Nanubahi from Dalal Street on Lehman Brothers
Nanubhai of Dalal Street wants to comment on recession in his own thinking style.
How Indians would have saved Lehman Brothers? I happened to run in to Nanubhai on Dalal Street. He was eating Khaman Dhokla (eating dish made up of "Besan" and most of the Gujarati's do like to it and many dishes made up of "Besan" like Surti Phaphda, Khamani, Gathiya, Bhujiya, Shev, Farsan) farsan shop (Evening eating snacks joint).
""Kem cho, Nanubhai?" "Majama". (How are You Nanubhai? Fine and doing wonders as usual.)
He was looking glum but gestured me to join him. As I bit into the tasty dhokla with tangy chutney on the Friday afternoon, which was fast turning into a 'Manic Friday' as per Dalal Street lingo, he was staring at the bull near the entrance, which overnight had become a Russian bear hugging everybody that passed the Street. Nanubhai is a well-respected Dalal Street dada with an answer to every shareholder's query.
"What went wrong with Lehman Brothers?" I asked. "Lots of things. If the founder brothers, Henry, Emanuel and Mayer were alive this wouldn't have happened. Lehman Brothers were more than a 150-year-old company. But yet, it had no Lehman in the company. Such a situation can never happen in India ."
"Are you trying to tell me an Indian would have handled this differently?"
"Bilkul (Yes). If it was an Indian firm, Lehman Brothers would have fought as soon as their father died and divided the company in to three different companies. They would have diversified into clothing, polystyrene, petrochemicals, vegetables, movie making, telecom, drilling oil, mobile phones, retailing, books, spectacles, gyms, wellness. In short, anything and everything under the sun. They would have made money for themselves and for their shareholders."
"But when there is massive failure there would be no option but to file for bankruptcy?"
"Fail-wail chance hi nahi! (No way and not at all) Even if they encounter tough times, they would have friends like Mulayam Singh and Amar Singh to bail them out. They could finish off competition by befriending the finance minister and getting duties levied on the imports of competition. They would fund and befriend ruling parties. Unfortunately for Lehman Brothers in 2008, without a Lehman on the board or some Indian business brothers at the top, they couldn't open the survival kit to stay afloat."
As we were sipping double kadak chai (Strong tea made in pure milk with extra sugar), I asked: "Did anybody anticipate this global meltdown?"
"Anticipate? Mazak chodo! (Anticipate, don't crack the jokes) I will tell you something. America has some 45 Nobel laureates in economics from 1970. From 2000 alone there are 15 Nobel laureates in econometrics sitting on company boards, treasury benches and in places like Harvard, Stanford etc.
Kisiko kuch patha nahin tha! (No one knows what the hell was happening) How come none of these had any inkling to the disaster awaiting the banking circles all over the world? Even the finance ministers of G-7 talked of strong "fundamentals" of world economy around this time last year! Two months back the only topic they were discussing was the rise in oil prices."
"What will happen if it goes all on like this?"
"Some American economist will study this, write a new a theory and get Nobel Prize next year, dekhna (Watch me). Seriously, they forgot things like control, double check, systems-in-place etc. and brought in vague words like "Subprimes to give loans left, right and centre".
"What will happen to the Indian market?"
"It's already having the Lehman Brothers' effect. Our finance minister seems to like the figure Rs. 60,000. While presenting the budget earlier in the year he pledged Rs 60,000 crore to write off loans given to farmers. Now he is pumping Rs 60,000 crore to help out the banks! I don't know what he will do next. He is again from Harvard!"
"What is the lesson to be learnt from the Lehman Brothers' episode?" I asked as we were leaving.
Nanubhai took a spoonful of saunf (Mouth washer) and said: "You know, we have an old elementary rule for keeping hisab-kithab (Books of accounts).
Divide a page into 'Left' and 'Right' with a line in the middle to denote Debit and Credit.
In case of LB, as somebody said, nothing was right in the 'Left' and nothing was left in the 'Right'," concluded Nanubhai.
How Indians would have saved Lehman Brothers? I happened to run in to Nanubhai on Dalal Street. He was eating Khaman Dhokla (eating dish made up of "Besan" and most of the Gujarati's do like to it and many dishes made up of "Besan" like Surti Phaphda, Khamani, Gathiya, Bhujiya, Shev, Farsan) farsan shop (Evening eating snacks joint).
""Kem cho, Nanubhai?" "Majama". (How are You Nanubhai? Fine and doing wonders as usual.)
He was looking glum but gestured me to join him. As I bit into the tasty dhokla with tangy chutney on the Friday afternoon, which was fast turning into a 'Manic Friday' as per Dalal Street lingo, he was staring at the bull near the entrance, which overnight had become a Russian bear hugging everybody that passed the Street. Nanubhai is a well-respected Dalal Street dada with an answer to every shareholder's query.
"What went wrong with Lehman Brothers?" I asked. "Lots of things. If the founder brothers, Henry, Emanuel and Mayer were alive this wouldn't have happened. Lehman Brothers were more than a 150-year-old company. But yet, it had no Lehman in the company. Such a situation can never happen in India ."
"Are you trying to tell me an Indian would have handled this differently?"
"Bilkul (Yes). If it was an Indian firm, Lehman Brothers would have fought as soon as their father died and divided the company in to three different companies. They would have diversified into clothing, polystyrene, petrochemicals, vegetables, movie making, telecom, drilling oil, mobile phones, retailing, books, spectacles, gyms, wellness. In short, anything and everything under the sun. They would have made money for themselves and for their shareholders."
"But when there is massive failure there would be no option but to file for bankruptcy?"
"Fail-wail chance hi nahi! (No way and not at all) Even if they encounter tough times, they would have friends like Mulayam Singh and Amar Singh to bail them out. They could finish off competition by befriending the finance minister and getting duties levied on the imports of competition. They would fund and befriend ruling parties. Unfortunately for Lehman Brothers in 2008, without a Lehman on the board or some Indian business brothers at the top, they couldn't open the survival kit to stay afloat."
As we were sipping double kadak chai (Strong tea made in pure milk with extra sugar), I asked: "Did anybody anticipate this global meltdown?"
"Anticipate? Mazak chodo! (Anticipate, don't crack the jokes) I will tell you something. America has some 45 Nobel laureates in economics from 1970. From 2000 alone there are 15 Nobel laureates in econometrics sitting on company boards, treasury benches and in places like Harvard, Stanford etc.
Kisiko kuch patha nahin tha! (No one knows what the hell was happening) How come none of these had any inkling to the disaster awaiting the banking circles all over the world? Even the finance ministers of G-7 talked of strong "fundamentals" of world economy around this time last year! Two months back the only topic they were discussing was the rise in oil prices."
"What will happen if it goes all on like this?"
"Some American economist will study this, write a new a theory and get Nobel Prize next year, dekhna (Watch me). Seriously, they forgot things like control, double check, systems-in-place etc. and brought in vague words like "Subprimes to give loans left, right and centre".
"What will happen to the Indian market?"
"It's already having the Lehman Brothers' effect. Our finance minister seems to like the figure Rs. 60,000. While presenting the budget earlier in the year he pledged Rs 60,000 crore to write off loans given to farmers. Now he is pumping Rs 60,000 crore to help out the banks! I don't know what he will do next. He is again from Harvard!"
"What is the lesson to be learnt from the Lehman Brothers' episode?" I asked as we were leaving.
Nanubhai took a spoonful of saunf (Mouth washer) and said: "You know, we have an old elementary rule for keeping hisab-kithab (Books of accounts).
Divide a page into 'Left' and 'Right' with a line in the middle to denote Debit and Credit.
In case of LB, as somebody said, nothing was right in the 'Left' and nothing was left in the 'Right'," concluded Nanubhai.
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