Tuesday, December 29, 2009
And it is not as if this is a legacy issue (which it might for I have seen this directors lift in a few old buildings) as ours is a brand new building - less than a year old...
Am I generalising? I hope so...
Sent from BlackBerry® on Airtel
Wednesday, December 16, 2009
Temples are meant to be institutions where all humans are equal. Rich or Poor, Old or Young, Beautiful or Ugly; God treats all his worshipers equally we are told or is it? Is it like all are equal but some are more equal type of equality that we are looking at?
I recently visited a temple (Golden temple at Vellore, click here for its website) where there were at least three types of entry tickets - Free, Rs100, Rs250. People who wanted free entry had the longest walk to see the idol those who paid Rs250 had shorter walks. People with no entry ticket did not get close to the idol, they could see the idol from around 20 feet away while those who paid Rs100 or Rs250 got to within 10 feet of the idol.
Monday, March 09, 2009
Tuesday, March 03, 2009
Sunday, March 01, 2009
Saturday, February 28, 2009
Friday, February 27, 2009
Either you provide stimulus to the economy (which would involve in varying degrees a combination of tax cuts or spending increases) or you worry about rising fiscal deficit. It cannot be a situation where if it provides stimulus (or attempts to) you criticise it for higher fiscal deficit and if it does not provide you criticise it for not doing enough for the economy.
The issue of fiscal deficit is important (I am by nature a fiscal conservative, would prefer very low or balanced government accounts) but we should not get uncessarily worried over high fiscal deficit. The problem of high fiscal deficit crowding out private investment or causing high inflation etc would arise only when the economy starts to recover.
If the basic hypothesis is that the current slowdown is very severe and unless the government provides the stimulus things will get far worse, then the current worry of slowdown precedes future worries of high fiscal deficit. The thought process then has to be lets first get out of the current crisis and worry about future crisis later on.
One can logically criticise the government on its state of finances only if the basis hypothesis is that either the growth deceleration is short lived and given the steps already taken growth will recover within a reasonably short time (3-4 quarters) by itself or that the growth deterioration is not severe enough to warrant the fiscal deterioration of the magnitude that we are seeing. Growth will slow from unsustainable levels (>9%) to more sustainable trend level and thus we should keep the house in order to be prepared for the next cyclical uptick. If this is not the basic hypothesis, criticism of the government on its fiscal profligacy is unjustified in my view...
Sunday, February 22, 2009
Firstly, the objective of any domestic pricing regime (lets accept that domestic fuel prices cannot be completely deregulated for at least the next few years) is
1. Prices should correspond to international prices, but not be as volatile as international crude prices
2. Oil PSUs must realise a fair price for their product, lest we make them bankrupt...
3. The pricing mechanism should be transparent and not subjective prerogative of the government in charge or oil minister in charge.
So the solution i have is that domestic prices be linked to a 'moving average' of international oil price with domestic prices being rest weekly or monthly. The moving average could be a 30 day moving average or 60 day or 90 day or 365 day depending on the smoothening we desire. Obviously, the higher the period, the smoother the domestic prices relative to international prices.
Now, this moving average solves all problems. It makes domestic prices respond to rising or falling international price of Oil - but depending on the smoothening factor with a lag. So week to week or month to month domestic prices don't jump around in volatile manner and so consumers are protected from the volatility. It ensures that Oil companies recover a fair price, there will be a lag but it will work both ways, they will earn slightly less in an upcycle of oil prices and slightly more when prices correct. The mechanism is transparent in that the reset period and smoothening factor are both known ex ante and so not subject to whims and fancies of incumbent government or oil minister.
My sister is studying dentistry. She has completed her Bachelors degree and wants to pursue her Masters in that field. But to her horrow, she finds that in the entire state of Maharashtra there are just 15 (yes fifteen) seats for Masters in government colleges. Of these 15, 7 are under various reserved categories so there are just 8 (eight in the whole state of Maharashtra) seats for doing Masters in Dentistry. Her friends in her current college (where she is studied for her Bacherlors) number considerably more than 15. So the available seats are not even enough to accomodate the bachelors output of a single college.
Now if my sister doesnt manage to occupy one of those 15 seats (8 actually as she belongs to open category), either she has to go abroad for her Masters which is extremely expensive proposition; take admission to one of the private colleges which are even more expensive (Fees in any decent private college are ~US$100,000; an MBA from Harvard is cheaper) or NOT pursue her Masters.
Given what I know of my sister, she is most likely to choose the final option in case she does not make it to the government colleges. Now that would be a very sad thing...
Thursday, February 19, 2009
It is remarkable how many countries are likely to contract this year. Of the 55 countries in the table below, 38 (almost 70%) are expected to contract. And it is not just Developed countries but many EM countries and many even in our own backyard –
The top 3 countries in terms of maximum contraction of their economy –
Saturday, January 24, 2009
Here we were believing that the only source of an Oscar for India is in the 'Best Foreign Movie' category and then came Slumdog (a good movie no doubt) a de-facto Indian movie with not 1 but a stagerring 10 Oscar nominations with three nominations for AR Rahman including one jointly with Gulzaar. It has already won 4 Golden Globe's including 1 for AR Rahman.
What a remarkable turn of events!
It is this non-linearity (life jumps; does not progress steadily in a linear manner) which is what I find most difficult to come to terms with. Non-linearity is everywhere, take financial markets (who predicted such staggering collapse of world economy), politics (see how the terrorist attack of 26/11 was a non-linear event in regional politics), sports (who predicted India of all teams would win the T20 world cup that too in bouncy grounds of SA).
Unfortunately our minds are by design extremely incapable of handling non-linearity; something we witness on almost daily basis - which causes a lot of problems and frustrations!
Friday, January 23, 2009
If I look up on Bloomberg's January economic survey, out of 60 respondents, just 11 expect US economy to contract in 3Q of this year and just one contributor expects US economy to contract in 4Q of this year (In contrast almost everyone expects US economy to contract in 1Q and 2Q of the year).
Similarly almost nobody predicted a fall in equity prices of this magnitude, but almost everyone now thinks that they have fallen so much, that we are close to the bottom if not already at the bottom. They however did not apply reverse logic. When equity markets rose sharply between 2004-2007, they did not expect equity market to fall simply because it had risen so much :)
What does that say about the skill of 'analysts' in forecasting?
Thursday, January 22, 2009
What IS also surprising is the shock that has been expressed by investors and regulators et al. It is common knowledge that a whole bunch of companies employ aggressive accounting at the minimum and do outright fudging in some cases.
What IS surprising is the swiftness with which the central government has acted (leaving aside the laxity in the first couple of days; but that largely reflects not knowing what to do as they have never faced such a situation before.), replacing its board with a new board which carries significant credibility - Kudos to the govt for their actions so far.
The SEBI proposal to have a peer audit of all large companies (Sensex, Nifty) is welcome but that audit needs to be truly independent and it must be paid for by the SEBI or the exchanges. In fact this is a good time to revist the practice of annual audit being paid for by the company (the management effectively). Its also a good time to increase disclosures...
Overall this will obviously create a negative impact about India globally amongst investor community but the speed with which the situation is resolved and guilty punished and steps taken to reassure that other large companies' books are not cooked is crucial in determining how long lasting the impact would be...