NO LEHMAN BROS. IN INDIA

I happened to run in to one of my friends on Dalal Street. He was eating
'Khaman Dhokla' in a farsan shop.

'How r u, I asked?'

'Fine.' He was looking glum but gestured me to join him.

As I bit into the tasty dhokla with tangy chutney on the Friday afternoon,
which was fast turning into a 'Manic Friday' as per Dalal Street lingo, he
was staring at the Bull near the entrance, which overnight had become a
Russian bear hugging everybody that passed the Street.

My friend is a well-respected Dalal Street dada with an answer to every
shareholder' s query.

'What went wrong with Lehman Brothers?' I asked.

'Lots of things. If the founder brothers, Henry, Emanuel and Mayer were
alive this wouldn't have happened. Lehman Brothers were more than a
150-year-old company. But yet, it had no Lehman in the company. Such a
situation can never happen in India.'

'Are you trying to tell me an Indian would have handled this differently? '

'Bilkul. If it was an Indian firm, Lehman Brothers would have fought as soon
as their father died and divided in to three companies. They would have
diversified into clothing, polystyrene, petrochemicals, vegetables, movie
making, telecom, drilling oil, mobile phones, retailing, books, spectacles,
gyms, wellness. In short, anything and everything under the sun. They would
have made money for themselves and their shareholders. '

'But when there is massive failure there would be no option but to file for
bankruptcy?'

'Fail-wail chance hi nahin! Even if they encounter tough times, they would
have friends like Mulayam Singh and Amar Singh to bail them out. They could
finish off competition by befriending the finance minister and getting
duties levied on the imports of competition. They would fund and befriend
ruling parties. Unfortunately for Lehman Brothers in 2008, without a Lehman
on the board or some Indian business brothers at the top, they couldn't open
the survival kit to stay afloat.'

As we were sipping 'double kadak chai', I asked: 'Did anybody anticipate
this
global meltdown?'

'Anticipate? Mazak chodo! I will tell you something. America has some 45
Nobel laureates in economics from 1970. From 2000 alone there are 15 Nobel
laureates in econometrics sitting on company boards, treasury benches and in
places like Harvard, Stanford etc. Kisiko kuch patha nahin tha! How come
none of these had any inkling to the disaster awaiting the banking circles
all over the world? Even the finance ministers of G-7 talked of strong
'fundamentals' of world economy around this time last year! Two months
backthe
only topic they were discussing was the rise in oil prices.'

'What will happen if it goes all on like this?'

'Some American economist will study this, write a new a theory and get Nobel
Prize next year, dekhna. Seriously, they forgot things like control, double
check, systems-in-place etc and brought in vague words like Subprimes to
give loans left, right and centre.'

'What will happen to the Indian market?'

'It's already having the Lehman Brothers' effect. Our finance minister seems
to like the figure 60,000. While presenting the budget earlier in the year
he pledged Rs 60,000 crore to write off loans given to farmers. Now he is
pumping Rs 60,000 crore to help out the banks! I don't know what he will do
next. He is again from Harvard!'

'What is the lesson to be learnt from the Lehman Brothers' episode?' I asked
as we were leaving.

My friend took a spoonful of 'saunf' and said: 'You know, we have an old
elementary rule for keeping hisab-kithab. Divide a page into 'Left' and
'Right' with a line in the middle to denote Debit and Credit. In case of LB,
as somebody said, nothing was right in the 'Left' and nothing was left in
the 'Right',' concluded my Friend.
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