Irony

As mentioned earlier, I quite enjoyed Rock On, the movie. This was primarily because of its songs. In a smart move, the movie ended (just before the credits) with an exhortation to the lines of 'Don't download the music, buy the CD'. This was, in my humble opinion, a spectacular marketing stunt. I was just making a mental reminder to myself to get the songs, and I determined then and there that I would buy the music instead of filch it off the internet.

Thus began my travails. Most of my music listening happens in the car, as I drive. I have only a cassette player / FM stereo system installed, so buying the CD was not really warranted. I have searched, so far, in no less that 4 music stores - and have not found the CD, let alone a cassette. The wife has tried obtaining the music too, unfortunately with the same fate. Dont know if it is luck or poor distribution on the part of Big Music (the company that bought the music rights of the movie)

I have since (shamefully, I must confess) downloaded the songs from the internet, and the wife has burnt a CD which she keeps in her car (she has a magnificent 10 CD changer there). Yet I am condemned to scour the FM channels for the songs of Rock On. I remain hopeful though!!

From the lair of Liar's Poker

This blog usually carries the (often opinionated and usually incorrect) views of the author. However, sometimes there are articles that capture succintly the essense of what the author wishes to communicate. One such article is this one, written by Michael Lewis (author of Liar's Poker, The New New Thing, Moneyball and other books).

Highly recommended! And good for a laugh today.

History in our midst

This weekend, the wife and I decided on impulse to soak in a bit of the culture that surrounds us, which we always overlook. So we stopped by the 700 year old Tughlaqabad fort right in the middle of the city. And were amply rewarded for our efforts. The pictures (unfortunately taken only from a camera phone) tell a much more eloquent tale:
The fort was built by Ghiyasuddin Tughlaq in AD 1321. At that time vast and powerful, it encompassed an entire city within it, including water tanks, palaces, and the commoners' dwellings. The tomb of Ghiyasuddin, his wife and son - the (in) famous Mohammed bin Tughlaq - still lie in the fort in an exquisitely beautiful marble domed mausolem that is surprisingly very well maintained. It truly is an 'oasis of peace'. Highly recommended to those in / around Delhi

The end of capitalism?

One aspect of the much analysed cataclysm in the financial markets that bothers me is the implicit admission by the US administration that capitalism is dead. When the times are good, the capitalist makes money. When the times are bad, the public bails out the capitalist with a mega size cheque. Ok, this is an extreme statement. The public is buying the junk that is killing the capitalist. Actually the public is doing it so that 'markets can function'. Well. Hello. As per me, this is also part of capitalism - creative destruction needs to happen. It must not be stopped.

Per me, some of the consequences of the US administration's actions will last a lifetime - a) the world has seen the birth of the largest market manipulator ever - the US government. Ban short sales. Pour in the billions. Go after sellers. Where was this concern when firms were levering themselves up 30 times? (I kid you not - Lehman had $600 billion of debt, and $26 billion of equity!!). I wish I could get the same treatment - I will lever my meagre networth 30 times, make money when I can, and if I lose it all, I will look forward to Uncle Sam to capitalise me. What this tells every speculator is that everyone loves a rising market. So go ahead and plunge!!
b) who ultimately pays for this mess? Partly, the US taxpayer - he gets taxed more so that the US can fund its GIGANTIC fiscal deficit. But ultimately, 'Helicopter' Ben can just print more US dollars to bridge any gap between revenue and expense. This depreciates the dollar, screws exporters in (for example) India, spikes oil (and other commodity) prices, fuelling global inflation, so again screws India, and reduces the value of Asia's massive dollar reserve holdings (screwing, yet again, good old India).

I still think that the market will win out in the long term - such market manipulations will postpone the inevitable in the short run, but in the long run we will still see the necessary de-levering required to restore balance to the markets. But in the long run, we are all dead. So let us leave these minor problems for our children.

Bitter medicine

I wrote about the need for character in these troubled times, and hours later 'Helicopter' Ben obliged (would love to claim some credit for it!!). The US Fed has (rightly and bravely, in my humble opinion) ignored the 80% probability of a 25 bips rate cut that bond traders were betting on, and kept rates unchanged. While this probably means more pain for beleagured over-leveraged entities (like AIG?), it is good for the markets in the long run.

If I remember right, this (and the decision to let Lehman sink) is the first time that the Fed has signaled that it is walking away from bailing out failing institutions using taxpayer's money. This is good since it removes the obstacles from the forces of capitalism's 'creative destruction' - weaker firms will fail, painful de-leveraging will occur, and the business cycle will continue. Certainly this means more pain in the short term, but the writing on the wall is loud and clear - if managements of financial firms suffer from the same hubris or lethargy in dumping toxic assets / raising capital that Lehman did, then they too will suffer. This is good because it will prevent the buildup of insanely easy credit the next time around. Prevent? Maybe not - but it certainly should make a comeback more difficult.

At the time of writing this, the Dow Jones index has greeted the fed announcement with a knee-jerk 100 point drop. Looks like the behavior of a sulky child to me.

Crisis and opportunity

By most parameters, we are bang in the middle of tough times. Bombs explode at will in our metro cities and kill and maim innocents every few months. Fear stalks every move, even an innocent stroll in a busy market. Two of the top 4 investment banks in the US (and most B School students' employers of choice) are history overnight. A lot of friends / colleagues / batchmates are out of jobs and the outlook looks bleak for a lot more. Cassandras are calling it the beginning of another worldwide great depression.

One cliche I have always heard is that the Chinese symbol for crisis is made of 2 parts - one signifying danger and the other opportunity. While current times do seem like they are loaded with danger, it seems very difficult to find the opportunity anywhere.
To find and exploit opportunities needs character. Where will we find character?

We cannot look for it in the government in India, which has tried to stem the scourge of terrorism but has not been very successful. We certainly cannot look for it in the home minister, who keeps parroting inane homilies every time there are lives taken. We cannot look for character in the shenanigans of the US Treasury or 'Helicopter' Ben Bernanke, who have tried to bail out falling giants, but are finding the going very tough.

That leaves us. All of us, Indian or otherwise, citizen or police, consumer or producer, have to show character and last out these tough times. Because, like all things natural, times will change, and the situation will improve. It is a question of riding the storm out.

My favourite (for the moment)

Rock On rocked.
Check this out:

Aargh!!! Not another...

Another day, another irritant...

I woke up to this (courtesy Mint) - not my idea of a great start to the day.

 

In a nutshell, the issue is thus: India is suffering from a major power shortage crisis.  The only way out of this crisis is more power generation. The government has tried (for 61 years now) and has realized that it cannot build generation capacity fast enough. Enter private power producers. These guys will put at RISK (this is a term that ALL bureaucrats should be drilled with - in fact, there should be a separate section in the IAS exam on risk and reward) millions and millions of dollars, and produce electricity.  They will try to lock in long term offtake contracts that gives them adequate return for the risk they are taking with their millions. Electricity cannot be stored - if not used, it goes waste. For this reason, they keep a small percentage of power uncommitted so that they can sell it in the spot market to overcome any sudden requirements. For this, there is a market mechanism to determine rates that these producers get - it is a simple auction on an electricity exchange - the buyer sees prices, and decides if he wants to buy (if so how much) or no.

Enter Mr. Bureaucrat. He is all-knowing and all-powerful. He thinks he is smarter than the market. He is in addition, a bleeding heart. He says - from now, you cannot charge more than Rs. x per unit. He justifies it thus - “How can an MPP developer sell power at Rs8 per unit while it is only costing him Rs2 to generate" The learned gentleman does not realize that there is a risk that someone is taking that needs a reward. In any case, how does he justify the cap of Rs 6 per unit?? So he is saying - you can make 3 times your money, not 4 times. I am the arbiter and judge of this, and not the market. This is because I am smarter and wiser than the market. 

Is this bureaucrat going to guarantee offtake? What if there is no demand for power, or no transmission capacity at a particular time from the power plant to the user? Then the producer makes electricity for Rs 2 a unit, and cannot sell it. So the money goes waste. Will this generous gentleman then assure offtake?

The net result - government intervention in pricing will kill private investments in power generation or power trading. India will continue to be condemned to live the life that its bureaucrats thinks she deserves. 

It would be comic if it were not so pathetic. 

Chrome

I am writing this post from the all new Chrome - Google's new web browser. Right now (in ten minutes of use) I cannot figure out how it is different (or better!) from the Internet Explorer - except the fact that I need to re-install some plugins that I had on IE. 

Full report in a couple of days!!

Heard on the radio

Delhi has this (well deserved?) reputation of being an aggressive and violent city. Today I heard a jingle on the radio which captures this nicely and along with Delhi, pokes fun at itself -

Man: Shooting, wrestling, boxing...
Woman: (disgusted) zaroor Dilli wale honge
Man: Arre, these are our Olympic winners!

I like it

Why so serious?

So much has been written about The Dark Knight that saying anything else about it would be cliched at best and plagiarism at worst. However, having just seen the movie, I feel compelled to spread the word. The movie is - not to put too fine a point upon it - SUPERB. It is the best comic book movie ever, and I dont think there can be a better one. I was always a Batfreak, and I am always wary of things that other people praise, but this movie has exceeded my wildest expectations.

Without further ado, here is a list of the things I loved about the movie -

The characters:

1. The Joker - the guy is a genius, evil personified, who is always one step ahead of Batman, the police and the District Attorney. The freak without a plan, a disciple of chaos, the single most powerful character of the movie had me hooked. Heath Ledger, with his nervous flicking of the tongue, really lives as the Joker. The 'irresistable force' more than matches Batman's 'immovable object'
2. The concept of Batman as menacing - I always thought of Batman as a good bloke, but after this movie, I can see why he is a menacing presence to all
3. Two Face - the ultimate rational being, who gives everything a 50-50 chance. Also, a victim of fate

The ideas:

1. That Batman is unique in that he need not be a hero, and so can do what is right. This special quality makes him transcend the usual crop of (now seemingly) daft superheroes
2. That chaos is more menacing than the most scary 'plan'
3. That it is ok to burn down the forest to get the rogue bandit

The gadgets:

1. The Batbike - uber cool. What else can I say?
2. The brightly blinking 'parachute' that flies up
3. Two Face's coin

The dialogue:

1. Why so serious?
2. One must die a hero, or live long enough to become a villian

The technique:

1. The fast pace and buildup of suspense in the screenplay
2. The background music - haunting and enticing

This is the third Christopher Nolan movie that is in my list of all time greats - after Memento, The Prestige and The Dark Knight, what will he come up with next?

Thoughts from the spectacle

I watched with great amusement the (in)famous trust vote in Parliament on live TV. Must say it was more engrossing than any of the K-soaps (not that I have, or ever would want to watch the damn things). It had all the elements - drama, suspense, passion, intrigue.

At the end of it all, the primary thought that struck me was that there is a silver lining in all this muck - no, I was not at all disgusted by the sight of wads of money being waved around - lets face it, how surprising was it? Everyone - bar none - knew that large scale buying of votes is pretty common in our polity - it has happened before, and will happen again. So why go all hypocritical and apoplectic about the 'sanctity' of Parliament or the 'damage to the integrity of the nation'? In fact I think this is a good thing because it at least lays out the rules of the game clearly - jiske note uska vote.

But to return to the silver lining - and that was that among all the cacophony and noise, the speeches by Rahul Gandhi and by Omar Abdullah stood out - for being sensible, rational, and (dare I add?) ethical. I was an ardent opponent of Sonia Gandhi being offered the PM's post, but I have revised my opinion about Mr. Gandhi Jr. For one, the guy spends a lot of time actually visiting far flung places and seeing how things are happening on the ground. For the other, even for his (incorrect?) prescriptions to problems - remember the famous Rs. 70,000 crore farm loan waiver? - at least he has in his target the correct problems. Not stupid cliches like 'communalism' or 'communism' but a much more real and practical war against poverty. That is the real scourge that needs to be eradicated, and that is what our esteemed lawmakers should spend their time thinking about. Whether you choose Medicine A (i.e. fiscal grants, loan waivers etc.) or Medicine B (i.e. spreading education, enabling entrepreneurship, upholding basic human rights and restoring individual dignity through capitalism) is the next step. But the basic step is to recognize the problem.

I have hope that Rahul Gandhi and Omar Abdullah and their like have recognized this problem. The King is dead - long live the King!!

Quotes on fear (thank you Wikipedia!)

Like one that on a lonesome road
Doth walk in fear and dread,
And having once turned round walks on,
And turns no more his head;
Because he knows, a frightful fiend
Doth close behind him tread.
Samuel Taylor Coleridge, The Rime of the Ancient Mariner, Part VI, st. 10 (1798)

Courage is resistance to fear, mastery of fear — not absence of fear.
Mark Twain, Pudd'nhead Wilson, ch. 12 (1894)

I must say a word about fear. It is life's only true opponent. Only fear can defeat life. It is a clever, treacherous adversary, how well I know. It has no decency, respects no law or convention, shows no mercy. It goes for your weakest spot, which it finds with unerring ease. It begins in your mind, always. One moment you are feeling calm, self-possessed, happy. Then fear, disguised in the garb of mild- mannered doubt, slips into your mind like a spy. Doubt meets disbelief and disbelief tries to push it out. But disbelief is a poorly armed foot soldier. Doubt does away with it with little trouble. You become anxious. Reason comes to do battle for you. You are reassured. Reason is fully equipped with the latest weapons technology. But, to your amazement, despite superior tactics and a number of undeniable victories, reason is laid low. You feel yourself weakening, wavering. Your anxiety becomes dread. Fear next turns fully to your body, which is already aware that something terribly wrong is going on. Already your lungs have flown away like a bird and your guts have slithered away like a snake. Now your tongue drops dead like an opossum, while your jaw begins to gallop on the spot. Your ears go deaf. Your muscles begin to shiver as if they had malaria and your knees to shake as though they were dancing. Your heart strains too hard, while your sphincter relaxes too much. And so with the rest of your body. Every part of you, in the manner most suited to it, falls apart. Only your eyes work well. They always pay proper attention to fear.Quickly you make rash decisions. You dismiss your last allies: hope and trust. There, you've defeated yourself. Fear, which is but an impression, has triumphed over you. The matter is difficult to put into words. For fear, real fear, such as shakes you to your foundation, such as you feel when you are brought face to face with your mortal end, nestles in your memory like a gangrene: it seeks to rot everything, even the words with which to speak of it. So you must fight hard to express it. You must fight hard to shine the light of words upon it. Because if you don't, if your fear becomes a wordless darkness that you avoid, perhaps even manage to forget, you open yourself to further attacks of fear because you never truly fought the opponent who defeated you
Yann Martel, "Life of Pi", (178-9)

I must not fear. Fear is the mind-killer. Fear is the little-death that brings total obliteration. I will face my fear. I will permit it to pass over me and through me. And when it has gone past I will turn the inner eye to see its path. Where the fear has gone there will be nothing. Only I will remain.
Frank Herbert, Dune - Bene Gesserit Litany Against Fear (1965), pg. 8.

Fear

There is nothing to fear but fear itself - Franklin D Roosevelt

Oftentimes the fear of the unknown cripples me. A dark gnawing shadow grips my very heart and paralyzes my brain. I become helpless and freeze. Such is the power of fear.

At such times, I draw inspiration from stories of other peoples' overcoming great obstacles. I remind myself that life is a series of arbitrary events that even out in the end. I reassure myself that I can take the rough with the smooth.

I read this statement again. I am no longer afraid.

Jaane Tu? Not really...

Saw the mega-hit and much appreciated Jaane Tu yesterday. And came away with mixed opinions. The movie is overall ok, though only because of 3 positives. The negatives, per me, are 2 (but really big ones!).
Ironically, 2 out of the 3 positives are probably the shortest parts of the movie. And they are: 1) Naseeruddin Shah's character 2) Bhaloo and Bagheera and 3) the hero himself

The negatives are 1) The heroine: all she does in the entire movie is sport a very supercilious expression. The lady tries to be "sweet" but ends up looking like a class A candidate for punishment. Her accent is also pretty thick and should have been worked upon.
The 2nd negative is the story itself - somehow it does not seem feasible in the least (not least the rigmarole and hurry-scurry during the climax). What are mobile phones for, if I may ask?? And how about PCO booths?

All in all, I think the problem was that I went in with expectations that were higher than warranted.

Communist bashing

For a change, this is not me ranting away, but more measured opinion :-)
Check it out here

Some excerpts:
There is a long history of such conduct, going back to the Communist hostility to the Congress-led freedom movement and the willingness to act as agents of the British imperialists (because both Soviet Russia and Britain were on the same side in World War II). That was followed by the denouncing of Independent India as a bourgeois sham, leading to armed insurrection against the lawful government. And when the Chinese attacked India on the northern borders, the Communists once again did not take a clear position with the national mainstream

As for economic issues, when the Green Revolution was achieved, the Communists criticised it as a phenomenon that would displace labour and help only big farmers — whereas it is the Green Revolution that helped India become self-sufficient in food. Indeed, in Punjab which was at the heart of the change, there has been a growing labour shortage, and not the creation of surplus labour. The Left was also critical of the induction of computers, organising strikes to stop computerisation and thereby condemning office workers and whole organisations to manual processes long after they should have computerised and achieved quantum gains in productivity. Once again, the war cry was that workers would be displaced, whereas it is the computer age that has created huge employment in the country — with the Left Front-ruled West Bengal now struggling to reap some benefit by inviting the computer software giants to come to the state. And, of course, the Communists were bitterly critical of the "IMF-World Bank-dictated" economic reform programme that got launched in 1991; ironically, it is this very programme that has given the country freedom from IMF conditionality and also from the need to borrow from the World Bank

For many years, the Communists have also criticised those not of their ilk as being foreign agents, compradors and such like. Yet, as Soviet documentation has established, it is the Communists who were busy taking money from a foreign country, even as they pointed fingers at others. And coincidentally or not, the Left's opposition to the nuclear deal happens to tie in quite nicely with the interests of Communist China, which would like to see India remain in a nuclear straitjacket

Screwed!!

A friend recently had a windfall and landed some good money. He (being a saving type) does not want to splurge it on consumption goods, but wants to use the corpus to ensure financial security later in life. He is a worried man!
He narrated his logic to me thus:
1) if he keeps the money as cash, inflation erodes its value very quickly
2) if he invests in stocks, going by his recent experiences, he could see the value of his windfall decline 30% in a week
3) the amount is not large enough to buy any real estate. Moreover, he does not want to take a loan and buy property in these times of rising interest rates
4) if he keeps it in a fixed deposit, negative real interest rates screw him
5) he would like a new car, but he thinks rising oil prices will make running costs prohibitive

Not being entirely sober at that time, I suggested he roll up the entire amount, and throw it 'on the toss of a coin' (as Kipling would have said, rather written) on crude oil futures. Alternately he could punt on a short position on the US dollar.
That is the only certain thing in these bedevilled times!!

Thought for the day

I met a hugely successful person (by all conventional standards) today. Though he had a tendency to speak in rhetoric, one good thought he left with me -
'Don't run after money, because then you are only running along with everyone else. Follow your principles, do what you do best and let money run after you'

Not reproduced here verbatim, but substantially to similar effect. I love it!!

Powerful

I saw Aamir yesterday, and was blown away by the movie. It is gripping, hard-hitting and powerful. One needs a strong stomach to watch the thing. Although it evoked very mixed reactions from the people around me, without giving anything away, a few things that really stood out for me in the movie:

• The humanity of the protagonist - the guy is an everyday joe, doing what anyone would in his situation. What he does at the end, when he takes charge of his own destiny, is something that requires great courage. The alternative was quite easy to do, and putting myself into his shoes, I probably would have taken the easy way out - I could not have done what he did
• The depiction of Bombay - very real (brutally so!)
• The taut script - no needless subplots, no (melo)dramatic dialogue, good background score, good acting. The name itself - Aamir - which means a leader of men - is very apt
• The thoughts it provoked in me - the essence of the movie is that everyone is responsible for their own destiny, and that there comes a time when (to express it most beautifully) a guy's got to do what a guy's got to do. An individual is a trifle, insignificant and immaterial. There comes an opportunity to transcend oneself, to become greater than the sum of your existence and the society around you. The one who grabs that opportunity is Aamir

Day dream

Malvinder Singh is a guy I envy right now. The dude is all set to pocket approximately $2.5 bn (or Rs. 10,000 crores - the number of zeros in that number has me reeling :-) from selling Ranbaxy to the good Japanese at a hefty premium to market.
Without going into usual debate over whether he did the right thing or no (suffice it to say I approve of the transaction), the more interesting debate in media right now is - what the blazes is he going to do with Rs. 100,000,000,000 (thats 11 zeros folks!)?? Mr. Singh still has a job (he will continue to lead Ranbaxy), and he has made some noises about making Religare a bank (though I dont think he is very serious when he says that), but all this does not prevent me from fantasizing about what I would do if I ever laid my hands on such moolah.
Of course my initial thoughts run to tropical islands, decadent living and luxury homes, but then I decided to find out what use better minds than mine have figured out for money.

• Till recently Mr. Rich Man #1, Bill Gates has decided to give away all his money to the Bill and Melinda Gates Foundation, which will use it to prevent AIDS, and organize social initiatives in poor economies like India / Bangladesh etc.
• Mr. Rich Man #2 (and God to legions of investors), Warren Buffett will give away his entire fortune to (surprise surprise) the Bill and Melinda Gates Foundation
• Not too long ago India's richest family, the Tatas, use all the profits from the Tata companies (via Tata Sons) for charity...

I begin to see a pattern. And it gives me ideas. What I would really do with Rs. 9,990 crores (I have put away 10 crores in the bank, remember?) is

a) build a huge university. The university will operate on a pure capitalistic model, with extremely high standards of admission, the best paid faculty, and the best hostel infrastructure, and a market driven fee strucutre. However, the poorest 30% students would get scholarships which would cover their tuition fee (the funds for this would come from interest from an allocated amount). (I will need to devise some smart way of figuring out the real deserving poor students vs. rich kids whose parents get their income through 'unofficial' means)

b) build a huge hospital, extremely modern and efficient, with the best infrastructure, the best paid doctors and nurses, and market rates for treatment. However, the poorest 30% patients will get diagnosis, treatment and medicine for free (funds to come out of interest on an allocated amount)

While I actually have no clue if this would cover the amount at my disposal, I have an idea it would be enough. Anything left over I will hand over to my wife to invest in equity markets and multiply manifold, the proceeds of which I will use to buy my decadent island :-)