Gulam Nabi Azad’s inspiration

Indian central health and family welfare minister recently came up with a wonderful solution for the country’s population crisis. He was of the opinion that India’s population crisis can be addressed with one magic pill – no not the i-pill or unwanted-72, which I am told by the media are two of the best performing products this year, but good old television. He feels TV in every Indian household combined with quality late night programmes would ensure people will watch telly and fall asleep.

I was wondering, who could have inspired Mr Azad. Was it Steve Towers, with his ‘revolutionary’ “Outside In” philosophy ? Eureka !, I found the answer. Its  The Flight of the conchords who inspired him. Well take a look at the lyrics of their song “Its business time“.

Aww yeah
That`s right baby.
Girl, tonight we`re gonna make love. You know how I know, baby? `Cause it`s Wednesday. And Wednesday night is the night that we make love. Tuesday night`s the night that we go and visit your mother, but Wednesday night is the night that we make love. `Cause everything is just right conditions are perfect. There`s nothing good on TV. Conditions are perfect.

Leave no stones unturned !

‘Leave no stones unturned’. Thats the golden rule when it comes to territorial claims and the related propaganda war.

DD News, the state owned 24 hours news channel, includes Gilgit and Chitral in its city/town weather report in its telecasts.

The blue marble

Bumped into this at a souvenir shop on Swanston street in Melbourne. A map where southern hemisphere is on top, with the prime meridian criss crossing through Australia, Papua new guinea, Japan, Russia etc.  Looks completely different, contrary to our view of the world.  Mercator would be proud of this.

Following reality show from down under

Away from the action down under in Victoria, getting a broadband internet connection to follow the indian general election results, was numero uno on my things to do this morning. Thanks to my hotel, that was easier than making Maggi.

Interesting one, it might be this time, as we may see Dr Singh getting one more shot at premiership, which if he manages would be the first since Jawahar Nehru. Advani, the Karachi born octogenarian probably will have one last shot at premiership. I don’t even want to waste time mentioning the big list of so called prime ministerial candidates who are next to being worthless, the worst of them, a self proclaimed virgin leader of dalits.

Ofcourse, interesting things expected in my two home states – AP and TN. Finally, waiting eagerly for the next trading session in Bombay as am sure there will be quick bucks to be made. Can’t forget May 2004’s trading sessions in bombay.

Godly cash flows

People think that the credit crunch is a creation of the 21st century. However, like the religious fundementalists say, all things are there in the scriptures. The Gods of India have a practical example of how individuals with low credit ratings are forced to accept loan terms which are frankly usurious. In contrast, we shall also see how a well managed fiscal plan makes living comfortably. Our tale begins with Mr. Venkateshwara, a young god with a great deal on his hands, but not much hard cash to his name. One fine day, he finds this young lady and decides to marry her. But the young lady is not content with a simple court wedding. After all, this is a god’s wedding, and must be celebrated with the pomp and ceremony it delivers. So, Mr. Venkatashwara goes to Kuber Bank, a closely held firm controlled by its namesake, and requests a personal loan for marriage expenses. Now, Kuber takes one look at the impecunious Venkateshwara (also called Balaji), and decides that this young man is what would be called sub-prime. And not only is he sub-prime, he also wishes to use this loan on a mere consumption expenditure rather than investment purposes. Automatically, the interest amount is now increased appropriately by rating the borrowers risk accordingly. Venkateshwara’s repayment philosophy also seems a bit dubious. Based upon this wedding, he intended to set up a temple where people could worship him, and thereby pay off his debt. Well, to cut a long story short, due to low regulation, Kuber bank did make the loan to this sub-prime borrower, albeit at an interest rate that he considered was appropriate for such a high risk loan. As it turned out, Mr. Venkata’s temple was a spectacular commercial success, raking in over Rs. 500 crores a year (approximately INR 5 Billion). But that is not quite enough. From the records that mythology provides us, this only counts as payment towards the interest portion, so that Mr. Venkateshwara stays out of the term “Stressed Asset”! So Mr. Venkateshwara, inspite of having fantastic cash flows is still indebted. If records are to be believed, he will only be able to pay it off at the end of the universe itself! On the other hand, about a 1000 kilometres away, we have the example of Mr. Siddivinayak. An astute god, based out of India’s commercial capital, Mumbai, he has access to the finest financial consultants (the ones who believe that cash is king) in the world. Having been exposed to the business world’s ups and downs, he maintains a low level of financial leverage, ensuring that his debts to the Kuber Bank are always promptly paid off. As a result, although his revenues from his temple are at a comparitively paltry Rs. 50 Crores, he is comfortably in cash. So there ends this lesson from mythology.

- syndicated from Blahla.

Looks like recession is really here !

Took some time to realise and more importantly digest the same, but some reasons to believe recession is here definitely.

1. The pantry on my office workfloor used to stock badam powder, instant coffee powder, tea bags, Filter kaapi dicaution and of course fresh milk to mix with any of the above ingredients. A fortnight ago, badam powder dissapeared, and from today, instant coffee powder met the same fate. The housekeeping guy in the pantry gently tells the coffee patrons that they now have only one choce – Filter Kaapi. His prediction is that ‘Taj Mahal’ tea bags might soon be replaced with ‘Three Roses’ dust tea powder and 100 percent milk replaced with milk + water combination. My good friend and colleague, Udbhav Gupta instantly gave his consultant brain some work and infered that these measures will save my company atleast INR 5 crores (50 million) annually.

2. I get a dose of economics at every place I go, whether it is the neighbourhood pizza outlet, Krishna sagar in bangalore or Vasantha bhavan in Madras, and got to say most of it is Keynesian. Patrons around me discuss economics while poor gossipping is  feeling the pinch of recession.

3. The flamboyant Bernie Ecclestone is asking his franchisees to cut costs, though Redbull seems to have ‘got wings’ (no prizes for guessing who gave them), owning not one, but two teams.

4.Forget paper money, poor banks have no plastic money. Calls from telemarketers selling credit cards are almost zero.

5. Bollywood characters too are feeling the recession pinch, as King Khan is relegated to playing a common  middle class man in his latest flick “Rab ne Bana di Jodi“

And most importantly, I ’ve shed my trademark laziness and started working hard to cling on to my job.

THE Reality Show

People tend to forget that long before Endemols and Alvas were wearing short pants, Nirvachan Sadan brought reality shows into India in 1952 itself. Common, what can be more real than a billion (discount the billion to what ever amount it was in 1952) people voting  across the country. And a point worth noting is that, the humble civil servants at the Election Commission of India were the ones who introduced the biggest attribute that a reality show is identified with – “delay the announcement of  result thought you have the votes with you to pump up the pulse of audience”.

Elections in india have always been in phases, the ballot boxes (EVMs these days) then stored in strong rooms (which are supposedly more secure than the offshore banking lockers in switzerland and Liechtenstein), then congregated at a central location on counting day, and results declared after a gripping phase of counting. Adding spice to the whole process are Prannoy Roy and Yogendra Yadav (there are countless of them these days, my apologies for not listing them all).

While the results of elections in other countries (including some from sub saharan africa) seem to coming out in in real time – almost on the election night itself, this turn around of results has only seen a marked increase in India over  years. For example, the voting for state legislative assembly of Chattisgarh, starts today and one has to wait almost a month for the result,  so that some more phases of polling in the same state, and many more phases of polling in 4 or 5 more states is also done with. In the northern most state of Jammu and Kashmir, the polling is divided into 7 phases spread across a month. And this is only the start of a long and tiring election season which ends with a grand finale- Pan Indian General Election in April/May 2009. Way to EC of India !!

 

Invest in Das Kapital

Lady luck has always been terrible and awful with me in matters related to investing/trading/speculation, no matter what the underlying is. Take this example.

 

In mid 2003, I was wandering around in a busy street in Tirunelveli, on the southern tip of India, with a friend of mine. We spotted a pavement kiosk selling second hand books. After digging hard, we laid our hands on hardbound volumes of  Das Kapital. The volumes made up the complete collection of Kapital and the editions were pretty old – published in England circa 1930s, but they were in good condition.

 

Mid 2003 – those were the days when capitalism and free markets ruled the world like never before. Perhaps that was the reason, the pavement book seller of Tirunelveli valuated the complete hardbound collection of 1930s published Kapital at just 20 Indian Rupees. I happily paid him (not that I wanted to read it, but owning a hard bound 1930s Kapital looked hip to me) though my friend, a firm anti capitalist was filled with grief that Marx was being sold at 20 rupees on pavements.

 

I just buy books, don’t read them. Most get lost or orphaned. The same fate met this poor collection as well I guess as I never ever remembered that I own such a collection, Infact I do not even remember whether I left it at my friend’s home in Tirunelveli or got it back with me to Madras.

 

I read this article today– Marx is back ,and the first thing that came to mind- no prizes for guesses . The first thing I did was to call up that friend who is based in Bangalore these days and ask him about the whereabouts of that collection. I thought we can get a good price for the collection now. ( I know you might be accusing that free marketers like me will never shed greed even after the ongoing debacle). After a strong attempt to recollect the sequence of events related to that collection, we still could not figure out where that collection can be now. May be I gave it to some friend and never asked for it back, may be my mother just disposed it off ( as she keeps doing often with some antiquated stuff of mine), May be we just left it at Tuticorin beach which we visited on that trip.

 

A tale of two Bail outs

I haven’t seen much of legislative procedures(debates, voting etc) in other parliaments but for the Indian one, until last evening when most television channels were showing US congressional debate on the grand $700 bn bail out which it seems will be the anti dote for everything toxic that is going on in financial world. The debate took the turn of socialism vs free markets. I thought such issues were settled almost a decade ago after a prolonged fight between non interventionists like von Hayek, Friedman, Thatcher, Raegan etc and interventionists ranging from Keynes to Lenin.

 

Let us take the case of two bailouts, one cleared & being implemented and one proposed.

 

Bailout 1: Many banks in India(mostly public sector) were carrying huge “Bad assets” on their books, thanks to repeated agricultural failures and the subsequent non payment of farm loans by poor farmers. In this case, banks were never greedy to give them loans, but were told to do so by the government as a national obligation. Federal government had to something about these bad assets. So one fine day, the finance minister announces a bail out plan where in all the farmers will be liberated of the debtor status, and the tax payers will be paying back the loans to these banks on behalf of those poor farmers. I do not know the exact quantum but it is somewhere in the range of $10 bn.

 

Bailout 2: Many banks in the US were carrying “Toxic assets” on their books, purely because of their greed. They had lent unlimited money to sub prime people (poor people) to buy homes. These people could not pay back the mortgages and as a double whammy, the value of the collateral- the house itself started falling. The banks ran out of liquidity and one was willing to lend them for fear of default(counterparty risk). The situation worsened with banks either becoming insolvent or them finding it tough to meet capital adequacy requirements. So one fine day the federal government announces a $ 700 bn bailout. This money can be used in multiple ways. One of the ways was that the federal government would buy these toxic mortgages from banks, which meant the tax payers bear the risk or reward (if at all there is going to be any in few years) of these mortgages. Other way was to capitalize the banks by buying stakes into them, to meet the capital adequacy. As this article went to server, the first of the above described plans was in the draft bill.

 

Just compare both the cases. The first bailout is no doubt socialism. The poor farmer was liberated from the loan, bank recovered its money and the tax payer had an extra cheque to write. The second bail out- socialism, well hardly. The poor house owner was not liberated from the mortgage, in fact the mortgage was foreclosed and he kicked out, bank got its money and the tax payer had an extra cheque to write. Probably aristocracy is what this can be called.

 

Inference- No matter what shape the bail out takes, banks are always in a win-win position finally though they had to go through some tense moments, in both the cases and the tax payer always in a lose-lose position.

 

Oh yeah, finally, the Indian parliament should probably source the real time electronic voting system from the contractor who supplied to US congress, because the present one sucks. People who watched the voting farce in Lok sabha(lower house of Indian parliament) during the voting of Indo-US nuclear agreement will definitely agree with me.

That’s not so Taiwan !

According to Wiki, Republic of China (a.k.a Taiwan) has the highest number of claims if all territorial disputes in South, South East and East Asia are taken into account. That would as well make Taiwan Numero Uno in the whole world for this category as the areas in question are notorious for territorial disputes. That’s an amazing statistic. One should be really perceptive to think of Taiwan at the thought of territorial disputes. The catch is that most of these claims arise due to the fact that Taiwan(Rep of china) has been claiming the whole of mainland China (People’s Rep of China) ever since the nationalists led by Chiang Kaishek fled to the island of Formosa (Taiwan) after a bitter war with the communists led by Mao. Considering, China has got a claim in most parts of this world, Taiwan has been linked automatically to all those parts, thanks to its primary claim on mainland China.