19.08.2008

• Desperate rescue act mounted by reserve banks across the world
• In a bid to contain the contagion that is fast spreading and appears to have engulfed the famed Morgan Stanley, the central bankers of the major powers have announced a $247 bn lending window.
• By infusing additional liquidity, the central banks are trying to make worldwide interbank and money markets functional once again. In the US, money market funds are reluctant to buy commercial paper. This, in turn, is forcing companies to tap lines of credit from banks to finance short-term working capital needs.
  
• Banks, in turn, are hoarding cash by either refusing to lend to each other or doing so at higher rates. Investment banks like Morgan Stanley and Goldman Sachs are in trouble because they rely on short-term loans to run their businesses. But they are finding it increasingly hard and costlier to borrow. It remains to be seen if central banks can break this vicious cycle.
• I was noting yesterday that stock markets, commodity markets etc., may collapse in the wake of the current contagion, for indirect reasons. Many of you would have wondered what could these indirect reasons be and how would they impact other unrelated sectors; right?
• Now you see one of the first such impacts unfolding right before our eyes. Lehman had invested substantially i.e., about $500 mn in some of the prestigious real estate projects in our country. As it has gone bust, these projects will suffer now. It may lead to a situation of distress sale and the real estate prices may come crashing. Or it may negatively impact a couple of the big real estate players in the country and hit their customers very badly. There could be a scenario wherein a middle class man or an upper middle class man suffering for Lehman's collapse here in India.
• An artist's record
• I am sure you would remember Damien Hirst, the artist we took note of for the first time on 07/07/07.
• Remember his specialty? He makes art out of dead animals and the like.
  
• He made history on two counts recently. On the same day that Lehman Brothers went bankrupt, he auctioned 223 of his art pieces for a record $199 mn!! This is the first ever time that a single artist's works have fetched that much money. The record so far had been held by Picasso's works auctioned way back in 1993 for $20 mn.
• The second first that he has notched up in the process is that he gave a complete go bye to the art dealers and galleries. He auctioned the works directly on his own.
  
• Language lessons: easel
• An upright tripod for displaying something (usually an artist's canvas)
• If you are asked to define development, what could your answer be?
• Will it look like this?
• Development is the expansion of human freedoms to enjoy and sustain life and environment. Development involves strengthening of the capacity of human beings to realise the full potential of human creativity for the greater common good of people, society, environment and civilisation. Human dignity and democratisation — social, economic and political — need to be the defining force in the envisioning and process of development.
• This is from John Samuel who wrote a piece in today's ET. I found it really comprehensive.
• One more noteworthy snippet from this piece:
• What is meant by empowering people?
• Empowerment of people involves the ability to ask questions, seek solutions, make strategic choices and claim human rights.
• Government's measures to encourage auto exports from India
• It is extending the Focus Market Scheme (FMS) incentives to the auto industry where export to targeted markets will get cash-incentives of up to 5%. This is aimed at increasing the competitiveness of the Indian automobile industry abroad.
  
• The Indian auto industry, which exported more than 1 million vehicles worth $2.8 billion last fiscal, to the world market is likely to get a major booster in the 83 countries covered under
  FMS. The scheme is likely to help Indian auto majors garner a larger chunk of the emerging markets in Africa, Latin America and the CIS bloc and make India a global small car hub.
• Here is an example of a very complicated loan transaction that is camouflaged as a transaction of sale/purchase in stocks and derivatives.
• This one will be loved by my stock market friends. I am sure some of them will be wondering why or how they missed an opportunity of making risk free returns.
• Read this piece. Excellent.
  
• See the developments in camera technology? I am amazed.
• There are now 24 mega pixel cameras!!
• BTW this piece tells us about what a 'full frame' camera is. Read this. It is for techno enthusiasts and photographers.