The sign of the busting of bubble started to show from the middle of 2006 with the transition of loan from ‘interest only’ and ‘teaser rates’ to regular payments. This coupled with increase in market interest rate led to doubling or even tripling of monthly repayments. Unable to pay the increased monthly repayments, borrowers began defaulting and surrendering their houses adding to the pile of inventory of unsold houses. Unsold inventory was up nearly 40% in sept ’06, around the time when prices began to decline.
Continue reading “Subprime Crisis… (Part II)”
The latest Financial Stability Report for March ’18 released by RBI shows that interconnectedness of Indian Banking industry has come down considerably over last year. That is important to note since the rapid spread of contagion during financial crisis in 2008 was primarily due to the fact that the financial institutions in US had become highly … Continue reading Banking Sector Interconnectedness in India..
The amalgamation of Bank of Baroda, Vijaya Bank and Dena Bank announced yesterday comes more than a year after the last successful merger in the PSB space. It clubs two PSBs having less than 2% market share with a mid-sized bank to create the country’s third largest bank. However, there are still around ten PSBs … Continue reading Analysing Amalgamation of BoB, Vijaya Bank & Dena Bank..
The decision of National Company Law Appellate Tribunal (NCLAT) earlier this month to accept the bid of Numetal and conditional acceptance of bid by ArcelorMittal for sale of Essar Steel is one of many and not yet the last of interesting twists & turns to the saga. The insolvency process, which began in June last … Continue reading The Curious Case of Essar Steel Insolvency..!
The subprime crisis has caught the global attention again, today marking the collapse of Lehman Brothers, ten years ago. The crisis remains a classic case study for the enormity and swiftness with which it unfolded. A brief attempt to revisit and simplify the complex issues involved..The genesis of the issue, paradoxically, lies in another crisis … Continue reading Subprime Crisis – Ten Years On.. (Part I)
The tariff hike on some of the Chinese goods by US government has shown that Mr Donald Trump is serious about what he talked about during his election campaign. Even though he has been facing severe criticism for his protectionist trade policies, his point of view with regard to China needs to be understood properly. A brief attempt..
Continue reading “US China Trade War – Understanding the Dynamics..”
Liquidation order for Lanco Infratech by National Company Law Tribunal (NCLT) seals its fate. The company which generated revenue (consolidated) of over Rs 8,000 crore just two years back would soon cease to exist. As per the last annual report (FY17), it had over Rs 27,000 crore of order book in just one segment, not … Continue reading Lanco Infratech – Here Today, Gone Tomorrow…
In its second attack on shell companies, government prepares to strike-off another 1,00,000 of them from the Ministry of Corporate Affairs (MCA) register. This comes about a year after the first such move when it had de-registered over 2.25 lakh such companies and disqualified over 3 lakh directors. So, what are shell companies and how … Continue reading Understanding Shell Companies…
While software services continue to get maximum attention, Business services is also a sizeable segment and provide some useful insights. The segment reported exports of over $37 bn, less than software, but substantial nevertheless. In fact, its growth rate at 13% implies that it is not witnessing the kind of challenges software is going through. Further, … Continue reading India’s Balance of Payment.. (Part II)
Balance of Payment (BoP) for 2017-18, as per the RBI data, shows a reasonable jump of over 13% in exports. this has come after a gap of five years during which it has shrunk by nearly the same amount. However, the gans were more than negated by even sharper increase of 20% in imports. But these brief numbers do little justice to the complex dynamics of goods, services and financial trade. A brief attempt to give more sense to the numbers.. Continue reading “India’s Balance of Payment – A brief Analysis.. (Part I)”