State Bank of India chairman Pratip Chaudhuri, yet again, took on the Reserve Bank of India (RBI), saying saying CRR is a “waste” for the economy and successive interest rate cuts by central bank have failed to contain inflation.

The CEO caused a flutter in the banking community by demanding the abolition of the Cash Reserve Ratio (CRR) in SBI vs RBI round II. RBI did promptly appointed a committee to look at this issue. The reserve ratios, CRR and SLR (Statutory Liquidity Reserve), are an important feature of Indian banking regulation. Continue reading “CRR VS SLR : ROUND II RBI VS SBI”

9 Rules for investors, this one from Morgan Housel:

I am still wondering how the name of the hurricanes in US are put up . It was Katrina sometimes back now sandy. Anyways this blog is not about hurricanes, here are some rules from Morgan house for investors.

1. Nine out of 10 people in finance don’t have your best interest at heart.

2. Don’t try to predict the future.

3. Saving can be more important than investing.

4. Tune out the majority of news. Continue reading “9 Rules for investors, this one from Morgan Housel:”

Margin Call

The film’s title comes from a stock market term referring to a demand for money when something bought with borrowed funds has ruinously decreased in value, which pretty much describes the crux of the situation the firm finds itself in. “Margin Call” has a fondness for business jargon in its dialogue.

Margin Call takes place at a fictional bank in the early days of the financial crisis. The bank sees the writing on the wall, and its CEO John Tuld (Jeremy Irons) makes the decision to dump a ton of MBS onto the laps of customers, Continue reading “Margin Call”

Initial Public Offerings (IPOs) must simply be abolished

It is a provocative paper arguing that Initial Public Offerings (IPOs) must simply be abolished by Adam Pritchard (“Revisiting ‘Truth in securities revisited’: Abolishing IPOs and harnessing markets in the public good”). He suggests that “companies bec[o]me public, with required periodic disclosures to a secondary market, before they [a]re allowed to make public offerings”.

Pitchard wrote

“No one believes that IPOs reflect an efficient capital market. In fact the evidence is Continue reading “Initial Public Offerings (IPOs) must simply be abolished”

Why I Left Goldman Sachs: Former VP Greg Smith

So the movie Boiler Room was really about Wall Street investment banks all along? Greg Smith’s book “Why I Left Goldman Sachs” comes out few days back. Here are a few quotes from the script.

“Greg Smith: Goldman Sachs, and other firms on Wall Street, started learning how to use the information they were getting from their clients, in order to bet with their own money. At times, betting against their clients. And you know, that’s a real changed mentality from how do we do Continue reading “Why I Left Goldman Sachs: Former VP Greg Smith”