Remembering My Father

My gratitude to God for my father. I am blessed to have known him, loved him, and been loved by him since the day of my birth.

My father has always been a very special person...flawed and imperfect, as we all are, but loving and generous. Today is my dad's 4th Death Anniversary. The man who had the most influence on the man I became passed away on Oct. 22, 2004. He succumbed to a heart attack at age 52 and It was one of the saddest days of our lives. My whole family was stunned as he had never been previously diagnosed with any heart conditions and it was a shock beyond words can describe. It has been said that the loss of a parent is one of life's most traumatic events. I now know the devastating truth of that statement. My dad was a very important person in my life, and he still influences me in his death. I am grateful for all of the things he did for me. I know now how right he was even when I thought I knew everything.

The last time I saw my father was a warm night in mid march, 2004. He dropped me off in the airport where I was scheduled to catch a flight back to NYC. He gave me a big hug and wished me well. He said he was proud of me and told me to take care of myself. To this day I can never forget those last moments and keep re-living them every time I close my eyes.

My father was a prideful man, but not like most would think of it. He was proud of the achievements of my mother and myself; Though my brothers were young, he always encouraged them to dream and achieve. He was proud of the achievements of everyone in our family; he was proud of the accomplishments of his friends and everything in my father's life centered on caring about others. My dad never let a friend ever be forgotten, no matter where he was, and that's a major tribute to the kind of man my father was.

My dad was a genius when it came to movies. He loved watching movies. In fact he was crazy about them. I remember he would stay up till 3.00AM watching movies almost everyday and he used to write reviews which were published for various magazines/papers. He had this knack of knowing what will click with the audience and he served as a story editor, writer and gave creative inputs for dozens of films. I remember a lot of producers and directors used to come to my dad for ideas around story and screenplay. When he listened to a story or a song for the first time, he used to say immediately if it will be a hit or flop and sure enough he was never wrong. And even now, when I watch a film or a show, the first thing I think is how he would critique it.

With my dad, every Sunday was 'Breakfast Day'. He used to take me, my brothers and all my cousins to have breakfast at our favorite drive in restaurant. I remember the first watch he bought me at Alsa Mall. To this date, I guard it with my life and wear it on every important occasion in my life. He also bought me a He-Man toy every month and I always think of him every time I look at my Castle Greyskull and remember how he used to play with us sometimes.

My dad was also a teacher early in his career and I remember all the lessons he used to give me when I was young. He used to be very strict with me when it came to studies and I remember every time I flunked, he would take extra time to tutor me and teach me the lessons again. I greatly enjoyed our time and after a while I began flunking on tests in 5th grade on purpose and would proudly come home and demand that he tutor me again.

I remember my dad taking me to learn how to drive. I got my earliest driving lessons from my dad in his white ambassador. I was so excited that he actually allowed me to get behind the wheel of his car and the more I got excited, the more paranoid he got. This one time, I remember getting into an accident as I misjudged the distance and rammed into a truck. Luckily no one was hurt and my dad was sitting next to me and had the presence of mind to handle the situation, while I was still sitting quite stunned.

Most of all, though, I remember my dad coming to the airport to pick me up and drop me off every single time I came back home. Ever since I left home, he had not even missed coming to pick me up and drop me off even once and I can still almost see him every time waiting for me when I go back home. Next was his belief in his God; belief was important to my dad. He used to make a trip to Tirupathi every year without fail even if he had to go alone.

I learned from his strengths; I learned from his weakness and it is all those strengths and weaknesses that has taught me how to be the person I am today. I was only 26 when I lost my dad and I so desperately to tell him how much has happened in the last 4 years since he has left us. I want to wrestle with him on the floor, I want to watch him working from afar. I want to fly him around the world and take him to all the places he always wanted to go but never had the time to. Though there are a lot of things I will never be able to share with him, he has left me with a life time of memories.

I never fail to think of him even though I know that he is not there anymore. Sometimes I pretend he is still there and talk to him. Over the last few years I have discovered many ways I am similar to my father, but it was not until this year that it really struck me just how many similarities there are. I cannot of course speak of them, but I just wish dad is still here with us to share our successes and happiness.

Miss you dad and we love you and I know you are watching over us and guiding us wherever you are!!

Wall Street Words

CEO --Chief Embezzlement Officer.
CFO-- Corporate Fraud Officer.
BULL MARKET -- A random market movement causing an investor to mistake himself for a financial genius.
BEAR MARKET -- A 6 to 18 month period when the kids get no allowance, the wife gets no jewellery, and the husband gets no sex.
VALUE INVESTING -- The art of buying low and selling lower.
P/E RATIO -- The percentage of investors wetting their pants as the market keeps crashing.
BROKER -- What my broker has made me.
STANDARD & POOR -- Your life in a nutshell.
STOCK ANALYST -- Idiot who just downgraded your stock.
STOCK SPLIT -- When your ex-wife and her lawyer split your assets equally between themselves.
FINANCIAL PLANNER -- A guy whose phone has been disconnected.
MARKET CORRECTION -- The day after you buy stocks.
CASH FLOW-- The movement your money makes as it disappears down the toilet.
YAHOO -- What you yell after selling it to some poor sucker for $240 per share.
WINDOWS -- What you jump out of when you're the sucker who bought Yahoo @ $240 per share.
INSTITUTIONAL INVESTOR -- Past year investor who's now locked up in a nuthouse.
PROFIT -- An archaic word no longer in use.

Mark-To-Market - Hero or Villain?

The financial markets are getting clobbered everyday to a point where it makes no sense anymore. It is not a question of 'Will', but 'When' the next write down is coming. If it not really ‘If’ but ‘Who’ will be the next bank to fail. One of the biggest problems is being blamed on the "Mark-to-Market" accounting rule. Mark-To-Market (MTM) accounting rules have turned a large problem into an ever larger one. MTM also known populary as ‘Fair Value’ accounting is facing opposition now from all quarters as it is forcing financial firms to treat all potential losses as if they were actual cash losses. i.e. this rule assumes that what people are willing to pay for an asset is always the same as the asset's value. This means that companies must value the assets on their balance sheets based on the latest market indicators of the price that those assets could be sold for immediately (read today). Under such a rule, declining housing prices don't just reduce the value of defaulting mortgages. They reduce the value of all mortgages and all mortgage-related securities because the housing collateral protecting them is worth less. For e.g. lets say the mortgage was sold at X today. But when the value of the house reduces (especially now with the credit markets frozen up) and someone is only willing to pay X-5 for the same mortgage today, the rule says the firm must immediately write down a loss of 5 as the mortgage can be sold for X-5 today.

Its a tough rule since there is no market to establish the real value and not all assets that have no trading market are bad assets. Moreover, the firms do not have to sell them today itself, so does it make sense that they really have to value them at the prices they fetch today? Even if the firm does not sell at the low price, and even if the value of these assets is above the price at which others are willing to pay today, the firm must record them as losses on the books - the sole reason which is causing write down after write-down, thereby violating capital requirements causing the equity to tank and in turn the stock prices to fall. Once panic sets in, we have seen what can occur with Bear, Lehman and ML - people simply start panic selling, even when they know the underlying business of the company is fine. It looks like a vast majority of mortgages, corporate bonds, and structured debts are still performing. But because the market is frozen, the prices of these assets have fallen below their true value. Firms that are otherwise solvent are bring forced to price assets at fire-sale values chasing away capital and leading to a further decline in asset values. All the banks have taken a hit because of this rule.

Further confusing investors, the rule has inconsistent application across industries and companies. MTM favors private companies over public companies. As the government is being so aggressive with the use of these capital regulations with the banks, we can see just about the only transactions taking place in the sub prime marketplace have been sales to private equity firms that do not have to mark assets to market prices.

Banks, though, are subject to regulatory capital standards and therefore can be rendered insolvent overnight based on an accounting write-down. The same is true of what happened to Fannie Mae and Freddie Mac, which had positive cash flow when they were nationalized by the Treasury. Here's something you won't believe: Fannie Mae and Freddie Mac have not drawn a dime from the Treasury's $200 billion facility that was created to bail them out. It was the use of mark-to-market accounting that allowed Treasury to declare them bankrupt. On a cash flow basis, they were solvent.

Because of all this, Washington finds itself in a somewhat awkward position in that its own rules is rendering many financial institutions insolvent in a manner which does not reflect their true value. A lot of big banks (Actually all of them) are currently lobbying heavily in Washington to get rid of the MTM accounting rule. But I think a mere accounting rule change won't reduce foreclosures or raise home prices -- then again, if spared drastic write downs, banks might be more willing to lend, raising home prices and reducing foreclosures. The economy might just jumpstart but at this point my guess is as good as yours and the truth is no one knows how things are going to play out.

The $700 Billion Dollar Question

The stakes are clearly huge in the Treasury's proposal to stabilize the US financial system. It looks like the treasury secretary, Paulson, has become even more powerful now with $700 billion at his disposal. I think the plan which promises to buy up to $700 billion of a variety of troubled assets (read mortgage-related securities and loans) will at least enable financial institutions to restructure and recapitalize their balance sheets. But while Wall Street may be bailed out, i still question the impact to Main Street. But a lot of critical answers seem murky or unanswered like what the real prices for these distressed assets are or how these assets will be valued. Also, who is going to manage them and is the government really going to hold them till maturity like it claims to.

The participating financial institutions can dispose of their troubled loans and securities closer to their intrinsic value..this means that all the problem assets will be flushed out and the banks can resume getting back to normalcy. This would go a long way to restore confidence since there won’t be any 'write- downs or losses' every quarter.

Here are some questions for which I think we need some real answers.

How will prices be determined? - This will totally make or break the success of the bailout. With all the write downs as any indications, setting the purchase price is not an easy task. The pricing at which Treasury buys the assets will likely become the benchmark pricing for all mortgage assets.

How will banks decide whether to participate in the Treasury program? - This is weird as participation in the Treasury asset sale program is voluntary. Banks can keep mortgage assets if they consider Treasury asking prices out of line with intrinsic values, taking into consideration ultimate losses from defaults. Again, goes back to the previous question, if prices are not set correctly, banks simply won’t participate.

What will be the impact of such sales to capital base? - This is kind of a double jepordy as the impact on financial institutions' capital will depend on the price levels at which the Treasury makes its purchases. Even if the firms choose not to participate or sell assets into the program may also need to mark down assets based on newly established benchmark prices, leading to erosion of their capital....there by coming out with more 'write-downs'

Is $700 billion enough? - This is the golden one. $700 billion is a lot of money. It is much greater than the $85 billion loan to AIG plus another $38 billion they are giving AIG (just announced today), and the $100 billion of capital support to Fannie Mae and Freddie Mac or the $29 billion to JPMorgan deal for Bear Stearns.

This bailout seems like an extraordinary governmental intervention - although it will provide important short-term relief, does not look like a complete solution to the financial markets. Again make no mistake; the plan will help the banks. I don’t see how the common man is going to be really benefited. To think that the ex-chairman of Goldman will be handing out $700 billion to other wall street banks... It just seems like wall street's his inner circle will benefit from all of this even more... Just barely was the plan announced and he already tapped his favorite banker from Goldman to be his adviser. I just question why the taxpayers money is being used to make wall street CEO's more rich and help them get bigger tax breaks.