Subprime had happened earlier : When Genius Failed!

Ben Bernanke, Alan Greenspan, P Chidambaram – all three are men with above average intelligence, and reasonably competent in their jobs. However, one thing common to all 3 of them is all of them are trying to play with the rules of economics. They do not let market forces play to the fullest extent.

Alan Greenspan bailed out LONG TERM CAPITAL MANAGEMENT – not very long ago in the USA. Ben bailed out (i have called it a burial in another post) Bear Sterns -both Investment banks which were above oversight!

PC on the other hand is playing around with the word inflation. He says that the inflation is 7% or thereabouts while holding petrol prices low. He calls up steel, sugar, cement manufacturers to hold the price line while giving a nice salary revision to his government employees! Then he plays dirty with the farmers by banning the private sector from procuring wheat. All these steps are likely to cause extreme pain to the new government that is likely to come in after the election. God save the next FM. But till then if you are a shareholder of IOC, HPCL, BPCL, Tata Steel, you have to bear the brunt and hope for a quick election call!

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2 Responses to “Subprime had happened earlier : When Genius Failed!”

  1. Ravinder Makhaik on May 12th, 2008 at 1:06 pm

    Improving purchasing power of the organised and powerful employed sector, cutting the earnings of the farm sector, and pleading before cement and steel manufacturers while holding the price line for petroleum products is certainly going to rebound somewhere.

    There is much pain left to be played out there

  2. Hi Subra

    This is absolutely prophetic.

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