Satyam Means "Enron" in Hindi
Wow, talk about a bombshell this morning. Satyam's Chairman B. Ramalinga Raju admitted to making up earnings and cash, dropping an already battered share price by over 90%. You can read all about it in Rick Munarriz's piece: Satyam: Slumdog Millionaire
My first thought was how risky investing abroad can be. My second thought brought me down off my high horse.
What must foreign investors think of the U.S. (the supposed bastion of financial integrity) when they hear about the Madoff scandal, whose $50 billion in alleged fraud dwarfs Satyam's $3 billion market cap (yesterday's market cap, not today's miniscule market cap).
Or the housing and derivatives mess that has necessitated trillions in bailouts and the nationalization of businesses.
Or Ye Olde Enron and Worldcom scandals.
And that's before we get to the "little" stuff like crazy CEO payouts, Detroit paying people not to work, and bribery for Senate seats.
I'd like to say that it's easier to spot scandal in the U.S., but investing is risky business everywhere.