religious extremist and a killer. BBC has an article on this. Excerpts:

n the communally charged atmosphere during India's Partition in August 1947, Godse and his accomplices held Mahatma Gandhi responsible for the miseries of the Hindus and accused him of appeasing Muslims.

Right-wing Hindu nationalist organisations like the Rashtriya Swayamsevak Sangh, (Nationalist Volunteers' Organisation) were banned and many of its leaders were sent to jail following the assassination of Gandhi.

The RSS is the ideological fountainhead of India's main opposition party BJP.

'Selfless act'

Nathuram Godse was later tried and hanged but the RSS was exonerated and the government decided to lift the ban on its activities.

Even though the RSS publicly rejects Nathuram Godse, its leaders don't hide their appreciation for what they call his "selfless act".

"We will have to accept that Nathuram Godse acted with selfless spirit; he did not have any self-interest in it. He must also have been aware that he would be hanged for what he was going to do. This spirit cannot be denied," RSS ideologue Devendra Swaroop told the BBC.

"But he was wrong if he thought that Gandhiji was taking history in a wrong direction and by killing him he could correct the course of history," adds Mr Swaroop.

"RSS firmly believes that Godse acted at the spur of the moment and it was quite detrimental for the Hindu society. Gandhi dead proved to be stronger than Gandhi alive."

[More...]]]> http://mohanblog.teluguoneradio.com/index.php?entry=entry080207-162451
On the other side, while Mitt Romney just announced that he is dropping out from the GOP race, Mike Huckabee of GOP is still in the fray. McCain is clearly the front runner. Romney's parting statement:

"If I fight on in my campaign, all the way to the convention, I would forestall the launch of a national campaign and make it more likely that Senator Clinton or Obama would win. And in this time of war, I simply cannot let my campaign, be a part of aiding a surrender to terror."

What a joke! ]]>