"Don't disgrace potato buyers"

Nitin Desai in Business Standard talks about the market for credit.

“The market for credit is not like the market for potatoes. When I buy potatoes, I choose a vendor, select the spuds, pay the cash and that is the end of it. I do not need to know much about the vendor; nor does he need to know much about me. Once I have paid for and collected the potatoes, the relationship between us is at an end.”

I would say the metaphor is just not up. When my wife buys potatoes, she checks each spud out, rolls it in her hand and looks for any sign of decay or staleness. No she didn’t call that “due diligence”. I guess this must be the practice of every potato buyer since we don’t want to risk our health and that of the family.

But MBA’s do it differently. If there is a market for risk, then it’s not risk for them. Name of the game is slice and dice. So are the credit rating agencies. They just sniff around for a (seemingly) credible issuer (just a name) and that’s it. That’s why capital adequacy and other supervisory arrangements have failed to prevent an elaborate tower of debt, built on shaky foundations that came crashing down when the first high flyer crashed into it.

"Nitin, for God's sake, don’t bunch ordinary potato buyers with those gilt edged MBAs. They are far more caring.

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In other words

And you thought bribes are par for the course only in the east. Wake up. Elsewhere, they call it rebates.

For the past six years, Advanced Micro Devices has been pleading in a variety of Romance languages for the European Union to take action against rival Intel for alleged abuses of its market dominance, and yesterday the company finally got its wish. The EU's top antitrust regulator has charged Intel with illegal business practices conducted over the years "with the aim of excluding its main rival, AMD, from the x86 computer processing units (CPU) market." Among the alleged offenses: Intel gave rebates to computer makers if they promised to buy all or most of their chips from it; Intel paid computer makers to delay or cancel products that used AMD chips; and Intel sold chips to some strategic customers below cost when bidding against AMD.

Intel has 10 weeks to file an official answer, but for the moment released a "who, us?" response. "The way ... in which competition is played out in this market is through price discounts by Intel and by AMD, and there is nothing unlawful about those discounts," said general counsel Bruce Sewell. "We believe that these rebates are lawful anywhere in the world." Should the lengthy EU process end up going against Intel, the chipmaker could be fined 10 percent of its global revenue for each year it broke the law.

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