Michael Lewis on "Why I'm Ready to Be New Citigroup CEO"

Micheal Lewis column: "Why I'm Ready to Be New Citigroup CEO".
Fun stuff! Here is an excerpt.

The Wall Street CEO must possess an extraordinary ability to be paid huge sums of money each year without losing composure.

This isn't as easy as it sounds, especially when the firm is losing billions. Imagine if some board handed you $40 million or so a year (before benefits) and tossed in a nine-figure severance package. If you're like most people, you'd dance around the kitchen naked with the drapes wide open -- until you realized what people who raised you would say when they read about it in the paper.

Markets headed further down ?

From Forbes : BNP Paribas Freezes Funds

One of Europe's largest banks, France's BNP Paribas, said on Thursday it had frozen three of its investment funds, citing volatility in the U.S. asset-backed securities market. The funds' exposure to risky subprime loans means the bank can no longer calculate their net value.

BNP Paribas blamed "the complete evaporation of liquidity" in certain areas of the U.S. securities market for its inability to calculate the fair value of the three funds in question

Hmm.. So any fund that has invested in these three funds will now no longer be able to accurately calculate their net value. So should they also be frozen ? That would trigger a cascading effect, which likely will result in no mutual fund any where in world being able to calculate their net value.

Here is the normal way in which this would have been handled. These funds would probably treat their entire sub prime mortgage investments as wiped out and calculate their net asset value accordingly. Investors would be allowed to redeem at this calculated net value. New investment in the funds would be stopped to allow existing investors to gain if there is any value left in the sub prime mortgage investment.

The fact that this wasn't done leaves room for speculation that losses from the sub prime part of the funds could have been unbounded i.e the entire net value of the funds could have been wiped off. A scary thought for markets already under some strain.

Disclosure : I have no short position in any markets.

Is Moser Baer on a winning track ?

From Economic Times Moser Baer is planning to come out with Hindi movie DVDs at Rs 38, VCD at 24. If they can get this pricing going, It will be run away winner.

Does this pricing sound feasible ?
They are promising FMCG margins to retailers so lets say 20% or Rs 8 per DVD
Royalty , lets say is 10 Rs per DVD
That leaves Rs 20 for manufacturing, packaging, distribution, inventory carrying costs & profits
Blank DVDs retails for about Rs 10, So it appears that if they have got the manufacturing costs right and can get their demand forecast right, they may be able to pull it off.

Even if they don't, I like the bold move made by the company which has been through some tough times in the last couple of years

Dislosure : I do not own any Moser Baer stock.