Saturday, June 21, 2008
Lehman's tryst with Short-Sellers - Déjà Vu
Lehman Brothers has been time and again the subject of short selling and rumours of discount and/or distressed selling that it is indeed not funny! CEO and Chairperson Dick Fuld has probably been through this more than once to realize that it will pass. Yet there is the scare that LEH may go the Bear Stearns & Co. way.
Three reasons why I [and a lot of people] think that LEH cannot go down the BSC way. For one, a run on the bank, if it were to happen, has been taken care of. Capital Reserves are in place and so is the Fed Reserve!
Second, they are far more diversified and have far more friends on the street than Bear. Just look at the timing of the favorable report from Morgan Stanley. Nothing about doubting the integrity of the equity research. It is exactly what the truth is. But the report did help arrest the fall of the stocks.
Finally, and most important, is the presence of Dick. None of the others at Wall Street have been at the helm longer than him. It is not just a function of time. It is the passion he has for a firm that he has nurtured and seen grow. One of the two people on the board who didn't want Lehman to merge with AmEx. It is like a child [or maybe a mother] that he has come to love and nurture. I believe that he will fight tooth and nail to sell it off. He is proud of what The Brothers have achieved.
Here is a nice report in the Financial Times that is good read on the subject.
Lehman Brothers Logo Source: Lehman.com
Dick Fuld Picture Source: Euromoney.com
Tuesday, June 3, 2008
The fickle Indian supporter
Brownian motion may be described as the random movement of particles suspended in a liquid or gas. The mathematical model of Brownian motion could be used in real-world applications like the fluctuations of the stock market. Another application that is becoming evident is the fluctuations in the Indian Field Hockey team performance and with that the support and attitude of the Indian Hockey team 'supporter'.
Once a glorious winner, India now sees itself at the sidelines as teams like the Netherlands, Germany and Australia have fast outpaced the warriors of the yore. Indian Hockey has gone through various ups and downs in the recent past. The downs have been the dismal performance of the team and its scarring [it was about time it came though] absence from the Beijing 2008 Olympics. That speaks for various other perfomance over the past decade. The only upside seen is the ouster of the IHF [Indian Hockey Federation] chief KPS Gill and his deputy Jothikumaran. The IOA [Indian Olympic Association] in a landmark decision chose to dissolve the IHF board and appoint veteran Olympians to head the sport in the country.
KPS Gill was the true narcissist. Adamant and hot-headed, he clinged onto the IHF like a leech. He blamed everyone [but the IHF management of course] for India's hockey slide. His views on player contracts, compensation, junior leagues were draconian and abysmal. At one instance, he actually sacked a whole bunch of players for asking better [decent and reasonable would be the right word] pay packages after winning the Asian games in 1998. After not qualifying for the Olympics for the first time ever, Gill said, “We will prepare for the 2010 World Cup. Hockey is not instant coffee.” True, it is not instant coffee. But, it does NOT take 18 years to brew any kind of coffee. Maybe he meant 18 years aged single malt scotch whisky.
Following his ouster and with the new management with the veteran olympians in place, Indian hockey looks to ressurect itself from the dead. The first competitive tournament for the selected team was the Azlan Shah Hockey tournament in Ipoh, Malaysia. With defending champions Australia are not playing this time, there are four teams bound for Beijing which are trying to make their mark: Pakistan, Canada, Belgium and New Zealand. Besides these, hosts Malaysia and Argentina make up a strong line-up of teams.
The Indian team and hockey in India was ridiculed by one and all after the Olypmic qualifier debacle in Chile. As usual, the Indian fans were extremely of the loss of the team [understandably so]. However, it is a pity to see the manner in which hockey is always compared to cricket in the country. Most people believe that hockey is a poor cousin of cricket in India and they are not far off from the target when they say that. Nevertheless, comparisons are not entirely justified. For one, cricket has been well managed and marketed in the country. Second, there is little glamour in the game of hockey in India. This is particularly sad given the fast paced nature of the game that can even put a popular sport like soccer to shame. The media is also to blame as hockey news is relegated to a corner story [unless it is a negative story like the olympics qualifier].
Let us see how the fickle Indian deals with all of this...
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