Tuesday, October 21, 2008

Sunday Night Brain Fart ! :)

Sunday Night Brain Fart !

Pakistan in a nut shell this week :)

I got this email from a friend in Pakistan !

" After seeing this month's electricity bills (withdrawal of subsidy and recent rate hike), an unruly mob burnt down a WAPDA office in Lahore. Pakistan is on the verge of economic collapse and seeking a financial bail-out package from IMF, everything built in the last decade has been systematically destroyed by the so-called champions of democracy " .

This is from someone who was totally into the movement for the restoration of judges, anti musharraf and for the so called jamhooriyat. He voted for 'N' this time and has vowed never to vote for him again. This is 'Dar's' doing according to him. He took too much time persuading everyone that the previous government was lying on all statistics. Even though the Pak. Rs. was standing strong at Rs. 60 and the dollar reserve was at $18 billion. It was Pakistan's insurance policy to say the least. $18 billion dollars gone ? How did we manage that ? Its like this government started living off Pakistan's savings account.

Another Question. How was Pakistan Rupee standing strong in January with very high oil prices ? Its was withstanding the pressure when the prices of oil were $140 plus per barrel. But Petrol prices started to dip in the 2nd quarter of this year and the Pak. Rs. started to dip even further. Let me get this straight - Dollar was dipping to new low, Oil prices were going down and even then the Pak. Rs. was going down. Low oil prices should have helped Pakistan balance of payments. The bottom line is it did not !

Former Banker Shaukat Tareen was finally appointed ! Yawn ! But its too little too late.

But my friend who sent me this email crying hoarse blamed the problems to the procrastinators in the present government. I am kinda enjoying his U-turn. But after all biggest looser here are the Pakistani Public.

I am afraid to say this but are we the next Argentina ? Well all the signs are there.

What to Expect :
IMF is coming back. This means 25% increase in petrol, gas and electricity charges across the board. Inflation has to be double digits. Plus we will be spending 50% of our budget on debt servcing up from 23%. It was reduced 6 years ago after all debt was refinanced to a lower rate and no new loans were taken by the government. We were static at $38 billion and then after the earth quake it went up to $40 billion.

IMF will give a $10 billion loan at a phenomenal 17% interest. Its like charging Pakistan to a Master/ Visa credit card for $10 billion. Last time this financial blunder was taken by Leghari when he was the caretaker President. He took out $1 billion. (That debt was rescheduled and refinanced by friendly countries - Egypt, China, UAE, Austria, Norway, Sweden and Turkey).

IMF has $201 billion to loan out and with the current financial problems it will be very difficult dealing with them because they will not budge an inch).

Pak. Rupee :
In the back drop of all of this Rupee I hear will cross the psycological barrier of Rs. 100 to the US dollar coming December . That will be site to watch.
By the way Indian Rupee is at Rs.49 up from Rs. 44.
Bangladesh Taka is at 68 to the US Dollar ! Allah kee Shaan !
Pakistan is at Rs. 81 to the dollar.
I google it for everyone who is in disbelief ! Please click here :

BD to US dollar coversion


Who will help before the default which occurs in December :

Well no one ! Saudis, US and China have flatly refused to give pakistan right out cash. Which is good in a way. All these countries are feeling very vary because of Zardari and Nawaz Sharif. They know they are corrupt to the core and Pakistan will never see whatever money they give Pakistan.

What are the options open to them ?

These 'friendly' countries want to benefit the people of Pakistan and are side stepping the govenment and Zardari. This is a very intersting scenario. They are talking about Trade and commerce. Ironically India just started trading via the 2 border towns . Trade will happen once a week across the border after 61 years. Bravo Bravo !

China-US and Saudis said the same thing and are its like their response is co-ordinated i.e. NO CASH FOR YOU !

What was the much hyped China visit about :

More of the same .............China will invest heavily in Pakistan in 'China-only economic zones'. NOT !

So what came out ?
Pakistan did get 2 nuclear plants from China which were negotiated in Musharraf's last visit.
Chasma III and IV. We will trade more with China and there were lots of investment promises like always.
Thats it !

Liquidity crunch for small Pakistani Banks !

KASB - Khadim Ali Shah Bokhari and Atlas Bank merged today sighting the liquidity crunch in these two banks.
Altas is one of the biggest conglamorates in Pakistan and manufacture Honda cars and motorcyles. KASB is the is one of the biggest brokerage houses in Pakistan and are the local representatives for Myrill Lynch ! They have merged. These mergers are Pakistan related or not but it has sent shock waves to the 'fire walled' Pakistani banking system

Who is next ? Arif Habib Group ?

Karachi Stock Exchange is down from 18,000 to 10,000 points. Almost $60 billion has vanashied from the market ! There is no plan to get the money back so far ! So we will sit with the KSE in the pitts !

3 Pakistani Companies on Forbes List !
BD has none ! So what if their Taka is bigger then Pak. Rs.
India has around 20. China has 100s !

The 3 are Nishat Mills, Cherat Cement and Engro Chemicals !
Look for yourself !


Telecommunications :

The cellular phone subscribers’ base crossed 90 million in Pakistan. This means Pakistan has more phones then the entire population of Briton and for that matter the largest county in the EU - Germany !

I had to add some Humor at the End !
News hungry and with a huge Nuisance value Mullah's strike again !
Another fatwa ! They are not even 0.1% but they do get in the print media !

Zardari Slapped with Fatwa for Flirting With Palin !
(Newser) – Asif Ali Zardari’s overly-friendly interaction with Sarah Palin earned Pakistan’s president a fatwa from a conservative mosque for salacious behavior, not to mention the scorn of feminists who accuse him of objectifying the US vice-presidential candidate, the Christian Science Monitor reports. At the UN last week, Zardari told Palin she was “gorgeous,” continuing, “Now I know why the whole of America is crazy about you.”
The fatwa accused the husband of late prime minister Benazir Bhutto of “indecent gestures, filthy remarks, and repeated praise of a non-Muslim lady wearing a short skirt,” but stops short of ordering violence. Feminists charge Zardari’s behavior demeaned Palin: “He was looking upon her merely as a woman and not as a politician in her own right … it was shameful,” one said.
LOL ! Thats all I can say this

Cheers ! :)

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