BSEIndia: All Stock Market News: 05/14/10

Gregorio Lopez has a message for the Greek workers who are protesting deep cuts in salaries and pensions that come with an international, trillion-dollar rescue package: You're on your own.

Lopez and his fellow employees at the Lavalan wool-processing factory worked for a year without pay after Argentina's economy imploded in 2001 and the country defaulted on a record $95 billion debt.

They endured blows from riot police to keep creditors from carting off the equipment. In the end, they had to take over the factory and form a worker-run cooperative to save their jobs.

"It was really ugly," Lopez said. "We didn't have support from anybody - not the government, not even the union. ... Our only way out was to do it ourselves."

Argentina also had to go it alone after failing to make the deep cuts demanded by the International Monetary Fund to secure more loans. The country in 2001 was in many ways where Greece and other southern European nations are today, with its economy sputtering, companies failing and huge debts coming due. But instead of a trillion-dollar rescue to keep Greece from defaulting, Argentina got a cold shoulder from lenders.

While Europe's rescue package announced this week has at least postponed the worst - a domino effect of defaults across Europe that could drag down the euro and even break up the European Union - Argentina ran out of options. It defaulted and had to figure out how to rebuild its economy without outside help.

But in its isolation, the country boomed. By boosting government spending to stimulate the economy, Argentina increased its GDP by more than 50 percent since 2003, and now plans to emerge from default by resolving the last of its bad debts.

President Cristina Fernandez says Argentina's experience shows that austerity measures are exactly the wrong medicine in a debt crisis, which is why Europe's rescue plan is "condemned to failure."

"You don't need to be an economist to know that if you reduce the flow of economic activity, you reduce even more the capacity to pay the debt," Fernandez said in a national address this week. "It's clear that you won't be able to pay what you're being lent."

Even supporters of Europe's rescue package say Greece, Portugal, Spain and other overly indebted European countries now face years of wage cuts, increased taxes and living with less to have a chance of avoiding national bankruptcy.

But getting your financial house in order is the best prescription for growth, European Central Bank President Jean-Claude Trichet said in an interview published Friday on the bank's website, expressing an orthodox economic theory that is directly opposed to Argentina's position.

"It is a complete fallacy to say that fiscal soundness dampens growth. It is exactly the contrary," Trichet said. "It is the absence of fiscal credibility which dampens growth."

Before its default, Argentina had spent years following Washington's economic doctrine - privatizing public services, dropping trade barriers, taking out huge loans and linking the peso 1-to-1 to the dollar. Then its economy slowed in the late 1990s, and it found it had borrowed more than it could pay back.

The IMF, which liberally lent Argentina money in good times, said draconian cuts in government salaries and pensions had to be made before fresh loans could be offered - at 6 percent interest, a rate Argentines thought was obscenely high.

It fell to Argentina's economy minister Ricardo Lopez Murphy to announce the austerity measures in the spring of 2001: $2 billion in budget cuts, including a sharp drop in education spending. Massive street protests forced his resignation in days. But the economy kept souring, and debt payments loomed.

With no political consensus for unpopular measures, Argentina drove its economy off a cliff - declaring its world-record default and devaluing its currency. Overnight, Argentines lost most of their wealth. Money stopped circulating. The economy virtually stopped.

Fernandez's husband and predecessor, President Nestor Kirchner, put Argentina on a path to recovery beginning in 2003. The Kirchners allied with labor unions to increase wages and contain politically destabilizing protests, and the government now provides direct subsidies to vast sectors of the work force. Booming prices for soy and other commodities provided a huge boost.

But now many worry that Argentina is headed right back where it started, even without access to traditional lenders - and that it is taking the wrong lesson from Europe's crisis. To maintain high government spending, Fernandez has tapped central bank reserves and the pension funds she nationalized, and agreed to pay a whopping 15 percent interest on $7 billion borrowed from the government of her ally Hugo Chavez in Venezuela.

"Argentina is burning through its reserves, it doesn't have investments, it doesn't have savings, it doesn't have an economic plan. It's living for the moment," said Marcelo de las Carreras, a Buenos Aires financial consultant. "Sooner or later, it's going to get slammed, because these funds are running out. A country needs to have a plan for creating wealth, not just for spending it."

European markets also remain jittery. While the IMF-European community rescue package has eased concerns of a wave of defaults within the 16-country eurozone, the euro has dropped again amid fears that highly indebted governments won't be able to persuade their citizens to swallow draconian budget cuts.

They didn't in Argentina. And everyone suffered, especially the workers, who took it upon themselves to save their jobs.

At the Lavalan factory, business is streamlined - and booming: 44 employees, working without bosses, now process 2,000 tons of wool a season, taking in more than $1 million from some of Argentina's biggest exporters.

The movement they pioneered also has spread to some 200 factories employing 15,000 people - all working collectively and sharing the profits.

Lopez said several laws have swung in their favor - one made it easier to form cooperatives and expropriate abandoned businesses, while another Fernandez signed in March puts workers on more equal footing with creditors in bankruptcies.

Lopez, for one, hopes workers in Greece will find it in themselves do so something similar.

"A job is the basis of everything," he said. "Hopefully they will get all the help they need and won't have to endure what we went through.

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.

Nothing in this article is, or should be construed as, investment advice.

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[investwise] Gold: Fine Till US Short Term Rates Remain Below 2 per cent!

Investing in gold is that you're not really investing in gold. You're investing against the U.S. dollar. It's not that gold goes up, it's that the value of a dollar goes down.

Actually, it's even more subtle than that. What you're doing is you're betting against the interest rate on the dollar. I know this sounds odd, but any currency you carry around in your wallet has an interest tied to it. That's essentially what the currency is—that rate—and it's the reason why anyone would want to use it. Gold can be seen as the way to keep all those currencies honest.

People mistakenly believe that gold is all about inflation. That's not quite it, but high inflation is usually very helpful for gold. What gold really likes is to see is very low real (meaning after inflation) interest rates. Gold is almost like a highly-leveraged short on short-term TIPs.

Here's a good rule of thumb. Gold goes up anytime real rates on short-term U.S. debt are below 2% (or are perceived to stay below 2%). It will fall if real rates rise above 2%. When rates are at 2%, then gold holds steady. That's not a perfect relationship but I want to put it in an easy why for new investors to grap. This also helps explain why we're in the odd situation today of seeing gold rise even though inflation is low. It's not the inflation, it's the low real rates that gold likes.

This chart shows the three-month Treasury bill rate minus the one-year inflation rate (low is good for gold, high is bad):

gold prices bond yield graphic

In February, gold took a big hit when the Fed announced it was lifting the discount rate. This isn't the all-important Fed funds rates, but you can see how nervous the market was over the threat of higher real rates.

This rule of thumb also tells us that gold can rise very quickly and it can fall very quickly. One Ben and his pals at the Fed raise rates, gold is in for a world of hurt. The history of the price of gold is long boring periods with sharp dramatic spikes. The up part of the spike is fun. The downside, less fun.

What's tricky about gold is that it's also impacted by geo-politics. Gold peaked in 1980 shortly after the Soviets invaded Afghanistan. It reached a low point not long before we did the same.

The pricing of any commodity can be tricky because commodities are subject to substitution. Let's say that gold, despite its high price, is the cheapest way to make a part for a certain kind of semiconductor. That will drive demand for gold. However, let's say that once gold crosses a certain level, it's no longer the cheapest way to make the part. Maybe unobtanium is a better way to go. That will, in turn, undermine gold's value. It's price impacts its price.

This is a major difference between investing in equities and investing in commodities. Stocks are companies, filled with people aiming to make a profit. Gold is just a rock. It just sits there. In 10,000 years, it will still be a rock.

My view is that the Federal Reserve will raise interest rates earlier than expected. I don't know exactly when that will be but it will put gold on a dangerous path. For now, my advice is to stay away from gold, either long or short.

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[investwise] Aban Will Lose $ 1.3 Bn In Revenues, As Aban Pearl Sinks off Venezuela!

Aban Offshore Gets Hit By A Political Maelstorm in Venezuela

Opposition charges Venezuela's PDVSA of paying excessive sums of money for a "Junk Heap", asks Government to renege on payment of $ 1.3 bn.

An offshore natural gas platform that sank off Venezuela encountered problems last year before being hired by the Venezuelan government, an official in nearby Trinidad and Tobago said Friday.

Lieutenant Kirk Jean-Baptiste, spokesman for the Trinidad and Tobago Coast Guard, confirmed that authorities received a distress call from the rig Aban Pearl platform Aug. 14 because it was tilting after one of its floating devices was damaged.

He said that by the time the Coast Guard arrived, those aboard the rig had been able to correct the problem.

The platform sank off Venezuela on Thursday after all 95 workers aboard safely evacuated. Venezuela authorities are investigating what led to the sinking.

Oil Minister Rafael Ramirez has said the platform was inspected in Trinidad and certified as being in optimal condition before it was moved to Venezuelan waters.

A group of Venezuelan opposition lawmakers led by Ismael Garcia have denounced what they call a deal by the state oil company Petroleos de Venezuela SA, or PDVSA, to lease a "junk heap."

Garcia called for an investigation and presented the attorney general with a copy of the contract Friday, saying the $1.3 billion that Venezuela agreed to pay to lease the rig was excessive.

"PDVSA has an obligation to clear up why such a bad deal was done," Garcia said. The opposition politician cited the past incident with the rig in Trinidad's waters.

There was no immediate comment from PDVSA on those accusations.

The Singapore-flagged platform, built in 1977, is owned by a subsidiary of the Indian company Aban Offshore.

Despite the sinking, Venezuela maintains its goal of starting commercial offshore gas production in 2012, said Eulogio Del Pino, PDVSA's vice president of exploration and production.

Ramirez said Thursday that PDVSA will soon obtain a replacement rig. He said workers on the lost rig avoided any leak by disconnecting a tube leading from the gas fields to the platform before it sank.

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RE: [sharetrading] Respect for Soldiers...

Touche………

Having flown through out my life (on way to my job and return twice a year for last 27 years), I am yet to see respect for fellow passengers, who are living, let alone the dead….. Except once when landing in Rome……. But never seen after that even there… Most of us consider a plane as a bus (may be a bullock cart in India and a horse cart abroad), to exit even before it comes to a halt. Irrespective, the last passenger onboard, on the last seat is also the first to get up even before the seat belt sign is off, though he would be the last to exit. Check this out next time on board….

There was a boat tragedy in THEKKADY last year, where in all the passengers (tourists) moved to one side of the boat for a better view of the animals, instead of remaining in their seats. A large number of persons could not be rescued as it was far away from human settlements…. And perished. So remember, next time when flying to remain at the seat, till seat belt sign is extinguished, if not till the passengers before you are exited..

Touche……

From: sharetrading@yahoogroups.com [mailto:sharetrading@yahoogroups.com] On Behalf Of HS Ratti
Sent: Friday, May 14, 2010 7:10 PM
Subject: [sharetrading] Respect for Soldiers...

will wei n India, Indians do this ????

a large no of mortal remains are being transported by Air India on daily basis from Srinagar..

Subject: Honour & Respect for Soldiers. Must read

.

This is sent by Bill Doherty, a godly man. He retired from PanAm as a 747 pilot.

He writes: My lead flight attendant came to me and said, "We have an H.R. on this flight." (H.R. stands for human remains.) "Are they military?" I asked.

“Yes,” she said.

“Is there an escort?” I asked.

“Yes, I already assigned him a seat.”

“Would you please tell him to come to the flight deck. You can board him early," I said..

A short while later, a young army sergeant entered the flight deck. He was the image of the perfectly dressed soldier.  He introduced himself and I asked him about his soldier. The escorts of these fallen soldiers talk about them as if they are still alive and still with us.

“My soldier is on his way back to Virginia ,” he said. He proceeded to answer my questions, but offered no words.

I asked him if there was anything I could do for him and he said no. I told him that he had the toughest job in the military and that I appreciated the work that he does for the families of our fallen soldiers. The first officer and I got up out of our seats to shake his hand. He left the flight deck to find his seat.

We completed our preflight checks, pushed back and performed an uneventful departure. About 30 minutes into our flight I received a call from the lead flight attendant in the cabin. 'I just found out the family of the soldier we are carrying, is on board', she said. She then proceeded to tell me that the father, mother, wife and 2-year old daughter were escorting their son, husband, and father home.  The family was upset because they were unable to see the container that the soldier was in before we left. We were on our way to a major hub at which the family was going to wait four hours for the connecting flight home to Virginia .

The father of the soldier told the flight attendant that knowing his son was below him in the cargo compartment and being unable to see him was too much for him and the family to bear. He had asked the flight attendant if there was anything that could be done to allow them to see him upon our arrival. The family wanted to be outside by the cargo door to watch the soldier being taken off the airplane.. I could hear the desperation in the flight attendants voice when she asked me if there was anything I could do. “I'm on it,” I said. I told her that I would get back to her.

Airborne communication with my company normally occurs in the form of e-mail like messages. I decided to bypass this system and contact my flight dispatcher directly on a secondary radio. There is a radio operator in the operations control center who connects you to the telephone of the dispatcher. I was in direct contact with the dispatcher.. I explained the situation I had on board with the family and what it was the family wanted. He said he understood and that he would get back to me.

Two hours went by and I had not heard from the dispatcher. We were going to get busy soon and I needed to know what to tell the family. I sent a text message asking for an update. I saved the return message from the dispatcher and the following is the text:

“Captain, sorry it has taken so long to get back to you. There is policy on this now and I had to check on a few things. Upon your arrival a dedicated escort team will  meet the aircraft. The team will escort the family to the ramp and plane side. A van will be used to load the remains with a secondary van for the family. The family will be taken to their departure area and escorted into the terminal where the remains can be seen on the ramp. It is a private area for the family only. When the connecting aircraft arrives, the family will be escorted onto the ramp and plane side to watch the remains being loaded for the final leg home. Captain, most of us here in flight control are veterans. Please pass our condolences on to the family. Thanks.”

I sent a message back telling flight control thanks for a good job. I printed out the message and gave it to the lead flight attendant to pass on to the father. The lead flight attendant was very thankful and told me, “You have no idea how much this will mean to them.”

Things started getting busy for the descent, approach and landing. After landing, we cleared the runway and taxied to the ramp area. The ramp is huge with 15 gates on either side of the alleyway. It is always a busy area with aircraft maneuvering every which way to enter and exit. When we entered the ramp and checked in with the ramp controller, we were told that all traffic was being held for us.

“There is a team in place to meet the aircraft,” we were told. It looked like it was all coming together, then I realized that once we turned the seat belt sign off, everyone would stand up at once and delay the family from getting off the airplane. As we approached our gate, I asked the copilot to tell the ramp controller we were going to stop short of the gate to make an announcement to the passengers. He did that and the ramp controller said, “Take your time.”

I stopped the aircraft and set the parking brake. I pushed the public address button and said, “Ladies and gentleman, this is your Captain speaking I have stopped short of our gate to make a special announcement. We have a passenger on board who deserves our honor and respect. His Name is Private XXXXXX, a soldier who recently lost his life. Private XXXXXX is under your feet in the cargo hold. Escorting him today is Army Sergeant XXXXXXX. Also, on board are his father, mother, wife and daughter. Your entire flight crew is asking for all passengers to remain in their seats to allow the family to exit the aircraft first. Thank you.”

We continued the turn to the gate, came to a stop and started our shutdown procedures. A couple of minutes later I opened the cockpit door. I found the two forward flight attendants crying, something you just do not see. I was told that after we came to a stop, every passenger on the aircraft stayed in their seats, waiting for the family to exit the aircraft.

When the family got up and gathered their things, a passenger slowly started to clap his hands. Moments later more passengers joined in and soon the entire aircraft was clapping. Words of “God Bless You,” “I'm sorry, thank you, be proud” and other kind words were uttered to the family as they made their way down the aisle and out of the airplane. They were escorted down to the ramp to finally be with their loved one.

Many of the passengers disembarking thanked me for the announcement I had made. They were just words, I told them, I could say them over and over again, but nothing I say will bring back that brave soldier.

I respectfully ask that all of you reflect on this event and the sacrifices that millions of our men and women have made to ensure our freedom and safety in these United States of America .

Foot note:

As a Viet Nam Veteran I can only think of all the veterans including the ones that rode below the deck on their way home and how they were treated. When I read things like this I am proud that our country has not turned their backs on our soldiers returning from the various war zones today and give them the respect they so deserve.

I know every one who has served their country who reads this will have tears in their eyes, including me.

Prayer chain for our military... Don't break it!

Please send this on after a short prayer.. Prayer for our soldiers Don't break it!

Prayer:

“Lord, hold our troops in your loving hands. Protect them as they protect us. Bless them and their families for the selfless acts they perform for us in our time of need. Amen.”

Prayer request: When you receive this, please stop for a moment and say a prayer for our troops around the world.

There is nothing attached. Just send this to people in your address book. Do not let it stop with you. Of all the gifts you could give a Marine, Soldier, Sailor, Airman, and others deployed in harm's way, prayer is the very best one.

No virus found in this incoming message.

Checked by AVG - www.avg.com
Version: 9.0.819 / Virus Database: 271.1.1/2868 - Release Date: 05/12/10 00:10:00

HSR

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RE: [sharetrading] ABAN

In the field of offshore industry, every nut and bolt is INSURED at more value than it is worth. ABAN will make more money from this disaster, than loose, if the insurance payments have been made properly. Which I expect will be the case (they will have a new rig for free, considering that many of their rigs are mostly old. They would be saying good riddance). As at presently no oil major will accept a rig w/o insurance. So wait for the drop to continue and pick at an opportune moment……

But as insurance payments are delayed, the recovery will be slow…. As earnings are hit….

Abe

From: sharetrading@yahoogroups.com [mailto:sharetrading@yahoogroups.com] On Behalf Of Manish Sharma
Sent: Friday, May 14, 2010 3:22 PM
To: sharetrading@yahoogroups.com
Subject: [sharetrading] ABAN