08.09.2008

• Finally there is a deal on Singur
• Look at this graphic which gives the timeline of the agitation led by Trinamool Congress.
• But there is no word from Tatas yet on the compromise that is reached by the West Bengal government and the Trinamool chief.
• India US nuclear deal clinched
• While we were taking ‘off’ from current affairs briefings yesterday, the announcement about the nuclear deal came.
• With NSG clearance, the last remaining hurdle to enable civil nuclear commerce with the US, that remains is ratification from that country’s legislature of the 123 Agreement finalised between the Bush administration and New Delhi. The bipartisan support that exists for the deal is expected to enable smooth sail for the ratification process.
• Look at the text of the NSG document granting the clean waiver for India.
• What can be a better time to learn / recap the basics of nuclear energy? Look at this excellent primer in ET in the classroom column.
• If you are asked to sum up the strategic gains made by India while clinching the nuclear deal, say in about 200 words, the following can be one of the best answers:
• With the deal signed, India is the only country that possesses nuclear bombs but is not part of the Nuclear Non-Proliferation Treaty to be accepted into the community of nations allowed to legitimately engage in nuclear commerce. The major powers of the world have recognised India’s status as a growing power whose potential to contribute to a stable global order is huge. It is that recognition that persuaded them to work out the current exception to nuclear convention in the form of the waiver from NSG. As India strengthens its strategic capabilities with the help of technologies made accessible as a result of the deal, it would put an end to the current situation of an ever-widening strategic gap between China and the rest of Asia. As India steps into its now acknowledged role as a balancer of power, it will benefit India and the world.
• US government takes over Fannie and Freddie
• Is the peak of the subprime worries behind us? If we go by what is still happening in the US market, we will be left with some doubt in this regard.
• These two giants own or guarantee almost half of the $12 trillion in the US home loans and the government had been leaning on the companies to help pull the economy out of the housing crisis.
• An independent enquiry conducted by Morgan Stanley concluded that the giants have indulged in creative accounting practices, which while legal, enabled them to overstate the value of their reserves.
• Fannie was created by the government in 1938 as part of President Franklin D Roosevelt's New Deal. Freddie was chartered in 1970 to compete with Fannie. As losses on the mortgages grew late last year, the companies recorded $14.9 billion in combined net losses, eating into their capital. Fannie raised $14.4 billion since November and Freddie sold $6 billion of preferred securities. Plans for a $5.5-billion sale were delayed as the company's fortunes sank.
• Fannie had $47 billion of capital as of June 30, according to company filings. The company is required by its regulator to hold $37.5 billion. Freddie's capital stood at $37.1 billion, compared with a requirement of $34.5 billion, filings show. Fannie's market capitalisation is now $7.6 billion, down from $38.9 billion at the end of last year. Freddie's has fallen to $3.3 billion, from $22 billion over the same period.
• Look at this excellent graphic which tells us the basics about them. I love such explanations.