Skip to main content

Improvement Project of Science Construction CS

Abstract Science Construction’s business is in planning, developing and building road projects. The major of its clients are municipalities, city governments, and other public sector entities. While the bankruptcy rates for these clients is very low, when economic downturns happen, their ability to pay in a timely fashion also suffers. This leads to businesses such as Science Construction needing to take on additional debt and to find creative methods in order to stay afloat during times of recession. Methods such as selling accounts receivables at discounted rates and taking larger lines of credit through banks and other lending institutions are some of the ways organizations can remain viable when their cash inflows have turned into a trickle. Science Construction is asking the Turkish Courts to postpone their bankruptcy proceedings for a year while they attempt to restructure. Through this, suggestions such as forcing shareholders to pay their debt to the organization, gaining credi...

The Saving and Loan crises in 1989

The “Black Monday” in 1987 was followed in quick succession by two more crises in US economy till the advent of new millennium. The Saving and Loan crises in 1989 and thereafter the Long Term Capital Bailout in 1998; were the two turmoil that rocked the US economy.
In US, like banks, savings and loan institutions accept deposits from public and offered mortgage loans to them. They are in the business since 1800s and remained under strict regulation till 1970s. In late 70s, new competitors, Money Market Funds started offering higher interest rate than S&Ls. The S&Ls sought deregulations to offer higher interest rate and more loans from government; what they got. It was something like handing in babies with shot-guns.
The 1980s real estate boom saw many S&Ls grew so fast as never before! Their speculative assets grew faster than ever. Loans granted against superficially priced properties brought many S&Ls prospects down, even to dooms! It was due to huge payment defaults by borrowers. By 1987, believe it! 505 S&Ls went bankrupts. The depositor’s money with F&Ls was guaranteed by Federal Savings and Loan Insurance Corporation (FSLIC). But the enormity of amount turned FSLIC itself bankrupt! By 1995, half of the total F&Ls in US, totaling 747 went bankrupt.
It was in 1989, the newly elected President George H.W. Bush bailed out F&Ls, dolling out $153 billion dollar. Out of which $124 billion was tax payer’s money. This saw dissolution of FHLBB and the FSLIC and replaced by other regulatory bodies while seeking recourse.
While the F&L crises were on, seed of another crisis was planted. Legendary bond trader John Meriwether founded his own hedge fund leaving Salomon Brothers. A man of his stature attracted top financial minds of his time. He could raise $1.25 billion as capital to start with for his newly established Long Term Capital Management Meriwether. It was commonly known as LTCM and its mantra was scientific way of leveraged arbitrage.
This was primarily a Hedge Fund; how it brought about another Wall Street crash in 1989 is another story. It will be discussed in the next article.

Comments

AMIT said…
I like your way of writing.

Write poetry

Popular posts from this blog

CHITTARANJAN IN 50s

Hi, Everybody, sometime some of you keep me asking about my days and time at Chittaranjan. This is natural, after all there are gaps of decades between most of you and me ! This has prompted me with an idea of writing this to share my old good days with those of you who are interested. Indian Railway under the British colonial rule was another group of companies with different British Managements. Since the different railway networks under all of them were used mutually for their own benefits. At places, different railway companies had the facilities of repairing and maintenance of their locomotives and passenger and goods carriages. To name a few, like Anda, Adra, Howrah, Liluah, Mughal sarai, Jhajha , these are they places I mention since they are quite closed by our loving Chittaranjan. The locomotives were imported from Manchester, England and few from Canada and Australia , all under the Union Jack. A good number of railway operational staffs were anglo Indians,...

Jyoti Basu.....The Great Son of Bengal

I don't remember the exact date, but probably it was in the month of August 1991. I was attached as a free lancer to a least know weekly “ The Democratic Forum” ; my fancy to give a try to my journalistic flair was the sole motive with that association. My editor, Late Mr M.L. Shah was the person who was encouraging me. That day he came to my office and asked if I was free in the evening. Fortunately I was and asked him back the reason. He said Mr Jyoti Basu would give a press conference at the press club, Kolkata and if I wish I could attend that. It was a pleasant surprise ; so I readily agreed. In the evening Mr, B.L. Shah of “Dainik Rooplekha” , a Hindi daily from the same stable of my weekly, fetched me from my office to the press club. We were early birds, outside the club , on the lawn people were sitting making circles and chatting with each other. I felt a fish out of water, as none knew me and so I. Turning to my companion, I found he was enjoying my discomfort! ...

MONEY MATTERS

Taking the global queue, the Indian Stock indexes have plunged and everyday finding new low. Informed experts opine that the bear phase is ushering. Everybody is busy with all their wisdom, calculations how long the bear phase will last. No doubt it is pertinent question. The investors have deserted the market, without a sign of returning early. The day traders are trying hard to recover their loses. The general feelings of payment crises under existing circumstances is not ruled out. News are there as brokers committing suicides. Obviously it transpires that they did so apprehending trouble due to non payment of their dues. The Finance Minister assured neither Indian Banks nor Indian burses are under any sort of threat. Let us trust him and raise no question. Whenever the bear phase users in the market , you know, people start guessing the bottom. Because the bottom offers ideal time to enter the market. But most of us, keep guessing but can never identify the true bottom. Better not...