THANKS GOD for the International Herald Tribune (IHT) which picked up on the fact that Tony Blair, who used to be an MP for working class area Sedgefield, had a great time a-frolicking on Richard Branson’s paradise island with a number of other luminaries just a few days ago. They are all saving the world.
There’s a great quote from Richard “Virgin” Atlantic to the effect that the gals on Mosquito Island would normally be naked but wore bikinis because Tony Blair is reticent about such things and he has been the prime minister a couple of times.
Blair, the IHT rightly notes, is now a geezer working for JP Morgan Chase, which of course swallowed Bear Stearns just a little while back. Apparently, Jimmy “Whackypedia” Wales was also there at the shindig, as well as Google’s Larry Page, while Volester Paul Allen watched the proceedings from an enormous dinghy [shorely a shpaceship? Ted.], but didn’t set foot on the paradise isle.
It’s a tough life, but someone’s got to do it, notes the IHT, here.
THE SNAFU called the sub-prime market is bound to have an effect on the fate and fortune of AMD.
AMD, unlike its nemesis Intel, relies heavily on loans to finance its business and the collapse of Carlyle, and Bear Stearns underlines the difficulty in financing large, medium and small companies face.
With even homeowners with impeccable credit records facing difficulties re-financing their mortgages, companies face bigger challenges, particularly in such a capital intensive business as fabricating semiconductors.
Even though Wall Street showed signs of recovering yesterday after the Fed cut interest rates, most financial analysts believe that the crisis in the banking market is still far from over. ♣
BOGGARD But Abu Dhabi is holding steady, according to this INQster article, here.
JP MORGAN, propped up by the Federal Reserve, has bought Bear Stearns for $2 a share, giving it a value of $236 million rather than the $3.5 billion it was worth last Friday and the $2o billion it was worth a year ago.
The sale is a devastating indictment of the stupidity that made large financial institutions lend money to people who couldn’t repay the loans. The Federal Reserve will provide the not insignificant sum of $30 billion to cover Bear Stearns’ exposure in these so-called “sub prime” markets.
The alternative to flogging Bear Stearns was for the firm to go bust, with many analysts believing that the move heralds a deep US recession.
Shareholders in Bear Stearns are not at all happy with the sudden collapse of valuable equity to what is effectively junk. ♣
BEAR STEARNS and other financial institutions’ woes, which are really self inflicted, are having their toll on the Indian outsourcing market.
Layoffs at Indian IT firms could be as much as 25 per cent during the year, because of the fallout from the sub-prime crisis.
The Times of India reports that the write off of billions of dollars means a slimming exercise is underway. This, the newspaper rather coyly called “people pruning”. Which parts of the people will be pruned? Fingers, toes, arms, leg? Nope, the whole person.
There will be other kinds of “pruning” the paper said, with jollies no longer the order of the day. Infosys, Wipro and TCS are likely to go further than the others in their “people pruning”. ♣