Blame Game II
The Empire Strikes Back
In an interview to WSJ Alan Greenspan categorically states he is not responsible for the sub prime mess. Ask me why ? Housing is not part of the Federal Reserve Board Statute. Great. What has this housing bubble led to ? A total mess. Mr Greenspan : Is this in the Statute of the Fed ?

VISA IPO Conundrum

The markets are in doldrums. Everyone is running for cover. Nobody knows the depth of the Sub Prime Mess. Paul Krugman the noted economist - who also doubles, triples & quadruples as an author, columnist & professor - in a recent interview for Fortune predicts the crisis and its ripple effect will run into 2011.( see CNNMoney.com ) forget to add both up ) The entire outstanding is unsecured. Which in simple English translates as - its next to impossible to recover any ) Some analysts guesstimate the total mess at over US $ 1 trillion. Yes i.e. $1,000,000,000.00 !!!! No wonder the Fed & Capitol Hill could not cheer the markets or the economy with a recovery package of $ 100 b. This amount looks more like a rounding off error rather than a election year resurrection bid. At the horizon we have another crisis looming large. The Credit Card Crisis - C3 for short. Our beloved brethren in America have run up $ 1.6 trillion ( don't ask me to do the math again. Multiply the Sub Prime Mess into 1.6 ) The entire outstanding is unsecured, which in simple English translates as - ITS IMPOSSIBLE TO RECOVER ANY Delinquencies here will do nothing except down grade the rating of all defaulting card holders, effectively bringing majority of Americans in the Sub Prime bracket. Then America will be best known as United States of Sub Prime.
In a mess of this magnitude the first thing that happens is passing the buck a.k.a Blame Game. It is doing the rounds right earnest. Even everybody who is nobody points fingers at Alan Greenspan. Agreed he slept over the knowledge. Also agreed- If he could not predict it who could ? When the economy was firing on all cylinders at 5+ percentage GDP growth each one you were falling head over heel praising Alan. Where were you Ladies & Gentlemen all these days ? My question is why blame only Greenspan. The present incumbent Ben poor chap, clueless. To top it all another crisis with no end in sight. The Grand Iraq Mess. Jeeeeeeesus. George W Bush cannot have worse times. Another couple of trillions. Looks like these days they don't talk anything less than a trillion.
Add it all up and its easy to predict the end of the unipolar world right ? Wrong. A BIG wrong. America has been in worse conditions and they have sprung back to prominence and dominance. They have done that many times before and they will do it again. I have no doubts about it. Absolutely.
Now in this back drop comes the VISA IPO. A much awaited & over hyped public issue. Visa Chairman Joseph Saunders has been working on this for over 18 months. When Visa announced the issue price of $ 44, jaws dropped. Oh by the way did I mention this is the largest IPO ever on planet earth at a little over $ 18 ( billions of course dear- who talks anything less thesedays ) Add it all up wrong time, higher than expected price band & a huge huge offering. Recipe for disaster right ? Wrong.
The issue was over subscribed and when it got listed started trading at a 28 % premium. If this is not a conundrum what is ?
This reminds me of a joke. A Wall St. type married his college day heart throb. And in their honeymoon his bride asked him : " Tell me honey .. how do these share prices fluctuate ? Pat replied the broker " Well. It depends. On who is sits in the White House, the result of African elections, rainfall in sub Saharan Africa and other factors". The baffled girl said " Darling if you don't know say so " Yes. Its all true but unbelievable.

Bubble 2.0

If it looks like a duck, walks like a duck and quacks like a duck then chances are its a duck. Same holds good in the Tech Space. You may argue that the excesses of the 2000 era is absent. Agreed. But the excesses are in a different form.
Imagine a valuation of US$ 15 billion for my friend Mark's FaceBook. ( Jerry...... crimping about 150 m US you missed out on a golden opportunity. This could easily be the Goof-Up-of-Your-Life. If only you had cut the deal with Zuckerberg how easy it would have been to resist the Microsoft bid.) Coming back, FaceBook has no clue of a revenue stream. Slightest attempts to monetize the operation has been stiffly resisted by its incumbents.

Gone are those days of eye balls , unique visitor count, stickiness, traction et cetera. Such criteria do longer count.

FaceBook apart so many other also rans are now running for cover. Investors of all hues are ready to exit at any valuation from many non-revenue investments . Such is the desperation. We have seen this happen before and history repeats itself. Capital is getting increasingly scarce thanks largely to the mother of all American excesses - The Sub Prime Crisis. All said & done it actually good for the tech space. Its only in such shake outs the winners emerge. Also all the excess funds sloshing around is flushed out and the Valley gets lean and mean. But America being America and valley being part of it, we will get ready for Boom 3.0 and as I just mentioned history repeats itself.
We have gone through the irrational exuberance ( sorry about the cliche ) and the agonising down sizing. Don't we all learn from mistakes. Looks like a BIG no. Else how will history repeat itself.

PhotoWalk 6

We have been talking about photography for long. Now its time to walk the talk. Mr Chandrachoodan is arranging the 6 th PhotoWalk on 18 th April ' 08 Sunday. As per his blog post, SelectiveAmnesia the walk starts at 8 am from Madhya Kailash and ends at NIFT. The walk should take about 2 hours. All shutter bugs are welcome. Do join us guys.