Thursday, 20 December 2012

Just Monitory Fines for banking crimes are not enough.

One after the other major banks of the world are being fined by UK, US or European governments for their roles in tempering with the LIBOR rates and many such irregularities. And authorities are just putting a fine on banks which will be paid by the bank from it's profit which obviously was meant to be shared by the shareholders. But none of the banking officials who really committed those mistakes are being punished.  
This will not stop the banking officials in future from committing the same fraud again and in fact they will just shrug off these fines and will carry on with their work.
So where is system being improved? where are we putting more rigorous checks so that in future similar things do not happen? No where?
Just fines will not work, there has to be serious punishments to the banking officials and to the banks also which are involved in such practises.

Wednesday, 10 October 2012

Shocking: 1100 billion EUROs down the drain

The IMF has calculated that the European governments and central banks to Europe and other member countries have so far wasted a total of 1100 bn euro in effort to save the sinking government and banks in last 3 years. And after that much money also countries and banks in Europe are no where close to stability, still risk of them going down are same or greater as they were at start.
and all that money 1100euro spent has gone to save the banks and private investors who had invested in the banks without doing any due diligence, before investing. So by spending such huge money govts. and in fact saved private investors and banks who lent to govt. and in turn made people of the respective countries poor for generations to come as the people will have to pay all this money in forms to tax of spending cuts over many future generations.
 Just imagine if the same amount of money was spent in improving infrastructure, education , supporting small businesses or funding new future technologies/research, what a better life we would have got?
But, the govts. of the day!

Wednesday, 25 January 2012

Us Vs Them: Is there really democracy?

It's often told , especially by the westerners, that we in west are able to decide our government and we have freedom and Chinese don't have such a right. And I have been believing all this for years really. But now I am really starting to doubt this fact. Is there real democracy anywhere? This is a big question in my mind. In west, we have seen governments changing in many countries in last few years, especially since this financial crisis started, e.g. in US, in Spain, in Greece, in Belgium, and even in India.
And these changes in the govts. were done through the so-called democracy. But what have these changes given to the citizens, to the people? The more of the same. In India we see the same corruption, same kind of policies continuing or policy paralysis. In western countries, same policies are continuing which caused this financial crisis in the first place. Increasing level of unemployment. In fact, some govt. heads are replaced by unelected leaders like in Italy and Greece so as to make decision-taking unhindered without being concerned about the citizens. So there is no change, it's continuation of the the same even if there is change in govt. Politicians promise something when they are not in govt. but once they are in it they continue with the status quo.
But in case of Chinese communism, at least govt. act and they deliver, that too regularly. So is it not the better system for as long as at least economic management of the country is concerned?

Wednesday, 18 January 2012

Watch two episodes of Big Boss less and become wealthier

Yes friends, you read it RIGHT! Maybe read again the heading, it's exactly what you read. You can definitely become much more wealthier than what you currently are just if you cut down around two episodes of Big Boss (or any other mindless sitcom) per week. Most of us spend precious time in watching every week. But none spend any time in enriching oneself with personal financial education. Most of the working young Indians are horribly illiterate when it comes to managing their money. They know how to earn money but they don't know how to manage it. And what matters in life is not how much you earn every month or every day but how you manage that money over your life is what matter. People like Warren Buffett and Rakesh Jhunjhunwala have become multi-multi billionaires just by managing their money (probably they never earned any money they just managed money and that earned money for them).
But the question would be in your mind, if indeed you have come this far by reading this post, how to learn about money management? Most of us would think, I am earning enough, I can hire someone who would manage it for me. But let me warn you friends, if these guys, who we think can manage our money better, know really better then we would not be having this current financial crisis which is gripping the western world. Someone else would manage your money well only when you know enough the rules of the game. So friends I am just suggesting to learn the rules of the game which is one of the most important game of life.
So back to the question.."How to learn about money management?". Just google it and you find loads of information on it. And read religiously about it for a year and then see how your l(w)ife changes after that?

Sunday, 15 January 2012

How and why West ended up in this financial crisis?

Here, in very brief , is why Europe and US is suffering from this financial crisis:
  1. Banks knowingly gave loans to the customers who were, for sure, not able to pay them back. This happened mostly in US.
  2. then banks sold these loans to other banks by mixing and making cocktail of the loans. This all just to earn more and more bonuses. Banks of Europe also joined this party.
  3. such cocktails were sold at higher and higher prices by one bank to another and to British game of "pass the parcel", with only difference that the parcel did not contain the gift but assets worth zilch so when music stopped, the bank which was holding the parcel lost everything. and in this game almost every bank had parcel when music stopped.
  4. so this way almost all western banks lost most of their market value and almost became bankrupt
  5. Now since all banks were "too big to fail" so govts saved them by paying money without asking anything in return
  6. since govts did not have money of their own so they had to borrow, and since banks debts were so huge that govts' debt became HUGE.
  7. thus most govts in West ended up becoming hugely indebted.
  8. and now to repay those debts, govt have to get money from somewhere so they are squeezing their own citizens, by cutting their pensions, social services, taxing them more.
  9. So as a result every citizen is suffering or will have to suffer
  10. So in a line citizens will be paying for banker's mistakes.