Cinema Rasik

Tendulkar the Terrific - Thanks Wall Street Journal

Cinema Rasik — Sat, 06 Mar 2010 13:08:00 GMT

Sachin Tendulkar, already the greatest batsman ever, did something absolutely amazing on Wednesday, February 24. He scored a double century in a One Day International match against South Africa.

We cannot even comprehend this feat. Double centuries are a rare phenomenon even in Test Cricket which take 5 days to complete a match. One day Cricket was invented to speed up the game by restricting each side to 50 overs or 300 balls bowled. In such a short game, it seemed inconceivable for any one player to ever score 200 runs.

This unbelievable feat was performed by Sachin Tendulkar last week and it was put in perspective by Richard Lord in the Wall Street Journal. We recommend this Tendulkar the Terrific article to every Cricket fan. A few excerpts are below:

Born on April 24, 1973, Sachin Ramesh Tendulkar made his international cricket debut just 16 and a half years later. Since then he's broken most of the international game's batting records: most Test match runs (13,447), most One Day International runs (17,598, a frightening 4,170 ahead of the next contender), most Test scores of 100 runs or more (47), and the same in One Day Internationals (46).
But his latest achievement was particularly special. Try, for a moment, to think of another sportsman a couple of months short of his 37th birthday, at the very top of his particular game for more than two decades, who still has the ability and, more to the point, the hunger to take that game to heights previously unscaled not just by himself, but by anyone. Then try to digest the fact that, of his 93 international 100s, 10 have come in the past year.

(Photo: WSJ)

Then Richard Lord talks about Sachin, the man and the obvious comparison with another athlete who dominated his game, Tiger Woods.

There's his integrity—no off-field dalliances, match-fixing allegations or doping indiscretions for this sporting titan. Then there's his incredible humility; in an era of brash, trash-talking sportsmen-with-attitude, he's never been heard to utter a single boastful word, nor one denigrating an opponent. His celebration upon reaching the latest landmark was typical: a raised bat, a glance to the heavens, a smile of quiet satisfaction.
From a purely sporting perspective, he's cricket's Tiger Woods. Even before his recent off-course indiscretions, however, what Mr. Woods got was admiration and respect; what Mr. Tendulkar gets is love.
Mr. Tendulkar is a beacon of stability in a sport, in a country and in a world that are changing at a pace many find unsettling. He's an unbroken link to values of hard work, humility and reliability, and for that reason a lot of people find him uniquely reassuring.

Too truly understand the greatness of Sachin's feat, listen to what Virender Sehwag, the dominating opening batsman, said " I would like to watch this 200 run innings of Sachin at least 100 times". Readers might recall that Wisden had honored Sehwag as its Leading Cricketer in the World for 2008.

We concur with Sehwag. We hope to get a DVD of Sachin's immortal innings. So we can watch this double century of Sachin's whenever we need some divine inspiration.

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An "Anti-Defamation" Petition to Penguin Books USA & Penguin Books India from the Global Indian Diaspora

Cinema Rasik — Sat, 06 Mar 2010 12:47:00 GMT

On January 23, 2010 we wrote an article about a review by one Pankaj Mishra of a book by Wendy Doniger titled Hindus: An Alternative History". A reader of this Blog had brought these to our attention.

We were appalled by the book, its NYT review and, above all, by what we considered to be sheer journalistic misconduct of the New York Times Editorial Board in approving this review. We expressed our opinion and the journey of thought that led to our opinion in our article Cultural & Religious Defamation Tacitly Accepted By New York Times Editors?- Our Perspectives.

Then a reader informed us that this book had been chosen by the National Book Critics Circle for their "centerpiece" award for 2009. According to the NBCC website, this is a group of 600 plus book critics all across America. This we felt was a perfect opportunity for Tom Friedman, the veteran New York Times opinionator, to put his own views into practice in his home town. So, on January 30, 2010, we wrote an article titled Tom Friedman, Will You Practice What You Preach? As far as we know, Mr. Friedman has done nothing. We are not surprised because it is easy to write about religious defamation in Middle Eastern Countries while it might be a trifle embarrassing to admit the same problem within one's own journalistic brotherhood.

We understand from our readers that there has been an outpouring of letters and emails to the Board of NBCC from Hindu organizations in America & India expressing their outrage about the Doniger book and the decision of NBCC to consider this book for its centerpiece award.

This outrage seems to have galvanized the Indian community. Now this community has begun a petition to Penguin USA & Penguin India to withdraw the book by Doniger. The home page of this petition is at http://www.petitiononline.com/dharma10/petition.html

Section A of the Petition begins with the following self-explanatory paragraph:

"The following are a just a SMALL SAMPLING of examples of the factual errors that run rampant through this disgusting book. By due diligence that is badly overdue from your editors, you can either find for yourself, or we will be glad to direct you to, scholarly references so that you can verify these errors yourself and withdraw this obscenity. "

Section B provides some examples of "Derogatory, Defamatory & Offensive Statements" from the Doniger book. Again, the first paragraph of this section is self-explanatory:

"Clumsily written, each chapter is a shocking and appalling series of anecdotes which denigrate, distort and misrepresent Hinduism and the history of India and Hindus. Doniger uses selective quotations from obscure and non-original, peripheral and ignorant references with a bizarre emphasis on sexuality and eroticism. Cited below are only a handful of quotes along with our understanding and interpretation, with references from Hindu scripture."

The Petition concludes with the following:

As concerned readers, we ask PENGUIN GROUP to:

1. WITHDRAW all the copies of this book immediately from the worldwide bookshops/markets/Universities/Libraries and refrain from printing any other edition.

2. APOLOGIZE for having published this book “The Hindus: An Alternative History”. This book seriously and grossly misrepresents the Hindu reality as known to the vast numbers of Hindus and to scholars of Hindu tradition. PENGUIN must apologize for failure to observe proper pre-publication scrutiny and scholarly review.

Sincerely,

We respectfully request readers to review the petition and, if they concur, to sign the petition at http://www.petitiononline.com/dharma10/petition.html

Send your comments to editor@macroviewpoints.com

Apology for Offensive Cartoons from a Danish Newspaper - A Lesson for Indians Worldwide?

Cinema Rasik — Sat, 06 Mar 2010 12:11:00 GMT

Most readers would recall that a few years ago Danish Newspapers published cartoons that were deemed offensive by Muslims around the world. The publication of these cartoons was met with violent demonstrations in many Muslim countries. The Danish newspapers and their brother Newspapers in Europe maintained that the publication was protected under freedom of expression while the religious Muslims felt the cartoons were deeply defamatory to their religious beliefs. For the most part, the American print media were restrained in their coverage and, as we recall, did not publish the cartoons.

Last week we saw a short comment in the New York Times titled Denmark:Cartoon Apology. This week, on March 4, Business Wire carried an article about the "first success" achieved in getting Danish newspapers to apologize.

Both these articles state that on February 26, 2010, the Danish Newspaper Politiken published its apology and the draft of the settlement that has been apparently reached between Politiken and the Law Firm that represented an International Organization of Muslims with over 95,000 members in 8 countries including Australia.

Left to right: Mr. Jacob C. Jorgensen, Mr. Faisal Yamani, Mr. Philipp Plog & Mr. Alexei Panich (Photo: Business Wire)

The Business Wire article quotes Mr. Faisal Ahmed Zaki Yamani, the Executive Partner of the lead Law Firm, as saying "In our view, all religious icons of all religions..........all deserve respect and protection from ridicule and defamation".

We concur. While we hold the principles of freedom of speech very dear and sacrosanct, we pointed out in our January 30 article on Academic Freedom that even in America, Freedom of Speech has not been viewed as absolute sanction or license. All major voices in American Media were unanimous in this view of freedom of speech in the immediate aftermath of September 11 attacks. In fact, as we recall, a humorist was fired from a TV network at that time for expressing views that were complimentary of Al Qaeda.

We are surprised by the legal victory of the Ahmed Zaki Yamani firm. We confess to being pleased to a certain extent because we do feel that the Danish Newspapers crossed a red line.

Perhaps we feel so because we witness the persistent and pernicious defamation of Indian Religion & Culture in the European-American Media. This has spread to English language media in India that are funded by capital from European-American TV & Media networks. In contrast to Danish Newspapers which only drew cartoons, nude paintings of sacred Indian icons and religious figures have been supported and acclaimed by European-American funded TV networks in India. Anchors at TV networks in America, Europe or India see nothing wrong and fear no retribution from making horribly insensitive or defamatory comments about Indian religion.

On this Blog, we have drawn* attention to so-called "scholarly" books published by American Universities that contain disgustingly defamatory content about Indian Religion & Culture. We have drawn* attention to mainstream organizations that actually consider giving awards to such work deemed defamatory and erroneous by Hindu Religious and Scholarly bodies.

These "scholarly books" and their affirmation by American Universities & Newsmedia have created a deep sense of outrage among Indians in India and in the Global Indian Diaspora. So far, this outrage has been contained due to the essentially peaceful, tolerant nature of Indian Society. So far, the most common expression we hear is the traditional Hindi proverb "Hathi to chal raha hai, Kutte bhunke to bhunke" or "The elephant walks serenely without paying any attention to the barking of mongrels (at him) ".

But we have begun to see a new awareness among the Global Indian Diaspora, an awareness that argues for immediate and articulate response. After all, mongrels can carry rabies or other diseases and venomous bites from such mongrels may only be ignored at peril.

So, we wonder whether the legal victory of the Ahmed Zaki Yamani Law Firm provides any lessons to the global Indian Diaspora?

* Our prior articles are:

Tom Friedman, Will You Practice What You Preach?

Cultural & Religious Defamation Tacitly Accepted By New York Times Editors?- Our Perspectives

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Interesting Videoclips of the Week ( March 1 - March 6)

Cinema Rasik — Sat, 06 Mar 2010 11:13:00 GMT

What a wonderful week this was for equity investors! In fact, since the V-bottom on Friday, February 5, the stock market has moved up in a grinding, low-volume manner. That was also the story this week with most NYSE-based stock traders bemoaning the lack of volume. For 3 days, the stock market approached 1121 and then backed away giving confidence to bears. Then, on Friday, the S&P 500 took comfort from a non-terrible jobs number to cross 1121, 1125 and even 1132. If technicians are correct in their charts, there may not be much resistance until 1200.

The market action was the type we have written about, the 2006-2007 type grinding action that sucks volatility out of the markets, the precise type of action that results from liquidity-providing quantitative trading strategies. In 2007, this action continued to drive the markets higher and higher until July 2007. As a result, the Quant positions kept getting larger and larger until the bad news began making an impact on volatility. Then in August 2007, volatility spiked on some bad news and Quants were essentially blown up in those 2 infamous days of August 2007.

Will 2007-type action continue in 2010? So far, the parallels seem to hold.

Goodbye Greece

The Greece situation essentially stopped impacting the US stock markets in mid-February. This is eerily similar to the way the stock markets greeted the first outbreak of the subprime crisis in February 2007. Now, as then, the stock markets assumed that these crisis were contained and that they would not cause any problems for corporate earnings or global growth. The contagion factor was considered unrealistic and ignored because the initial problems were confined to about 2% of their sectors.

As we all know, in 2007 the contagion from subprime kept spreading into other sectors like leveraged loans. The economy kept getting weaker under the complacent or somnambulant rally of the stock market until we all woke up and the stock market started throwing up.

Will we see a repeat of this phenomenon in 2010 if or when the Dubai-Greece issues prove to be the tip of the contagion? Will we see a repeat in the other members of the PIIGS circle? Or will we see something come up in China?

Hello Again China

This week began with the CLSA Asia-USA conference in San Francisco. Christopher Wood, the well regarded seer of CLSA, gave the consensus view that Asian economies will win because of fiscal strength and smart management. Mr. Wood prophesied that USA will suffer a currency armageddon in about 5 years. Mr. Wood did state that in the short run the European crisis will feed dollar strength against the Euro but that the end game of the crisis will be in the USA. To hedge against this risk, Mr. Wood advised investors to own gold bullion, gold stocks and Asian & Emerging Markets equities (see clip 1 below). This was also the advise of Marc Faber who asked viewers to buy some Gold every month forever.

The case of Mr. Wood and his cohorts rests entirely on China. As he said "If China blew up, it would be very negative for all of Asia and all of Emerging Markets. My view is China is not going to blow up, but grow between 8 & 9% this year, this is incremental tightening and incremental weakness and it presents a great buying opportunity"

For another view on China, see the comments by Professor Victor Shih of Northwestern University in the Bloomberg article China’s Hidden Debt Risks 2012 Crisis . In this article, Prof. Shih argues that China's hidden borrowing would push China's government debt to 96% of GDP next year. If true, this would translate into a much weaker Fiscal situation for China than what Christopher Wood believes.

Last week, we had the pleasure of meeting some European investors, the type that invest with the best and brightest of hedge funds. Uniformly, they articulated the various fears about China but professed complete confidence in the ability of the Chinese leaders to manage these problems without damage to financial markets. Yet, none one of these investors showed much confidence in the ability of American leaders to manage the US debt situation.

That, folks, is the quasi-religious tenet of global stock markets today. The resilience of equity markets is based on this supreme confidence in Chinese leaders. If this confidence wavers, the action in the global stock markets will feel like an earthquake.

Rising Geo-Political Tensions and Defense Expenditures

As any casual reader of this Blog can observe, geopolitical analysis is one of our favorite pastimes. We have described at length the rise in military tensions between China & India and the consequent rapid rise in military spending by India.

This week we came across a similar article about China's northern border, with that darling of frontier markets, Vietnam. We were surprised to read that Vietnam was Russia's best customer for its arms exports in 2009. The article discusses an emerging military relationship between Vietnam and Russia to counter the increasingly ominous shadow of China. Vietnam is currently embroiled in a dispute with China about oil exploration around Spratly islands.

On this topic, we learned last month that Japan has taken its territorial dispute with China about waters of China Straits to the International maritime agency. Japan, Vietnam and India - this could possibly feed Chinese fears of encirclement with uncertain consequences.

All this probably has nothing to do with the rise of Asian markets in 2010, but these are developments that at some point will reduce multiples. Add these to what we believe are increasingly tenuous fiscal situations in China, Vietnam, South East Asia, India and you might begin to believe that USA might be an island of relative fiscal safety after all. Take that, Mr. Wood.

Treasuries - Parallels to 2007?

We remind readers of our comments of February 20 when we discussed the parallels of the December 2006-June 2007 sell off in Treasuries (with short term rallies in January & February). So far, the parallels seem to be working. Treasuries ended the month of February with a rally. March has begun the way February began, with a sell off.

As we have noted before, the months of April & June have been pivotal for the Treasury market since 2003.

In 2003 & 2005, the Treasuries rallied furiously from April to June. The peak of Treasury prices and lows of treasury yields were reached in June. The months of June to November saw a steep sell off in Treasuries in 2003 and 2005.
But the action in 2004 & 2006-2009 was just the opposite. Treasuries sold off from April to mid-June in these years to create great buying opportunities in June. Then the Treasury market mounted huge rallies from June to November.

For some reason, fundamentals or valuation do not seem to matter for the price action from April to June. The risk tolerance of investors and their conviction in global growth as well as US inflation expectations seem to be the main factors.

Speaking of fundamentals, the Wall Street Journal informs us in its article BlackRock Plays It Safe: Treasurys that the brilliant firm has moved its Treasuries position to Neutral from last year's Underweight position. At the same time, the article states that BlackRock has "meaningfully" reduced its overweight positions in other fixed-income assets, such as corporate bonds and mortgage-backed securities. This is exactly what Curtis Arledge, BlackRock's Fixed Income CIO, told CNBC Fast Money viewers on February 19 (see clip 1 of our videoclips article of February 20).

On the other hand, we note that, based on this week's CFTC data, small speculators now hold their largest long position in 10-Year Treasuries. Small Speculators have not proved to be particularly savvy in trading and this statistic worries us.

So what happens to Treasuries from April to June this year? We will know in a month or two.

US Economy

We are increasingly troubled by the turn in the economic data we see. House prices have turned weaker and so have some leading economic indicators like the ECRI indicator. Readers might recall that the ECRI indicator was the first one to show a rapid rise last summer. That was when every financial network featured the experts from ECRI to trumpet the signal from their leading indicator.

We do not have access to ECRI or its research. So we tend to depend on other authors to comment on the ECRI indicators. Based on the comments of these authors, we understand that the yearly growth in the ECRI leading indicator hit a new low this week.

The US Monetary Policy Forum has created a new Financial Conditions Index ("FCI"). This FCI also suggests a greater drag on the economy going forward. This is a brand new index that was created by experts and presented to the Fed during the last week of February.

If these indicators are as good as their creators argue, then the much awaited dip in the second half of 2010 might indeed materialize.

At least, so argued Richard Fisher of the Federal Reserve in an CNBC interview this week (see clip 5 below).

Featured Videoclips

Sometimes we get asked why we focus on CNBC videoclips. We have the longest experience in watching CNBC and so we can, we feel, comment better about the behavior of CNBC Anchors. Secondly, CNBC does get its first choice of guests given its lead network status. But the CNBC website is also a critical reason for our focus. CNBC posts virtually every segment of CNBC TV on its website. This helps us when we are traveling overseas and we cannot watch CNBC live. For example, we cannot watch CNBC Fast Money when in Europe. So we tend to watch the show the next day via clips on the CNBC website. How we wish Bloomberg & Fox Business follow this practice?

We feature the following clips this week:

Christopher Wood of CLSA on Monday, March 1
Barton Biggs of Traxis Partners on Monday, March 1
Jing Ulrich of JP Morgan on Wednesday, March 3
Thomas Hoenig of Kansas City Fed on Tuesday, March 2
Richard Fisher of Dallas Fed on Tuesday, March 2
Jersey Shore Cast with Jay Leno on Wednesday, March 3
Monica Hesse on Washington Post on Tuesday, March 2

1. Greed & Fear - Christopher Wood of CLSA on CNBC Power Lunch - Monday, March 1

We have discussed some of the comments of Mr. Wood in our overview section Hello Again China. But his coup de grace is below:

"My view is there is an inevitable end game as a result of all this massive spending of taxpayer money in the western world & Japan to bail out bankrupt banking systems, my view unfortunately is that the end game will be a systemic government debt crisis in the western world...it will probably happen in Europe and I think it will climax in the US and I am expecting on a five year view the collapse of the US dollar paper standard"

This is the sort of stuff that makes people like Mr. Wood well-regarded in the investor world. Our simple question is why does not all of this apply to China? It is a reasonably well documented and supported view that Chinese Banks are loaded with bad debts and nearly bankrupt based on a apples-to-apples comparison with US banks. China has spent taxpayer money even more massively than America to support its own banks. In addition, China is in a much weaker position than America in terms of its dependence on other nations and for its resource lifeline.

So why doesn't Mr. Wood predict a systemic debt crisis in China as Mr. James Chanos does?

The first answer is that Chinese leaders are smart and intelligent while the American leaders are not. As Nassim Taleb said so eloquently in Davos that every human being should short US Treasuries as long as Bernanke & Summers are in office (see clip 5 of our February 1- February 6 videoclips article).
The second answer is that China is not a democracy. So they presumably can do what they like to solve their problems without sharing the nature of their solutions with any one. America is a democracy and it needs popular support as well as Congressional approval. Our own simplistic view is that this chaotic system prevents America from making a huge mistake. We do think that the all powerful Chinese leadership could quite possibly make a gigantic mistake as most dictators have ended up doing.

We are willing to make a wager with Chris Wood. We will look at this issue in 5 years. Our bet is that the American financial system & the American Dollar will be in a better shape than the Chinese financial system & the Chinese Remnimbi in March 2015.

Will Mr. Wood take this bet?

2. Biggs' Big Picture - Barton Biggs with CNBC's Mark Haines - Monday, March 1

Barton Biggs, Managing Partner of Hedge Fund Traxis Partners, was the Global Strategist at Morgan Stanley for many years. Mr. Biggs is an interesting and entertaining speaker. He is also an astute investor. Mr. Biggs was at the CLSA conference and offered his views on China as well as the need to own farmland & gun. We are not kidding.

What is happening today is sort of a spontaneous combustion in a compost heap, there are a lot of bad things in the compost heap but there are some good things too..
No it (China) is not a massive bubble; it is the real thing and eventually China may well be a massive bubble but that could be years away from now and for the time being the situation in China looks very healthy, yes, they are tapping on the brakes as they should be doing and doing some incremental tightening but the economy is basically is so healthy that domestic demand is picking up so strongly that there are gonna do the forecasts of the experts here somewhere between 11% and 8-9% real growth this year
somebody that has a significant amount of wealth in the world today, a good way to hedge against bad things happening is to own some farmland and a gun, yeah

Yeah, indeed.

3. China Fears Unfounded? Jing Ulrich with Maria Bartiromo - Wednesday, March 3

Ms. Ulrich is the chair of Chinese Equities for JP Morgan. Her views are traditional consensus views about China & its markets.

4. Hoenig: Man at Center of Rate Debate - Thomas Hoenig with CNBC's Steve Liesman - Tuesday, March 2

Mr. Thomas Hoenig is the President of the Kansas City Fed. He is currently the most hawkish member of the Fed. A summary of his views can be found at Fed Should Raise Interest Rates Sooner Than Later: Hoenig on cnbc.com. A couple of his quotes are below:

"I think we shouldn't be guaranteeing the markets a zero rate for an extended period. I think the crisis of a year ago has passed. We're in recovery,"

Hoenig emphasized that although he's worried about the nation's high unemployment rate, failing to raise rates due to this problem will only invite future excesses. That's because raising the interest rate to 1 percent isn't creating a tight policy — it's removing a substantial easing policy, he said.

5. Dallas Fed President Speaks - Dallas Federal Reserve President on Squawk Box - Wednesday, March 3

A summary of Mr. Fisher's comments can be found at Banking Giants Should Be Broken Up: Fed's Fisher on cnbc.com.

6. Jersey Shore Cast on The Tonight Show with Jay Leno - Wednesday, March 3

This videoclip is about investing, it really is in a way. So just check it out, will you? Many thanks to CNBC Power Lunch for bringing this clip to our attention.

7. Save a City: Tax Tattoos - Monica Hesse, Washington Post Style Editor on CNBC Power Lunch - Tuesday, March 2

Monica Hesse and the Power Lunch crew discuss a proposed bill in Minnesota that seeks to levy taxes on tattoos, body piercings, manicures and facials. Monica Hesse is a rarity, a print journalist who comes across as funny, witty and charming on TV. This is a fun clip to watch. Thanks PowerLunch.

Send your feedback to editor@macroviewpoints.com

The Hoagland Opinion - An Intelligent, Insightful & Must-Read Article

Cinema Rasik — Sat, 20 Feb 2010 14:16:00 GMT

Jim Hoagland, a contributing editor to the Washington Post, wrote an article this week titled As Obama bets on Asia, regional players hedge. Mr. Hoagland is a respected columnist with deep contacts. He is an intelligent man and he tries to be analytical as well as dispassionate. So we read what Jim Hoagland writes.

This article by Mr. Hoagland is a must read in our opinion. We provide a few excerpts below:

Asia forms the crossroads of success or failure for Barack Obama's grandest foreign policy designs. This impression has crystallized over a year in which the president has shown himself indifferent to Europe, sentimental and somewhat conflicted about Africa, perplexed by the Middle East and largely oblivious to Latin America.

Obama's choices about China, India, Japan and Pakistan loom at least as large as the urgent challenges of wars in Afghanistan and Iraq. Asia's giants, India and China, present differing and opposed models of international cooperation.

Romanced by the Bush administration to balance China's inexorable rise in military and economic power, India finds itself out of sync with the Obama administration on some key issues. There is no open conflict. But neither is there the air of excitement and innovation about the U.S. relationship that I found on my last trip here 18 months ago.

Obama's emphasis on setting an initial date for withdrawal from Afghanistan in his Dec. 1 policy speech, even as he sent additional U.S. troops, stirred doubt here about U.S. strategic patience. So have the frequent U.S. military visits to and overblown praise for Pakistan's army leadership, despite credible evidence of high-level Pakistani involvement in cross-border terrorism directed at India.
India has recently moved troops away from the Pakistan frontier while increasing deployments into border areas that China is claiming in pugnacious and offensive rhetoric. In a break with its past opposition to foreign bases in the region, India has secured military transit and stationing rights at an airbase in Tajikistan. And Singh's government lavishly welcomed Japan's new prime minister, Yukio Hatoyama, on a recent three-day visit that included publicity about plans for joint military maneuvers in the Indian Ocean.
These are clear signs of Indian hedging: seeking allies for worst-case scenarios while accommodating China on economic matters. The Obama administration's failure to reaffirm clearly that India's rise is in U.S. strategic interests has contributed to this hedging. That is a mistake the president should quickly correct, in the interests of his own vision of a new world order centered on the Pacific and Indian oceans.

There are other more clear cut signs of hedging. One such sign was discussed in detail in our article President Bush Proposes & President Obama Disposes? India-Russia Sign a Landmark Nuclear Deal.

The reality is that President George Bush had the vision to build a long-term strategic partnership between America & India. President Obama does not think in these terms. His focus in inwards. His instincts are short term and tactical in nature.

The other reality is that President Obama thinks that the world has expectations of his Presidency and his dream is to fulfill these expectations by ridding the world of nuclear weapons and by implementing a strict climate control regime. This is a Nehruvian approach and that is why we asked in July 2009 Is President Obama America's Jawaharlal Nehru? In contrast, like President Reagan, President Bush simply wanted to ensure America's global predominance in the 21st century.

Today's India is getting closer to President Reagan's approach while President Obama is steering America towards the Nehru approach. This simple reality is the underlying reason for the current disquiet in America-India relations.

Send your feedback to editor@macroviewpoints.com

Last Week in Af-Pak - A Beginning of The End Game or KSM Redux?

Cinema Rasik — Sat, 20 Feb 2010 13:15:00 GMT

This past week in Afghanistan-Pakistan was a momentous one. It began with the arrest of Mullah Abdul Ghani Baradar, the Taleban military commander believed to be the deputy to Mullah Omar. Such a man would know just about everything there is to know about the senior Taleban leadership. Mullah Baradar was arrested in the southern city of Karachi. This shows how deeply the Taleban have penetrated into Pakistan. It is also rumored that the Taleban money is in Karachi Banks. So Baradar's capture could lead to seizure of Taleban's monies.

Within days of this arrest, two other senior Taleban leaders were arrested inside Pakistan. These were Taleban's shadow governors for two northern Afghan provinces; Mullah Abdul Salam of Kunduz and Mullah Mir Mohammed of Baghlan. According to the New York Times, these two arrests were apparently unrelated to Mullah Baradar's capture.

(A New York Times picture)

Then on Friday, February 19, Pakistan announced that the Mohammed Haqqani was killed by a missile. Mohammed Haqqani was the younger brother of Sirajuddin Haqqani, the top military commander of Taleban in North Waziristan. The New York Times reports that Sirajuddin was actually the target of the attack. The Haqqani network was blamed for the suicide bombing attack against the CIA in which senior CIA operatives were killed.

By any analysis, this was a successful week for the American military operation in the Af-Pak region. The question is whether this is a short term tactical victory or a the beginning of a long term turn in the war against the Taleban.

Why do we ask? Because this string of successes reminds us of another string of intelligence successes a few years ago. At that time, the arrest of Khalid Sheikh Mohammed ("KSM") was considered to be a crippling blow to the Al-Qaeda -Taleban network. KSM was the military planner of the 9/11 attack on New York. He was reputed to be the number 3 in the Al Qaeda hierarchy with close ties to Osama Bin laden and Al-Jawahiri, the number 2 in Al Qaeda. KSM's arrest yielded an intelligence treasure and did a great deal of tactical damage to the Al Qaeda-Taleban network.

But we know today that the arrest of KSM and a few other senior terrorists did little to hurt the Taleban in the long term. The Taleban grew from strength to strength from 2002 to 2009. This resurgence of Taleban prompted President Obama to commit to the current Afghan "surge". During the past several years, it became obvious that elements of the Pakistani military-intelligence establishment were actually helping the Taleban rebuild. Whenever America put on a high degree of pressure on Pakistan, this establishment responded by publicly helping in the arrest of "senior" terrorists. This was in keeping with the public posture of Pakistan as America's most critical ally in the War On Terror. It became obvious later that many of these arrests were in fact sacrificial lambs and behind the facade of these arrests, Pakistan continued to help the Taleban to get stronger.

This is why we raise the question whether this week's actions are in effect KSM redux and simply a tactical accommodation to American pressure. We do not think so, because we dare say "this time it is different".

The difference this time is that the end game has begun for the post-America control of Afghanistan. Such control is an absolute strategic necessity for the Pakistani Army, the Most Important Player (MIP) in the Af-Pak game. Such control requires the Pakistani Army to exercise serious operational authority over the Afghani Taleban network resident in Pakistan. Those who oppose Pakistan will be arrested and possibly shopped to America if they refuse to cooperate with the MIP.

This may be why Pakistan has refused to handover Mullah Baradar and the other Taleban leaders to the United States. On February 19, Pakistan's interior minister Rahman Malik said that Pakistani authorities were still questioning these Taleban leaders to determine whether they had violated Pakistani law. He added that if they have not done anything wrong, they will go back to the country of origin or Afghanistan and not to United States.

This is not how a critical ally in the War on Terror behaves. So we ask whether a deal is being negotiated. Will the arrested Taleban leaders strike a deal with the Pakistani Army and agree to do its bidding inside Afghanistan? Or will the American Military agree to give the Pakistani Army what it desires inside Afghanistan in exchange for these prisoners & their intelligence?

This is the Af-Pak region and nothing is as it seems. As Daniel Markey, senior fellow for South Asia at the Council on Foreign Relations told the New York Times “The United States side is pretty worried about seeing a deal emerge that suits everyone other than us,”

We concur.

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Interesting Videoclips of the Week (February 14 - February 20)

Cinema Rasik — Sat, 20 Feb 2010 11:46:00 GMT

Editor's Note: In this series of articles, we include important or interesting videoclips with our comments. Our Web Software does not permit embedding of the clips into our articles. So we shall have to be content to include the links to the actual videoclips. We are very happy with the tremendous response from readers to this series of articles. We thank them sincerely and profusely.

This is an article that expresses our personal opinions about comments made on Television and in Print. It is NOT intended to provide any investment advice of any type whatsoever. No one should base any investing decisions or conclusions based on anything written in or inferred from this article.Investing is a serious matter and all investment decisions should only be taken after a detailed discussion with your investment advisor and should be subject to your objectives, suitability requirements and risk tolerances.

Stock Market at Peace & Ben the Trader

We have such short memories. By the end of the week, we could be excused for asking "what is Greece?". Worries (or shall we say rumors) about Nakheel & Dubai World debt bothered the markets a bit. But, by the end of the week, we could not find any one interested in talking about it.

This has been the story since 2006. As long as the S&P 500 is ok, the entire world assumes a Panglossian stance. And the S&P 500, as we discuss later, is run by machines and the geniuses that control machine algorithms. This week the stock market found its inner peace and volatility ebbed away quietly.

This may be the reason that Ben Bernanke decided to pull the lever on his first discount rate hike of this cycle. Once derided as an academic, Ben has become a trader. He made the announcement on Thursday evening and thereby let the damage be done first to Asian markets. Most of the Asian markets we track were down over 1% overnight.

May be Ben did know the CPI number when he made the discount rate hike announcement. If so, he knew that a weak CPI would calm the Treasury market and the stock market by dissipating inflation concerns. That would contain the damage of his announcement.

Lo & behold, that is exactly what happened. After the release of the CPI, expert commentary suddenly shifted to a more quiet and bullish tone. The Treasury market & the Stock market stabilized. Then the Men with their Magnificent Machines took over.

But there is no doubt that Chairman Bernanke surprised veteran Bond investors. A few like Jim Bianco of Bianco Research (see clip 2 below) and David Kotok of Cumberland Investors had the courage to call Bernanke's action a tightening. Others chose to treat the action as technical. In fact, the Fed itself took pains to spin this action as only technical in nature.

In any case, Bernanke earned new respect from the big guys. You hear this from both Bill Gross of Pimco (see clip 3 below) and Curtis Arledge of BlackRock (see clip 1 below). Now, investors have to be wary of Bernanke. We have argued before that Bernanke had to instill fear in large speculators because fear is a a pre-requisite for non-bubble markets. We believe that Bernanke has taken the first step towards instilling such fear and we congratulate him for it.

Outside of the box thinking permits us to give a good deal of credit to Robert Rubin for the stability of financial markets in the mid-1990s. Henry Paulson was an Investment Banker but Robert Rubin was a trader, He was, if we recall correctly, the head of the Risk Arbitrage desk at Goldman. As a trader, Rubin knew exactly when to strike fear in the markets and when to calm the fears. When we lost this trading feel in the early 2000s, we ended up creating a bubble.

So we hope that Bernanke will continue to surprise financial markets by announcing decisions not in policy meetings but at critical junctures in the markets. Fear of such action and the instability from such actions will allow Bernanke the freedom to not raise rates any more than he really wants to.

So we celebrate the transformation of Bernanke, the Academic into Bernanke, the Trader. This may be a bit premature, but, heck, we use every excuse we can to celebrate. That's what New Orleans taught us in our youth.

Quantitative Managers

Last fall, we wrote on a few occasions about how the low-volume, low-volatility grinding up action in the stock market reminded us of 2006-2007. At that time, we virtually begged CNBC to find smart reporters with contacts who could report on the Quants. They could not bothered. We suppose it is an audience pleaser to report from the New York Stock Exchange and interview old fashioned stock traders about the action on the NYSE. The fact that over 60-70% of the trading volume takes place outside the NYSE is never mentioned.

So we tried to find our own sources, meager and unsmart as they might be. They told us the simple rule that when volatility goes down, the accuracy of statistical models goes up geometrically. In other words, the reliability of quant models, especially of the high frequency intra-day models, is higher on the days the VIX falls . (This actually may be a chicken-egg situation but let us not get bogged down in variance-swap discussions.) These models, we are told, are usually long-biased because the market, with large long-only players, is statistically long-biased.

This is why we notice that when volume goes down and volatility gets sucked away, the markets go up in a grinding manner. Such markets tend to frustrate and anger old fashioned traders, like say CNBC's Art Cashin or Steve Grasso, because they have been trained to believe that volume is a necessary condition for credible rallies. Readers might recall that, since July 2009, floor traders like Cashin kept pooh-poohing the S&P rally while the rally kept going up in their proverbial faces.

This week's action in the stock market was exactly the same, the volume was low, almost pathetic, volatility kept ebbing away, VIX kept going down and the S&P 500 kept grinding up.

However, these Stat models go awry when prices jump randomly as they do on news events. This is because price jumps cannot yet be modeled on reliable statistical basis. Yes, there is a lot of work being done on what are called Poisson Jump processes, but this work remains rudimentary. When price jump in a non-statistical manner, stock portfolios are hedged dynamically with VIX related trades. That is why VIX jumps and stocks go down sharply.

This is what we have been told. We hope to get feedback from our smart readers on this topic. We know we cannot rely on CNBC to discuss this stuff. They prefer to invent daily reasons why the market goes up or down.

From what we understand, the Quant managers are still buying cyclicals, commodity stocks and shorting Treasuries just like they did in the fall of 2009.

Treasuries

The action in US Treasuries also reminds us of 2006-2007. Treasuries began a strong rally in June 2006. This rally continued until November 2006. Then the sell off began in December 2006 (called perfectly by trader Rick Santelli in mid-December). The action in Treasuries was choppy in early 2007 and a major sell off began in April 2007 to culminate in a great buying opportunity in June 2007.

Frankly, we are unsure whether the 2009 Treasury market would behave like 2007 or 2005. Readers might recall that January 2005 saw a violent rally in the Dollar and by March 2005, investors were worried about the pace of fed tightening. Then the high yield market blew up in April 2005 thanks to GM and the European situation worsened. The Treasury market had a great rally from March 2005 to June 2005. The NonFarm report released in the first week of June was very weak. That morning marked the top in Treasury prices (& the low in Treasury yields). By about 10:30am that morning, the Treasury rally began selling off. The sell off continued until October 2005.

Sovereign debt events and Fedspeak will decide how long duration Treasuries behave in the next few weeks. But there is little doubt in our mind that the Speculator positioning is just begging for a sharp rally. Large Speculators are short huge amounts of 30-Year Treasuries & 10-Year Treasuries while they are long massive amounts of 2-Year Treasuries, the maturity most vulnerable to Fed tightening.

The 30-year Treasury bond was sold and sold this week. At week's end, the yield spread between the hated 10-Year Treasuries & the intensely hated 30-Year Treasuries reached 93 basis points, after having touched the extreme 100 basis points level on Thursday. If investors believe that the Fed is serious about removing liquidity, then the yield curve could flatten and force large speculators to sell the 2-Year and buy the 10-Year or the 30-Year. What a lovely bonfire that would make?

If this were not enough, we have the specter of Joe Terranova of CNBC Fast Money warning viewers about the Bubble in Treasuries both on Thursday & Friday. If that were not enough, Fast Money brought back its patron saint, Peter Schiff and he told viewers to sell 30-Year Treasuries if they owned any and not to buy any. Peter Schiff over rode all Fast Money Traders and exhorted his flock to buy Gold, Gold & Gold. Only Gary Kaminsky was scornful of Schiff's views. Yes, Guy adami did disagree a little but quickly rolled over by highlighting the points on which he agrees with Schiff.

Does Fast Money or Peter Schiff know that George Soros, arguably the best macro trader of our time, thinks that Gold is now the ultimate bubble? If they know, do they care? Why should they if Maria Bartiromo, who interviewed Soros, refuses to discuss the Soros view? We all know how CNBC would have reacted if Soros had called Treasuries a bubble.

But Fast Money Edition 2010 is not the Fast Money of 2009. For yet another week, we have to thank Fast Money for daring to think outside their cherished box. On Friday, they invited Curtis Arledge, BlackRock's Fixed Income CIO, to discuss the Fed action & Treasuries. This is a must watch clip and gets our pole position for the week (see clip 1 below). Never have we seen any one on Fast Money ever speak so boldly about 30-Year Treasuries. He even put Peter Schiff in his place. Will Guy Adami learn from Curtis Arledge?

If the BlackRock man was straight, narrow and bold, the Pimco guys were, well, what they usually are. See clip 3 below for the Greenspanish comments of Bill Gross. At least, Bill Gross expresses views that us mortals can try to decipher. His cerebral co-CIO Mohamed El-Erian gave viewers a soporific lecture. At the end of the interview, Erin Burnett asked him for his best idea and received another dissertation as an answer. With most guests, Erin would press for a clearly stated idea. But this was Pimco's CEO and probably she remembered the CNBC "do not press Pimco" rule (see clip 4 below).

But Erin Burnett made up for this lapse with a terrific segment featuring Ken Volpert of Vanguard and James Bianco of Bianco Research. These two disagreed with each other. This is an absolutely must listen conversation for any investor (see clip 2 below).

Maria Bartiromo also convened an excellent panel on Thursday after the Fed announcement. She even included David Rosenberg, the economist who has been brilliantly prescient on the economy and correctly bullish on Treasuries. In fact, any one who listened to Rosenberg saved his or her networth from being cut in half and any one who bought long maturity Treasuries in June 2007 on Rosenberg's recommendation made a pot of money in late 2008.

In this interview, Maria asked Karen Finerman of Fast Money for her (negative) views of US Treasuries. But she did NOT ask David Rosenberg for his views of US Treasuries.

Is this Rosenberg's official CNBC punishment (see paragraph below) for being correct in his recommendations? Or is Maria simply reverting back to her 2007 cheerleader role for GLG2 (Global Liquidity & Global Growth). May be this is why Maria has never discussed the Soros view of Gold as the ultimate bubble of this time.

Currencies

King Dollar marched again this week and Knave Euro kept falling to his knees. So did the British Pound. Next week should bring more fun as Greece tries to raise money in the markets. Speculator positioning and resistance levels suggest that the dollar might consolidate its gains. But currency markets have a way of acting like tidal waves.

Some Wall Street firms downgraded their targets on the Euro to 1.32. 1.28 & 1.25. Then we heard the respected Gary Shilling on Bloomberg TV. Dr. Shilling said he expects the Euro to reach parity with the Dollar in 2010 and he expects a flood of money to flow into Treasuries as investors run from the Euro.

As we recall, it was Walter Zimmerman of United-ICAP who first made the parity prediction, way back & way early in September 2009. What does he think now? How would we know unless Maria Bartiromo invites him again? But we forget, Zimmerman said in October 2009 that Gold was a bubble. If Maria does not talk about Soros, she certainly is not going to talk to Zimmerman.

CNBC Anchors do tend to act in mysterious ways. They choose to not invite people who have been proven right and they keep inviting people who have been proven to be wrong, dreadfully wrong.

CNBC Quasi-Religion & It's Icon

Of course, we speak of Mark Matson. This is a gentleman who keeps exhorting viewers to buy stocks right now otherwise they would miss getting aboard  the "greatest wealth-creating engine". This is a man who gleefully and proudly proclaims that his key to diversifying US stock portfolios is to invest in global stocks. We do not grudge anyone their views. Mr. Matson apparently believes what he says and he has every right to express his opinions on TV.

But we have realized that the Matson views represent the semi-official, quasi-religious conviction of CNBC Anchors* and Mr. Matson could be described as an icon of sorts for this conviction. Look how he is treated by CNBC Anchors. First PowerLunch invited Mr. Matson. Last week, we heard Larry Kudlow heap verbal honors on him. This week, we saw Mark Matson featured in a debate on the Burnett-Haines show with another manager. At the end of this "debate", Mark Haines dutifully said "Mark won". Of course, this is the same Mark Haines who, according to TV statements of his co-anchor Erin Burnett, keeps his money under a mattress while publicly exhorting his viewers to buy stocks based on his own declarations of market bottoms. Of course, this is the same Mark Haines who kept singing the praises of technology stocks in late 1999-2000 as the lead anchor of Squawk Box. We can still hear the ringing "Qualcomm, Qualcomm" invocations of his colleagues Faber-Kernen in the first quarter of 2000.

These days, CNBC does try to bring on a couple of bears here and there. But the CNBC heart is where it has always been, in exhorting its trusting viewers to buy, buy and buy stocks and to get aboard the "greatest wealth-creating engine".

This is why we advocate watching CNBC safely and repeating Caveat Viewer.

* We mean the day-time anchors and not the Fast Money Traders or Jim Cramer.

Featured Videoclips

This week, we feature the following videoclips:

Curtis Arledge of BlackRock on Friday, February 19
Jim Bianco, Mario Gabelli & Ken Volpert on Friday, February 19
Bill Gross on Friday, February 19
Meredith Whitney on Thursday, February 18

1. The Word in the Street Now - Curtis Arledge of BlackRock on Fast Money Half-Time - Friday, February 19

BlackRock is the largest asset manager in the world. The firm is also renowned for its expertise in Fixed Income markets. Whenever Larry Fink and Peter Fisher of BlackRock appear on TV, we try to listen to every word they speak. So we looked forward to hearing what Mr. Arledge, BlackRock's Chief Investment Officer for Fixed Income, had to say.

Watch this clip. The conversation with Mr. Arledge begins at minute 08:03 of the 12:51 minute clip. Melissa Lee begins the conversation by asking his opinion of the Treasury Yield Curve:

Arledge - every body who studies yield curve knows that yield curves generally steepen until the Fed actually begins to move rates, then when it does, it tends to be a pretty aggressive trend towards more flattening......we were a little surprised by the timing of it, we all know now when he says he is going to do something, we will probably shouldn't wait around for it...the yield curve has gotten very steep as people were trying to figure out ...when the Fed would move..

Then Gary Kaminsky asked a terrific question - Curtis, walks us through ... your outlook for interest rates for the rest of the year, what came out of your morning meeting based on last night's action?

Arledge - our general view is that we are going to be rangebound, market is really looking for lot higher rates, you can see that in forward yields in the market, you have the 10-Year at around 3.80%, if you go buy an 11-year treasury and finance it for a year, at the end of the year, you are going to own something that is about 4.30%, the market is already building in 50 basis points higher in 10-Year Treasury...
Schiff interrupts - they need to build in lot more than that..
Arledge - that is not my view, if you look at the yield of the 10-Year Treasury or even the 30-Year Bond, from the beginning of 03 to the middle of 2007, the average yield on the bond during one of the best economic periods we have had in recent history..it was 4.86%,
Schiff interrupts again - would you, would you lend money to the US Government for 30 years at these rates?
Arledge - yes I would, I actually think it is one of the more liquid markets, I think the credit worthiness of the US, especially relative to the size and depth of the liquidity, is pretty high and I don't have a view that we are going to have runaway inflation. & I think we still have significant credit mechanism issues ...
Kaminsky - When will we see the Fed raise the Fed Funds rate?
Arledge - You know, my personal view is that not this year, early 2011 perhaps, there are some that believe they are going to move it earlier..I think the economy is doing better, a lot of the numbers we are seeing, a lot of the earnings we are getting, are still coming out of the recovery bounce, and the sustainability of this growth is going to be choppy,... what people are missing are credit mechanisms... we had two gigantic lending platforms in this country, traditional banking and capital markets through securitization & the shadow banking system, that one is still not on and it is going to be awhile before the economy can move as it did in earlier this decade
Lee - ....Do you think the front end of the yield curve is vulnerable to a correction at this point?
Arledge - listen, again, I don't think the fed is going to be moving this year. I think there is a tremendous amount of money in the front end of the yield curve., in cash, money that was previously in funds, invested in equities, in alternatives, ... I would point out that a lot of this cash is actually there because they don't have access to unfunded revolvers and liquidity from banks as they used to and so some of this needs to be there to replace that.......I think the front end is going to find support.
Lee - Curtis, it is a pleasure to have you. with us. Thank you so much.

This was one of the most articulate, succinct, clear-cut and useful fixed income interviews we have heard on CNBC. Thanks for this interview, Melissa. Frankly, this little interview has so much content and insight that it should be the topic of several Trade School clips for Fast Money.

We have been critical of CNBC Anchors from time to time. But we have also given credit where it is due. Today, we give tremendous credit to Melissa Lee for her grace and composure in this interview. Both Peter Schiff and Gary Kaminsky overrode her in this segment and asked the questions they wanted to ask. We are glad they did because their questions were terrific. Unlike some of her colleagues, Melissa Lee did not pout or lose her composure. She stepped back and she let Peter & Gary ask their questions. This is the behavior of a confident, veteran anchor. Melissa sacrificed her ego to make her show even more useful for viewers like us. Well done, Melissa. We are happy that you are the anchor of this show.

Finally, after listening to Curtis Arledge, we wondered why Bill Gross can't speak with such clarity? (see clip 3 below).

2. The New Normal - Jim Bianco, Mario Gabelli & Ken Volpert with CNBC's Erin Burnett - Friday, February 19

This is one of our favorite clips of recent weeks. An absolute must watch in our opinion. Ken Volpert of Vanguard is the Manager of the second largest Bond Fund in America. Jim Bianco is an uncommonly shrewd analyst & guru of fixed income markets and the President of Bianco Research. Mario Gabelli is a veteran stock investor and principal of Gamco Investors.

Jim Bianco expressed the minority view (& contrary to the Bill Gross view - see clip 3 below) that the Fed action was actually a tightening. "It began yesterday", he said. This is one of the reasons we like Mr. Bianco. He is not just intelligent and insightful. He is as courageous as he is bright. He tells it like it is. We recall him telling investors in 2006 that all risk assets were essentially the same trade. This was long before this idea got into the investment mainstream.

Mr. Bianco said that when the Fed stops buying mortgages, then money will have come out of other asset classes to buy mortgages otherwise mortgage rates would go up. Ken Volpert said that the spreads between Treasuries and mortgages would widen by about 25-50 basis points. But the fact that there will not be as much government buying in the bond market in general would mean all rates including treasury rates would go up as well. Mario Gabelli said that mortgage rates are a bargain now and if rates go up by 25 basis points, it is bupkus.

Then Jim Bianco made an interesting point (again contrary to the Bill Gross view - clip 4 below):

Bianco - Let me take the question (of mortgage rates going up) a little differently. If the Fed is going to start raising rates and if the Yield curve is going to start flattening, right now something around 40% of all earnings are coming from the financial sector, one of the highest percentages we have ever seen, a lot of that is attributed to the very steep yield curve. The fed starts flattening the yield curve, financials are not gonna make as much money (that is also what Meredith Whitney says in clip 4 below), all these assumptions about $85-90 S&P 500 earnings, a lot of that, 40% of that is coming from financial earnings, they are gonna crimped down too, it will have a big effect on the stock market. The biggest driver of earnings right now in 2010 might be the steep yield curve. If the Fed started raising rates, that yield curve will start to flatten, then they are going to put a crimp on the biggest driver of earnings we have right now.

At this time, Erin Burnett asked the three guests "where is the best place is to put your money":

Volpert - In the bond market, where I focus, the 5-10 year corporate sector is very attractive right now, mainly because the yield curve is very steep, the yield difference between the 2-year and the 10-year is at historical wides, about 180 basis points and you get about 180 basis points in the credit spread...so you get a lot pf protection against rising rates..the short end of the yield curve rises because the Fed tightening, the longer end of the market may actually like that....

Gabelli said that they are bottoms up stock pickers and gave two stock ideas, Millicom (MICC) and National Fuel Gas (NFG).

Bianco - I am worried that the Fed is going to be too slow in pulling back all of its excess reserves and create inflation..if you buy a 5-year or 10-year TIP, you can get 1% real (after-inflation), 1% over whatever the eventual inflation rate is going to be, I think for portfolios that is going to be a very hard bogey to beat over the next couple years...I take that without doing much work..

Mario Gabelli asked a question about Volpert's best idea and what would happen to it under inflation. Bianco essentially said that the Fed does not have inflation under control.

Volpert - I do think that there is tremendous slack in the economy and when you look at the breakeven in inflation in TIPS, you see that TIPS vs nominals are pricing in a lot more inflation than we are going to be seeing in next 2-3 years....so TIPS right now have a negative carry over nominals.. and actually are not gonna perform all that well compared to actual nominal Treasuries....you are probably right, Jim, 5 years out, but in the next couple of years, there is tremendous slack and nominals would probably do better....

Erin Burnett excels at running this type of segment, especially when it is made of top-tier talent like this one. However, in her previous segments, the Fixed Income experts went out of their way to NOT disagree with each other. This is the only segment of its type where the two Fixed Income experts actually contested each other's views. That made the segment more educational, more useful and more fun.

So Erin, please include Jim Bianco in all future segments of this type, on Fed days and on other days like this one.

3. The Bond King's Fed Outlook - Bill Gross on CNBC Squawk Box - Friday, February 19

We have the highest respect for Bill Gross as a tactical bond trader, especially as an interest rate trader. So we looked forward to hearing his views. This interview got interesting right away:

Quintannia - We are trying hard to not get wrapped up in the money market minutia....What's important this morning as investors try to take stock?
Gross - OK. I think.Bill Dudley is the guy, not that Ben isn't the man...this is the Fed's version of ground hog day...Bill Dudley told us a few months ago that an extended period of time..meant at least six months..that's the key. that means at least six months the Fed funds level stays where it is.. last night we saw the shadow and heard the phrase again and we have at least six more months of zero degree interest rates..that's the key to focus on..

This is how Mr. Gross thinks or finds a key on which to base his trades. This reminds us of March 2008 when he drew a lesson from the Fed's orchestration of the Bear Stearns takeover by JP Morgan. For a few months after that, Bill Gross & Mohamed El-Erian came on CNBC and kept recommending investors to buy bonds issued by Brokerage Firm Holding Companies because in their opinion, the Fed had signaled these would be protected. In other words, Gross & El-Erian took their cue from the Fed and acted on it, big time. Unfortunately for them and for most investors, the Fed allowed Lehman to file for bankruptcy. If we recall correctly, that day proved to be the worst day ever for the Pimco Total Return Fund. So the strategy of basing trades on what the Fed does once can go wrong. But of course, the Lehman case will never be repeated, at least by the Bernanke Fed.

This is followed by an interesting discussion between guest host Rich Bernstein and Bill Gross about whether the Fed has ever got the tightening cycle right.

For us, the most interesting exchange began at minute 02:10 of this clip;

Bernstein - do you think investors should be positioning portfolios now for a curve steepening or a curve flattening? How do you think the markets are going to react to this over the next several months?
Gross - I still think curve steepening because what we have seen already, what we do know, or what we think we know, is that Quantitative Easing, the trillion and half dollars of purchases, mortgages yes but also Treasuries and agencies, is about to end... as that ends, the Fed checkwriting for 5, 10, 30 year pieces of paper basically is over and that is an influence and has been an influence over, the past month or so, for steepening of curve, and so those that are expecting a flattening really need a Fed tightening and they need some type of solution to this absence of Fed checkwriting..so I would say, steepening, steepening, steepening, (emphasis ours)
Lee - Further steepening though, because part of the market jitters overnight, last night when the news first crossed was the thought that the curve was going to flatten, that the curve would actually invert sooner than was anticipated, but you are saying the very opposite shall happen. therefore financial institutions can still make good money off of a further steepening of the curve..(emphasis ours)
Gross - I would say that, let me amend that a second Melissa, the curve is about as steep as it has ever been, the spread between the fed funds and the long bond if that's how you want to measure it..this is 460 basis points, or 440-450 basis points, that's historic, so to expect anything more I think is a stretch.. all the markets need as you have mentioned, is a continuation of the existing spread, in order to make lots and lots of money, and all bond managers need is a continuation of the existing spreads in order to roll down that curve and make money as well (emphasis ours)

Then Carl and Melissa asked Bill Gross about stocks and the Dollar. Mr. Gross said that maintaining current fed funds rate should be positive for equities and that a "strong dollar is a wild card" for the markets. Then he went on to speak of the Pimco "New Normal" concept of lower levels of growth going forward.

Then Carl asked about the next move by the Fed.

Gross - this particular one and the timing yes was a little unusual and surprising.. I think it was really a move to appease the 3 or 4 hawks on the Fed, yes it gave them something..so I wouldn't expect another 50 or a renormalization to a 100 basis points spread ...they have had their moment and will continue to see this type of Fed Funds level going forward..
Lee - ..If you think the discount rate move is not such a big deal, then is next move to 100 basis points also not a big deal ...is that more symbolic of something else?
Gross - that is symbolic too..the point has been made that there only 15 billion dollars of money at stake here, it is a penalty rate, we are in a period of time when penalty rates don't mean as they did 12 months ago and so let's get over it..

We highlighted some comments because this interview confused us. Consider his comments about steepening:

First Bill Gross says to Carl that the yield curve will steepen because the markets will miss the Fed's buying; in case we did not get his point, he emphatically repeats steepening, steepening, steepening.
But then, a couple of minutes later, he tells Melissa that the yield curve is at historically wide spreads and that it is a stretch to expect the yield curve to steepen further..

We are confused. It seems to us that these two statements are diametrically opposite and mutually contradictory.

Remember the short end is the Fed Funds rate and that is set at zero. Bill Gross said he does not expect the Fed to raise the Fed funds rate for the next 6 months. So:

If the yield curve steepens, then the 30-Year rates will go UP and so investors should Sell 30-Year Treasuries, but
If the yield curve stays at the current historic wide spread, then the 30-Year rate will STAY where it is and so investors should Hold 30-year Treasuries.

This is why the investment conclusions of the two Gross statements also seem to be mutually contradictory. Can our readers help us with our confusion?

When we heard Mr. Gross and then when we watched the clip again, we were particularly struck by his comment "all bond managers need is a continuation of the existing spreads to in order to roll down that curve and make money as well". Then we thought:

To roll down the curve, bond managers must be currently sitting at the top of the curve. Because, how can you roll down when you are not even on the curve, right? So in terms of fixed income investing, Bond Managers must currently Hold long duration bonds so that they can roll down the yield curve with these bonds and make money.
As a corollary, if you are not on the curve today, you should get on it pronto and then roll down the curve, right? In terms of investing, if Bond managers do not currently own such long duration bonds in their portfolios, they should Buy such bonds and then roll down the curve with these bonds to make money, right?

So, according to this logic, it appears reasonable to believe that Bill Gross is actually making a Hold or a Buy & Hold recommendation on long duration Bonds. We wanted to know whether Mr. Gross agreed with our logic. So we requested a clarification from Pimco. We have not heard from Pimco so far.

We then wondered how is Pimco positioned to take advantage of rolling down the Treasury Yield Curve? We recall both Bill Gross & Mohamed El-Erian telling us that they are underweight mortgages. We recall them telling us that investors should own German Bunds rather than US Treasuries. Actually El-Erian clarified this last week by saying Pimco had bought German Bunds vs. US Treasuries. He also told last week that the trade was basically over.

All this created the impression in our minds that Gross & Co, did not like long duration US Treasuries. This was also the impression that CNBC Anchors like Carl Quintannia got. In fact, Carl said to Bill Gross on January 8 that "Bill, people will now say, of course, now that Pimco has trimmed their Treasury holdings, let's spend like sailors right" (see our clip the Glenn Beckization of Bill Gross in our January 3 - January 8 videoclips article).

But we must be candid. We do not recall Bill Gross ever making an explicit statement that Pimco did not own long duration US Treasuries or that Pimco was underweight long duration US Treasuries. In fact, we wondered in clip 1 of our January 9 - January 16 videoclips article whether Bill Gross was signaling that 10-year Treasury yields could fall between then and March 2009? In deed, we asked our readers "Folks, did Bill Gross just slip a curve ball past our plate?" Read that article to understand the reasons for our confusion.

After all of this, we still wonder how exactly is Mr. Gross positioned to take advantage of his own call for "rolling down the curve to make money?" Pimco is not going to tell us but will they tell CNBC anchors?

But therein lies the rub. Either CNBC Anchors are not confused like we are or they have no desire to question Mr. Gross in any serious and comprehensive manner. This time Carl Quintannia and Melissa Lee gave Mr. Gross a free pass. Previously it was Maria Bartiromo, Erin Burnett & Joe Kernen. Is it any surprise that we wonder whether CNBC has a "do not press Pimco" rule like the NBA's widely believed but never acknowledged Jordan rule.

We are in awe of the talent of Bill Gross and his legendary trading acumen. Bill Gross is, to us, the Michael Jordan of interest rate trading. Our fervent hope is to learn to "trade a bit like Bill".

This is why we listen to every word of Mr. Gross and try to decipher his meaning. Unfortunately, the more we listen the more confused we get. This is why we continue to seek help of our friendly CNBC Anchors. So far, they have not delivered.

4. Tough Calls for the Banking Sector - Meredith Whitney with Maria Bartiromo - Thursday, February 18

Meredith Whitney needs no introduction to any investor, especially to any investor in Banks stocks. Unlike many analysts, Meredith is a "trading" analyst. Not only is she right on the fundamentals of her sector, her recommendations work out as trades as well. This is why we gave her our 2009 award for Most Useful Guest.

This interview is similar. Ms. Whitney explains why she is bearish on bank stocks and why she expects these stocks to fall by another 10-15%. The CNBC website provides 3 summaries of her comments at The Market View, at Whitney On Financials and at Bank Profits Ready to Tumble, Stocks to Fall: Whitney.

The most interesting exchange for us took place at minute 05:15 of the 08:58 minute clip.

Bartiromo - Banks represent such a big portion of the S&P 500, you are looking for the Banks to be 10-15% lower than where they are right now, then the market trades down?
Whitney - As a percentage of the market, the Banks are gonna trade down..

Then Meredith switched quickly to talking about regional banks. So she dodged Maria's question. When you watch the clip, you will see that Maria did not understand the switch. Here we have our Most Useful Guest of 2009 speaking with the Most Useful Anchor of 2009 and the Guest pulled a fast one on the Anchor. That is like Maria beating Meredith in bank stock picking. Not good, Maria.

As we watched this exchange, we recalled Whitney's appearance on Squawk Box on December 8. Joe Kernen was on top of his game in that interview. He asked tough questions and pressed her when Whitney answered. He blamed her for extending her bank franchise into being a seer on the broad markets. It was fun to watch Joe put Meredith on the defensive. At one point, Meredith almost apologetically said to Joe that she doesn't have estimates for Caterpillar. (see clip 2 of our December 6 - December 12 videoclips article).

May be Meredith remembered the Kernen treatment and that is why she artfully dodged Maria's question. But how did Maria let her? Was she just rushing through the interview or was she not adequately prepared? In any case, we are disappointed, Maria.

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The Ignatius Opinion - A Virtual Blueprint of Convenient, Myopic & Wrong Analysis about Af-Pak

Cinema Rasik — Sat, 13 Feb 2010 13:45:00 GMT

David Ignatius, an Op-Ed Columnist for the Washington Post, recently wrote an article titled A new thaw between India and Pakistan. Mr. Ignatius is a respected columnist with deep contacts. He is an intelligent man and he tries to be analytical as well as dispassionate, in our opinion. Unfortunately, intelligence goes astray without adequate knowledge and analysis often goes awry when it is not based on the correct framework.

To put it simply, when you begin with wrong axioms, your conclusions go wrong. His recent article is a good example of this simple fact. Like most European-American journalists, Mr. Ignatius begins with the axiomatic framework laid out by the British in 1947 when they engineered the partition of India. He makes the ridiculous statement that "India & Pakistan were separated at birth in 1947." He may not realize that India was born a few thousand years earlier than England and Pakistan was not born. It was amputated from India in 1947. This is a big deal and not a small point as Ignatius should know.

The Sins Of England - America's Inheritance

England broke off a strategic part of India in 1947 and allowed it to be called Pakistan or the land-of-the-Pure. The stated reason was to allow Muslims in India their own state. The real reason was to ensure that India did not become as regionally dominant as British India had been. The only man of consequence in India who did not accept the partition was the only true Indian, Mohandas Gandhi. But he gave way to the wishes of his English-oriented colleagues and the land-of-the-Pure was created.

The simple stated reason for the existence of this new state proved false. India today has more Muslims than the land-of-the-Pure. The Bangladeshi people found themselves regarded as not pure enough by the pure-Panjabi race of western Pakistan. So Bangladesh broke away in 1971. Today, the Pashtun people, forced to be a part of the artificial land-of-the-Pure than their native Afghanistan or land-of-the-Afghans, are in virtual revolt against the domination of the pure-Panjabi race.

When he discusses a thaw, Ignatius reverts back to the old English patronizing framework, that India is a strong democracy and if only India could comfort the land-of-the-Pure by easing its pressure, then that little brother pure-regime would get the confidence to talk peace.

To be fair, Ignatius is only one of many people who put forth this sort of thinking. Recently Paul Beckett of the Indian edition of the Wall Street Journal asked Prime Minister to "make the call" to Pakistan. David Ignatius is a serious columnist and a respected one. We believe that Mr. Ignatius is trying to think seriously about a solution. So we take his views seriously and work diligently to show where he is wrong.

But, for the sake of hypothesis, let us enter the Ignatius framework and assume that a thaw between Pakistan & India is necessary for the American objective of stabilizing Afghanistan.

Remember that in every deal, there is a Most Important Player ("MIP") and the success of the deal depends on whether this MIP wins with the deal or loses.

The Most-Important Player ("MIP") in this Deal

Who is the MIP in the USA-Pakistan-India deal? The simple answer to this question reveals why the Pakistan-India problem has been unsolvable for 60 years and why the Afghanistan problem might prove to be just as unsolvable.

The creation of the land-of-the-Pure in 1947 created the MIP of the region. That MIP is the so-called Pakistani Army. This is a non-religious organization, at least at the senior levels. But it has used the banner of Islam to build a broad and deep infrastructure in all aspects of Pakistani society. The popular saying in Pakistan is that "other countries have their own armies, but here, the Pakistani Army has its own country."

This MIP is smart. When needed, it has sacrificed its leader, its face rather than give up its power. A few years ago, the Pakistani Army sacrificed Pervez Musharaaf but retained its power & control through Musharaaf's successor, Kiyani. In 1971, the Pakistani Army sacrificed Yahya Khan and in 1965, the Pakistani Army sacrificed Ayub Khan. But it retained its MIP status. The MIP worked under the covers to undermine the civilian government and then again this MIP took over the state with a new face.

This MIP controls virtually every thing of consequence in Pakistan. They control all the revenues that come into Pakistan including billions of American aid. The senior people at this MIP have a gravy train and they share it with the lower levels and their minions, including the militants on their payroll. Through the years, this MIP has built a system of patronage through which they control the administration, the media and the religious school system. Just look at the way they unleashed this network on President Zardari when he tried to work with the Obama Administration to reduce the power of the Army. The MIP showed Mr. Zardari and President Obama who is the Boss. Now, both Zardari and the Obama Administration work with the MIP and not against it.

What would happen to this MIP if there is a real thaw between India & Pakistan? A real thaw would enable the populations of India & Pakistan. literally blood brothers, to come together in pursuit of economic progress and a better future for its people. A thaw with India would enable the rise of a Pakistani Civilian Government with teeth. American aid and the government's revenue would first be used for economic purposes and not for the military. A thaw with India would reduce the rationale for such a massive Pakistani army. Finally, a thaw with India would embolden the other provinces of Sindh, Pashtunistan and Baluchistan to demand equal rights without fear of Army repression.

A real thaw or peace with India will be a crippling blow to the power of the Pakistani Army within Pakistan. Therefore, as long as the Pakistani Army remains the MIP of the game, a real thaw between India & Pakistan will remain a mirage.

History of Prior Indo-Pak Thaws or Thaw Attempts

In his article, David Ignatius describes secret talks between Pakistan & India in 2007, talks that appeared to have made significant progress. Then he writes "the momentum was shattered by the Mumbai attacks and there appears to have been little movement since". Mr. Ignatius cannot be that gullible.

He should remember the 1999 thaw. Prime Minister Vajpayee of India had a dream of achieving peace between India & Pakistan. For once, Prime Minister Nawab Sharif of Pakistan shared this vision. They opened a bus link between the border cities of Amritsar and Lahore. The average Pakistani trusted Mr. Vajpayee. We were regularly told by Pakistani cab drivers in New York City that they trusted Mr. Vajpayee and hoped for peace between Pakistan & India.

But the MIP did not approve. General Musharaaf, the Pakistani Chief-of-Staff, planned and executed an invasion across the Kashmir border to seize the mountain peaks on the Indian side. Thus began the Kargil war. It is now confirmed that Musharaaf did this without the knowledge of his Prime Minister Sharif. When the Pakistani Army lost the Kargil war, Musharaaf turned on Sharif, arrested him and seized power as the Army dictator of Pakistan.

We believe that the 2008 Mumbai attacks were convenient in destroying the talks that began in 2007. They succeeded. The MIP won. This is why the Pakistani Army has done absolutely nothing to arrest or punish the terrorists behind the Mumbai attacks. In fact, the deadly Lashkar-e-Toiba ("LeT") organization has become stronger since the Mumbai attack and enjoys virtual freedom inside Pakistan.

There are signs that the MIP has mutated into a more deadly organization than before. Ten years ago, analysts could take comfort from the fact that the secular Generals controlled the MIP. Today, it is not so clear. After 20 years of religious indoctrination, the lower officer ranks of the MIP have become much more radical than the Generals who head it. These lower ranks enjoy considerable freedom of operation and they might be able to mount small scale operations like the Mumbai attacks on their own.

David Ignatius suggests that India reduce the pressure on Pakistan, presumably by removing more troops from the border with Pakistan.

Does he not realize that removal of Indian troops from the border would give the LeT and other terrorist groups greater opportunity to infiltrate India to mount terrorist attacks?
Does he also not realize that such a terrorist attack would once again destroy any potential thaw between Pakistan & India?
Does he not understand that a conflict between Pakistan & India is exactly what the Terrorists want because that would eliminate even the token pressure on them from the Pakistani army?

It is likely that David Ignatius does not understand these points. Or if he does, he may simply think that they are irrelevant. That might be his biggest illusion.

The Ignatius Illusion or Is It the Obama Administration Illusion?

Like the Obama Administration, David Ignatius begins with the wrong axiom. He thinks it is important for Pakistan & India to help "the United States to stabilize the tinderbox of Afghanistan", as he puts it. He is naive and wrong. So is the Obama Administration. By his promised deadline of 2011, President Obama has unfortunately begun the end game in Afghanistan, the struggle for the spoils after America leaves.

The victory of Scott Brown in Massachusetts and the transformed political calculus in America have put extraordinary pressure on the Obama Administration to deliver at least a semblance of success in Afghanistan. This is why the Obama Administration is pursuing diplomacy in a hurry and trying to pressure both Pakistan & India into a face-saving deal.

Fortunately, America has a strong, tenacious and cunning player in Secretary Gates. While in India, he said it would be appropriate for India to respond militarily against Pakistan if there is another terrorist attack on India from Pakistani soil. Then in Pakistan he told the MIP that the USA would consider inviting the Indian Army into Afghanistan to train the Afghan police. The presence of Indian troops in Afghanistan is a red line for Pakistan. So the MIP agreed to go along with the American plan.

To India, Secretary Gates laid out the possibility that India could lose all leverage in Afghanistan if the wrong Taleban forces took control. He argued that India needs to enter the diplomatic game if it wants to preserve a role in post-American Afghanistan. As a further stick, Secretary Gates discussed the possibility of inviting Turkish troops into Afghanistan. Turkey has emerged as the new favorite country of the Obama Administration. As a Muslim country and the successor to the Ottoman Empire, Turkey does have impeccable Muslim credentials, credentials that could neutralize Iranian cards in western Afghanistan. India cannot afford to stay away with external players like Turkey entering Afghanistan.

This is how the current tango between India & Pakistan began. Will it work? We are not optimistic because the Obama Administration is making the mistake of looking at the situation from its own perspective rather than from the perspective of the MIP.

An Existential Danger for the Pakistani Army

We have argued for some time that the real struggle in Af-Pak is the 1,200 year old battle between the Pashtuns and the Panjabis. Today, the Pashtun race is divided by the Durand line, the so called border between today's Pakistan and today's truncated Afghanistan. Even after this division, the Pashtuns remain the majority in Afghanistan and will dominate any post-US Afghan government. This government will contain a sizable portion of the Afghan Taleban, the same formidable warriors that are fighting the might of the American army today.

These Taleban do not respect the so called border today and they do not respect the Pakistani Army, which by its own admission does not control the border. Does any one imagine that tomorrow these Taleban will respect the border, a stronger Taleban in power in Kabul?

Look at Stratfor map below, the best map we have seen of the Pashtun populated area.

We think that any post-American Afghan government that contains the Afghani Taleban will end up exercising control in all areas of Pashtun residence. In other words, the new Afghan-Talebani government will end up in control of Pashtunistan or South Afghanistan, area that Pakistan considers its sovereign territory.

This map is republished with the permission of STRATFOR

Pashtun Populated Areas in Orange

What will Pakistan do then? Launch its army against the new Talebani Afghan Government? The same Pakistani Army that refuses to battle the weaker Taleban today because it cannot win in the Pashtun terrain. So does any one seriously believe that the Pakistani Army will attack the stronger Taleban tomorrow, a part of the new Afghan government?

And which Pakistani Army? The predominantly Panjabi regular Army or the predominantly Pashtun Frontier Corps? It is likely that a stable Pashtun dominated Afghan-Taleban government in Kabul will end up winning over the loyalties of the Pashtun Frontier Corps. After all, a brother joins the brother against a cousin.

A de facto control of all Pashtun regions by and a silent switch of loyalty of the Frontier Corps to the new Pashtun Afghan-Talebani government will end up breaking up today's Pakistan into north-western Pashtunistan and south-eastern Panjab-Sindh provinces that border India.

If they choose to fight this reality, the Panjabi regular army of Pakistan will have to confront the Afghan-Talebani irregular or regular forces. Either this will be a real, open and brutal war Or more likely it will become a vicious war of attrition resulting in covert, terrorist type attacks through out Pakistan & Pashtunistan. The second alternative will transform Pakistan as the new quagmire for America and the region.
If they choose to accept this reality and accept the de facto partition of the land-of-the-pure, the Panjabi Pakistani Army will again face its traditional northern enemy in Pashtuns of Afghanistan, the same people who conquered Pakistani Panjabis for the past 1, 200 years. On the east, they will have India, a stronger. richer and internationally important regional power. On the west, it will have Shiite Iran that has also dominated the Pakistani Panjabis for the past 1,400 years.

Regardless of what choice they make, the formation of a stable Afghan regime will create deep fissures within the remaining land-of-the-Pure. If Afghans can have their stable regime, why not the Baluch in Baluch-i-stan. If the Bengalis and the Pashtuns can get self-governance, why can't the Sindhis of Sindh? After all, Sindh is the most sensible and least extremist of all provinces inside Pakistan.

This is why we think that formation of a stable Afghan-Talebani regime will end up as a crippling blow to the MIP of the region, its power, its privilege and its gravy train.

This is why we believe that the Pakistani Army will do everything it can to destroy the chances of a stable Afghanistan. And the easiest way to do that is still the same:

Create a military conflict with India, either through another deadly terrorist attack on India or through another incursion. Such a conflict will end the current diplomatic plans of the Obama Administration, keep the Afghan conflict on the boil and maintain Pakistan's status as the critical front-line state for America's war on terror. This has always been the MIP's tactic for winning.

This is why we have maintained that the real battle in Af-Pak is between America and the Pakistani Army, the MIP of the Af-Pak game. This is why we think David Ignatius is dreadfully wrong and so are his sources.

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Step Aside Fantasy Football, Here Comes Fantasy Cricket

Cinema Rasik — Sat, 13 Feb 2010 13:09:00 GMT

Within 9 months of its launch, the Fantasy Cricket site Dream11.com has signed over 450,000 registered users with over 9 million page views per month. These users are spending an average of 16-20 minutes on the web site per visit. We thank the Wall Street Journal for this facts and for publishing the lovely article A Wicked (Virtual) Googly by Nando Di Fino on the WSJ website.

Dream11.com game - source WSJ article

This article is not just sports but about sports business as well. After all, its tag line says "What Fantasy Veterans Can Learn From a New Cricket Game Catching On in India."

Only sports aficionados can appreciate the scale of Cricket madness in India. Add to that the explosive growth of internet in India and you have the potential for a great business in Dream11,com. As the WSJ article writes, "if just 5% of Indians decide to try fantasy cricket, the number will double North American fantasy sports participation. And if it works in India, there are cricket fans in England, Australia, South Africa, and the Middle East".

Read this article to get the real flavor of Dream11.com. Thank you Nando Di Fino and WSJ.com for this article.

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