This is a period when all kinds of things are getting marked to market -- not just complex securities but also reputations, assumptions and maybe even some inexorable trends that no longer look so inexorable.
The last item on the list is occasioned by the news Thursday morning that
IBM Corp. is building (with a nice assist from local authorities, according to The Wall Street Journal) a tech service delivery center in a building that used to house a department store in downtown Dubuque, Iowa.
Now, this is a deal that must have been in the works long before Jan. 7, when Satyam Computer Services Ltd. chairman Ramalinga Raju (pictured) said he'd
cooked the books to the tune of $1 billion. And maybe it's a type of service that IBM, which has a big presence in India, wouldn't have wanted to locate in India, anyway.
Still, it makes me wonder if Satyam, which has been dubbed India's Enron, might really turn out to be its WorldCom.
When Wall Street darling WorldCom turned out to be guilty of fraud in 2002, more than a few execs at older-line telecom companies were heard to complain bitterly about how a crooked operation had been held up to them for so long as a paragon of performance.
Juxtaposing the IBM decision with the Satyam revelations reminds us that just because it's a flat world doesn't mean that the streets are all one way.
This is not to say that all Indian outsourcing and software firms are untrustworthy, by any means. But it could be that the pressure Satyam was apparently under to keep its results looking strong is an indication that some of the advantages that offshore providers have enjoyed in this realm may be eroding. -
Kenneth Klee
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Juergen Lasowski
And the winners are...
This was clearly worse than what happened at Enron. Here's a good analysis of what happened: www.commentsoncredit.com