Monday, February 11, 2008

Whatz Subprime crisis and Subprime pain: Who lost how much

The United States' subprime crisis has turned out to be bigger than previously thought and has the potential to drag the world's largest economy into a recession.

And although there are varying opinions on whether the US could slip into a recession or not, most economists do feel that despite the US Federal Reserve's rate cuts and the Bush administration's $161-billion economic aid plan, chances of a recession are high.

Be that as it may, one thing is for certain: the losses from the subprime that financial majors have incurred will take a long time to get over.

Given below, in the table, are the estimated losses that some of the world's largest banks have suffered on account of home loan defaults in the US. The total figure adds up to over $76 billion and does not take into account losses suffered by many other financial majors that had an exposure to the crisis.

Four Indian banks -- State Bank of India, ICICI Bank, Bank of Baroda, and Bank of India too have big exposure to credit derivatives, with the spreads on these widening since international lenders turned risk-averse following the crisis in the US subprime (or high-risk home loan) market.

Credit derivatives are instruments for which the underlying asset is a loan or a bond. Marking to market means valuing a portfolio based on the prevailing market price.
Subprime losses till date

Bank - Losses -
Citigroup - $18.0 billion
UBS - $13.5 billion
Morgan Stanley - $9.4 billion
Merrill Lynch - $8.0 billion
HSBC - $3.4 billion
Bear Stearns - $3.2 billion
Deutsche Bank - $3.2 billion
Bank of America - $3.0 billion
Barclays - $2.6 billion
Royal Bank of Scotland - $2.6 billion
IKB - $2.6 billion
Societe Generale - $2.0 billion
Freddie Mac - $2.0 billion
Wachovia - $1.1 billion
Credit Suisse - $1.0 billion

ICICI Bank has the highest exposure of $1.5 billion. SBI has an estimated exposure of $1 billion, BoI of $300 million, and BoB of $150 million. About 5-10 per cent of this figure could be the losses that these banks could incur.
Understanding the subprime crisis

Just what is the subprime crisis? And why is it having such a decisive impact on the Indian stock market?

Let's understand it. Take, for example, an American who seeks a home loan, but does not have a very good credit rating. That essentially means that banks may not extend him a home loan. Enter, another American with stellar credit rating and the willingness to take on some risk. Given his good credit rating, banks are willing to give him a loan at a certain rate of interest.

This individual the divides the loan into small lots and gives them out as home loans to lots of Americans, who do not have very good credit rating and cannot get a home loan from any bank. He gives out the home loan at a rate of interest higher than it is paying to the bank it borrowed money from.

This higher rate is referred to as the subprime rate and this home loan market is referred to as the subprime home loan market.

By giving out a home loan to lots of individuals, the individual ensures that even if a few of them default, his overall position is not affected much. But the individual giving out loans in the subprime market does not stop here. He does not wait for the principal and the interest on the subprime home loans to be repaid, so that he can repay his loan to the bank, which has given him the loan.

He goes ahead and securitizes these loans. Securitization involves converting these home loans into financial securities, which promise to pay a certain rate of interest.

These financial securities are then sold to big institutional investors. The interest and the principal that is repaid by the subprime borrowers through equated monthly installments is passed onto these institutional investors.

The individual giving out the subprime loans, takes the money that he gets from selling the financial securities and passes it on to the bank, he had taken the loan from, thereby repaying the loan.

A neat plan. But then things went horribly wrong. The subprime home loans were given out as floating rate home loans. So as interest rates increased, the rates on floating home loans too went up, and so did the monthly installments needed to service these loans.

These high installments hit the subprime borrowers with the terrible force. Many, given their poor credit rating to begin with, defaulted. Once, more and more subprime borrowers started defaulting, payments to the institutional investors who had bought the financial securities stopped, leading to huge losses.

So how did that effect stock markets in India? Institutional investors who had invested in securitized paper from the subprime home loan market, saw their investments turning into losses. Most big investors have a certain fixed proportion of their total investments invested in various parts of the world.

Once investments in the US turned bad, more money had to be invested in the US, to maintain that fixed proportion. In order to invest more money in the US, money had to come in from somewhere. And this money came in from emerging markets like India, where their investments have been doing well.

These big institutional investors, to make good of their losses on the subprime market, have been selling their investments in India and other emerging markets. Since the amount of selling in the market far overweighs the amount of buying, Indian stock prices have been falling.
Additional inputs: Business Standard

Subprime crisis: Worst may be yet to come

Much has been written on the subprime crisis and the impact it will have on the world, in general, and on India in particular. However, the worst might be yet to come.

So what is the subprime home loan market? It is aggregation of those individuals in the United States to whom, normal banks do not lend, for the simple reason that their credit histories are not good. Hence, there is a greater chance of the individual taking the loan defaulting. And no bank likes to take on customers who are likely to default.

Here is where institutions which have a good credit rating and are willing to take some amount of risk, come in. They borrow money from banks and lend it to the Americans who have a bad credit rating. They divide this loan, into a lot of small tranches and give it out as home loans to Americans who do not have a good credit rating and to whom the bank will not give a home loan directly.

They give out the loan at a rate of interest, which is obviously higher than the rate at which they had borrowed from the bank. This higher rate is referred to as the subprime rate and this home loan market is referred to as the subprime home loan market.

The loans given out in the subprime market are largely adjustable rate mortgages(ARMs). These mortgages are somewhat similar to the floating rate home loans given in India, where as the interest rates vary, the equated monthly installment (EMI) of the floating rate home loan also varies. But there is more to the ARMs than that.

The two most popular adjustable rate mortgages are the interest-only ARMs and payment-option ARMs.

Interest-only ARMs, as the name suggests, involves paying only the interest on the loan for the first few years. This can typically vary anywhere from 3 years to 10 years. After that the principal repayment kicks in. What this does is that during the initial few years of repaying the loan, it keeps the EMI low. Once the principal repayment kicks in, the EMI starts increasing substantially.

Under the payment-option ARM, the interest rate for the first year is very low. After that, the interest rate is the same as other mortgage loans. But the low interest rate comes with a cost attached. The unpaid interest, essentially the difference between the offered interest rate and the real interest rate that is being charged on other mortgages, gets added to the overall loan and the overall loan keeps increasing.

There are certain dates on which these loans are reset. When these loans are reset, the EMI on these loans changes. The largest resets are expected to happen in the first six months of next year.

In 2007, around $197 billion of subprime loans have been reset. Estimates suggest that in the first six months of 2008, around $521 billion of resets are expected. Of this resets nearly 30% will be on interest-only ARMs and payment-option ARMs.

What this means is that the EMI of the subprime borrowers, who have either an interest-option ARM or a payment-option ARM, is expected to go up, as and when these resets happen. Once this happens, whether the subprime borrowers will continue to pay their EMIs is not very certain.

As we have seen in the earlier articles, the institution giving out the home loans in the subprime market does not keep the loans on its books. It does not wait for the principal and the interest on the subprime home loans to be repaid. It goes ahead and securitises these loans. Securitisation essentially involves, converting these home loans into financial securities, which promise to pay a certain rate of interest. These financial securities are then sold to big institutional investors.
The interest and the principal that is repaid by the subprime borrowers through EMI is passed onto these institutional investors who buy these financial securities.

Now once the EMIs go up, there is a great chance that subprime borrowers may not be able to pay them. If these EMIs are not paid, then investors who had bought the securitised paper will not get paid and hence suffer losses.

To cover their losses they may have to sell their investments in emerging markets like India, where there investments have been generating return.

And when they sell their investments in emerging markets, the markets are likely to fall, if there is less buying at that point of time.

Subprime crisis: Worst may be yet to come

Much has been written on the subprime crisis and the impact it will have on the world, in general, and on India in particular. However, the worst might be yet to come.

So what is the subprime home loan market? It is aggregation of those individuals in the United States to whom, normal banks do not lend, for the simple reason that their credit histories are not good. Hence, there is a greater chance of the individual taking the loan defaulting. And no bank likes to take on customers who are likely to default.

Here is where institutions which have a good credit rating and are willing to take some amount of risk, come in. They borrow money from banks and lend it to the Americans who have a bad credit rating. They divide this loan, into a lot of small tranches and give it out as home loans to Americans who do not have a good credit rating and to whom the bank will not give a home loan directly.

They give out the loan at a rate of interest, which is obviously higher than the rate at which they had borrowed from the bank. This higher rate is referred to as the subprime rate and this home loan market is referred to as the subprime home loan market.

The loans given out in the subprime market are largely adjustable rate mortgages(ARMs). These mortgages are somewhat similar to the floating rate home loans given in India, where as the interest rates vary, the equated monthly installment (EMI) of the floating rate home loan also varies. But there is more to the ARMs than that.

The two most popular adjustable rate mortgages are the interest-only ARMs and payment-option ARMs.

Interest-only ARMs, as the name suggests, involves paying only the interest on the loan for the first few years. This can typically vary anywhere from 3 years to 10 years. After that the principal repayment kicks in. What this does is that during the initial few years of repaying the loan, it keeps the EMI low. Once the principal repayment kicks in, the EMI starts increasing substantially.

Under the payment-option ARM, the interest rate for the first year is very low. After that, the interest rate is the same as other mortgage loans. But the low interest rate comes with a cost attached. The unpaid interest, essentially the difference between the offered interest rate and the real interest rate that is being charged on other mortgages, gets added to the overall loan and the overall loan keeps increasing.

There are certain dates on which these loans are reset. When these loans are reset, the EMI on these loans changes. The largest resets are expected to happen in the first six months of next year.

In 2007, around $197 billion of subprime loans have been reset. Estimates suggest that in the first six months of 2008, around $521 billion of resets are expected. Of this resets nearly 30% will be on interest-only ARMs and payment-option ARMs.

What this means is that the EMI of the subprime borrowers, who have either an interest-option ARM or a payment-option ARM, is expected to go up, as and when these resets happen. Once this happens, whether the subprime borrowers will continue to pay their EMIs is not very certain.

As we have seen in the earlier articles, the institution giving out the home loans in the subprime market does not keep the loans on its books. It does not wait for the principal and the interest on the subprime home loans to be repaid. It goes ahead and securitises these loans. Securitisation essentially involves, converting these home loans into financial securities, which promise to pay a certain rate of interest. These financial securities are then sold to big institutional investors.
The interest and the principal that is repaid by the subprime borrowers through EMI is passed onto these institutional investors who buy these financial securities.

Now once the EMIs go up, there is a great chance that subprime borrowers may not be able to pay them. If these EMIs are not paid, then investors who had bought the securitised paper will not get paid and hence suffer losses.

To cover their losses they may have to sell their investments in emerging markets like India, where there investments have been generating return.

And when they sell their investments in emerging markets, the markets are likely to fall, if there is less buying at that point of time.

Insane - Yet Again....

Cant tell what you wont grasp
Cant show what you wont see
For my world is a notion to you
A Reality meant only for me
Bother not, if you fail to know
Worry not if I refuse to clarify
For my world lives in me
In me must It also die
If I appear insane, so be it
Its true, the way you know
I care less, what you see
Who I am, I alone know

Champagne Supernova - Oasis (One of my Favourite song)

How many special people change?
How many lives are living strange?
Where were you while we were getting high?
Slowly walking down the hall
Faster than a cannonball
Where were you while we were getting high?
Someday you will find me
Caught beneath the landslide
In a champagne supernova in the sky
Someday you will find me
Caught beneath the landslide
In a champagne supernova
A champagne supernova in the sky
Wake up the dawn and ask her why
A dreamer dreams, she never dies
Wipe that tear away now from your eye
Slowly walking down the hall
Faster than a cannonball
Where were you while we were getting high?
Someday you will find me
Caught beneath the landslide
In a champagne supernova in the sky
Someday you will find me
Caught beneath the landslide
In a champagne supernova
A champagne supernova
'Cuz we don't believe
That they're gonna get away from the summer
But you and I will never die
The world's still spinning around we don't know why
Why-why-why-why-i-i
(guitar solo)
How many special people change?
How many lives are living strange?
Where were you while we were getting high?
Slowly walking down the hall
Faster than a cannonball
Where were you while we were getting high?
Someday you will find me
Caught beneath the landslide
In a champagne supernova in the sky
Someday you will find me
Caught beneath the landslide
In a champagne supernova
A champagne supernova
'Cuz we don't believe
That they're gonna get away from the summer
But you and I will never die
The world's still spinning around we don't know why
Why-why-why-why-i-i
(a really long guitar solo)
(background - sounds like a bunch of "No"'s)
(birds chirping)
(more guitar)
How many special people change?
How many lives are living strange?
Where were you while we were getting high?
We were getting high <-- 9 times, background "Oooh-oooh"
(Fades out 7th-9th times to just one "Oooh-oooh")
(Song gets really quiet, fades to a peaceful guitar solo.)

The Hollow Earth - Agharta, The Subterranean World

I dont recall exactly who sent this to me.. but still a wonderful article on Hollow Earth ( A follow through for my old post...)

By: Dr. R. W. Bernard, B.A., M.A., Ph.D. - Chapter 7.2:


The word "Agharta" is of Buddhist origin. It refers to the Subterranean World or Empire in whose existence all true Buddhists fervently believe. They also believe that this Subterranean World has millions of inhabitants and many cities, all under the supreme domination of the subterranean world capital, Shamballah, where dwells the Supreme Ruler of this Empire, known in the Orient as the King of the World. It is believed that he gave his orders to the Dalai Lama of Tibet, who was his terrestrial representative, his messages being transmitted through certain secret tunnels connecting the Subterranean World with Tibet.

Similar mysterious tunnels honeycomb Brazil. Brazil in the West and Tibet in the East seem to be the two parts of the Earth where contact between the Subterranean World and the surface world may be most easily achieved, due to the existence of these tunnels.

The famous Russian artist, philosopher and explorer, Nicholas Roerich, who traveled extensively in the Far East, claimed that Lhasa, capital of Tibet, was connected by a tunnel with Shamballah, capital of the subterranean empire of Agharta. The entrance of this tunnel was guarded by lamas who were sworn to keep its actual whereabouts a secret from outsiders, by order of the Dalai Lama. A similar tunnel was believed to connect the secret chambers at the base of the Pyramid of Gizeh with the Subterranean World, by which the Pharaohs established contact with the gods or supermen of the underworld.

The various gigantic statues of early Egyptian gods and kings, as those of Buddha found throughout the Orient, represent subterranean supermen who came to the surface to help the human race. They are generally represented as sexless. They were emissaries of Agharta, the subterranean paradise which it is the goal of all true Buddhists to reach.

Buddhist traditions state that Agharta was first colonized many thousands of years ago when a holy man led a tribe which disappeared underground. The gypsies are supposed to come from Agharta, which explains their restlessness on the Earth's surface and their continual travels to regain their lost home. This reminds one of Noah, who was really an Atlantean, who saved a worthy group prior to the coming of the flood that submerged Atlantis. It is believed that he brought his group to the high plateau of Brazil where they settled in subterranean cities, connected with the surface by tunnels, in order to escape from poisoning by the radioactive fallout produced by the nuclear war the Atlanteans fought, which brought on the flood that submerged their continent.

The aubterranean civilization oi Agharta is believed to represent a continuation of Atlantean civilization, which, having learned the lesson of the futility of war, remained in a state of peace ever since, making stupendous scientific progress uninterrupted by the setbacks of recurrent wars, as our surface civilization has been. Their civilization is many thousands of years old (Atlantls sank about 11,500 years ago), while ours is very young, only a few centuries old.

Subterranean scientists are able to wield forces of nature we know nothing about, as demonstrated by their flying saucers, which are operated by a new, unknown source of energy, more subtle than atomic energy. Ossendowski claims that the Empire of Agharta consists of a network of subterranean cities connected with each other by tunnels through which vehicles pass at tremendous speed, both under land and under the ocean.

These people live under the benign reign of a government headed by the King of the World. They represent descendants of the lost continents of Lemuria and Atlantis, as well as the original perfect race of Hyperboreans, the race of gods.

During various epochs in history, the Aghartan supermen or gods came to the surface to teach the human race and save it from wars, catastrophies and destruction. The coming of the flying saucers soon after the first atomic explosion in Hiroshima represents another such visitation, but thls time the gods themselves did not appear among men, but they sent their emissaries.

The Indian epic, "Ramayana" describes Rama as such an emissary from Agharta coming on an aerial vehicle, which was probably a flying saucer. A Chinese tradition speaks of divine teachers coming on aerial vehicles. Similarly, the founder ot the Inca dynasty, Manco Copac, came the same way.

One of the greatest of Aghartan teachers in America was Quetzalcoatl, the great prophet of the Mayas and Aztecs and of the Indians of the Americas in general, both in South and North America. That he was a stranger among them, coming from a different race (Atlantean) is indicated by his being fair, while they were dark; his being tall, while they were short; his being bearded, while they were beardless. He was reverenced as a savior by the Indians of Mexico, Yucatan and Guatemala long before the coming of the white man. The Aztecs called him "God of Abundance" and the "Morning Star." His name Quetzalcoatl means "Feathered Serpent," meaning a teacher of wisdom (symbolized by the serpent) who flies. He was given this name because he came on an aerial vehicle, which appears to have been a flying saucer. He probably came from the Subterranean World, because after he remained some time with the Indians, he mysteriously vanished the same way as he came; and was believed to have returned to the Subterranean World from which he came.

Quetzalcoatl is described as having been "a man of good appearance and grave countenance, with a white skin and beard, and dressed in a long flowing white garment. He was also called Huemac, because of his great goodness and continence. He taught the Indians the way of virtue and tried to save them from vice by giving them laws and counsel to restrain them from lust and to practice chastity. He taught pacifism and condemned violence in all forms. He instituted a vegetarian diet, with corn as a principal food, and taught fasting and body hygiene. According to the South American archeologist, Harold Wilkins, Quetzalcoatl was also the spiritual teacher of the ancient inhabitants of Brazil.

After remaining some time with the Indians, and seeing how little they cared to follow his teachings, except his recommendation to plant and eat corn as a basic food in place of meat, Quetzalcoatl departed, telling them that some day he would return. That this "visitor from Heaven" left the same way in which he came - on a flying saucer - is indicated by the following facts. When Cortez invaded Mexico, the emperor Montezuma believed that the predicted "return of Quetzalcoatl" had occurred, because a fireball then gyrated over Mexico City, making the people wail and scream, setting the temple of the war god on fire. This fireball was believed to have been the flying saucer on which Quetzalcoatl traveled.

Osiris was another such subterranean god. According to Donnelly, in his book, "Atlantis the Antediluvian World," the gods of the ancients were the rulers of Atlantis and members of a superhuman race which governed the human race. Before the destruction of their continent, which they foresaw, they traveled by flying saucer through the polar opening to the Subterranean World in the hollow interior of the earth, where they continued to live ever since.

"The Empire of Agharta," wrote Ossendowski in his book "Beasts, Men and Gods," "extends through subterranean tunnels to all parts of the world." In this book he speaks of a vast network of tunnels constructed by a prehistoric race of remotest antiquity, which passed under both oceans and continents, through which swift-moving vehicles traveled. The empire of which Ossendowski speaks and concerning which he learned about from lamas in the Far East, during his travels in Mongolia, obviously consists of subterranean cities inside the earth's crust, which should be differentiated from those existing in its hollow center. Thus there are two subterranean worlds, one more superficial and one in the center of the earth.

Huguenin, whose book on flying saucers and the subterranean world we previously mentioned, believes that there exist many subterranean cities at various depths, between the earth's crust and its hollow interior. Concerning the inhabitants of these subterranean cities, he writes:

"This other humanity has reached an elevated grade of civilization, economic and social organization and cultural and scientific progress, in comparison with which the humanity which lives on the earth's surface are a race of barbarians."

In his book, Huguenin shows a diagram of the earth's interior, showing various subterranean cities at various depths, connected with each other by tunnels. He describes these cities as existing in immense cavities in the earth. The city of Shamballah, the capital of the subterranean empire, he portrays as existing at the center of the earth, in its hollow interior, rather than inside its solid crust. Ossendowski writes:

"All the subterranean caverns of America are inhabited by an ancient people who disappeared from the world. These people and the subterranean regions where they dwell are under the supreme authority of the King of the World. Both the Atlantic and Pacific Oceans were once the home of vast continents which later became submerged; and their inhabitants found refuge in the Subterranean World. The profounder caverns are illuminated by a resplendent light which permits the growing of cereals and other vegetables, and gives the inhabitants a long life-span free from disease. In this world exists a large population and many tribes."

In his book, "The Coming Race," Bulwer Lytton describes a subterranean civilization far in advance of our own, which existed in a large cavity in the earth, connected with the surface by a tunnel. This immense cavity was illuminated by a strange light which did not require lamps to produce it, but appeared to result from an electrification of the atmosphere. This light supported plant life and enabled the subterranean people to grow their foods. The inhabitants of the Utopia, described by Lytton were vegetarians. They had certain apparatuses by which, instead of walking, they flew. They were free from disease and had a perfect social organization so that each received what he needed, without exploitation of one by another.

It is claimed that the earth's crust is honeycombed by a network of tunnels passing under the ocean from continent to continent and leading to subterranean cities in large cavities in the earth. These tunnels are especially abundant in South America, especially under Brazil, which was the chief center of Atlantean colonization; and we may believe they were constructed by the Atlanteans. Most famous of these tunnels is the "Roadway of the Incas" which stretches for several hundred miles south of Lima, Peru, and passes under Cuzco, Tiahuanaco and the Three Peaks, proceeding to the Atacambo Desert. Another branch opens in Arica, Chile, visited by Madame Blavatsky.

It is claimed that the Incas used these tunnels to escape from the Spanish conquerors and the Inquisition, when entire armies entered them, carrying with them their gold and treasures on the backs of llamas, which they did when the Spanish Conquerors first came. Their mysterious disappearance at this time, leaving only the race of Quechua Indians behind, is also explained by their entering these tunnels. It is claimed that when Atahualpa, the last of the Inca kings, who was brutally murdered by Pizarro, the gold that was being carried to his ransom on a train of 11,000 pack llamas, found refuge in these tunnels. It is claimed that these tunnels had a form of artificial lighting and were built by the race that had constructed Tiahuanco long before the first Inca appeared in Peru.

Since the Incas who entered these tunnels to escape from the Spaniards were never seen since and disappeared from the earth's surface, it is probable that they continued to live in illuminated subterranean cities to which these tunnels led.

These mysterious tunnels, an enigma to archeologists, exist in greatest number under Brazil, where they open on the surface in various places. The most famous is in the Roncador Mountains of northeast Matto Grosso to where Colonel Fawcett was heading when last seen. It is claimed that the Atlantean city for which he searched was not the ruins of a dead city on the surface but a subterranean city with still living Atlanteans as its inhabitants; and that he and his son Jack reached this city and are still living therein. This is the belief of Professor de Souza, Commander Strauss and O. C. Huguenin, whom we have mentioned before.

The Roncador tunnel opening is guarded by fierce Chavantes Indians who kill anyone who dares to enter uninvited and who might molest the subterranean dwellers whom they respect and reverence. The Murcego Indians also guard these secret tunnel openings leading to subterranean cities in the Roncador Mountain region of Matto Grosso. We quote a letter to the author from an American, named Carl Huni, who lived many years in Matto Grosso and made a special study of this subject:

"The entrance to the caverns is guarded by Murcego Indians, who are a dark-skinned, undersized race of great physical strength. Their sense of smell is more developed than that of the best bloodhounds. Even if they approve of you and let you enter the caverns, I am afraid that you will be lost to the present world, because they guard the secret very carefully and may not let those who enter leave. (This may have happened to Colonel Fawcett and his son Jack, who are believed to have entered a tunnel leading to a subterranean city in the Roncador Mountains, never to return.)

"The Murcego Indians live in caverns and go out at night into the surrounding jungles, but they have no contact with the subterranean dwellers below, inhabiting a subterranean city in which they form a seli-contained community and have a considerable population. It is believed that the subterranean cities they inhabit were first constructed by the Atlanteans. One thing is certain, that no radioactive fallout can reach them. No one knows whether those who live in these ancient Atlantean subterranean cities are Atlanteans themselves or others who settled there after their origlnal builders were gone.

"The name of the mountain range where these Atlantean subterranean cities exist is Roncador in northeast Matto Grosso. If you go in quest of these subterranean cities, take your life in your own hands as you may never be heard of again, like Colonel Fawcett.

"When I was in Brazil I heard a lot about the underground caverns and subterranean cities. They are, however, a long way from Cuiaba. They are near the Rio Araguaya, which empties into the Amazon. They are to the northeast of Cuiaba at the foot of the tremendously long mountain range named Roncador. I desisted to investigate further because I heard that the Murcego Indians jealously guard the entrance to the tunnels from people who are not sufficiently developed, because they do not want trouble. In the first place, they do not want anyone who is still enmeshed in commercialism and who has a desire for money.

"There are also caverns in Asia and Tibetan travelers mention them. But as far as I know, in Brazil are the biggest ones and they exist at three different levels. I am sure I would get permission if I wanted to join them and they would accept me as one of theirs. I know they use no money at all, and their society is organized on a strictly democratic basis. People do not become aged and live in everlasting harmony."

This subterranean Utopia mentioned by Mr Huni (now residing in New York) seems to resemble greatly the one described by Bulwer Lytton in his book, "The Coming Race." Lytton was a Rosicrucian and probably based his novel on occult information concerning existing subterranean cities.

The ruins of a number of Atlantean cities were found in northern Matto Grosso and the Amazon territory, indicating that Atlanteans once colonized this country. Some years ago an English schoolteacher, hearing rumors of a lost Atlantean city on a high plateau in this region went to find it. He did, but the hardships of the journey cost his life. Before he died he sent by carrier pigeon a note describing a magnificent city he discovered whose streets were lined by high gold statues.

If the Atlanteans once colonized Brazil and constructed cities in Matto Grosso on its surface, why did they build subterranean cities there? It could not have been to escape the deluge that submerged Atlantis and outlying areas, because Matto Grosso is a high plateau where floodwaters could not have reached. The South American archeologist, Harold Wilkins, offers another theory: that the subterranean cities were built to escape the radioactive fallout resulting from a nuclear war the Atlanteans fought. This seems to be a very reasonable explanation, or otherwise here would be no reason to undergo the great labor of excavating the earth and constructing subterranean cities when the Atlanteans already had magnificent cities on the earth's surface.

If and when we are endangered by a nuclear war, we, too, will have to find refuge inside the earth and dwell there in illuminated subterranean cities and produce our foods under this light. It would of course be much easier to join existing subterranean cities constructed by the Atlanteans thousands of years ago, who vastly surpassed us in engineering skill, than to construct our own. If friendly contact with subterranean dwellers could be established, when war came, or even before, when radioactive fallout increases beyond the danger point and menaces our survival, ft would be to our advantage to contact these subterranean cities and, if we are admitted, to establish residence in them.

There is no old age in Agharta and no death. It is a society in which everyone is young looking, even if many centuries or even thousands of years of age. This seems incredible to surface dwellers exposed to the harmful effects of solar radiation and the autointoxication of food poisoning from a wrong diet. The symptoms of old age are not the natural result of the passage of time nor an assumed aging process, but to adverse biological conditions and habits. Senility is a disease; and since Aghartans are free from disease, they do not grow old.

The superior scientitic culture of the subterranean people, of which their flying saucers are an evident example, is the result of superior brain development and more energetic brains. This is due to the fact that their vital energies flow up to their brain, rather than being dissipated through the sexual channel as among so-called "civilized" surtace races. In fact, sex indulgence is completely out of their lives, because of their fruit diet, their endocrines are in a state of perfect balance and harmonious functioning, as in little children, and are not stimulated to abnormal activity by metabolic toxins, as produced by such foods as meat, fowl, fish and eggs and by such aphrodisiacs as salt, pepper, coffee, tobacco and alcohol. By keeping their blood-stream pure and free from toxins, the subterranean people are able to live in complete continence, conserving all vital energies and converting them into superior brain power. Their superior scientific achievements result from the fact that their brains are superior to ours in intellectual development.

Concerning Agharta, Professor Henrique J. de Souza, President of the Brazilian Theosophical Society and a leading authority on the Subterranean World, in his magazine, published an article he wrote, "Does Shangri-la Exist?" from which we quote:

"Among all races of mankind, back to the dawn of time, there existed a tradition concerning the existence of a Sacred Land or Terrestrial Paradise, where the highest ideals of humanity were living realities. This concept is found in the most ancient writings and traditions of the peoples of Europe, Asia Minor, China, India, Egypt and the Americas. This Sacred Land, it is said, can be known only to persons who are worthy, pure and innocent, for which reason it constitutes the central theme of the dreams of childhood.

"The road that leads to this Blessed Land, this Invisible World, this Esoteric and Occult Domain, constitutes the central quest and master key of all mystery teachings and systems of initiation in the past, present and future. This magic key is the `Open Sesame' that unlocks the door to a new and marvelous world. The old Rosicrucians designated it by the French word VITRIOL, which is a combination of the first letters of the sentence: `VISTA INTERIORA TERRAE RECTIFICANDO INYENES OMNIA LAPIDEM,' to indicate that `in the interior of the earth is hidden the true MYSTERY ' The path that leads to this Hidden World is the Way of Initiation.

"In ancient Greece, in the Mysteries of Delphos and Eleusis, this Heavenly Land was referred to as Mount Olympus and the Elysian Fields. Also in the earliest Vedic times, it was called by various names, such as Ratnasanu (peak of the precious stone), Hermadri (mountain of gold) and Mount Meru (home of the gods and Olympus of the Hindus). Symbolically, the peak of this sacred mountain is in the sky, its middle portion on the earth and its base in the Subterranean World.

"The Scandinavian Eddas also mention this celestial city, which was in the subterranean land of Asar of the peoples of Mesopotamia. It was the Land of Amenti of the Sacred Book of the Dead of the ancient Egyptians. It was the city of Seven Petals o! Vishnu, and the City of the Seven Kings of Edom or Eden of Judaic tradition. In other words, it was the Terrestrial Paradise.

"In all Asia Minor, not only in the past but also today, there exists a belief in the existence of a City of Mystery full of marvels, which is known as SHAMBALLAH (Shamb-Allah), where is the Temple of the Gods. It is also the Erdamf of the Tibetans and Mongols.

"The Persians call it Alberdi or Aryana, land of their ancestors. The Hebrews called it Canaan and the Mexicans Tula or Tolan, while the Aztecs called it Maya-Pan. The Spanish Conquerors who came to America believed in the existance of such a city and organized many expeditions to find it, calling it E1 Dorado, or City of Gold. They probably learned about it from the aborigines who called it by the name of Manoa or City Whose King Wears Clothing of Gold.

"By the Celts, this holy land was known as "Land of the Mysteries" - Duat or Dananda. A Chinese tradition speaks of Land of Chivin or the City of a Dozen Serpents. It is the Subterranean World, which lies at the roots of heaven. It is the Land of Calcas, Calcis or Kalki, the famous Colchida for which the Argonauts sought when they set out in search of the Golden Fleece.

"In the Middle Ages, it was referred to as the Isle of Avalon, where the Knights of the Round Table, under the leadership of King Arthur and under the guidance of the Magician Merlin, went in search of the Holy Grail, symbol of obedience, justice and immortality. When King Arthur was seriously wounded in a battle, he requested his companion Belvedere to depart on a boat to the confines of the earth, with the following words: `Farewell, my friend and companion Belvedere, and to the land where it never rains, where there fs no sickness and where nobody dies.' This is the Land of Immortality or Agharta, the Subterranean World.

This land is the Walhalla of the Germans, the Monte Salvat of the Knights of the Holy Grail, the Utopia of Thomas More, the City of the Sun of Campanella, the Shangri-la of Tibet and the Agharta of the Buddhist world."
*******

Entropy

The branches and leaves
They twist the wind
to hushed swirl tire
And many a forest
animal a fire
their shrill trill.
[But they only endow the silence
with an unworried entropy.]


Wake up to early morning
breakfast cereal digestion
Eyes skitting the time
Unworried, unwary?
But the taste is forgotten
In quandries potential and lost.
Until the 8 starts juices flowing
And Head, a Bustle-Fuddling TIME.


The pages slip away, away...
Across torrential darkness
Through a void of weariness
Whipping up a taste for nervousness
Erosion to a lovely apathy.
Distilled to a turgid clay-mess.


Will it all fall away
The rude mould made?

Geometry Philosophy

Simple circle
met a sphere
whilst studying anthropology.
"Look at me," said circle
excitedly. "I'm everywhere.
Up, Down, Every direction.
Infinitesimal to definite size.
I'm not discrete, but every possibility,"
excitedly. Sphere
bounced inside
circle. "No. That's me.
Just me. Once removed
form your universe of possibilities."
subconsciously.
Sphere met circle
Bounced and hulaed
Felt sort of strange
Could not see inside reality
Just felt familiarly queasy
Uneasy, as if geometry
was, after thought
unreality.
Point just itched
circle who twitched
sphere who gave
a little bounce.

Now its u.....

Now you, feeling the same things I do, the feelings of need, the warmth and care, do you take a chance, do you dare?

Maybe it will be uncomfortable at first, sometimes confused by our loneliness our hunger and thirst,

I can’t say what your hearts telling you, I can only pray were on the same page and you’re feeling it too.

Built by friendship and the need to talk everyday, we have both come to a point in our life that true feelings exist in the words that we say,

I assure you our friendship is built to last, for I am not a child, the future is grown from a shared past.

Becoming friends with you and feeling the way that I do, you’ll always be and are my best friend tried and true.

So if in the end friendship is all that you desire, I will still feel blessed by the chance to feel the heat and the warmth from your fire.

There will not be a one night stand, no matter what happens, you’ve helped to make me grow into a caring man, thankful for your honesty and your reaching hand…

Shez no more....

Was she moved?
I think she was.
By the experience.

I think she was
And so was I.
Moved.
By the experience.

No tears In Years;
No love in droves
No wonder we move
No more so.

Do we see it in the air?
Or is it, calculated emptiness.
Is it shooting adrenalin?
Or are we, in our no way fussed.

No wonder we love
When all we loved is lost
And all we love
Moved
Every, moment, onwards...

India Inc to face difficulty in fund raising


MUMBAI: Turbulent markets, wary investors and sinking valuations could force some Indian companies to adjust their expectations when they go to raise money for their mega projects, analysts and consultants said on Tuesday.

Some companies will be forced to swallow a lower valuation in order to raise money, while a few may have to offer sweeteners, such as additional shares, in order to complete the transaction.


India Inc is likely to raise over $12 billion through a mix of equity, rights, debt issues over the next five months. Most of the money will be used to build power plants, refineries and retail networks and bank branches. Last week, this kind of fund raising would have hardly raised eyebrows among investment banks and corporate finance executives. But today, it makes them break into cold sweat.

“They have to offer more equity to raise required capital. Even if they do so, one is not sure if they can raise the funds because there is a serious dearth of funds in the equity as well as the debt markets across the global,” Ambit Corporate Finance partner and CEO Ashok Wadhwa said.

Tata group plans to raise funds for acquisitions and capital expansion in steel, tea, chemicals, auto, IT and hospitality segments while the Essar group will be raising funds for refinery expansion, vessel acquisitions and power plants construction. The Aditya Birla Group firms, Hindalco Industries and Aditya Birla Nuvo, have also announced similar plans.

In the case of some companies, the fund raising is spread out over a few years, so they can afford a slight delay. Some others can turn to private equity instead of markets, though here again, valuations could play spoilsport. Private equity fund managers are likely to demand a fair and reasonable valuation.

Industry observers said the on-going carnage is expected to delay some of the plans. This could result in an increase in the number of PE deals in the domestic market.

"If the market continues to be choppy, the companies have to revisit their expectation on valuations. The investors, especially, in the QIP and FCCB sectors, may not agree with the projections of corporates. Even long-term investors like private equity firms may force corporates to revise the valuations," a senior official with Ernst & Young said.

However, companies disagree that their fund raising plans will be hit. Essar Power MD Arun K Srivastava, for instance, said power companies will not be hit.

" Power companies, which have got fuel tie-up, clearances from the government and marketing agreements, could raise the required funds. But the companies, which have not firmed up their projects, will be affected when they raise money from the market." JSW Group director finance Sheshagiri Rao also said steel companies would not be impacted.