THE ONLOOKER

The avalanche in Wall Street and burses all over the world is the sole point of discussions everywhere. In fact poor are bearing the burnt when they go to the market and fail to understand what relation the price of rice or cooking oil has with the stock market. So the middle class are, though most of them have burnt their fingers while participating directly investing in equities or through the mutual funds route. The worst sufferers are Americans, though the sub-prime crisis was initially caused by those who took loans but failed to pay. It is obvious that they have spent the money for procuring more goodies or using it for speculative purpose. But now their speculation having turned out to be abysmally wrong, many of them are filing for insolvency or bankruptcy taking with them till date no less than dozens of reputed bankers. The current symptoms suggest another great depression like 1929-30s is surfacing fast. Though the socialistic measure of pumping exchequers money into the b...

Earlier I discussed about the strategic importance of Hormuz Strait in relation to global oil supplies. It is equally sensitive to political developments in any of those counties surrounding it, specially Iran. There is an alternative transportation route for oil bypassing this strait out of gulf region. The route is 1190 Km (745 miles) long East-West Pipelines through Saudi Arabia stretching to Red Sea. But this pipe line at best can handle five million barrels per day, that makes one third of the oil what oil tankers can handle. So, additional capacity is required to be created but that would increase the transportation cost. At the same time the pipe line would relieve the strait of its heavy tanker’s traffic and hazards involved. But this move will be unwelcome by many Gulf States , since this will benefit the Saudi Arabia, as it will receive the transit fees for the oil transported, paid by them. There are reports, that Iran threatened closure of the Strait of Hormuz is a glob...

The Bush Government's rescue operation through legislation of bill to address the current avalanche in US economy, may be a welcome relief but not a solution. This is observed by the George Soros, the investment Guru. Here is what Geroge Sores wrote about the rescue package in Financial Times.com : The emergency legislation currently before Congress was ill-conceived – or more accurately, not conceived at all. As Congress tried to improve what Treasury originally requested, an amalgam plan has emerged that consists of Treasury’s original Troubled Asset Relief Programme (Tarp) and a quite different capital infusion programme in which the government invests and stabilises weakened banks and profits from the economy’s eventual improvement. The capital infusion approach will cost tax payers less in future years, and may even make money for them. Two weeks ago the Treasury did not have a plan ready – that is why it had to ask for total discretion in spending the money. But the general i...