Risk Latte - The Ackermann Prophecy and the Credit Crisis

The Ackermann Prophecy and the Credit Crisis

Rahul Bhattacharya
July 18, 2008

Joe Ackermann, Chairman of Delhi-Bombay Bank (DBB) appeared in my dreams last Wednesday and delivered a sermon.

My friends and a few lesser friends had always told me that this was bound to happen one day. I didn't listen to Robbie Longhandle; Robbie always told me that Joe Ackerman manages his entire senior staff by delivering sermons to them while they are asleep. How the hell does he do it? Robbie wouldn't tell me that.

I didn't even listen to Abigail Hofman of ZeroMoney magazine; God bless the talented, young journalist! I'm sorry Abby, you were sincere in your advice; you are perhaps the most sincere journalist the City of London has ever seen, and I have been stupid to ignore your advice all these years.

Look guys, Joe Ackermann and I fell apart a long time ago, when I didn't listen to him and turned down the job he offered me; in fact, it was a blessing in disguise for him and his bank; he then went ahead and offered the job to my fellow Indian, AJ, who of course deserved the job much more than I did. AJ's boss, mentor, whatever...the person whom he had followed from ML had just died in a plane crash and he was feeling so insecure. Come on guys, have a heart! So, it was all good.

But that was so long ago. Why come back now and torment me? And I am not even an employee of DBB. Robbie had said that a chosen few outside of DBB also get to see Joe in their dreams; but those occasions are rare and momentous.

In fact, a couple of years back, I'd met Joe while he was visiting Hong Kong. We met by chance in a go-go bar and even though he was completely sloshed he recognized me instantly. I'd said to him then: listen, Joe, mate, no hard feelings, you went your way and became the Chairman of DBB while I discovered the tastiest Chinese noodles on this side of the Pacific. You found gold, you found AJ. Joe had simply smiled that enigmatic smile of the bodhisattvas. I thought I had made my peace with him.

Anyway, coming back to my dream of last Wednesday here is what I saw. Joe was wearing this peculiar attire which made him look half like Buddha and half like the Hindu god Vishnu. He was standing outside the Winchester House on Great Winchester Street, semi-clothed, and had a pained look on his face. I was standing next to him. The Blackberry hung like a pendant on a gold chain around his neck. I could see that every five seconds there was an incoming mail and almost all of them were from AJ. One message said: Joe, get your half covered butt inside ASAP, we need you in one piece when we meet with those jokers from Frankfurt tomorrow morning.

Joe was saying to me, in a lilting Mississippi dialect: "Rahul, I know you're a nice guy, its just that you ain't successful, my man. Well, to be honest, there ain't no successful guy that's nice." I didn't know what to say, so I simply said, "Joe, what's wrong with you? I thought you were Swiss, or Swiss-German or British, whatever". He closed his eyes and was quiet for a few seconds. When he opened his eyes he was all British again. Then he burst out, with such energy and vigour that I was completely overwhelmed.

"Shut up, and listen to me, you old fool. I am going to tell you something very important. If you are going to listen to me and do as I say, you are going to be rich, almost overnight. But if you don't, then heavens will fall and your way will be paved in thorns. Look at AJ, how successful he is today. It's all because of me! He listens to me, or at least he used to listen to me until a couple of years ago. He's made a fortune. What did he know about making money? It was all camel shit to him till he came to DBB and then I taught him the art of making money. And look at you! You were bright, you knew your math, and you knew your derivatives; all you needed was to suck up to your one eyed bosses. I told this to you then, when you came for the interview; I could see it in the lines of your palm. You simply couldn’t suck up to your bosses. So I offered to help you and teach you the art; the Kamasutra of survival, sodomy and corporate management. I offered you the job, you imbecile. And you turned it down!"

I was trembling, not so much from what I was hearing but merely at the sight of Joe. Joe was truly looking like a supernatural being and had somehow managed to acquire a halo above his head. Robbie had mentioned once that to stop Joe from completely demolishing you in your sleep, you need to invoke the spirits of dead bankers at DBB. By dead bankers, he of course meant, fired bankers. But one weapon - an image so terrifying that it can even stop Joe in his tracks - that was sure to work was invoking the spirit of AJ. Even though Joe is the Chairman, AJ, in true sense of the word, runs DBB and cannot be fired; only Trinity, the Hindu Gods control him. AJ is the chimera, the demon that can rob Joe of his speech; invoke the name of AJ, and his spirit will dissipate the image of Joe.

Please AJ, come to my help. In the name of all those camels and goats that saw you blossom on the deserts of Rajasthan while you were in high school, I beseech you to come to my rescue.

AJ didn't come to my help. Apparently, he was engaged in his own dreams and talking to the angels of the other world trying to figure out how to come out of this nasty credit crisis, which essentially meant how Joe Ackermann could be sent home packing and he could take his place at the head of the table.

Joe continued delivering his speech:

"Tomorrow, I am going to give an interview to the FT and say that the end of the credit crisis in sight. That would be a momentous interview and FT will put it on its cover page. Yes, you fool; I truly believe that the credit crisis is in sight. I am an honest man; I say I what I believe in and there is not much that I believe in these days, except for maybe AJ." He continued...

The whole world will listen to my interview and they will act accordingly. The blogspots will pick it up, the internet chat sites will pick it up; brokers will place orders to buy shares of battered financial institutions the moment FT's edition is out. Credit traders, especially the ones at DBB, will cancel their vacations and start thinking of CDO cubes...what?.....you haven't heard of CDO cubes? The guys at JPM stopped short at CDO squares because they had no imagination. Talk to AJ, you stupid bugger! AJ thought about CDO cubes long before the City cab drivers started investing in CDOs. Listen to me, you poor noodle eating sod. Do as I tell you to do"

I said, my voice quivering in trepidation, "Joe, what are you asking me to do? Shall I go ahead and buy some shares of Lehman Brothers?"

"No, you cretin, you intellectually retarded hobbit!" he bellowed. "I knew you'd say something like that. I am saying the end of the credit crisis is in sight. What does that mean? What does that mean in the great cosmic sense?" I was quiet, and had the distinct impression that I was crying. Tears of joy were rolling down my cheek, tears of happiness at being blessed by Moses of the Great Winchester Street.

"Rahul, listen to my inner voice. Listen to my cosmic voice. Don't take my speech at face value. When you read my interview in the FT tomorrow, read carefully to decipher the cosmic code embedded in that. That's what AJ does. That's why he is so successful. The cosmic code will tell you what to do"

And then Joe vanished from my dreams and I woke up. On Thursday, Joe indeed gave an interview to the FT and I saw the transcript on Friday. Joe Ackermann was saying that the end of the credit crisis was in sight.

What should I do? Oh Lord, how should I interpret this interview, this forecast - the oracle, if you will - and make some money? How? How?

I called Robbie long distance in Tasmania and asked for his help. He was on his way to the Antarctica to supervise some trading activities of DBB (apparently, DBB is setting up a hidden dealing room in Antarctica from where it will do its proprietary trading in credit derivatives. I am told Anshul Rusty, the infamous CDO trader, who was apparently fired from DBB is now the head of their Antarctica desk.)

Robbie had a few minutes to spare before he caught his boat. He said, "Rahul, can you see the stars at night?"

I said, "Excuse me, Robbie; I am talking about what Joe said about the credit crisis."

Robbie replied calmly, "I know. But tell me, can you see a star - any star, say, the Proxima Centauri - in the night sky? Of course, you can. Proxima Centauri, is the star closest to us and is only about 4.3 light years away. It is within your sight! All the stars in the night sky are within your sight. Theoretically, you can get to them. But in reality, can you reach those stars? Not in your life time or many thousand life times. Just because you can see the stars, doesn't mean that they are reachable. A lot of things in this universe are within your sight but they are practically unattainable."

Now I know why Robbie is such a genius and why even AJ cannot get rid of him. He asked me if I had heard of the Ackermann prophecy. When I replied in negative, he said: "Ackermann prophecy tells us many things, things of supreme importance in the world of banking, finance and the markets. One of the central tenets of this prophecy is that both the long and the short of equity are tied to the credit and that credit is an object, a concept, an asset..whatever, noun you may prefer...that exists only at a distance. You can see it only from a distance. You will be approaching it forever...the moment you come very close to it, it disappears."

Before, I could ask for any further clarifications, mostly on how do I use this prophecy to make money, Robbie hung up on me.


Note: This is not a research or analyst report. This is personal blog. Risk Latte Company and/or any of its members, including the author of this blog, is not a registered investment advisor. We do not advise anyone to buy, sell or invest in gold unless he or she has taken advice from a registered investment advisor or bank.

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