## Monday, December 29, 2008

### A book, verily a book

Comment by Aftam Alam:

Ajay,

First I cursorily glanced through the content. I am now reading the book or shall I say chewing the book at my pace. Let me admit it meets my expectation 100%.

A little observation from me. I have always found you discussing ideas and institutions and never personalities. In this book, you have taken a departure and have given the list of architects of modern Indian financial system. By and large, I find it valid but I feel there are two notable omissions.

1. G V Ramakrishna for forcing acceptance of SEBI in the market. In the initial stages, "forcing" was the only course to create acceptability in the prevailing wayward market chaos.

2. D R Mehta for bringing market perspective into SEBI thinking. I can tell you this with conviction for I was an insider then. SEBI was and continues to be a cocktail of ignorance and arrogance. D R Mehta through committe approach and through informal line of communication with the market brought a sense of professionalim in SEBI policy making procedures. I also give D R mehta credit for hastening the introduction of derivatives. In his misplaced zeal for "Badla", he reversed G V Ramakrishna's decision and tried to give respectability to Badla system by commissioning a committee to document the features of badla system and policy prescriptions to safeguard its potential abuse. He wanted to give the badla system a semblence of respectability. The malfunctioning of this redesigned system made every one quickly realise that it was like putting a coat and hat on the top of a man who was wearing a tattered and dirty "dhoti". This definitely hastened the search for bonafide alternatives.

I rate their contributions superior to many in the list given in your book.

### Goodbye great moderation, hello financial fraud?

Comment by Anonymous:

your prognosis has come true. SATYAM.

### Crisis at Satyam

"share prices of both companies were in motion based on anticipation of these events prior to this"

Ajay, you went over this bit of your post unremarked. Why should there be "anticipation" of an event like this? Who were the people placing large blocks of trades in the run up to the announcement. Perhaps the answer to this seemingly irrational proposal, lies in what went down prior to the announcement.

Please note: LaTeX mathematics works. This means that if you want to say $10 you have to say \$10.