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Just Shoot Me

Bala, 28, Gordon Gekko in the making, pseudo-intellectual, cynic, bibliophile, obsessive compulsive ranter...

Nerds and Emperors

October 20, 2008

There are some books which you can read in any frame of mind and come out feeling much better. Robert Graves' I, Claudius is such a book. I read its sequel Claudius the God this weekend. It is not as good as its predecessor but is still a great read. At the end of I, Claudius Tiberius Claudius Drusus Germanicus Nero aka claudius the idiot aka poor uncle claudius aka clau-clau-claudius, after surviving his dysfunctional family, finds himself proclaimed as the emperor of Rome though no fault of his own. In Claudius the God he narrates his (mis)adventures as he sets about to rule Rome as an absolute monarch and restore the republic while he can.

In the first book, Claudius was a nerd pretending to be an idiot to fly under the radar of his family of adulterers,sociopaths, megalomaniacs and murderers. Now he is emperor and God, surrounded by sycophants, schemers, nymphomanic wives and quarreling advisors. In typical nerd fashion, he sets out to make Rome safer from her enemies - both within and without. The narrator here is not a nervous nerd trying to find acceptance with his family, but a whining nerd trying to make himself understood by his unappreciative subjects. Claudius the emperor is always alternating between self congratulation over his achievements and petulance over his subjects failure to recognize them. Ultimately he fails to restore the republic and the monarchy falls to Nero who is as despicable his predecessor Caligula.

The best parts in the book describe the invasion of Britain and the story of Jesus Christ (who is described as a pretender to the messaihhood). The story of Herod Agrippa is a distraction and just makes the narrative longer. What i missed most was the gallows humour that permeated I, claudius. And there is no larger than life villain to replace Livia. It is a good book but not comparable to its prequel.

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posted by Bala, 3:27 PM | link | 0 comments |

Sensex Below 10000!!!!

October 17, 2008

posted by Bala, 4:00 PM | link | 1 comments |

why regulation is a necessity.

October 14, 2008

i was going through a month old article on how AIG went under and came across this paragraph:

AIG was on one side of these trades only: They sold CDS. They never bought. Once bonds started defaulting, they had to pay out and nobody was paying them. AIG seems to have thought CDS were just an extension of the insurance business. But they're not. When you insure homes or cars or lives, you can expect steady, actuarially predictable trends. If you sell enough and price things right, you know that you'll always have more premiums coming in than payments going out. That's because there is low correlation between insurance triggering events. My death doesn't, generally, hasten your death. My house burning down doesn't increase the likelihood of your house burning down.

Not so with bonds. Once some bonds start defaulting, other bonds are more likely to default. The risk increases exponentially.

Credit default swaps written by AIG cover more than $440 billion in bonds 2. We learned this week that AIG has nowhere near enough money to cover all of those. Their customers-those banks and hedge funds buying CDSs-started getting nervous. So did government regulators. They started to wonder if AIG has enough money to pay out all the CDS claims it will likely owe.


What they did was the equivalent of writing naked puts on all the stocks that exist in the universe!!.(Even a lobotomized monkey with two weeks stock market experience would tell you writing naked puts on everyone and his uncle is the equivalent of playing russian roulette with 5 bullets in the chamber) and did they keep the money from the premiums to meet the inevitable defaults?..no they paid record bonuses and spent most of it!!! With such geniuses running the show, no wonder they nearly dragged down the world's financial system with them. Last heard they were treating themselves to some tax payer sponsored manicures after the fed bailed them out!!.

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posted by Bala, 8:27 PM | link | 2 comments |

The sad case of Iceland

October 13, 2008

BusinessWeek has a good article on the Iceland bankruptcy.

This Wikipedia Article also gives good information on what went wrong.

For those of us who have read about past bubbles and busts, there is nothing new here. We have all seen this before. When you hand the reins of the economy to people whose ideology makes them believe regulation is a bad word, they are bound to do this kind of things. This has happened before and will happen again.

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posted by Bala, 4:16 PM | link | 0 comments |

Bottoming out..

October 11, 2008

In the previous post, i was thinking about a bottom. I think Friday's trading action sort of confirms that there is not much downside left. I was saying 5%, but let me revise it to 10 % on either side of 3000 Nifty. I think there will be increased volatility in such a badass market (the world hasnt seen one such as these since the 1930s depression). So 2700 in Nifty will be the worst case line in the sand. I personally believe it won't be that bad, 3000 would be a better bottom.

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posted by Bala, 8:52 PM | link | 0 comments |

Had enough!

October 09, 2008

I think we have had enough of the price wise bear phase. I don't see much downside (say max 5% or so) from here. But that doesn't mean there is going to be a V shaped recovery either. I believe the time wise bear phase is just beginning and we are going to be stuck here for another year or so.

The valuations of Indian markets have become mouth watering to me. But still can't bring myself around to buy equity.

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posted by Bala, 6:45 PM | link | 0 comments |

You heard it here first..

October 08, 2008

All ye suckers, who bought ULIP (unit linked insurance plans) by the truck load, remember it is your money that has bought the shares being sold by FIIs. It is you who have been left holding the bag. It is your money FIIs are now withdrawing to wall street. In three years time, your Market plus policies would probably go the way of all Assured return schemes of UTI. (hint: no one saw any return, assured or not).

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posted by Bala, 1:42 AM | link | 0 comments |

when countries go bankrupt

October 06, 2008

It is not a company that is near bankruptcy this time, it is a whole damn country

For those who wonder what would happen if libertarian wunderkids ran everything.. read and weep

And as for the next college kid you see with a Ayn Rand book in his/her hand, contemplate homicide. And if you were a college kid who read Ayn Rand books.. i pity you.

==
Personally, i made some of my biggest trades in the past couple of days. I am not exactly rolling in money, for having moved much of my money into safe low yield fixed deposits. But it doesnt hurt to be a permabear now.

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posted by Bala, 8:21 PM | link | 0 comments |