Intellectual talks - Arundhati Roy - Stop the war

Article Courtesy : Times of India (http://timesofindia.indiatimes.com/articleshow/4331986.cms)

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The horror that is unfolding in Sri Lanka becomes possible because of the silence that surrounds it. There is almost no reporting in the mainstream Indian media — or indeed in the international press — about what is happening there. Why this should be so is a matter of serious concern.

From the little information that is filtering through it looks as though the Sri Lankan government is using the propaganda of the ‘war on terror’ as a fig leaf to dismantle any semblance of democracy in the country, and commit unspeakable crimes against the Tamil people. Working on the principle that every Tamil is a terrorist unless he or she can prove otherwise, civilian areas, hospitals and shelters are being bombed and turned into a war zone. Reliable estimates put the number of civilians trapped at over 200,000. The Sri Lankan Army is advancing, armed with tanks and aircraft.

Meanwhile, there are official reports that several ‘‘welfare villages’’ have been established to house displaced Tamils in Vavuniya and Mannar districts. According to a report in The Daily Telegraph (Feb 14, 2009), these villages ‘‘will be compulsory holding centres for all civilians fleeing the fighting’’. Is this a euphemism for concentration camps? The former foreign minister of Sri Lanka, Mangala Samaraveera, told The Daily Telegraph: ‘‘A few months ago the government started registering all Tamils in Colombo on the grounds that they could be a security threat, but this could be exploited for other purposes like the Nazis in the 1930s. They’re basically going to label the whole civilian Tamil population as potential terrorists.’’

Given its stated objective of ‘‘wiping out’’ the LTTE, this malevolent collapse of civilians and ‘‘terrorists’’ does seem to signal that the government of Sri Lanka is on the verge of committing what could end up being genocide. According to a UN estimate several thousand people have already been killed. Thousands more are critically wounded. The few eyewitness reports that have come out are descriptions of a nightmare from hell. What we are witnessing, or should we say, what is happening in Sri Lanka and is being so effectively hidden from public scrutiny, is a brazen, openly racist war. The impunity with which the Sri Lankan government is being able to commit these crimes actually unveils the deeply ingrained racist prejudice, which is precisely what led to the marginalization and alienation of the Tamils of Sri Lanka in the first place. That racism has a long history, of social ostracisation, economic blockades, pogroms and torture. The brutal nature of the decades-long civil war, which started as a peaceful, non-violent protest, has its roots in this.

Why the silence? In another interview Mangala Samaraveera says, ‘‘A free media is virtually non-existent in Sri Lanka today.’’

Samaraveera goes on to talk about death squads and ‘white van abductions’, which have made society ‘‘freeze with fear’’. Voices of dissent, including those of several journalists, have been abducted and assassinated. The International Federation of Journalists accuses the government of Sri Lanka of using a combination of anti-terrorism laws, disappearances and assassinations to silence journalists.

There are disturbing but unconfirmed reports that the Indian government is lending material and logistical support to the Sri Lankan government in these crimes against humanity. If this is true, it is outrageous. What of the governments of other countries? Pakistan? China? What are they doing to help, or harm the situation?

In Tamil Nadu the war in Sri Lanka has fuelled passions that have led to more than 10 people immolating themselves. The public anger and anguish, much of it genuine, some of it obviously cynical political manipulation, has become an election issue.

It is extraordinary that this concern has not travelled to the rest of India. Why is there silence here? There are no ‘white van abductions’ — at least not on this issue. Given the scale of what is happening in Sri Lanka, the silence is inexcusable. More so because of the Indian government’s long history of irresponsible dabbling in the conflict, first taking one side and then the other. Several of us including myself, who should have spoken out much earlier, have not done so, simply because of a lack of information about the war. So while the killing continues, while tens of thousands of people are being barricaded into concentration camps, while more than 200,000 face starvation, and a genocide waits to happen, there is dead silence from this great country.

It’s a colossal humanitarian tragedy. The world must step in. Now. Before it’s too late.

The economy will be in shambles throughout 2009!!

This is what Warren Buffet had to say in his annual letter to shareholders.

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Our decrease in net worth during 2008 was $11.5 billion, which reduced the per-share book value of both our Class A and Class B stock by 9.6%. Over the last 44 years (that is, since present management took over) book value has grown from $19 to $70,530, a rate of 20.3% compounded annually.

The table on the preceding page, recording both the 44-year performance of Berkshire’s book value and the S&P 500 index, shows that 2008 was the worst year for each. The period was devastating as well for corporate and municipal bonds, real estate and commodities. By yearend, investors of all stripes were bloodied and confused, much as if they were small birds that had strayed into a badminton game.

As the year progressed, a series of life-threatening problems within many of the world’s great financial institutions was unveiled. This led to a dysfunctional credit market that in important respects soon turned non-functional. The watchword throughout the country became the creed I saw on restaurant walls when I was young: “In God we trust; all others pay cash.”

By the fourth quarter, the credit crisis, coupled with tumbling home and stock prices, had produced a paralyzing fear that engulfed the country. A freefall in business activity ensued, accelerating at a pace that I have never before witnessed. The U.S. – and much of the world – became trapped in a vicious negative-feedback cycle. Fear led to business contraction, and that in turn led to even greater fear.

This debilitating spiral has spurred our government to take massive action. In poker terms, the Treasury and the Fed have gone “all in.” Economic medicine that was previously meted out by the cupful has recently been dispensed by the barrel. These once-unthinkable dosages will almost certainly bring on unwelcome aftereffects. Their precise nature is anyone’s guess, though one likely consequence is an onslaught of inflation.

Moreover, major industries have become dependent on Federal assistance, and they will be followed by cities and states bearing mind-boggling requests. Weaning these entities from the public teat will be a political challenge. They won’t leave willingly.

Whatever the downsides may be, strong and immediate action by government was essential last year if the financial system was to avoid a total breakdown. Had that occurred, the consequences for every area of our economy would have been cataclysmic. Like it or not, the inhabitants of Wall Street, Main Street and the various Side Streets of America were all in the same boat.

Amid this bad news, however, never forget that our country has faced far worse travails in the past. In the 20th Century alone, we dealt with two great wars (one of which we initially appeared to be losing); a dozen or so panics and recessions; virulent inflation that led to a 211/2% prime rate in 1980; and the Great Depression of the 1930s, when unemployment ranged between 15% and 25% for many years. America has had no shortage of challenges.

Without fail, however, we’ve overcome them. In the face of those obstacles – and many others – the real standard of living for Americans improved nearly seven-fold during the 1900s, while the Dow Jones Industrials rose from 66 to 11,497. Compare the record of this period with the dozens of centuries during which humans secured only tiny gains, if any, in how they lived. Though the path has not been smooth, our economic system has worked extraordinarily well over time. It has unleashed human potential as no other system has, and it will continue to do so. America’s best days lie ahead.

Take a look again at the 44-year table on page 2. In 75% of those years, the S&P stocks recorded a gain. I would guess that a roughly similar percentage of years will be positive in the next 44. But neither Charlie Munger, my partner in running Berkshire, nor I can predict the winning and losing years in advance. (In our usual opinionated view, we don’t think anyone else can either.) We’re certain, for example, that the economy will be in shambles throughout 2009 – and, for that matter, probably well beyond – but that conclusion does not tell us whether the stock market will rise or fall.

In good years and bad, Charlie and I simply focus on four goals:
(1) maintaining Berkshire’s Gibraltar-like financial position, which features huge amounts of excess liquidity, near-term obligations that are modest, and dozens of sources of earnings and cash;
(2) widening the “moats” around our operating businesses that give them durable competitive advantages;
(3) acquiring and developing new and varied streams of earnings;
(4) expanding and nurturing the cadre of outstanding operating managers who, over the years, have delivered Berkshire exceptional results.

Book on Prabakaran

Click here to order online

Most people approach Prabakaran and his widely known LTTE on emotional ground. Either they blindly support or they blindly oppose. Both there approaches fail to paint complete picture about him. His organization was started with a rusted revolver, but now Prabakaran is running a government. He possesses police force, judicial system, army, navy and air force ... everything that a nation ought to has.

Before arriving into any judgment about Prabakaran and his outfit, it becomes imperative to understand the history of Sri Lanka's ethnic conflict. What was the beginning point the endless war between Sinhalese and Tamils? What started it and why? How long this fire is going to be on? Can the self determination question of Tamils could be resolved only at war front? What are the innocent civilians caught in the the crossfire going to see a dawn? Is Tamil Eelam the only solution? Can Prabakaran win that for his men? Or is everything is going to end at his demise?

LTTE is a banned organization in India. Prabakaran is a main accused in Rajiv Gandhi's murder. Many countries in the world have banned the tigers. Sri Lankan government does not show any signs of putting an end to the war as it believes tigers can be completely destroyed. What is in store for the rebels? What is going to be its future?

The book on Prabakaran tries to examine these questions.

Putting your money where your word leads other...

Just came across this paragraph from fortnightly investment magazine 'Capital market' .. It is not only impressive but thought provoking as well.

"Many research analysts do not invest in equities, but preach to investors on what to buy, hold or sell. As per the present regulation, a research analyst needs to disclose his holding in the company that he is commenting. It would be far better to make it mandatory for the analyst to invest a certain pre-defined sum in the recommended stocks for the period mentioned in the research report. This would definitely improve the sense of responsibility and accountability in the research community. It would also provide on-the-job training to analysts and make them aware of the risks involved in equity investment. Remember those who actually invest are shrewder than those who simply preach"

Indo-US nuclear deal.. - A look back

- Chellamuthu Kuppusamy

That was something unprecedented in the history of Indian democracy. We had never seen such a sensational 'display of money' on the parliamentary floor. Trust me those were some of the tragic cum hilarious scenes we witnessed during the recent 'no confidence motion' and it could match any nail biting one day cricket game. You know what I am coming to. Yes, it is about the widely debated Indo-US 'civil' nuclear deal.

The Unites States Congress which is the House of Representatives (akin to Lok Sabha) and the Senate which is the upper house have given their blessing to this historic deal on September 28th and October 1st respectively. There was a sense of vindication, according to the Indian ambassador to the US Ronen Sen.

What makes this deal so special and time critical? Does India really surrender its national interest and sovereignty with this deal? A little recap from the history would help answer these questions.

The United States has the reputation of being the only nation in the history of mankind to deploy nuclear weapon and massacre more than 200 thousand people in August 1945. That eventually brought the World War II to an end.

Postwar era saw the world dividing into two camps, needless to mention American camp & Soviet camp. Mutual suspicion, secret nuclear programs and arm race was inevitable. Need for checking the proliferation of nuclear arms was felt and Nuclear Non-Proliferation Treaty (NPT or NNPT) was born thanks to the efforts from Ireland and Finland. That was in 1968.

NPT recognized the United States, the United Kingdom, France, Russia, and China as nuclear weapon states (NWS) while the others were identified as non nuclear weapon states (NNWS). All the nations recognized by the UN signed NPT except India, Pakistan and Israel. For India, NPT did not prevent proliferation but actually classified the counties as ‘nuclear haves’ and ‘nuclear not haves’ as it only prevents ‘not have’ nations developing atomic armory after 1968.

Being a non-signatory of NPT, there was no restriction on India for conducting nuclear test. It perhaps carried out a test in 1974 to be coded as ‘Smiling Buddha’ which provoked serious reactions around the globe. Nuclear fuel supplying countries formed Nuclear Suppliers Group (NSG) that subsequently decided not to assist India in the civil nuclear energy space.

There were 34 long years before this ban could relax. Indo-US deal enables India to access outside civil nuclear technologies and fuel, while still being a non-signatory of NPT. This is the best things that could happen to India.

World’s largest democracy only has to assure that it would not mix its civil and military nuclear establishments, and let IAEA supervise its civilian atomic power station. An estimated 14 out of the existing 22 reactors are to be used for civil and the rest for military purpose.

Following the foot prints of the U.S, France has inked an agreement to sell nuclear technology and reactors to India. What France plans to sell to India is the large 1,600 MW reactor, indeed, the largest of kind in commercial operations in the world, says the Hindu Business Line.

We have an installed capacity of 145,587.97 MW, primarily sourced from coal fired thermal power. France, on the other hand, generates 78.8 % of its electricity from nuclear power. We are at 2.9%. A long way to go indeed! We are far from uninterrupted power supply.

1930 around the corner?

- Chellamuthu Kuppusamy

When Christopher Columbus landed in North America he would not have foreseen a financial institution to be established by his future fellow immigrants from western Europe, let alone that institution sending tremor to the financial market across the globe. Yes, I am talking about Lehman Brothers.

Henry Lehman was just 23-year-old when immigrated to the United States from Germany in 1844. He choose to settle down in the southern state of Alabama. Two of his brothers Emanuel & Mayer too took separate ships to the American shore and three of them formed Lehman Brothers in 1850. They took cotton trade as their primary business in which they excelled. In the next few years the center of cotton trade shifted from the south to New York City, which of course was - as it is today - the center of trading & commission business.

Civil war erupted 1982 and Lehman brothers financed Alabama state's reconstruction program. That was the beginning and the end came a couple of days ago. In the meantime they have grew, grew continually. They underwrote securities - initial public offers in particular - and did almost everything in the financial market. It did merger with American express and then de-merged again in 1994.

Subprime crisis that surfaced late last year forced Lehman Brothers to close down subprime division 'BNC Mortgage' and sending around 1,200 people home. On September 13 it decided to take bankruptcy protection. Its valuation based on September 15 stock price stood at $130 million. It's reported revenue for 2007 was 454 times more than this.

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Sixth months ago Bear Stearns, the fifth largest bank, was on the prink of bankruptcy. JP Morgan Chase bought it out for dirt cheap $2 per share. That was not alone. Just recently Fannie Mae and Freddie Mac were bailed out by the US government. Now even before this 'broke' news from America's fourth largest investment bank Lehman could sink in, even more troubling stories come out. American International Group (AIG), the largest insurance firm in the US, would become next Lehman unless it gets around $70 - $80 billion. Luckily FED has come forward to perform rescue act. Likewise Merrill Lynch & Co was luck enough to find a buyer in Bank of America.

The US economy has been the driving force of the global economy, whether we like it or not. Any trouble in the US is not a standalone subject in the current world where everything is interconnected and eventually nothing is insulted in the great financial eco-system.

Already some analysts are talking about 'another' great repression of 1930 that we have only studied in history books. But we are unlikely to see 'another' great depression, but a greater or lesser depression, because the world economy now is interconnected while it was insulated back in 1930.

Troubled waters - Indian economy

- Chellamuthu Kuppusamy


I was watching the US market opening report on UTVI last night and the female reporter from NYSE was elaborating the jobless claims in that country reaching 44 thousands plus level, which apparently is the highest since 2003. (We all know that 2003 is the year when the market bottomed out, at least in India with SENSEX around 3,000 mark) The united states is a strong economy where people spend a lot and they spend most of their incomes and borrowings. Therefore unemployment figures do not board well for the largest economy in the world, which not only determine the destiny of investments in that country but elsewhere around the globe.

When we talk about unemployment problem, what went unnoticed is the textile industry in India. In the last one year 3.5 lakh jobs have been lost in this space. There are already reports about negative inflation-adjusted salary hike in the much discussed IT sector where smaller players might loose their skin over the time. You should not have missed the news that Hexaware is trimming down their work force.

Automobile industry in India, which is already struggling to swallow the increased input costs, might face slowdown in demand thanks to RBI's move of hiking interest rate to combat inflation. Governor Y.V.Reddy in his last monitory policy announcement asserted that the idea is bring the inflation down to 7 % by 2009 March from the current level around 12%. Inflation is at 13 year high now. The interest rate was around 17% in 1995, which is exactly that period before 13 years. So, more rate hikes on the cards?

One areas that bestowed unprecedented return, namely real estates, is already facing softening demand and prices. Real estate and construction companies' decline was double that the average decline produced by the market on the bourses. In 2008, around 80 million sq ft (45 million sq ft in 2007) of commercial space supply is expected; indicating that supply is running ahead of demand. With the lending rate going up and the era of easy money is a thing of the past, one does not need to be rocket scientist to predict further decline in property prices across the country. Dalal street investment journal quotes on the current issue: "As for the NAV, a study states that 30 per cent decline in property prices leads to 50 per cent erosion of NAV and hence with property prices softening, NAV of companies with high land bank needs to be revisited.

Needless to say, banking was understandably the worst hit by inflation. Softening credit growth, upward trend in NPA etc can be expected. The, "Sir, would you be interested in any personal loans?" calls you normally get private banks on your mobile might change as, "Sir, we have an attractive fixed deposit scheme offering...". Most of the bank now trade 40-50 down from their 52 week high. They are also affected by treasury losses due to interest rate increment. This was evident in ICICI bank's recently announced quarterly results. The bank's net was dragged down by the treasury loss.

On top of all these we should not forget that our economy is still not detached from the agriculture whose fortune heavily depends on monsoon. With around 60 % of our population still in rural area basing their lives on the oldest vocation on this earth, severe draught for a couple of years can put some brakes on the growth.

Beware, cost of living, cost of health care, cost of politics (price tag for MPs), cost of housing, cost of education and of course the cost of girlfriends are on the rise and they are unlikely to come down.

What lies ahead? Have we shifted from a 'sustained bull run' to a 'sustained bear run' with periodic correction on the upper side? Has the India growth story faded? Are global slowdown and global commodity prices press the India Inc? What lies ahead?

Yes, it is troubled waters. FISH, IF YOU CAN & IF YOU HAVE HAVE THE WILL...