Tuesday, October 30, 2007

Rise and fall of Stan O'Neal

Speculations are rife that Stan O’Neal, CEO of Merryl Lynch, is likely to get the sack for the US brokerage’s subprime bets that turned bad.

New York-based Merrill in recent weeks has faced mounting criticism after it misjudged the severity of the subprime-mortgage crisis. The firm reported a third-quarter loss of $2.24 billion, reflecting an $8.4 billion write-down related to subprime mortgages. The firm apparently has a history of wrongdoings that almost brought it to the brink of collapse on a few occasions earlier.

O'Neal's is a classic tale. A nobody rises to the top, rules the kingdom and is ultimately brought down by the qualities that made him king in the first place. The fact that he had some famous enemies also helped hasten the downfall.

Stan had remarked once “My father told me I wasn’t cut out for farm work,” and added “I never took it as an insult.”. That composure should come to his aid when the Board of Directors of Merryl Lynch say something of the kind shortly, in equivalent Wall Street lingo.

Dick Bove of Punk Ziegel & Co. summarized expectations like this: "Pin the tail on O'Neal, blame him for all of the company's current problems, and kick him out. Then bring a white knight in and immediately resolve these problems and, possibly, in the process, merger Merrill out of existence, so that everyone will make their fortunes."

Big games. Big people. Bad world…! What do you think…?


Saturday, October 27, 2007

Ironic indeed

Between a rock and a hard place or devil and the deep sea...?

Ever since U.S. Marines first started deploying to Fallujah (Iraq) back in early 2004, military families in and around California's Camp Pendleton have fretted over their loved ones serving in Iraq's deadly City of Mosques. Over the last four years, hundreds of wives and parents have received unthinkably bad news from some 8,000 miles away. But this week, as a moment of peace and quiet marks life in Fallujah, the roles have reversed. A battalion of Camp Pendleton Marines in Fallujah now bears the burden of worrying about family back home, loved ones fleeing the wildfires that ravage San Diego County and parts of the huge marine base there.

"You leave home and it's safer here [in Fallujah] than it is at home"- remarks a soldier sensing the irony of the situation… Having to fight a never ending war for apparently no reason and not being able to be around when your own house is on fire…

Sad indeed…

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Tuesday, October 16, 2007

The quant blow up behind subprime fiasco

Was subprime fiasco the canary in the mine?

It is looking more and more like the answer is – well, yes. Many signs have suggested so, from job losses to a continuing credit drought to a weakening dollar, but that history has not yet been written.

And how the quants contributed to the blow up? MIT Review Part I and II, here and here.

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Saturday, October 06, 2007

Stick with Earth

I like this expression – “Lunar Governance”

It was fun reading Padma Tata in New Scientist. She wonders what is the politically correct way to describe a group of humans who settle on the Moon or Mars? "Colonies" is the term bandied about most often . But the word evokes memories of exploitative European settlers in Asia and Africa, points out MYS Prasad, deputy director of the Indian Space Research Organisation's Space Applications Centre in Ahmedabad. Scientists from India, a former British colony, would prefer to say lunar and Mars "habitation bases".

Go a step further. When those planets are inhabited, soon we are all going to pay for everything. How do we pay? After all, if space tourism really takes off and space travel becomes commonplace, people might need to pay for things up there. Why not just use ordinary cash, you might say? Or perhaps a credit card? Those aren't any good for space, according to George Fraser of the University of Leicester, UK. None of the existing payment systems we use on Earth – like cash, credit or debit cards – could be used in space for a variety of different reasons," says Fraser, whose team of scientists has designed a new space currency. "Anything with sharp edges, like coins, would be a risk to astronauts while the chips and magnetic strips used in our cards on Earth would be damaged beyond repair by cosmic radiation."

I ask, what the hurry is. Hell, the Bull Run is not yet over !!!!:-)


Wednesday, October 03, 2007

Great Detroit suicide

Assisting Detroit’s suicide seems to be contagious. Everyone wants to get in on it, including Toyota. Toyota, which pioneered the industry-leading, 50-miles-per-gallon Prius hybrid, has joined with the Big Three U.S. automakers in lobbying against the tougher mileage standards in the Senate version of the draft energy bill.

Michigan lawmakers year after year shield Detroit from pressure to innovate on higher mileage standards, even though Detroit’s failure to sell more energy-efficient vehicles has clearly contributed to its brush with bankruptcy, its loss of market share to Toyota and Honda — whose fleets beat all U.S. automakers in fuel economy in 2007 — and its loss of jobs. G.M. today has 73,000 working U.A.W. members, compared with 225,000 a decade ago. Last year, Toyota overtook G.M. as the world’s biggest automaker.

Thank you, Michigan delegation! The people of Japan thank you as well.