Of Global Financial Crisis and Karthik Rajaram
The late Karthik Rajaram, 45, born in India, grew up in Bangalore and graduated in 1985 from the now famous Indian Institute of Technology in Chennai is said to have shot his mother-in-law, wife and three children to death before killing himself sometime between Saturday evening 4 Oct and Monday morning 6 Oct. in their home on Como Lane, California. Cause of killing and suicide? Credit crunch and stock exchange collapse. He was unemployed and his investment was wiped out on the London Stock Exchange.
When I heard that Karthik Rajaram had killed his family and himself, I quickly looked at my own tragedy by logging in to check my investment. I was shocked to see the negatives and the free fall of my investment. I quickly called the investment adviser who re-assured me that I should not pull out what was remaining. He actually advised me that if I had some spare change sitting idle, this is time to buy more!!! Okay, I never went hope to wipe out my family. I guess Karthik loss was just too much to bear.
As I still thought about Karthik and markets continued their downward plunge with both London and Washington making promises of bail-outs, I saw a headline in the Evening Standard of 9th October which read “London Tycoons lose billions in meltdown”. The scale is frightening. Lakshmi Mittal, the Indian tycoon and owner of giant steel plant Arcelor Mittal and the richest man in UK lost £21.4 billion. It is estimated that over the last four months, he was losing £7 million per hour!!!, Anil Agarwal of Vedanta Resources, (one of the large copper mining companies in Zambia) lost almost $3 billion on the London stock exchange. The total estimated loss for 10 only London tycoons is about £31 billion.
The Credit crunch is a nasty flu that is working its way down and will sooner than later catch up with our countries that are already vulnerable. But our countries have faced worse calamities than the credit crunch, as our needs are at the bottom. Most people do not lose investments because they have none. They long for food, clothing and shelter. Our needs are Physiological as described under Maslow's hierarchy of needs, which is the first lower level. Our political debate is based on these needs and hence there will be no bail out package for the few who have moved up the ladder on Maslow’s hierarchy.