Talking of books one of my favorite books is :
Rise and fall of third Reich by William Shirer
One of the most important characters (after Fuhrer) I found interesting was was Joseph Goebbels
the propaganda minister.
Thursday, January 29, 2009
The economy and panic button
Now that Indian economy is expected to grow at the slowest pace in last 5 years, the UPA regime is in panic mode with the elections nearing.
It pressed the panic button and pushed the Reserve bank of India (RBI) to repeatedly take measures like increasing liquidity in the system. One more measure is in the offing it appears.
But certain factors are not being considered :
For a large economy like India it takes quite a while to see the effect of such measures.
From robust tax collection of last few years, the Govt. went on spending binge giving handouts to (some deserving) and mostly undeserving people, & not building assets. At the same time, completely ignoring infrastructure development started by the earlier govt. For instance,only small percent of the highway building program has reached financial closure resulting near standstill of this activity in the last couple of years. Consequently, for the measures being taken by RBI there are very few takers., as the economic activity has slowed down significantly in this area. And though liquidity is available banks are not prepared to lend.
When the oil prices were at the sky high levels, the govt. waited too long to increase the prices as a result nearly wiping out the oil distribution companies.
Now the oil prices have moderated the regime is reducing prices recklessly leaving very little money for the oil companies to invest for the future.
The justification for reducing prices given is to put money in people's pocket so that they can spend more. It appears that people in the finance ministry/ planning commission have no idea as to what they are talking about! They are ignoring the fact that India is not a developed country like U.S(where people tend to spend all the money) but is a developing country where most people save money whenever they can rather than spend it.
Finally, planning commission fellows like Montek is repeatedly interfering in working of RBI which is not their business in the first place thus destroying the independence of RBI.
If this behavior continues economy is heading for deeper trouble.
It pressed the panic button and pushed the Reserve bank of India (RBI) to repeatedly take measures like increasing liquidity in the system. One more measure is in the offing it appears.
But certain factors are not being considered :
For a large economy like India it takes quite a while to see the effect of such measures.
From robust tax collection of last few years, the Govt. went on spending binge giving handouts to (some deserving) and mostly undeserving people, & not building assets. At the same time, completely ignoring infrastructure development started by the earlier govt. For instance,only small percent of the highway building program has reached financial closure resulting near standstill of this activity in the last couple of years. Consequently, for the measures being taken by RBI there are very few takers., as the economic activity has slowed down significantly in this area. And though liquidity is available banks are not prepared to lend.
When the oil prices were at the sky high levels, the govt. waited too long to increase the prices as a result nearly wiping out the oil distribution companies.
Now the oil prices have moderated the regime is reducing prices recklessly leaving very little money for the oil companies to invest for the future.
The justification for reducing prices given is to put money in people's pocket so that they can spend more. It appears that people in the finance ministry/ planning commission have no idea as to what they are talking about! They are ignoring the fact that India is not a developed country like U.S(where people tend to spend all the money) but is a developing country where most people save money whenever they can rather than spend it.
Finally, planning commission fellows like Montek is repeatedly interfering in working of RBI which is not their business in the first place thus destroying the independence of RBI.
If this behavior continues economy is heading for deeper trouble.
Tuesday, January 27, 2009
elections in India
As general elections get near the fights are getting nastier. This is between the political parties and their lackeys and newspaper and TV channels.
The news media has their own favorites - it is basically business rivalry masquerading as high principle.
Recent incident in Managalore is one such incident.
Simple hooliganism (where few females & their friends were beaten up )which was stage managed in front of media was projected as atrocity, molestation, Talibantion etc etc.
This incident looks like it is a setup.
Whereas far greater incidents are simply papered over.
The news media has their own favorites - it is basically business rivalry masquerading as high principle.
Recent incident in Managalore is one such incident.
Simple hooliganism (where few females & their friends were beaten up )which was stage managed in front of media was projected as atrocity, molestation, Talibantion etc etc.
This incident looks like it is a setup.
Whereas far greater incidents are simply papered over.
Ponzi and other schemes
"In today's regulatory environment, it's virtually impossible to violate rules." -- Bernard Madoff, money manager, Oct. 20, 2007
About a year later, Madoff -- who once headed the Nasdaq Stock Market -- told investigators he had cost his investors $50 billion in an alleged Ponzi scheme.
I was amazed to read that Made -off (as some people call him) has been cheating for decades and had defrauded to the tune of 50 billion dollars (yes- billion).
Though he was arrested I read somewhere that he is living comfortably in villa though under house arrest. Nobody seems to be in a hurry to investigate. Lesson seems to be that when you rip off rich and powerful justice will be slow super slow.
When I was a kid in a small town of Karnatka state, Ponzi schemes used to be quite common, (they used to be called by various names such as chit fund, finance company, I heard this term only recently).
Modus operendi was : Some fellows set up a finance company and lend money at super duper interest rates. There used to be huge crowd of people to deposit money and collect interest - and the company used to lend money until a point when there was mismatch & promoter used to take money and disappear (unless he was caught and beaten by the people). The principle was : if inflow > outflow + profit the scheme will continue. This is same as that of scheme above. So long as Made-off's inflow was more than outflow and profit it would continue. Unfortunately, the scheme fell through when the market tanked.
By the way, some people are calling US govt. the biggest Ponzi scheme of all - i am trying to find out why- have vague idea. Any ideas?
About a year later, Madoff -- who once headed the Nasdaq Stock Market -- told investigators he had cost his investors $50 billion in an alleged Ponzi scheme.
I was amazed to read that Made -off (as some people call him) has been cheating for decades and had defrauded to the tune of 50 billion dollars (yes- billion).
Though he was arrested I read somewhere that he is living comfortably in villa though under house arrest. Nobody seems to be in a hurry to investigate. Lesson seems to be that when you rip off rich and powerful justice will be slow super slow.
When I was a kid in a small town of Karnatka state, Ponzi schemes used to be quite common, (they used to be called by various names such as chit fund, finance company, I heard this term only recently).
Modus operendi was : Some fellows set up a finance company and lend money at super duper interest rates. There used to be huge crowd of people to deposit money and collect interest - and the company used to lend money until a point when there was mismatch & promoter used to take money and disappear (unless he was caught and beaten by the people). The principle was : if inflow > outflow + profit the scheme will continue. This is same as that of scheme above. So long as Made-off's inflow was more than outflow and profit it would continue. Unfortunately, the scheme fell through when the market tanked.
By the way, some people are calling US govt. the biggest Ponzi scheme of all - i am trying to find out why- have vague idea. Any ideas?
Catch-22
I read parts of Catch-22 by Joseph Heller again.
It is one of my all time favorites- brilliant satire set during world war-2.
The tale is essentially that of
fictional airman, Yossarian, the existential hero and moral center of Heller's fierce satirical depiction of army life in Catch-22.
The title of this brilliant satire, in which the real enemy appears to be the commanding officers rather than the opposing army,
has passed into the language. With sinister logic, Yossarian, who is trying to get himself
removed from action on the grounds of insanity, is told that only madmen want to fly missions,
and the fact that he wants to be grounded proves that he is sane,
and therefore fit to fly. A Catch-22 situation describes any similar no-win argument.
Even now it has many parallels in daily life everyday.
Those of you who have not read grab a copy if you can.
It is one of my all time favorites- brilliant satire set during world war-2.
The tale is essentially that of
fictional airman, Yossarian, the existential hero and moral center of Heller's fierce satirical depiction of army life in Catch-22.
The title of this brilliant satire, in which the real enemy appears to be the commanding officers rather than the opposing army,
has passed into the language. With sinister logic, Yossarian, who is trying to get himself
removed from action on the grounds of insanity, is told that only madmen want to fly missions,
and the fact that he wants to be grounded proves that he is sane,
and therefore fit to fly. A Catch-22 situation describes any similar no-win argument.
Even now it has many parallels in daily life everyday.
Those of you who have not read grab a copy if you can.
Thursday, January 22, 2009
interview with ASQ ex president
Please checkout the interview by ASQ (American society for Quality) ex president's (E M Keim ) India
visit.
I found this to be quite informative.
http://www.livemint.com/Articles/2009/01/19205339/Using-quality-to-gain-an-edge.html
Few inferences could be drawn:
1. Holistic view of Quality has to be taken rather than quick fix solution.
2. In medium to long run it leads to improved profitablity
Comments appreciated.
visit.
I found this to be quite informative.
http://www.livemint.com/Articles/2009/01/19205339/Using-quality-to-gain-an-edge.html
Few inferences could be drawn:
1. Holistic view of Quality has to be taken rather than quick fix solution.
2. In medium to long run it leads to improved profitablity
Comments appreciated.
Sunday, January 18, 2009
predictions 2008
Yes! 2008 predictions read it some time ago- long time since I wrote here. Will be regular now onwards.
Read on:
1. "A very powerful and durable rally is in the works. But it may need another couple of days to lift off. Hold the fort and keep the faith!" -- Richard Band, editor, Profitable Investing Letter, Mar. 27, 2008
At the time of the prediction, the Dow Jones industrial average was at 12,300. By late December it was at 8,500.
2. AIG (NYSE:AIG - News) "could have huge gains in the second quarter." -- Bijan Moazami, analyst, Friedman, Billings, Ramsey, May 9, 2008
AIG wound up losing $5 billion in that quarter and $25 billion in the next. It was taken over in September by the U.S. government, which will spend or lend $150 billion to keep it afloat.
3. "I think this is a case where Freddie Mac (NYSE:FRE - News) and Fannie Mae (NYSE:FNM - News) are fundamentally sound. They're not in danger of going under I think they are in good shape going forward." -- Barney Frank (D-Mass.), House Financial Services Committee chairman, July 14, 2008
Two months later, the government forced the mortgage giants into conservatorships and pledged to invest up to $100 billion in each.
4. "The market is in the process of correcting itself." -- President George W. Bush, in a Mar. 14, 2008 speech
For the rest of the year, the market kept correcting and correcting and correcting.
5. "No! No! No! Bear Stearns is not in trouble." -- Jim Cramer, CNBC commentator, Mar. 11, 2008
Five days later, JPMorgan Chase (NYSE:JPM - News) took over Bear Stearns with government help, nearly wiping out shareholders.
6. "Existing-Home Sales to Trend Up in 2008" -- Headline of a National Association of Realtors press release, Dec. 9, 2007
On Dec. 23, 2008, the group said November sales were running at an annual rate of 4.5 million -- down 11% from a year earlier -- in the worst housing slump since the Depression.
7. "I think you'll see (oil prices at) $150 a barrel by the end of the year" -- T. Boone Pickens, June 20, 2008
Oil was then around $135 a barrel. By late December it was below $40.
8. "I expect there will be some failures. I don't anticipate any serious problems of that sort among the large internationally active banks that make up a very substantial part of our banking system." -- Ben Bernanke, Federal Reserve chairman, Feb. 28, 2008
In September, Washington Mutual became the largest financial institution in U.S. history to fail. Citigroup (NYSE:C - News) needed an even bigger rescue in November.
9. "In today's regulatory environment, it's virtually impossible to violate rules." -- Bernard Madoff, money manager, Oct. 20, 2007
About a year later, Madoff -- who once headed the Nasdaq Stock Market -- told investigators he had cost his investors $50 billion in an alleged Ponzi scheme.
10. A Bound Man: Why We Are Excited About Obama and Why He Can't Win, the title of a book by conservative commentator Shelby Steele, published on Dec. 4, 2007.
Mr. Steele, meet President-elect Barack Obama.
Read on:
1. "A very powerful and durable rally is in the works. But it may need another couple of days to lift off. Hold the fort and keep the faith!" -- Richard Band, editor, Profitable Investing Letter, Mar. 27, 2008
At the time of the prediction, the Dow Jones industrial average was at 12,300. By late December it was at 8,500.
2. AIG (NYSE:AIG - News) "could have huge gains in the second quarter." -- Bijan Moazami, analyst, Friedman, Billings, Ramsey, May 9, 2008
AIG wound up losing $5 billion in that quarter and $25 billion in the next. It was taken over in September by the U.S. government, which will spend or lend $150 billion to keep it afloat.
3. "I think this is a case where Freddie Mac (NYSE:FRE - News) and Fannie Mae (NYSE:FNM - News) are fundamentally sound. They're not in danger of going under I think they are in good shape going forward." -- Barney Frank (D-Mass.), House Financial Services Committee chairman, July 14, 2008
Two months later, the government forced the mortgage giants into conservatorships and pledged to invest up to $100 billion in each.
4. "The market is in the process of correcting itself." -- President George W. Bush, in a Mar. 14, 2008 speech
For the rest of the year, the market kept correcting and correcting and correcting.
5. "No! No! No! Bear Stearns is not in trouble." -- Jim Cramer, CNBC commentator, Mar. 11, 2008
Five days later, JPMorgan Chase (NYSE:JPM - News) took over Bear Stearns with government help, nearly wiping out shareholders.
6. "Existing-Home Sales to Trend Up in 2008" -- Headline of a National Association of Realtors press release, Dec. 9, 2007
On Dec. 23, 2008, the group said November sales were running at an annual rate of 4.5 million -- down 11% from a year earlier -- in the worst housing slump since the Depression.
7. "I think you'll see (oil prices at) $150 a barrel by the end of the year" -- T. Boone Pickens, June 20, 2008
Oil was then around $135 a barrel. By late December it was below $40.
8. "I expect there will be some failures. I don't anticipate any serious problems of that sort among the large internationally active banks that make up a very substantial part of our banking system." -- Ben Bernanke, Federal Reserve chairman, Feb. 28, 2008
In September, Washington Mutual became the largest financial institution in U.S. history to fail. Citigroup (NYSE:C - News) needed an even bigger rescue in November.
9. "In today's regulatory environment, it's virtually impossible to violate rules." -- Bernard Madoff, money manager, Oct. 20, 2007
About a year later, Madoff -- who once headed the Nasdaq Stock Market -- told investigators he had cost his investors $50 billion in an alleged Ponzi scheme.
10. A Bound Man: Why We Are Excited About Obama and Why He Can't Win, the title of a book by conservative commentator Shelby Steele, published on Dec. 4, 2007.
Mr. Steele, meet President-elect Barack Obama.
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