YOU KNOW WHAT WARREN BUFFET SAYS ABOUT OBAMA......? READ THIS

This is what he says and I am quoteing this from one of media reports---

As the President-elect Barack Obama gets all set to walk into the Oval Office as the 44th President of the United States of America now more than 24 hours, Warren Buffet, Chairman of Berkshire Hathaway and Kirby Daley, Senior Strategist of the Newedge Group, comment on Barack Obama and the challenges he will have to deal with as the president.

Warren Buffet said, “He's the absolute right Commander-in- Chief. That's another thing American people seem to do is we elect people that are right for the times, whether it was Lincoln or Roosevelt, you could not have anybody better in charge.”

Buffet added, “He's smart, got the right values, but he also understands our economics very well. He's cool, he's analytical, but then when he gets it all thought through he can convey to American people what needs to be done. Not to expect miracles, that is going to take time. But we are going to get to the other end.”

Even Kirby Daley said, “It will be a great speech. This guy is nothing if he isn’t a walking-talking speech machine.” Daley added, “He has built up so much hope in this nation. This speech is going to be of massive importance. What he should do and what he's going to do are two very different things. He should walk out there and he will go down in history if he prepares the country for what is inevitable and what is coming and that is severe belt tightening.”

9% FOR 2009 ? I HOPE WE CAN.........

The New Year for the Indian economy is an uncertain one. The highs that the markets reached a year ago have inadvertently led to the lows that it finds itself in. The euphoria from the Bull Run that lasted for four years has been wiped away in a matter of twelve months and has given birth to a Bear Market not seen in over half a century. For the Finance Department, getting the economy on track remains priority number one. In one sense it’s a good thing that India has not crept into a recession but the fact does remain that the magical growth rate of 9% will somehow not be that easy to achieve.

If 2009 was just another year then we could perhaps expect the government to finely balance the need of public sector units and private industry needs. A balancing act that has worked well for sometime in the past. The spanner in the works is the General Election of 2009.

An event where the world’s largest democracy will go to polls. For most parts the issue that is the incumbent point of contention is the one of Internal Security even more after the Mumbai terrorist attacks .In such a case other issues like the economy are being pushed aside. Perhaps the overwhelming sentiment for the Indian government is to somehow stay in power. The Rhetoric of anti terrorism is one way of winning seats.

From an economic point of view it’s hurting the country not to have a full time Finance Minister. With the Prime Minister also handling the Finance Portfolio, much of the finance work is being performed by senior bureaucrats of the government. With a very important Union Budget coming up in less than two months time the question that should be asked is will the finance department deliver a mini-budget to tide things over till the general election or will it deliver a full scale budget that addresses important issues?

There is also the question of growth for 2009.As said before a 9% growth is not achievable but the task of stimulating growth is paramount. In this aspect the government needs to make sure that interest rates come down for private players so that their projects aren’t stonewalled. At the same time if the rate cuts do not reflect appropriately in cheaper rates for average consumers then the problem will not have been fully solved.

Inflation is one area that seems to be under control but much of this too has come from consumers going into a saving shell. The drop in the price of crude oil has also helped the Indian economy to curb inflation as it is an importer of oil.

Were the trends to be reversed, will the Indian economy still be able to control inflation?

There are clearly many sectors that have been hit by the economic crisis of 2008.Real Estate, Infrastructure, Banking, Outsourcing and the like. Much of 2009 will be spent in cleaning up the mess of 2008.

In that sense it might not be such a Happy New Year after all.

THE SELF DESTRUCTION OF SATYAM & SPELL BACKWARDS MAYTAS

As many know the biggest scam in the history of India’s corporations has come to light. Satyam Computers, the country’s fourth largest IT Company stands on the brink of termination. More recently in the news for the failed takeover attempt of its sister company Maytas; Satyam is now staring into an abyss of anger and shame. Shareholders have dumped the stock left, right and centre. In every sense Satyam has managed to become India’s ENRON. It has cooked its accounts to show non existent revenues. We take a look at how this scam came about.

In a letter addressed to the Board of Directors of Satyam the former Chairman Ramalinga Raju whilst delivering his resignation has accepted total responsibility for the fudging of the company’s accounts. That was however of little concern as the damage has already been done.

In less than 24 hours the company could be sold to zero levels rendering it out of business. The National Stock Exchange has already removed Satyam from its Nifty index with the BSE likely to also remove it from the Sensex.

The fudging of accounts is indeed a criminal offence which if proved could very well lead to serious jail time for everyone involved in this fiasco. And upto 10 years

For now the only culpable offender seems to be Mr.Raju himself who has accepted all the blame himself in his letter. However, it is indeed difficult to believe that only he is guilty of this offence.

At some point earlier Satyam starts to make lesser and lesser profits. In order to maintain the same pace and acquire newer clients it starts to overstate its revenues and operating margins.

Profits reduce even more leading to Mr.Raju overstating his company’s revenues. While the revenues are in tens of crores, he manipulates the accounts to show them in the thousands.

Since the promoters and Mr.Raju’s family members hold minority equity stakes of Satyam Computers, Mr.Raju feels that if he reported the real figures his company could easily be a victim of a takeover. Therefore he continues to fudge figures and shows overstated numbers in quarterly reports and accounts.

Things start to become even more desperate and the fudging continues.

Mr.Raju realizes that he can’t continue to fudge figures anymore and decides to throw the dice one last time.

This time he decides to acquire Maytas Infra, A family owned company. The acquisition of Maytas could explain the discrepancies between the non-existent assets of Satyam and the existent ones. Due to massive shareholders oppositions the Maytas deal is called off. More allegations of corruption arise within the Satyam fold and the World Bank, an important client of Satyam decides to ban Satyam from doing business with the World Bank for eight years.

Finally, the writing is on the wall.Ramalinga Raju resigns realizing there are no other options left.

GOLD RESERVES AS ON DEC 2007

Gold reserves (or gold holdings) are held by central banks as a store of value. In 2001, it was estimated that all the gold ever mined totaled 145,000 tonnes.

1. One tonne of gold equated to a value of US$25.75 million as of October 2008 ($730/troy ounces)

2. The total value of all gold ever mined would be $3.39 trillion at October 2008 prices.

At the end of 2004, central banks and official organizations held 19% of all above-ground gold as a reserve asset.

3. About one percent of all above-ground gold (370 metric tonnes) was mined in the first five years of the California Gold Rush (worth approximately $11 billion at July 2008 prices).

4. IMF gold reserves refers to 3,217 tonnes of gold held by the International Monetary Fund. It is currently priced at $42 a troy ounce ($1,370/kg) for accounting purposes, a price that was fixed in 1971 just before the Nixon administration officially delinked the U.S.dollar from gold and instead allowed market forces to set the dollar's worth. An attempt to revalue the gold reserve to today's value has met resistance for different reasons. For example,Canada is against the idea of revaluing the reserve, as it would flood the market with gold and therefore depress its price.

5. It is also not clear whether the gold reserve is the property of the IMF or of member countries. As of September 2008, gold exchange-traded funds held 1,039 tonnes of gold in total for private and institutional investors.

6. The United States' holding of gold is worth approximately $241 billion (July 2008). Although the United States has the largest reserves of individual countries, in total the Eurozone gold holdings are greater (11,065 tonnes as of December 2007).

SEBI's clause call: No misuse of client funds by brokers

The Securities and Exchange Board of India (SEBI) will consider revamping key clauses in the client-broker agreement to prevent stock brokers from misusing client funds.

The dramatic crash in the stock market at the beginning of this year and the ensuing liquidity crisis led to misuse of client funds by many broking firms. Acting on this, SEBI had formed an informal committee — comprising senior officials from both exchanges, brokers, and investors’ representatives — in June 2008 to address the issue. “The committee has sent its recommendations to SEBI to make the agreement more investor-friendly and less cumbersome. It is very likely that some changes will come through,” said a person familiar with the development. In the current structure, an account opening form, known as ‘Individual Client Registration Form’, has boxes which the investor has to tick depending on whether he wants to trade in cash, derivatives or debt markets. There have been instances, where brokers have ticked the derivatives option after the client has filled in the form, and then used his account to punt in the market. To curb this practice, SEBI is considering introducing different colour pages in the form so that the investor knows what he is applying for, and the broker will not be able to make changes later on. The committee has proposed reducing the number of signatures to be done by clients in the agreement. If implemented, the agreement will henceforth require just half-a-dozen signatures as opposed to nearly 20 signatures at present. After the agreement is signed, brokers will be required to give the copy of the agreement, signed by both parties, to clients. Currently, the form has a section titled “adjustment of balance in family accounts”, which gives a room to the broker to adjust the outstanding balance of two family members against each other without the consent of the other client. That will no longer be possible, once the new agreement comes into effect. The committee has recommended a provision to have a prior consent from the member on the form to do so. Further, the committee has said that the broker should be compulsorily required to make the account ‘zero balance’ every quarter by exchange of cheques so that disputes don’t go beyond three months. This should be accompanied by a balance confirmation from the client with signature at the end of every financial year. It is also recommended that there should be separate forms — one having mandatory requirements by SEBI and other with optional conditions stipulated by the broker. Currently, stipulations are mixed in one form, which also includes certain conditions not mandated by regulator, but incorporated by the broker as a safeguard against potential legal action by the client. Sources said that initially, brokers on the SEBI panel were resisting these moves, as these would involve more time and costs, besides making them more accountable to their clients. But due to increasing cases of client-funds misuse coming to light, brokers had to bow down to pressure from other committee members.