Quick quiz. What is common to Suzlon, Moser Baer, Indo Solar, Websol Energy systems and Orient Green Power? All these stocks had successful runs on the stock market and hyped as the next game changers in wind energy, semi conductors, solar power and hydel/geo thermal power. Valuations were more on growth stories than through an hard nosed DCF spreadsheet. But now, they trade at record lows(like other stocks but what is different is the pressing fundamental concerns in each case). Is this a bubble finally bursting, or are investors panicking?
South Asia is becoming a hotbed for possible army coups as democratic governments in Pakistan and Bangladesh foil attempts by the army to topple the government. Note both countries have seen long tenures of army ruling them with civilian leaders assassinated or sent to exile. India though remains solidly democratic with the armed forces subservient to the government in both law and fact.
More Hedge Fund Employees were arrested by the FBI on Insider Trading Charges . Note Raj Rajaratnam the high profile hedge fund manager of the technology hedge fund is already cooling his heels in jail after being convicted of insider trading by paying money to company and insiders for illegal information. A number of low rung employees have also been jailed for lesser terms. His friend Rajat Gupta who was a former Mckinsey chairman is also facing charges which may result in conviction for passing confidential information to Rajaratnam.
Australia & New Zealand Banking Group , is going to cut 900 jobs are the Australian real estate market slumps. Financial Jobs are facing a carnage with banks cutting down left , right and centre .ANZ which is one of the 4 largest banks in Australia joins its couterparts around the world in sharply cutting banker jobs as the global slowdown bits the financial industry. Note the outlook in the Financial Industry is that of a Depression even as the world economy faces some hiccups from the European Debt Crisis . Real Estate Markets have been distorted globally by bad regulation , low interest rates etc. While China is seeing the first signs of a troubled real estate market, USA has been feeling the effects since the last 3-4 years. Australia has also joined in with the popping of the real estate bubble. Alongwith construction and real estate companies , financial companies who make the real estate mortgages are the worst hit in general.
The Financial Industry will shed another 150,000 jobs according to Richard Bove, an analyst at Rochdale Securities LLC . Royal Bank of Scotland the bankrupt UK bank that was taken over the British government is going to kill a number of investment banking divisions and will fire 3500 people. RBS has already fired thousand before in wholesale and corporate banking . Now RBS will completely exit from a number of divisions like M&A, Cash Equities etc. which will mean thousands of firings . In an environment when financial jobs are scarce , this means that the fired thousands will have a tough time getting into the workforce again.RBS is going to fire 3500 people in addition to 2000 already announced. This would bring down the 24,000 pre crisis headcount by almost 45% .
The Pakistani Government has been in a state of crisis for the last few months with relations detoriarating between the civilian government and the generals. Note the Army in Pakistan led by the Chief of the Army Kiyani calls the shots with the civilian government a mere puppet in the defence and foreign relations department. The Government in Pakistan has been in chaos ever since Osama Bin Laden was captured from near the Army HQ in Rawalpindi. After the Army got a lot of flat from everyone, it decided to hit back at the civilians using a memo by the US Ambassador Haqqani which talked of an army coup.