Omkumar's blog

This is a very interesting article on how China is becoming a rare-earth metal monopoly. "Deng Xiaoping's comment in 1997, where he said that China would be for rare earth metals what the Middle East was to oil, has become a very stark reality." I have a strong belief that China will emerge as a super power in a decade or so. I will continue to follow news articles that talk about China - both sides of the coins and collect them under the label "China".

Given the global economic downturn made me think that I should diversify my piggy bank. So I decided to move some of my savings back to India in case there was a run on the bank in the US. After much research two banks stood out State Bank Of India (SBI) and ICICI Bank . SBI, a public sector bank, being the largest bank in India by deposits and the bank in the world to operate the most branches (As of May 2008, the bank had 21 subsidiaries and 10,186 branches). ICICI Bank is the fastest growing commercial bank with a boat load of customer service equally competing with SBI and was the first to offer banking upto 8pm in the night in India. Traditionally banks close by noon in India. I remember when my mom spent most of her first saturday of a month going to various banks making deposits, paying bills etc. SBI was poor at customer service. It still is poor in my hometown (or so my parents say). Nonetheless I decided to open non-resident accounts in both the banks. Then it hit me what i...

BlackRock becomes the go-to firm for Divining Wall Street's Assets First of all, as a risk analyst isn't this too risky to put all eggs in one basket? The reasoning Geithner gave when asked why should we trust BlackRock, is simply, "They come with world class reputation". Well so be it. I guess, and I share Janet's (read the article) comment, that the government should come out with all the details about how the assets were valued and what measures did BlackRock take, even if it is propreitary. We are talking about billions of dollars under government custody now and people's lives and jobs are dependent on these analyses. When asked about transparency of what BlackRock does and who else it works for, Larry Fink, CEO of BlackRock says he has " to be opaque" about it. Don't we smell a Madoff stink here? When it comes to public tax payer's money being used, one should provide every transparent detail possible. Atleast the government should have...

This is cool. The PRM case studies have become shorter to be more relevant and not exhaustive for students. This is much easier for my preparation. Here is the letter I got from the exam manager... -------------------------------------------------------------------------------- From: PRMIA Member Services [mailto:support@prmia.org] Sent: Wednesday, April 29, 2009 12:21 PM To: Enkannathan, Omkumar Subject: IMPORTANT – Changes to PRM and Associate PRM Case Studies Dear Omkumar, Please be aware that four of the case studies used by both the PRM and the Associate PRM exam material have been changed. These are the case studies for LTCM, Riggs Bank, National Australia Bank and Barings. The previous case studies were very long and disproportionate to the number of relevant exam questions. We have replaced these four with shorter versions in order to make studying easier. Please note that no exam questions have changed and that the answers to all questions are contained in the new material. St...

To those who follow stock markets and trying to stay optimistic: * Consumer confidence slightly stronger than expected - This doesn't matter at all. Home purchases are only *slightly* increasing. Cyclical is catching up. Retail the same. In a broad perspective, this doesn't help revive the big economic slump we are already in. * "Bear Market Still far from bottom" - David Tice, chief Portfolio strategist for bear markets at Federated Investors Inc., talked with Bloomberg's Carol Massor yesterday about the outlook of the stock market. His view is bearish atleast upto mid 2010. The most alarming statement of his is that "We think we can get to 400 on the S&P , which is 55, 60 percent decline [from where we are now]". That is just pretty shocking. * More bailouts - Liaquat Ahamed, hedge-fund advisor and historian, says more bailouts are coming and this time Geithner won't be able to ask for taxpayers' money. Debt holders may try to safeguard the...

But why? Isn't this too much intervention of government on private sector? Clearly there is a cover-up. Can't we learn already from the Japanese in the early 90s. Some interesting quotes from the article... [BofA Chairman] Mr. Lewis has told investigators for New York Attorney General Andrew Cuomo that in December Mr. Paulson threatened him not to cancel a deal to buy Merrill Lynch. BofA had discovered billions of dollars in undisclosed Merrill losses, and Mr. Lewis was considering invoking his rights under a material adverse condition clause to kill the merger. But Washington decided that America's financial system couldn't withstand a Merrill failure, and that BofA had to risk its own solvency to save it. So then-Treasury Secretary Paulson, who says he was acting at the direction of Federal Reserve Chairman Bernanke, told Mr. Lewis that the feds would fire him and his board if they didn't complete the deal And we talk about freedom!

I dont know if this is strange but I am trying to understand why a pandemic such as Swine Flu could affect the markets. Ok, I understand Livestocks getting hit because businesses dealing with porks can be affected. The import of Pork meat from Mexico may be hindered and export companies and mass-production companies may see some hindrance (still this news is to premature to react upon). However, WHO came out and said that it is safe to eat the meat as the strain of the virus cannot survive normal cooking temperature. But why Mexican Peso - that you lost confidence on holding this currency because the country could devalue its currency? What is the reasoning behind this? Why Airlines - because their revenue will be affected? how? People dont want to travel to Mexico? People who already booked tickets to Mexico are either going to travel with caution or loose their ticket (or take up on insurance ). May be you will not book tickets to Mexico, US etc. So it will affect future bookings, d...