[When Securities Turn Blue & Red By Dhirendra Kumar Oct 13, 2008
Have you heard the Panchatantra tale about the jackal that turned blue? That story holds an important lesson in trying to understand the root cause of the global financial crisis. Here's my version.
Once upon a time, a jackal from the jungle wandered close to a village and was set upon by a pack of village dogs. While running to save his life, he stumbled and fell into a large vat of blue colour at a dyers' workshop. As he scrambled out, he was surprised to see that the dogs took one look at him and ran away, yelping in fear. He peeped into the water and saw that he had turned into a strange blue being. It was obvious to him that he had fallen into some sort of a magic potion and become a fearsome and powerful creature.
He went back into the jungle and declared himself to be the king. Scared of this blue apparition, the animals hastened to obey all his commands. Soon, using the money he extorted from the poor creatures, he bought himself an apartment on Manhattan's Upper East Side and another one in South Mumbai, probably in the NCPA building. However, he spent most of his time in Dubai. For some reason, he preferred the dry weather there. One day the unthinkable happened. Just as he stepped out of a helicopter after surveying the Burj Dubai-2 (he was planning to buy an apartment on the 8000th floor), it started raining. As the torrential rain poured down, his blue colour washed off and there he stood, revealed in his true jackalness. But it was OK because everyone around him was also a jackal. No, wait, that's a different story. As soon as he was revealed to be a jackal, the animals around him chased him back to the village.
The Jackal's pretence has a great similarity to securities being painted up and disguised into something they are not. When the dust finally settles on the Great Panic of 2008, we will all realise that in almost every part of this crisis, the original sin was investments that were pretending to be something they were not.]
Great Play of 2008 - A Tale of A vs. B - Episode II: Turning green when blue washes off. [TNM]