Thought Beans Blog

The Subprime mess in the US has resulted in billions of dollars of loss & thousands jobless. The major investment & financial companies across the world have been hurt badly. It would take years to heal the problem. The new housing sales in the US have declined & the stock markets are on a roller coaster. The rising food prices have also affected the food consumption habits. The SG of France has suffered billions of dollars loss in the trading by a rogue trader. Thousands of employees are being given pink slips by the wall street firms & the economy of NYC will be affected a lot. The americans who were used to cheap credit for house mortgages are finding it tough to repay the loans & hence resulting in the subprime mess. The fire sale of Bear sterns, an 80 year old instituion to JP morgan for a very small amount shows the damage subprime has done. The federal reserve in the US has also come under huge pressure to cut the rates

The May elections in Karnataka will be watched keenly by the COngress led UPA at the center. After the reorganization of the assembly segments, Karnataka is the first state to go for elections. The mounting inflation, price spiralling, farmers loan waiver & other factors will have an effect on the elections. There is lot discontent among the various party members owing to seats being given to new comers. Also this time it is the mining & the Real estate lobby which will have a say in the elections. Many high profile police officers who had quit in the hopes of getting party tickets were in a for a shock when the party supremos rejected them. With EC’s strict election guidelines, politicians are finding the going tough.  With the change in the assembly segments, many trusted segments for the parties have gone away with. In old mysore region, there is a fight among JDS, Cong & BJP. BJP which has a small presence in the region is trying very hard to gain a foothold there. In the coastal areas, it is a fight between the COng & BJP. In the Hyderabad & Bombay karnataka region, again it is a fight among the three though JDS presence is marginal.

Delta & Northwest have agreed for a merger creating the world’s biggest airlines subject to regulatory approvals & shareholders. The increasing fuel prices & rising inflation world over have put a dent on the  profit margins of the airlines & hence there is consolidation among the airlines industries. Northwest is buying Delta for $3 billion. They have a fleet strenght of 800 & the combined entity is valued at $11.2 billion. Airlines are increasingly finding the global economic turmoil difficult to manage. Even in the Indian airspace Kingfisher took a stake in the Air Deccan. Small airlines with no frills service are proving to be a big competitor for the big airlines & they are thinking of cutting down the costs.

The MSN’s bid for Yahoo has opened a can of worms with major players in the web like AOL, Google & News Corp all coming to the picture now. When MSN bid for Yahoo, it was like an another bidding war. With Yahoo rejecting the bid, it made way for other biggies in the web world to enter the fray. It seems Google’s CEO Eric Schimdt has also sought the advice of former investement banker who played a key role in the IPO of amazon, Netscape & others. To ward off the bid, Yahoo introduced many HR policies which would put a big hole in the packets of Microsoft. Yahoo is also mulling a plan of aliging with  AOL & testing the Google adsense ads. News Corp also entered the scene with MSN & trying for Yahoo. Congress is also considering whether yahoo’s testing of Google ads will have FTC into the picture. So the ball is in the courts of Yahoo now as to which way it will stike it. Would it be an advantage for MSN or will Yahoo stike an Ace.