Happened to run in to Nanubhai on Dalal Street . He was eating Khaman
Dhokla at a farsan shop.
'Kame cho, Nanubhai?'
'Saru che.'
He was looking glum but gestured me to join him.
Nanubhai is a well-respected Dalal Street dada with an answer to
everyshareholder'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 back
the 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.
Nanubhai 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
Lehman Brothers, nothing was right in the 'Left' and nothing was left in
the 'Right'.
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