Chow chow baath

Ted talk: How to spot liars?

2011-10-16T10:01:00.001+05:30

How to spot liars?
http://www.ted.com/talks/pamela_meyer_how_to_spot_a_liar.html

Steve Jobs. In Memoriam.

2011-10-06T18:47:00.002+05:30

The Moral Dilemma

2010-10-02T06:09:00.005+05:30

Philosophy students are well versed with the idea that morality is very ambiguous and related to the emotional center of the brain, even if it is irrational to do something.

The Trolley problem -

A trolley is out of control down a track. In its path are five people who have been tied to the track by a mad philosopher. Fortunately, you could flip a switch, which will lead the trolley down a different track to safety. Unfortunately, there is a single person tied to that track. Should you flip the switch or do nothing?

Now,

As before, a trolley is hurtling down a track towards five people. You are on a bridge under which it will pass, and you can stop it by dropping a heavy weight in front of it. As it happens, there is a very fat man next to you - your only way to stop the trolley is to push him over the bridge and onto the track, killing him to save five. Should you proceed?

In the first case, most people are ok letting the single person die, so they will flip the switch. But in the second case, which is rationally the same thing as the first, they will let the five people die.

Indian boxing

2010-09-25T04:22:00.001+05:30

Livemint has a good article on the Indian boxing team

Is boxing the new cricket?

Good luck to the boxing team. I wish they beat the sh*t out of everyone

Data visualization

2010-09-13T00:44:00.001+05:30

This guy visualizes complex data and gives clever easy visualizations - there is a TED talk but I'll spare that. Brilliant!

http://www.davidmccandless.com/

JEE dilution

2010-09-11T04:19:00.001+05:30

http://www.livemint.com/2010/09/10222039/IITs-oppose-ministry-plan-to-s.html?h=B

Politicians are all set to fix a system that ain't broken. They have diluted the IIT brand, they have diluted the JEE exam, now they want to kill the exam! I thought Kapil Sibal was a smart guy, but he is after "reducing burden" on students. Politicians never fail to disappoint.

The sad part is, not only will this not end up not identifying the best people for IITs, but also not address Sibal's concern about reducing the pressure on kids. The pressure on kids is gonna continue no matter how less the number of exams or how easy they are - because ultimately, there are a few million odd kids and 100000's jobs every year. The pressure is because the bottleneck is at the employment end, availability of well paying long- term -growth kind of jobs are limited. People tell me kids will have lesser exams to write, but I don't believe this will mean they will be under less pressure. More or less, at class 12, if you study for JEE, you have covered every other exam on the planet.

There are always kids who will complain about pressure, kids who wont make it to the top and take up other subjects which they are perhaps good at and where they can contribute well to society. Why should you make the overall system faulty for these kids. Why do you want these kids to enter IIT only?

As to the importance of having a tough JEE: Are you gonna decide who Einstein is by a 10th standard paper? So far, everyone acknowledges that nobody cracks all questions on the JEE paper which is why it is so respected. The top 100 do so well because they are challenged at the JEE level. Already so much dilution has happened in the JEE paper that bright kids cannot be differentiated. If you ask two class-10 kids what 2+2 is, both are gonna say 4. You have no idea that one of them can actually do integral log(x) dx, and this kid needs to get into IIT. It is important to be very meritocratic when it comes to IIT because otherwise bright kids are gonna end up at tier-2 and tier-3 colleges and not get opportunities they deserve, and on the other end, not-so-bright kids will get into IITs but have a lesser chance of moving the needle in their subjects, or making a big impact in research. I know I am putting tags on people, but I am restricting myself to the definition of bright = bright in the old JEE way. Of course kids are bright and talented in various ways and do various things very differently.

A larger question about having more IIT/IIMs: Great institutions are not built out of putting up new buildings and boards outside them. You need to attract great faculty and compensate them for their time, energy and work. Making the institutions autonomous while having control over compulsory aid for the poor, would be a big step in freeing some of the shackles that bind the institutions from making a splash in the international scene. A prof who publishes internationally is not the same as a prof who does national conferences, or one who does not do research. They should be paid differently and this can be done only when IIT IIMs are allowed to come out of restrictive Govt norms and run as pvt institutions. This should be the case particularly when the institutions don't take public money, like some of the IIMs.

Yes India needs more IITs IIMs, more kids getting better education and opportunities. But this will have to come from having great professors with great backgrounds and body of work. Not from reducing barriers to entry on students and professors and killing the goose that lays the golden eggs.

Nobel lecture

2010-08-31T06:31:00.000+05:30

Eric Kandel's Nobel lecture is here

Animal

2010-08-30T02:11:00.004+05:30

Have you heard Kesha? Yes, I am the one refering you to a girly girl album - Animal, I like the catchy music, and Your love is my drug, keeps playing in your head for a while after you hear it!

Preferably don't listen to it on your laptop, the background gets really toned down. I revisited Last.fm after a couple of years, and it still is quite interesting.

Brain science

2010-08-27T06:26:00.004+05:30

Charlie rose is doing (or is it a rebroadcast?) a special "Brain series", a series of panel talks on the brain and what we know about it - I watched 2 & 3 on TV (Bloomberg TV) and it is rivetting, so I wanted you guys to watch it as well. It has the best people in the world on the subject talking about it, so you will love it. This is better than V Ramachandran !

http://www.charlierose.com/

Go to Recent shows and you can try watching it. I would want to buy it!

Marriage invite

2010-05-10T20:53:00.003+05:30

Manic monday is near,
And I am trying not to panic here
For on that day, as I get out of bed
I shall be wed
To a gal fresh, scented and decorated
With song, dance and the feeding
I wish that you consider my pleading -
Do come and take part in my matrimony
Not as the bride, or the groom, but as a guest in the ceremony
You shall grace the stage for a little
And get photographed, for, and with a couple
Lest you get disappointed with the bustle
There would be plenty of the foods
To lift your moods

So come ye on the 30th of May, 31st as well,
For I shall look forward to your presence,
To make stronger the essence
Of friendship and of love.

If ye havent laughed your teeth off
At this p(r)etty verse
It is alrite coz you ain't that old
So then see you when it is not that cold
On the 30th of May, then, come on, be bold?

Job Hunt

2010-04-29T22:46:00.002+05:30

7 hrs of telephone interviews, 8 hrs of Video Conferences spread over 4 months, and what do I have? Yes, an offer, thank God. At last. This is a good day.

Bill Gates has a website

2010-04-25T19:25:00.002+05:30

Through TED, I came to Bill Gates website, and as a great admirer of his work, here is the link.

Annual Reporting

2010-04-23T17:52:00.007+05:30

This is to summarize my portfolio performance over the last year from
31 March 2009 to 31 March 2010-

Top holdings with over 5% exposure

For the record, Nifty did a 70% return during the same period. Did I buy them now? No, I have held each of them for atleast 9 months, and scaled. I believe last year was the easier year - great companies with good ROC/ROE and sustained execution and earnings momentum were visibly cheap. The key of course has been a rigorous application of relative valuation principles. This kind of stock selection will be difficult to sustain going forward. Historically, just buying great companies during normal times has resulted in underperformance. It worked fabulously last year.

At an earnings multiple of 21, Sensex is expecting good growth over the next two years. It has set a reasonable bar for earnings growth for the mainstream companies to beat. There is a good chance that next two years of corporate performance can lag expectation. In this context, one will have to weigh-in the possibility of diversifying into corporate NCD or cash at some point.

I want to hold some of the top holdings above for another year atleast. But I am turning cautious over Indraprastha Gas and JSW Steel.

Indraprastha Gas aims to triple revenues ( a laudable target) by investing heavily into Piped Natural Gas. PNG typically sucks up a lot of cash but service will be at lower margins and lower return on capital. Volume growth has been 8-10% in the CNG space, and much growth has been on the pricing front, something I believe will not be sustainable once the marketing exclusivity ends in Jan 2011. I believe it could cease to be a growth story in another year or become overpriced. I do not see great scalability outside Delhi for the business on lack of regulatory push for CNG or natural gas. JSW Steel's lack of backward integration into coal could be a cause for concern. However, I am fairly optimistic given management's stated goal to work in that aspect as well as emerging results. I am currently viewing any correction on coal concerns as an opportunity to buy. It will certainly be a good inflation hedge if nothing else. Given the run-up this year however, I will need to look out for over-optimism.

I believe investing in apparel retail is profitable only during the expansion phase since a low barrier to entry business loses profitablity quickly. This is why I picked up Brandhouse Retail (BHRL) at Rs 28 - a spin-off story from S Kumars with zero debt, 18% RoE and a lot of store additions ahead. Reid & Tailor, Belmonte among others are the brands that are exclusively marketed by BHRL. Brand promotion expenses are picked up by the brand and not the company. The company has to manage inventory and stores, which S Kumars has a demonstrated ability to do.

Zero debt stories are good if the companies earn good return on capital and will expand through moderate debt. Economic profits will accrue both through earnings growth as well as reduction in the cost of capital. It is a good story which has worked out well for Indraprastha Gas. I hope it works well for BHRL as well. I have been meaning to pick up some retail/consumption story but the others were one or more of overpriced/ overleveraged/ lack of demonstrated brands/low return on capital. BHRL was the only tick mark across all the criteria. (But BHRL is no longer zero debt, now has a interest coverage of 3.5, which is on the border of over levered )

But, after all this, I am just showing off - I am slightly sceptical of overpaying for growth, so given it is currently trading at 55 ish, I would wait and watch. Execution is key going forward.

I tracked good companies like Page Industries (sells Jockey in India, Sri Lanka, Middle East), put money when valuations were high and I knew it, and lost money. Sometimes you keep relearning old things. I still do not know why I took losses and got out Nagarjuna Agrichem when I knew I bought it cheap. The one I kick myself over is Sesa Goa, my model was screaming and crying and begging to hold on, but I sold on a whim and some volatility in the stock. I easily missed around 250% return.

And, most importantly, what have I learnt over the last year -

1) Try not to trade or look at performance too often
2) Slowly build position rather than going all out - sleep over ideas rather than jumping on them
3) Never do emotional trades
4) If you find a golden one which you lose sleep on for many days, get on a big position quickly
5) Most important, always look at valuation and mostly ignore technicals

Summertime blues

2010-04-12T21:34:00.002+05:30

I'm a gonna raise a fuss
I'm a gonna raise a holler
about a workin' all summer
just to try to earn a dollar
ev'ry time I call my Baby
try to get a date

my Boss says
No dice, Son,you gotta work late....

Sometimes I wonder what I'm a gonna do
but there ain't no cure for the Summertime Blues.

A well my Mom 'n' Papa told me
Son, you gotta make some money,if you wantta use the carto go a ridin' next Sunday,
well
I didn't go to work
told the Boss I was sick
Now you can't use the car,'cause you didn't work a lick.

(I'm gonna) take two weeks
gonna have a fine vacation
I'm gonna take my problem to the United Nations !
Well
I called my Congressmen
and he quote
I'd like to help you, Son,but you're too young to vote
.

Sometimes I wonder what I'm a gonna do
but there ain't no cure for the Summertime Blues.

The Who: Summertime Blues

"Summertime Blues" is a 1958 song by Eddie Cochran about the trials and tribulations of teenage life in America. But even in 2010, summertime blues aint all that different.

Ideas, art and gossip

2010-03-30T21:22:00.006+05:30

Michael Mauboussin talks to The New Yorker. The talk is not about markets or the economy, instead Michael talks about interesting faults in human thinking. He talks fast so if those ideas are new, make sure you understand him by going back and forth.

I have been interested in what Mauboussin says ever since I realized that he has straddled academia and investing. He has brought to the industry interesting thought processes and shed light on some old but forgotten ideas.

Elsewhere, Marcel Duchamp and his Fountain are featured in the Economist. If you haven't read my previous reference to the work, here it is. No, I do not have an obsession with urinals. But quirky trivia are good to know, like gossip. Hey, and gossip increases readership!

For example, can you name all the popular and known girlfriends of Justin Timberlake? I couldn't, so I looked it up.

(From Wiki)
Britney Spears -> Stacy Ferguson - > Jenna Dewan -> Alyssa Milano -> Cameron Diaz -> Scarlett Johansson -> Jessica Biel.

So there, I have transported my blog to the top of most google searches on the planet! :) Yay!

Links from the New Yorker

2010-03-20T20:00:00.003+05:30

I love The New Yorker. Over the past few days, some well researched columns:

1) Paul Krugman and how he got to be a passionate political columnist

For the first twenty years of Krugman’s adult life, his world was divided not into left and right but into smart and stupid. “The great lesson was the low level of discussion,” he says of his time in Washington. “The then Secretary of the Treasury”—Donald Regan—“was not that bright, and you could have angry exchanges where neither side understood the policy.” Krugman was buoyed and protected in his youth by an intellectual snobbery so robust that distractions or snobberies of other sorts didn’t stand a chance. “When I was twenty-eight, I wouldn’t have had the time of day for some senator or other,” he says.

Krugman’s tribe was academic economists, and insofar as he paid any attention to people outside that tribe, his enemy was stupid pseudo-economists who didn’t understand what they were talking about but who, with attention-grabbing titles and simplistic ideas, persuaded lots of powerful people to listen to them. He called these types “policy entrepreneurs”—a term that, by differentiating them from the academic economists he respected, was meant to be horribly biting. He was driven mad by Lester Thurow and Robert Reich in particular, both of whom had written books touting a theory that he believed to be nonsense: that America was competing in a global marketplace with other countries in much the same way that corporations competed with one another. In fact, Krugman argued, in a series of contemptuous articles in Foreign Affairs and elsewhere, countries were not at all like corporations. While another country’s success might injure our pride, it would not likely injure our wallets. Quite the opposite: it would be more likely to provide us with a bigger market for our products and send our consumers cheaper, better-made goods to buy.

2) Policy relevance of happiness research -

If “rising incomes have failed to make Americans happier over the last fifty years,” he writes, “what is the point of working such long hours and risking environmental disaster in order to keep on doubling and redoubling our Gross Domestic Product?”

To suggest that the U.S. abandon economic growth as a policy goal is a fairly far-reaching proposal. Bok concedes as much—“The implications of this critique are profound”—but he insists that all he’s doing is attending to the data. He takes a similarly provocative and, again, empirically driven position in a chapter titled “What to Do About Inequality.” His answer is, in a word, “Nothing.”

It’s true, Bok acknowledges, that rich Americans tend, on average, to be happier than poor ones. It’s also true that the incomes of the country’s top earners have, in recent decades, grown several times as fast as those of the earners at the bottom. But the statistics show that, over the past few decades, the subjective well-being of those at the bottom has remained unchanged. If the poor aren’t bothered by the growing disparity, Bok asks, why should anyone else be?

“The most obvious reason for deploring income inequality is our instinctive sympathy for those who must make do with many fewer goods and services,” he observes. “It is not immediately clear, however, why growing inequality should elicit such compassion if lower-income Americans themselves have not become less happy.”

3) On modern psychiatry

The National Institute of Mental Health estimates that more than fourteen million Americans suffer from major depression every year, and more than three million suffer from minor depression (whose symptoms are milder but last longer than two years). Greenberg thinks that numbers like these are ridiculous—not because people aren’t depressed but because, in most cases, their depression is not a mental illness. It’s a sane response to a crazy world.

Greenberg basically regards the pathologizing of melancholy and despair, and the invention of pills designed to relieve people of those feelings, as a vast capitalist conspiracy to paste a big smiley face over a world that we have good reason to feel sick about. The aim of the conspiracy is to convince us that it’s all in our heads, or, specifically, in our brains—that our unhappiness is a chemical problem, not an existential one. Greenberg is critical of psychopharmacology, but he is even more critical of cognitive-behavioral therapy, or C.B.T., a form of talk therapy that helps patients build coping strategies, and does not rely on medication. He calls C.B.T. “a method of indoctrination into the pieties of American optimism, an ideology as much as a medical treatment.”

In fact, Greenberg seems to believe that contemporary psychiatry in most of its forms except existential-humanistic talk therapy, which is an actual school of psychotherapy, and which appears to be what he practices, is mainly about getting people to accept current arrangements. And it’s not even that drug companies and the psychiatric establishment have some kind of moral or political stake in these arrangements—that they’re in the game in order to protect the status quo. They just see, in the world’s unhappiness, a chance to make money. They invented a disease so that they could sell the cure.

Greece - would it be 'ancient' soon?

2010-02-12T11:24:00.003+05:30

The Greece default issue raises a lot of questions. The outcome, whatever it is, would raise even more questions than it answers.

The Eurozone is a motley of uneven countries - uneven in terms of people, culture, institutional development, trade balances and as it has turned out, fiscal profligacy. With Greece hovering at a stratospheric 12% fiscal deficit and the markets going crazy anticipating the outcome, the consequences look dire.

1) Will Greece be bailed out?

a) If yes, by whom?

If it is going to be IMF, then it would signal that the more prosperous countries like Germany and France are in the EU only to benefit themselves and their commitment to the EU would be questioned. If it is going to be Germany, then will it also bailout other countries within the EU? The Eurozone does not have any ready legal framework for a bailout. If everybody plays self-centered games, only Germany will be left to preserve the integrity of the EU. If indeed there is a bailout by the EU/Germany, how would you answer your local Panini shop owner in Lyon or the worker at the Munich brewery that his taxes are worth spending on some Greeks because their politicians had no idea how much to spend on what? It is going to be an interesting dance to watch, but it will not be pretty.

Is Greece important enough to be saved? Financially, it would not have much of an impact on the rest of the world. Of course the Greeks would have to go through a hard penance for the next decade in the face of low domestic demand and no room for monetary, fiscal or exchange rate policy measures.

b) If no, who is next?

Clearly if Greece defaults, speculation on further defaults alone could be dire for the other farmyard acronym countries to act immediately. They will have to line up investors for their debt, or get help from across the Atlantic (or China perhaps?). It would also raise concerns for EU integrity over the next few years and would give nightmares to the ECB.

2) Greece leaves Eurozone or buys more time for fiscal prudence

The trouble really is that a Eurozone member has zero flexibility in monetary or exchange rate policy. Time and again we read that central banks should not meddle with exchange rates. It is in times like these that the advantages and flexibility in policy action becomes evident. The UK is not in great shape(growth/inflation/fiscal deficit) . But it has had the additional ability to reduce rates and allow GBP to depreciate to sustain competitiveness. Greece has had to take what it gets from the ECB - which in any case has had the toughest monetary policy for any large country- in terms of interest rates and a overvalued Euro (due to carry trades).

It will be hard to cut fiscal deficit from 12% to 3% in 3 years, which Greece has to if it remains with the EU. In the current environment, it would mean a deep recession in the country and a lot more unemployment. If the EU agrees to a concession and sustained help over the next 5 yrs it would offer something for Greece to remain in the EU fold. That looks unlikely given that the prosperity within the EU is not what it used to be.

If Greece opts out of the EU, and figures out a way to return to the Drachma and get an independent monetary policy, it would offer a fighting chance to get back into shape far sooner than what being within EU would offer. This sort of move would obviously entail a lot of bureaucratic competence and resolve . More critically, such a move would take time and the markets aren't ready to accept it.

Takeaway
The larger issue is whether, in a globalized world, policy makers have a responsibility to the world at large or their local electorates. Clearly a freer world of capital, labour and trade would increase the welfare of most people in the world, but the constraints of local politics would make individual countries try and maximize the benefits of their people and a chance to get themselves re-elected.

Crystal Gazing - 10 years from now

2010-01-30T22:27:00.040+05:30

1) Ben Bernanke will get a Nobel Prize for Economics "for his contributions to monetary macroeconomics and his role as a Fed Reserve Chairman".

2) Reliance will do an Enron and confess to creative accounting. Markets will tank 40% and the world will point fingers at 'corrupt Indians'.

Now that I have got such weighty issues off my head, I will get down to other emotional subjects I have been encountering often. I know I mix-up a lot of things in a single post, but that what makes chowchowbaath tasty - ain't it mate?

Issue 1: "Academic" - What does the word mean to you?Is Bernanke an asshole?
Issue 2: Socialism vs capitalism debate

Markets folks I talk to use the word "academic" derogatorily. One of the reasons I did not do a PhD is I realized I could not be as good as my peers. Academic work is intellectually hard and I thought it was near-impossible to keep pushing the barrier throughout my career. I do get bored with anything quickly. When I say intellectually hard, I mean, when you look at a question or a problem, it takes time to understand the question. Unfortunately the problem would also be meaningful and would have a significant impact when translated to the real world.I know most markets folks are MBAs having not encountered a single complex problem their entire lives, let alone solving them.

This post is here to give academics their worth. If it sounds a bit weird, that is fine. I have been pained with the disgust expressed by market folks when encountered with the academic world.

Let it be understood that mobile phones, computers and jet engines were made and improved by 'academics'. Lay glib people who talk about 'useless academia' could not even have attempted to think about high speed combustion or nano-circuitry that are essential to such inventions. There may have been entrepreneurs and MBA folks who marketed the products, but the inventions would have come out nevertheless.

I appreciate the kind of effort that is put in academia, specially into the study of macroeconomics - I look at a lot of macroecon papers more closely than most of the charlatans who mouth names, and I know there is a sincere attempt at tackling complex issues. From a market perspective, macroeconomics is reduced to a simple relation between growth and inflation, and growth and unemployment. Most financial markets folks are comfortable talking about interest rates in the context of increased growth vs inflation and think they have understood it all.

I have also heard about how macroeconomics has been 'reduced' to numbers and lost 'intuitive meaning'. Popular blogs talk about how in 'their time', economics was more fun, that is, it could be put in 'simple words' or explained to the 'lay man'.

Firstly, everything that is done in the world need not be understood by the layman. If laymen were to necessarily understand everything, we would neither have computers nor jet engines. I make this comment specifically in the context of what happened in the Great Crisis of 2008-2009. Macroeconomics is a complex subject and needs dedication just like anything else. It would appear that I am refering to something obvious but every market professional is mouthing words like capitalism and free markets, so I felt the tautology is worth reminding.

Folks think macroeconomics is about philosophy - what is right? Free markets or socialism? They should be thinking about optimizing objective functions with dynamically weighted parameters under non-linear constraints. Unfortunately the driving variables follow unknown stochastic processes. To the extent that the solutions of those objective functions are known (solvable under certain local constraints) and recommend free markets, smart ass folks are correct. But if the solution turns out to be a Govt takeover and Helicopter-dropping-money-on-folks monetary policy, that should be well accepted.

Everyone has a smart-ass comment to make about the crisis or Bernanke. Why should the papers and market professionals take a dig at Bernanke? Because he is "an academic"? I point this question particularly to banks and market folks who pushed risk taking beyond safe limits while they knew they were doing it. If it were not for academic Bernanke, they would have been facing divorce lawsuits and thrown out of their houses by well pampered wives. They would have been biting dust and be thinking about drawing unemployment social security.

Bernanke has spent his life studying economic crises. Oh media and investors, how many hours have you spent on the subject? You got a few calls correct, so did you become the grand daddy with an opinion on everything? Why do you believe common sense would always work for complex problems? Or that your common sense is really common?

You can expect any comment you can make on the crisis to have already been looked at and analysed in great detail by Bernanke. Have you read his papers? Have you read his speeches? If you have some time, do go through these

Am I a sycophant? I'd gladly defend a guy who is doing his best, and I mostly find myself defending the underdog. I am surprised I have to be on the side of Bernanke despite his deep thought, lifelong work and insightful papers. He deserves much more than a Nobel (Nobels come cheap these days) and I pray he gets one nonetheless soon. Bernanke has put in his best and I would like to see him rewarded.

I do not believe that any smartmouth investor or market-hero could have fucking done close to what Bernanke has done. They would still be thinking about the risks of zero interest rates and the end of monetary policy as they knew it. (Incidentally, Bernanke wrote about zero interest rate monetary policy when he was an academic in 2004. ) They would still be worried about the advent of socialism and the death of free markets. While they were at media conferences explaining Fed's position and improving market ratings of 'central bank communication',it would just happen that a few large insurance companies and banks would go bust. Public money, savings and deposits would disappear. A few million laymen would lose jobs and probably declare insolvency.

"Hey, but capitalism survived mate. The sick were taken away - the fit survived. It does not matter if the fit turned out to be about 1 million rich folks, it was only incidental. It does not matter if the sick were only 299 million common folk - they can be dispensed with. In any case when the rich come back, the common folk will gain back their employments. It does not matter what happens in the meantime. They will claim social security insurance or something. It is an efficient long term solution. Who gives a fuck about common folk? By the way, did you hear, homes have become soo cheap, are you buying or what? It was only coincidental that a few common folk foreclosed their mortgages. It was a bubble anyway. They didn't realize it? Poor fellas. Tell your fund manager about Tampa sea-facing homes mate. He is a smart ass to have shorted the bubble. I love him."

If this was the way capitalism would survive, I'd rather be in a monarchy.

I end this with a quote from the movie "Frost/Nixon" - Bernanke could well be feeling the way Nixon does below (although don't draw parallels on the context)

Richard Nixon: That's our tragedy, you and I Mr. Frost. No matter how high we get, they still look down at us.
David Frost: I really don't know what you're talking about.
Richard Nixon: Yes you do. Now come on. No matter how many awards or column inches are written about you, or how high the elected office is, it's still not enough. We still feel like the little man. The loser. They told us we were a hundred times, the smart asses in college, the high ups. The well-born. The people who's respect we really wanted. Really craved. And isn't that why we work so hard now, why we fight for every inch? Scrambling our way up in undignified fashion. If we're honest for a minute, if we reflect privately, just for a moment, if we allow ourselves a glimpse into that shadowy place we call our soul, isn't that why we're here? Now? The two of us. Looking for a way back into the sun. Into the limelight. Back onto the winner's podium. Because we can feel it slipping away. We were headed, both of us, for the dirt. The place the snobs always told us that we'd end up. Face in the dust, humiliated all the more for having tried. So pitifully hard. Well, to *hell with that*! We're not going to let that happen, either of us. We're going to show those bums, we're going to make 'em choke on our continued success. Our continued headlines! Our continued awards! And power! And glory! We are gonna make those mother fuckers *choke*!

Ideas for structured notes

2009-12-25T12:27:00.003+05:30

**A strictly technical post**

1) Non-directional options

Structure pays out periodic coupons linked to the movement of underlying index/asset over previous period irrespective of direction. Index moves up by 5%, pay 5% coupon, down by 5%, pay 5% coupon

Pricing/Hedging: Say: 5 yr structure, semi annual coupon: Price forward start atm straddles every 6 months for 5 yrs.

2) Leveraged CPPI / Collaterized CPPI obligation (!)

Options on CPPI already have a market. Can we do leveraged CPPI notes?

Structure is 50% funded by the CPPI investor. The other 50% comes from issuing notes at a higher coupon than risk free rate. So CPPI investor gets exposure and capital protection for 100% by paying 50%.

Pricing/Hedging: Similar to regular CPPI except that bond floor has to incorporate NPV of promised coupon payments to note holders

3) CPFO (Constant proportion fund obligation)

Refer: CPDO

(Probably a wrong time to market such structures after the CPDO debacle)

Promise $100 5 yrs later, get $70 now (about 7.5% return when risk free is 5%). Construct portfolio of underlying equity funds and risk free asset, and keep rebalancing every quarter to achieve a stated (constant) proportion of risky assets. This strategy buys when the risky asset goes down and sells when it goes up thereby locking in profits (Risk: works in long term bull markets only, but then the investing world runs on it).

Since promised return is higher than risk free, bond floor is higher than $70 (if risk free is 5%, bond floor is at $75). When this strategy hits the bond floor, you have enough money to pay back the investor $100. Then convert all the risky into risk free, and 'cash in' the amount (similar to a "cash in" event in a CPDO).

Insightful articles on the crisis

2009-08-04T19:11:00.001+05:30

Hat tip :Anantha Nageswaran

Malcolm Gladwellon AIG: http://www.newyorker.com/reporting/2009/07/27/090727fa_fact_gladwell

Joe Hagan on Tenacious G(Goldman): http://nymag.com/news/business/58094/index1.html

Michael Lewis on The Man Who Crashed the World: http://www.vanityfair.com/politics/features/2009/08/aig200908

Der Spiegel article on The Man Nobody Wanted to Hear: http://www.spiegel.de/international/business/0,1518,635051,00.html

Stock Blurb

2009-05-17T12:22:00.013+05:30

I want to stick my neck out and point to a stock I like. Please do not take this as investment advice - do your own research. I will not dig deep into financials so as to not drive away the rare eager reader.

Indraprastha Gas Limited (IGL).
Price: Rs 118.85. Trailing P/E ('08): 9.2

The company supplies natural gas to residential and commercial users in Delhi and Noida. It recently acquired marketing exclusivity of CNG in Delhi for 3 years and monopoly rights over Delhi gas pipelines for 25 years. The stock has not reacted by much! (If you are not convinced about monopolies, take a look at the alpha generated by Container Corporation of india (ConCor) since 2003. Warning:Technically, ConCor is no longer a monopoly, so don't extrapolate the charts to the future. More about ConCor later when I am bored).

In 2008, when IGL was not a monopoly, it generated a RoE of 33% and had a dividend yield of about 3%. If you are still unimpressed, IGL had zero debt at the time. GAIL, Delhi Govt and BPCL are its promoters and assure its gas supplies. IGL also generates surplus power and there is a developing beeline of satellite towns who want a share of it. IGL is obviously facing the brunt of the recession, yet EPS is expected to stay flat to moderately positive (~3%). Capital expenditure is admittedly high, but GAIL has a Rs1000 cr earmarked for CGD projects alone. Moreover monopoly rights for 25 years would suffice any capex incurred.

Improving fundamentals:

1) Commonwealth Games in Delhi in 2010 should attract attention. Over the next 2 years, IGL plans to open 50 new CNG stations. At the end of the marketing exclusivity period, IGL is expected to have 220 CNG stations and most of the market.

2) Monopoly pricing power: CNG prices are regulated in India, but a 5% improvement (close to WPI) in pricing would possibly not attract the attention of the regulator. (As an aside, regulatory capture in India is not unheard of. Read this interesting piece: NCDEX vs Forwards Commission and this). Keep in mind that Delhi's government is a promoter and is incentivised to see IGL's profitability improve.

3) Natural gas supplies are ample and assured by its promoter GAIL. (Supplies of natural gas would increase as RIL's KG basin output would hit GAIL. - reduction in input costs and expansion of margins)

4) PNG/CNG offers a 50-75% cost advantage over other fuels. Users have a huge cost incentive to switch to natural gas.

5) Government regulation and incentives for automobiles to switch to CNG.

If you are interested in some backgrounders on City Gas Distribution projects in India, read this, this and this. Downside risks include excessive pricing intervention from the regulator and natural gas price hikes. But with IGL being promoted by Delhi govt and GAIL assuring gas supplies as a promoter, IGL seems to be in a particularly sweet spot.

Look at a similar company: Gujarat Gas Company Limited. The company has no direct access to gas and depends on GAIL. GAIL has its own pipelines and competes in many cases to supply gas to the same end users. In March this year, Guj Gas alleged that GAIL is not honoring its gas commitments. Guj Gas gets squeezed by GAIL and by end users for not honoring their contracts. Not a sweet spot at all.

I want to also write about Britannia Industries, Castrol India and Bharti Airtel. NED happened. So I leave you with that.

Art and all that jazz

2009-03-20T10:08:00.006+05:30

It was late January 2008, and I was early for Luenberger's Advanced Investment Science class at 2:15 pm. As I strolled the corridors of the engineering block, I bumped into a fellow Bangladeshi-American computer scientist who explained that the class is occupied by 'some photography' group. I cajoled him to join the class with me, even though the talk was about half way done. After listening to the prof's comments on the life and times of Margaret Bourke-White and Life Magazine's Fort Peck Dam cover, I decide to sit in regularly. (Warning - Detour ahead. Only much later did I realize Margaret Bourke's India connect through Gandhi- It is Oct 2nd 08 and a bunch of Indians and Asians are watching Kingsley's 'Gandhi' and having free Indian food (which was the point of the gathering) - Margaret meets Gandhi, and then Kasturba. Kasturba comments that Gandhi had vowed 3 times that he would stop making love, and failed, but 'this time' he seemed more resolute)

So I started sitting in more regularly - One of the succeeding classes was about Marcel Duchamp and the scandalous Fountain exhibit in 1917 which was taken off as being non-art (Imagine artists banning stuff as non-art). This brings me to a recent experience at the Cantor Arts Center, Stanford Univ (which I intended to visit since 1.5 yrs, but hadn't made it because of other 'business') -
If you haven't closed your browser yet - Thanks - your reaction is only natural, so don't worry. While I came in to view this, a 5 yr old girl was asking mama what it was, and mama said - 'Sweetie, You don't have to know what this is'. In fact this piece is the next step from Duchamp; Titled 'His and Hers', Robert Arneson puts detailed fundaes on what funk and dada truly stand for. The symbolism is truly in-the-face and oppressive. However, you can't imagine the joy yours truly felt when he made the Duchamp connect. As it turned out, I started attending those art history (or whatever the course was called) classes regularly and missed the actual coursework - Advanced Investment Science was not advanced and had little science in it.

While toilet watching may not be exactly a fun thing, Stanford has been. In other serendipities, I also learnt about early Jazz history (thanks to an American philosophy grad student) - so come prepared to discuss the nuances of King Oliver's Creole Jazz band next time we meet, or how the Orleans' Original Jazz Band was anything but original.

The whole point of this post -> name another place on the planet where one has the liberty, time, encouragement and enthusiasm to do things one wishes, or even accidentally pursue interesting things and not for once complain something is not available or cannot be done.

I will be leaving US in a couple of days and it has been fun as a student. In the next post, I will be in a different geography, I think. So long and thanks for all the fish (so far).

Data mining open source software

2009-03-20T10:05:00.004+05:30

As Javed Jaffrey would say - 'Just for the kicks':
Weka 3 - Open Source Machine Learning/Data mining software
LibSVM - Open Source Support Vector Machine Tools

Stanford, I leave

2009-03-06T08:32:00.011+05:30

I went to a Sequoia Capital presentation today at Gates, the Computer Science Building (obviously). It was a densely packed room full of hungry grad students, with many sitting on the carpet. Very unlike B-school where students tried to look smart, however uninterested they may be in the presentation. Very unlike B-school where they would have no clue of hot Valley startups apart from Facebook. I couldn't find a place to sit, so I stood next to a business development guy from the company who was camera-man for the talk. We talked about yes, facebook, and Twitter, and TechCrunch. He tried to brush my memory about an Eastern European guy who he thought was doing the same program I was.

The talk was about how IT will change the world, peppered with examples from the firms' portfolio companies. The talk was interesting, of course, but the atmosphere tense from the heat and the uber-passionate people, and the audience near perfect for a tech VC firm. The point was made - math and CS rule the world - and Omar, CEO and founder of AdMob stood around to answer questions at the end.

I would like to emphasize the unmatched geekiness of students. An Indian grad student next to me was SSH-ing to a remote server in the Gates basement somewhere through wireless access. The more interesting thing was he was running and training a face recognition code he wrote on his Macbook Pro. While he was looking around, the screen in front of him tracked various features of his face, eyelid markers, cheek muscles, a chin marker and so on. A few paces from me stood Jawed Karim, co-founder of Youtube. 'Will this happen anywhere else on the planet', so I wondered.

People, like me, come and people go. But the Valley thrives on. Stanford, I am sad to leave you.

Random thoughts

2008-11-09T08:20:00.003+05:30

Having been fed up with Economist's call for free capital flows and the benefits of 'free markets' in all respects, I felt happy when I read this.

Letter to Taylor

2008-11-07T12:20:00.003+05:30

Proposition: Fed should impose an upper cap on cash reserves held by banks.(as % of risk-weighted assets)

Objections:

1) Fed has no authority to dictate what is good for bank's investors (since banks could be taking unnecessary risk):

Agreed, but this could be good for bank's investors if the upper cap is held up sufficiently high. The Tier I capital is held so as to protect from bad loans/defaults. Under the current credit environment, where firms are not getting capital at all, could their defaults not rise, thereby making the excess cash in Tier I useless?

2) You are limiting the 'safety cushion' of banks

I believe by not lending and hoarding cash, the real economy could suffer much more, and there could be much more bad loans than Tier I capital ratios justify (Same reason as 1). By forcing an upper cap on cash reserves, banks will have to either lend it out to the real economy, or buy assets (financial or otherwise) and thereby stabilize prices.

3) How do you decide what the upper cash reserve ratio is?

This may not be done unilaterally by the Fed but can come about by discussion with banks and continuous revisions going forward. We are aware that the monetary base has increased without much affecting the money in circulation/real economy. So, if we can make banks not hold more than twice or 150% of the required reserves (Say), we could still see a lot of liquidity being injected into the market.
The exact amount could be discussed and decided as appropriate.

4) There are moral hazard problems

It is well known that the entire Fed activity is filled with moral hazard problems today. So agreed that there is a hidden bailout package to the real economy embedded in this. But is this not what the Fed is trying to achieve?

Pros:

1) This will inject a lot of liquidity into the real economy. At this stage, even though banks may appear well- capitalized, going forward, delinquencies/defaults are going to increase and this capital may prove insufficient. If GM defaults, as it looks like it may, we will begin to stare down a deep recession.

2) For the Fed, it is far better that it makes banks lend to the real sector than itself offering liquidity or capital injection into corporates (like GM and others). Banks would still have the right and knowledge to price credit appropriately, and there will be no distortions in terms of artificial and non-market determined interest rates. Further, Fed would find it easy to capitalize banks than capitalize the entire real economy.

3) It is very likely that banks will not object, but instead welcome the move (depending of course, on the level of the upper cap). All of them are sitting on a lot of cash which does not earn them any yield. They are not lending to the real economy because other banks are not lending to the real economy (herding). By imposing an upper cap on cash reserves for sometime, this fear will be assuaged. When all banks are in the same boat, why would they complain? And they know by now, that the boat will not be allowed to sink by the Fed.

4) As more capital is injected into the real economy, corporate defaults can be reduced very much and we need not have to go through as hard a recession as is being projected.

London and life since

2008-09-07T21:51:00.002+05:30

So I have been idle. So what? I think I spared you all that economic intellectual soup anyway.

I have been in London for the past few weeks - 11 or so I think. I will be getting to India in a week. Happy I shall be. Weekends were mostly spent at Wimbledon with Ramesh / Rashie what with good food, sleep, life, laughter, movies and other entertainment.

But some noteworthy moments in London -

1) Standing on the 7th Floor of Tate Modern and staring out alone into the Thames, St Paul's and Millenium Bridge at night. Much to everyone's boredom, but my excitement, a novice DJ was playing Chan Chan from the Buena Vista Social Club. Cuban music, solitude, some wine and a stunning view. I could not have asked for more.

2) Attending a evening 'Candlelit concert' at the St Martin-in-the-fields by the Belmont Ensemble. An all-female-violin group started with Vivaldi's Concerto for Two Violins, and ended with Handel's Alexander's Feast.

Current Music/Mood: Floyd, Money
Money, get away.
Get a good job with good pay and youre okay.
Money, its a gas.
Grab that cash with both hands and make a stash.
New car, caviar, four star daydream,
Think Ill buy me a football team...

Money, its a crime.
Share it fairly but dont take a slice of my pie.
Money, so they say
Is the root of all evil today.
But if you ask for a raise its no surprise that theyre
Giving none away.

Links

2008-06-09T10:14:00.003+05:30

Two quick things:

1) Raghuram Rajan talks about reforms in Indian banking sector - Remember that non-state banks would find business much easier next year after deregulation. (Many words are close to heart - Raghuram, India, Banking, reforms)

2) Is Larry Summers the canary in the mine? Three Indians question the rationale of the ex-Treasury Secretary about his intellectual honesty and that of many in the West. Brilliant.

All eyes on ... er, Iceland

2008-03-29T22:42:00.003+05:30

A small island country with a population the size of Pittsburgh - but heavily dependent on foreign capital for a lot of its economic development - Iceland. Banks have borrowed heavily in dollars, and have invested locally. Current account deficit of 16%, inflation 6.6% way above central bank targets. Benchmark interest rate at 15%. Bad, you think?

To add insult to injury, enter the hedge funds. Banks are heavily indebted, and in these deleveraging times, these funds long the banks' credit default swaps (CDS). (This way, they express the view that the credit risk or default risk of Icelandic banks are high - Long a credit default swap means buying protection against default). Buy more. Gimme more of that CDS thingy. What happens? CDS spreads end up high - So high that equity markets begin to take notice. Equity markets begin to think - Something wrong must be happening to these banks. These funds are already short the banks' stocks as well. When the wider stock markets react by selling the stocks, the speculators are reaping the benefit.

Summary: Buy massive amounts of CDS against Icelandic banks (collectively) and short bank equity-> Equity markets take notice of the widened CDS and panic -> Banks equity drops in value -> Funds benefit because of short bank equity.(By then other institutions have begun buying CDS because of panic. Exit CDS markets; exit equity markets => roll in profits)

Sounds new? Actually not quite: Hong Kong faced the same thing a year after it broke off as a British colony. The monetary authority responded by buying in the stock market massively and showing enough support so that all the speculators were hurt. Iceland, will you do the same?

Read more.

Topics of debate

2008-03-27T00:49:00.004+05:30

1) People should have noted the collapse in the commodities markets (just a correction?). While there was a lot of talk that the high prices of oil and gold were not justified by pure demand-supply arguments, mainly focussed around India and China, it took a while to correct. And what a correction it was!

Econbrowser believes in Jeff Frankel's theory about negative real interest rates being a reason about the commodities uptrend. Blame the Fed seems to have caught on as the recent mantra for all malaises.

Instead I believe that Harvard Professor Jeff Frankel has the correct explanation-- commodity prices at the moment are being driven by interest rates, with a strongly negative real interest rate increasing the incentives for speculation in any storable commodity.

Read more

2) Was the Fed right in bailing out Bear? Free markets and moral hazard versus systemic risk

Perhaps not directly addressing the issue, but the Minneapolis Fed Reserve has a fictional interview with Carter Glass (of Glass Steagall) fame about regulation in the banking industry.

Economist's View has this to say to Martin Wolf's lament in the FT about free markets:
Free markets is not the point. Producing well-functioning, competitive markets is the goal, that's when our models say the outcome is optimal. If removing restrictions gets you in the vicinity of the competitive outcome, and most often it does, then that is the right thing to do. But if making markets as free as we can doesn't produce a competitive outcome, then another approach is needed (and the extent to which an intervention that overcomes a market failure and produces a more competitive market reduces freedom is a debate for another day, but I don't see why it necessarily does).

Read more

Umm, well, the US economy

2008-03-22T06:51:00.007+05:30

First they said, this looks like a 2001 slowdown. Then comparisons with the dotcom bust began. Then it was compared to a 1990s mini-downturn. Then we were told this resembles a 1970s stagflation. Then wise people began to recollect the Great Depression of the 30's. And you were thinking it could not get worse.

It has, probably. Real interest rates have gone below zero already. Fed funds is at 2.25% (this is the overnight rate) but one month T-bills are at 30 basis points-ish (0.3% yield levels). These are below Japanese interest rates, and wiser men have begun linking this to the eye-opening Japanese "liquidity trap" episode- Read monetary policy failure. Krugman writes today about the same thing. What does it mean? In layman terms, it means America is pretty screwed. Krugman reminds us : "Conventional monetary policy is probably off the table". Note the word probably. I bet Uncle Ben and his co-workers are clinging to that word. We all want some lifelines, don't we? Market commentators grudgingly admit that there is possibly no one better than Ben who understands the crisis. Bernanke has spent his life studying the great depression, monetary policy failures, and crises. Innovative measures like lending to dealers directly and accepting mortgage backed securities as collateral are prime examples of Bernanke's willingness to do everything to save the economy. Bernanke has also looked hard at policy alternatives when conventional lending from the central bank fails. His research, it seems, could not have been more appropriate.

As a grim reminder, Japan has yet to come out completely out of that trap it got itself into in the 90s. There has been plenty of discussion on whether the same thing could happen to the US, but people remain optimistic about the US given better corporate governance, disclosure, and markets. I must hasten to add that we have seen all the three of those things failing in recent times. Hope for the best.

China

2008-03-16T00:37:00.000+05:30

THERE is no exaggerating China's hunger for commodities. The country accounts for about a fifth of the world's population, yet it gobbles up more than half of the world's pork, half of its cement, a third of its steel and over a quarter of its aluminium. It is spending 35 times as much on imports of soya beans and crude oil as it did in 1999, and 23 times as much importing copper—indeed, China has swallowed over four-fifths of the increase in the world's copper supply since 2000.

Read more

Subprime primer

2008-03-10T02:43:00.002+05:30

Found this interesting and humorous take on the subprime mess. You don't have to be a finance wiz to understand this! Worth a read. Warning: Rated PG for strong language

Commodities!

2008-02-22T12:07:00.002+05:30

The following stories all appeared in one single page of FT.com. Its like a gripping crime novel with an intense murder scene, an ensuing investigation comprising poets, writers, investment bankers and nobel leaurates. Lot of sweat, blood and money. I thought this set of headlines will never make it to the front page in the same day.

Look at what the last article has to say: "Insight" Article on why the bull run in commodities has a long way to go. Shouldn't we be looking for a correction? All of them are at key psychological levels: 1000, 100, 2000 etc., and have run unprecedented rallies. Shouldn't some bells be ringing? Food price rally is understandable, but coffee and cocoa giving outsize returns when supply hit is not significantly large? I think I am going to take my store of coffee and make some money tomorrow. Can I borrow your coffee powder, gentle neighbour?

Headlines from FT.com - Commodities News and Markets - 21-Feb-2008

Gold nears $1,000 as stagflation fears grow

Oil at new record above $100

Tea prices set to soar

Beverages markets near boiling point Coffee, cocoa and tea at multi-year peaks

Dubai Merc launches new oil contracts

Wheat prices surge to new high

Top-quality spring wheat jumps 90% - Feb 17 2008 19:07

Platinum hits $2,000 amid supply problems

Insight: Commodity bull run has a long way to go

Platinum smashes past $2,100

Brazil’s secrets of big oil discoveries stolen

Insight: Commodity bull run has a long way to go

Climate change

2008-01-24T12:19:00.000+05:30

Europe came out yesterday with a strategy roadmap for improving the climate/preventing further damage. While most of us are familiar with global warming, very few of us know of "global dimming". Sunlight falling on the earth's surface has diminished by over 30% since the 1950s due to particulate matter in the atmosphere. Now this has had a cooling effect. Climatologists are now worried that with drastic action on reducing particulate matter in emissions, this cooling effect would go down, and more sunlight could reach the surface. This could worsen the climate situation. Drastic examples include Portuguese forest fires in 2003 or the recently very hot French summer. Europe has taken well-intentioned steps since a decade and maybe for the worse!

With lower particulate matter emissions, temperature change during a day could reach new peaks, causing a lot of damage to crops, and agriculture :( . I was wondering if any of you know which commodity is most sensitive to large temperature changes. Going long that in Europe maybe a profitable idea for sometime (before trade takes over shortages).

See this documentary

Gates and Jobs interview together

2008-01-16T11:20:00.000+05:30

No this is not about the usual stuff; I am choosing to ignore that Citi posted a gargantuan 9 billion ( so far 17 billion) loss; except that any more losses, I am gonna start looking for new adjectives.

This is about a mail I wrote to a friend. I am posting it here, feel free to comment:

Machchi,

You have to watch this

This is the first part of a 7 part series. If you dont have time, do make it a point to watch the sixth of the 7 part series. At last Jobs says about Gates and himself (quoting from the beatles song - "Two of us"):
You and I have memories longer than the road that stretches out ahead

He is so intense and emotional immediately after he says that, and you get the usual Jobs intensity when he talks (that you always do) .

The link to the sixth part: (8 mins)

I didnt know anyone in the world who would be as excited about this like me, other than you.

Hope you get the time to enjoy this!

update: The video is only 4 mins

The Economist on India

2007-12-26T11:52:00.000+05:30

The pessimistic tone of the Economist starts to overflow whenever it even remotely concerns India. To the economist, the country is corrupt, ridden with far right politicians winning large-state elections, with a central government severely tripped by communists, and ubiquitous poverty. This is the image reinforced through repeated articles. I have seldom read articles about far-right in East Germany, or Benelux, or even France (to be unbiased, they do discuss them in their blogs section, but its not the same). I have also not read about severe labour protection in Western Europe (refered to in a derogatory manner). Its only mentioned in passing, and more as a matter of fact than a judgement. But when you have India in a sentence, the correspondents seem to be bent on passing judgements, give vague allegories, and reinforce irrelevant stereotypes.

Sample this article in this week's Economist:
The article on Dharavi (its always Dharavi in the Economist and never Bandra Kurla Complex) begins with:
AROUND 6am, the squealing of copulating rats—signalling a night-long verminous orgy on the rooftops of Dharavi, a slum in Mumbai—gives way to the more cheerful sound of chirruping sparrows. Through a small window in Shashikant (“Shashi”) Kawale's rickety shack, daylight seeps.

And it ends with this:

It is 2am, and a violent drumming erupts outside Mr Korde's house. Booming in a six-beat rhythm, it ends in a crashing roll. This is repeated, again and again, rising as the drummers approach. The sound is thunderous. A few huge rats rush by the window, fleeing the noise like driven pheasants. And suddenly the drummers appear, parading through the slum, dragging on wheels a huge statue of Durga—a Hindu goddess, a multi-limbed and multi-coloured giantess, astride a tiger.

On the drum-roll, the processors pause, and golden flares explode either side of the statue. In every doorway, along the alley, slum-dwellers are watching in silence. It is a thrilling and dream-like sight. This is apparently quite normal in Dharavi.

What is he writing about? There are more important issues, whose importance does not need corny allegories : Genocide in Sudan, or how Belgium was irresponsible for Rwanda, or even the fact that US is responsible for the Middle East, and the damage to Iraqis. India, I believe, is an easy target for the magazine.

Echoing this sentiment is this article from The Indian Economy blog.

The magazine's analysis is fairly poor when it comes to emerging economies. It invariably is mostly about what was (projected as what predominantly is), and very seldom good analysis of what can be or how it can be. I guess the Indian media have to take over. Mint and Business Standard are starting to show good columns, analysis, and well-educated writers.

And this blog incidentally turned 3 yesterday. Happy birthday!

Shanghai, Dubai, Mumbai or goodbye

2007-12-20T09:19:00.000+05:30

From the New York Times, in the context of Morgan Stanley taking a 9 billion USD hit. China bought into Morgan recently. I have to admit it made my day!

But he also pointed out that the bulk of the $9.4 billion loss occurred on one trading desk and that other areas of the firm, particularly the investment banking, asset management, retail brokerage and hedge fund servicing businesses, performed well.

As for the investment from China, Mr. Mack framed the transaction not as a desperate act but as a strategic move. And he refused to concede that Morgan Stanley was a weakened firm. “We remain bullish on Morgan Stanley’s significant growth potential,” he said.

Still, the investment shows how reliant Morgan Stanley and Wall Street are on foreign funds and gives additional credence to the joke now circulating on trading floors: “Shanghai, Dubai, Mumbai or goodbye.”

Should India have a sovereign wealth fund?

2007-11-18T13:12:00.000+05:30

Sovereign Wealth Fund: Investments made by countries in global assets through their foreign exchange reserves, or other low-yielding assets.

So India has USD 230 bn of foreign reserves. What should it do?

Should India use it for infrastructure finance?

Lets assume (proof follows) , with such dearth for capital, India should invest in infrastructure. Which only begs further questions like: Do you want more public money to go into areas which should ideally invite private enterprise? This question assumes importance, because as history is proof, public money poured into state owned corporations have been used inefficiently, we have no good way to measure the quality of work, it discourages competition and new entrants, and there are multiple cases of corruption. More importantly, there are governance issues (conflicts of interest) when you have a government which is the doer and the regulator.

On the other hand: Shouldn't the government invest in developing the country?

Since it seems logical that reserves can be channeled to finance infrastructure, the question then boils down to how to use this to create efficient institutional mechanisms so that:
1) Private enterprise and competition is encouraged as much as possible.
2) Government assumes a largely regulatory role and does not get into management.
3) Long term projects are executed well, and appropriate bankable contracts and risk-sharing agreements are put into place.

The Deepak Parekh Committee report on Infrastructure Financing has some interesting starting points (refer page46).
1) Monoline Credit Insurance: Start an entity which will cross-guarantee the debt that the infra firms take; This will improve the credit rating of the firms and improve bankability of the project by reducing long term costs of debt, or by giving access to long term debt which would be otherwise inaccessible.
2) Externally focussed investment arm: Start an entity which invests in ancilliary industries abroad that would be suppliers(/supply processed material etc) to the Indian industries and so on.

Although the report has hinted at governance issues, I do not know if there has been any positive step in this direction. It is also surprising that there is no active debate on this, or even articles on this issue in the Indian press.

Should it be invested in risky assets?

This is the title rephrased. When we have USD 230 bn, should we seek returns on that ? What is the philosophy behind reserves management? Who does it belong to? How much risk can/should the central bank take on the reserves? Should the central bank seek higher yields on the money? If yes, it means the central bank will be taking risks, it will be making bets in global markets. Potential losses come along with it. Is this sort of betting in the interests of the nation? The question may seem irrelevant now, because with the credit slump, domestic money is being parked in the risk-free category: Government bonds and bills, where our reserves are. So we should be gaining on the reserves in the credit slump. But account for USD depreciation against the rupee, and ask again. Then, if not US Govt bonds, then UK/Euro Sovereign bonds, still "risk free"?

China's sovereign fund lost a lot of money on Blackstone, and invested in Barclays (expecting to gain on the ABN buyout offer); both of which backfired. Blackstone IPO was the worst performing for the year for a while, and with the credit slump being what it is, Private Equity is adversely affected because of its reliance on leveraged transactions. About Barclays, the management nicely pulled out of the deal stating overvaluation reasons. Stock collapsed. So are there lessons to learn? Accepted that PE is a high risk asset class, but then where do you draw the line for a sovereign fund?

One thing seems clear: Prudence cannot be less emphasised. The more the better. The case seems to be: When you have the poor and the hungry in your family, would you go gamble your money? You may win, but is it worth the risk, because the downside is pretty costly for the country to take? I would like to see discussions on these issues in the Indian press.

I found a nice blog on the Indian economy, and he seems to be interested in pretty similar stuff that I am.

Gene Golub no more

2007-11-17T08:00:00.000+05:30

Prof Gene Golub passed away today. He was one of those people that made me feel coming this far was worth it. The always cheerful, smiling, fatherly and calm person shall be fondly remembered. He would smile at any question, and teach beautifully at this age. I saw a few students take his autograph on his "Matrix Computations" and thought of doing the same. Now it is too late.

Check out the comments on genehgolub.blogspot.com

Gene, you rocked!

Kannada film music

2007-11-11T23:32:00.000+05:30

Thanks to youtube, I am hooked onto the song 'Ninnindale' from the movie Milana. Long time since Kannada songs were this good in lyrics, music, singing, and decently peppy camera work!

The woes of the Fed

2007-11-10T07:52:00.000+05:30

Speaking of the woes of central bankers, US currently is at an interesting juncture. With the dollar declining, their exporters are making merry and trade deficit is declining. But add to this the fact that imports are getting more expensive and products are getting more expensive due to this, and you have "import inflation". Add to this further that crude oil is at $96 and has grown since $70/bbl levels in 2 months, you have a higher threat of inflation (recent numbers though show that this has reduced crude demand and so has had limited impact).

Keep in mind that the threat of recession looms, and inflation threats persist. What should the Fed do?
Scenario 1: Cut rates - Inflation increases; you saved the economy, but the consumer is complaining.
Scenario 2: Increase rates - Inflation is controlled; but the economy slows and goes into deeper recession -> you have the entire world complaining. Interesting. Shouldn't you have two policy instruments to control two different things?

Bank of England and the Credit crunch

2007-11-09T14:44:00.001+05:30

Interesting article on why and how the Bank of England failed to protect the interests of the UK financial system when the credit crunch broke out. The writer accuses Bank of England of multiple "charges".

Of particular interest was the run on Northern Rock Plc, which had to eventually close down due to lack of funds; something which UK had seen only in Victorian times. While the developed world went through a liquidity crisis, banks in India had so much liquidity that overnight rates were dealing at 0.25% (per annum rate mind you! - before the 31 July policy review). What an irony! RBI is still struggling to prevent inflows. Banks are puffed with cash and RBI has increased the cash reserves requirement twice during the last 2 months, currently at 7.5%. With huge capital inflows, M3 (monetary stock aggregate) growth rates are higher than targeted (~18%). On the one hand, it cannot ask the government to impose barriers for capital flow since it will be viewed as a regressive step in a liberalizing economy; on the other, the central bank has only few tools to handle the liquidity - issue bonds (under the Market Stabilisation Scheme (MSS)), or raise cash reserve requirements of banks. The MSS is meant to suck out the money released through RBI buying dollars, that is to "sterilise". But the cost of servicing the bond is borne by the Government. So the GoI sets a ceiling on the amount of MSS outstanding that RBI can have. Needless to say, even this ceiling has been revised in recent times, once going up from 1.1 trillion Rs to 1.5 trillion Rs and again increased to 2 trillion Rs in the recent review. And as to the cash reserve requirement, people compare ourselves to China where identical reserve ratios are at 13%. High reserves mean that there is money with the banks, but they are not authorised to lend it out. So it is of no use, and lies with the banks. Only if the country faces sustained capital outflow will the central bank have to lower the reserve requirements. But usually countries are only on one side for a considerable period of time. RBI's only hope is rupee appreciation which would take away the nice cosy yield of Indian assets from a FII viewpoint, but pray that the appreciation is slow and gradual enough for the economy to adjust. Incidentally, even with rupee appreciating at 12% since January, export growth is at a healthy 19%. But it seems to me that this growth is coming from the large players who can hedge themselves with banks, while the smaller fish which employ a lot of people are affected. In economics, averages matter little. The distribution matters more than the average. More export sops and fiscal incentives are the only hope to small exporters.

All the noise of a sliding dollar could lead to further capital inflows - FDI and PE in India doesn't seem to have slowed down due to lack of credit, and domestic demand is ever-increasing. RBI's task could only get tougher. The only beneficiary is incumbent governments. Well on the path of liberalisation, the country is getting enough attention globally, and gone are the days (?) when we had to conduct programs to attract investment from abroad, plenty of liquidity, and high domestic demand and growth rates. All the negatives: inflation, excessive credit growth, multiplier effects of high M3 growth rates, all these are borne by the central bankers.

Excerpts from the Bootstrapper's bible

2007-11-08T05:02:00.000+05:30

I am a bootstrapper. I have initiative and insight and guts, but not much money. I
will succeed because my efforts and my focus will defeat bigger and better-funded
competitors. I am fearless. I keep my focus on growing the business—not on politics,
career advancement, or other wasteful distractions.

I will leverage my skills to become the key to every department of my company, yet realize
that hiring experts can be the secret to my success. I will be a fervent and intelligent user
of technology, to conserve my two most precious assets: time and money.
My secret weapon is knowing how to cut through bureaucracy. My size makes me faster
and more nimble than any company could ever be.

I am a laser beam. Opportunities will try to cloud my focus, but I will not waver from my
stated goal and plan—until I change it. And I know that plans were made to be changed.
I’m in it for the long haul. Building a business that will last separates me from the
opportunist, and is an investment in my brand and my future. Surviving is succeeding, and
each day that goes by makes it easier still for me to reach my goals.

I pledge to know more about my field than anyone else. I will read and learn and teach.
My greatest asset is the value I can add to my clients through my efforts.
I realize that treating people well on the way up will make it nicer for me on the way
back down. I will be scrupulously honest and overt in my dealings, and won’t use my
position as a fearless bootstrapper to gain unfair advantage. My reputation will follow
me wherever I go, and I will invest in it daily and protect it fiercely.
I am the underdog. I realize that others are rooting for me to succeed, and I will gratefully
accept their help when offered. I also understand the power of favors, and will offer them
and grant them whenever I can.

I have less to lose than most -- a fact I can turn into a significant competitive advantage.
I am a salesperson. Sooner or later, my income will depend on sales, and those sales
can be made only by me, not by an emissary, not by a rep. I will sell by helping others
get what they want, by identifying needs and filling them.

I am a guerrilla. I will be persistent, consistent, and willing to invest in the marketing of
myself and my business.

I will measure what I do, and won’t lie about it to myself or my spouse. I will set strict
financial goals and honestly evaluate my performance. I’ll set limits on time and money
and won’t exceed either.

Most of all, I’ll remember that the journey is the reward. I will learn and grow and enjoy
every single day.
-------------------
You donʼt have to quit your day job. But you do have to get out there and do it. The more
you do, the more you do. Doors will open. Opportunities will appear. Your model will change,
your reputation will increase, you will become a magnet for smart people, good customers,
and investors. But none of this will happen if you stay inside and keep planning.
Build your business. One day at a time, one customer at a time. Lower your downsides, focus
on the upsides, and start building. But start.

Read more

How to know if you may be a quant?

2007-11-04T04:39:00.000+05:30

Found this amusing article on "How to know if you may be a quant? " This is from Prof Andrew Lo (MIT) webpage. Check out point 8. How many do you know in the list? My score is 15. Whats your score?

Social Networking for low skilled labor?

2007-11-04T01:08:00.000+05:30

Away from the busy-ness of finance, I am back to doing what I used to do at IIT - read tech blogs and watch Web 2.0 evolve, with crazy stunning ideas coming to the fore every other day. You always tend to associate social networking sites with the likes of Google (Orkut) and Facebook, and the Silicon Valley. Bangalore, it seems, is far away. Or is it?

It happens that a certain tech savvy entrepreneur started a social networking portal for low-skilled workers in Bangalore. Do you want a plumber today in Yeshwantpur, but dont know where to get them? Or maybe a savvy programmer to fix your personal website? Log on to babajob.com. It has a database, oops, a social network, of people looking for odd jobs. It is interesting how you get them on board, but you have plumbers, carpenters and poor graduate students (?) looking for pocket money. Maybe not the last one, but you get the drift. I don't know how effective it is, but seems like a kick ass idea. I can see a thousand MBAs laughing it off, or arguing vehemently why it will NOT work in advanced strategy classes. But they never start businesses anyway, so lets leave them aside. With cities experiencing a lot of migrant flux, such a site would relieve you of a lot of burden. Don't write that off for the weird name yet, for all you know, in another 2 years, when you finish your MBA and land up in Kolkattan suburbs figuring how to increase soap sales, you will bless me for writing this blog. Web 2.0 is still not over. It is still breaking down information asymmetries and creating new markets.

Hat tip to PJ (Pradeep) for the link. The site itself is here

Just to mention, Google launched an open source social networking platform and Myspace is already in the wagon. Will Facebook be beaten ? That remains to be seen. Techcrunch reports. Here is the link from Google

Bloomberg podcasts on economy

2007-10-27T06:48:00.001+05:30

If you wondered what mechanism theory was, for which Maskin and others won the Nobel, you may read the Wiki. But dont you want to hear from Kenneth Arrow? Bloomberg podcasts rock.

In addition to formulating the impossibility theorem, Arrow was a meteorologist for the Army. He has recently been involved in global climate change, this year's nobel prize work. He has his take on global warming in the podcast.

Please download :) And you can forgive the interviewer's interruptions. After all, he has to make his money and take that air time.

On Monetary Economics and kissing!

2007-10-26T09:50:00.000+05:30

We had a seminar where George Papanicoloau talked about image processing and financial mathematics in the same breath. Its one of those things that make you think its good to come all the way here. Some things are truely interdisciplinary.

I did a course on Macroeconomics in my third term (or was it second) at IIM B. Then, I had a brief exposure to credit markets, and reread some of the stuff in analysing the "Current Economic Scenario" in the final term. I went to fixed income/money markets on a trading desk. Whats struck me again is the abject loss of knowledge when it comes to monetary policy, the widespread speculation that precedes every central bank move (without any necessary backing of data), both in the markets and in the classroom. Is monetary policy a science or an art?

The precise movements in economic variables are unknown. Monetary policy, therefore, seems fairly fuzzy, like avoiding a rock on the road ahead, in some fog. You have heuristics, crude tools and indicators and plenty of previous experiences, sometimes yours, other times of your friends. The question that has puzzled me is, can it be made a science?

If the variables can be modeled, and the precise causes of changes noted, it would be a relatively easier task. All we have are models that are incomplete in one form or the other, but inadequate when the economy changes structurally: some variable in the model is "exogenously determined" and it conks. I have had a hunch that economic variables can be modeled as differential equations, with one of the solutions being the current state and path of the economy. I do not think that these variables exhibit the richness found in even common turbulent fluid flow problems (that of a tap, for example), which are defined by a couple of differential equations of the second order. My guess does not come only from this notion. The kind of wave solutions to growth, interlocking cycles of growth, and inflation following with a lag, money supply as a control variable (read "forcing function" in the ODE context) rings a lot of bells. I would like to come up with something more concrete than hunches.

The current state of literature is fascinating, with mostly sticky-information (Mankiw-Reis) or sticky-prices (Calvo) models occupying centerspace in most literature. Since I didnt study economics formally, I am putting down a few things here so that I dont forget. The stylized facts against which most models are being benchmarked are:

1) Contemporaneous correlation between inflation and output is positive or zero
2) Inflation systematically lags output
3) There is persistence of inflation (inflation and inflation with one lag are positively correlated)
4) Money has no long term effects on real output (Short term stimulus possible) ? This is debated (non -neutrality of money)
5) There is no long run trade off between inflation and unemployment
6) Expectation of inflation plays an important role in today's inflation. Does that mean current expectation influences future inflation? If that is true, then current inflation is dependent on previous inflation expectations. Current growth and expectation of future growth also forms a role in influencing this decision.
7) There is the Keynesian notion of "trend" rate of growth and the "natural rate of unemployment". At these levels, inflation is nominal. At higher growth rates, inflation is higher.
8) The controversial quantity theory of money : Mv = PQ. Which way is causality? This must be the equilibrium solution to all models
9) Higher money increases inflation.
10) There are irregular aperiodic waves of growth and inflation(boom recession cycles). (Real business cycle)
11) The Lucas critique for money: An economy cannot promote real growth indefinitely by just printing paper money (without influencing prices). This is because money is just notional.

The current state of understanding is reflected in Mankiw Reis and numerous inflation dynamics papers

Now I have to go to more interesting stuff. Some kind of a kissing festival at Stanford. And its an annual event. I cant miss the chance. Its called Full Moon on the Quad. If you dont believe it, see this for yourself: and this. That should settle that ;)

Power Sector Private participation

2007-10-26T09:33:00.000+05:30

Something about Goldman and Mcaquarie acquiring (close to acquiring) a 40% stake in PTC Financial services, the power trading and investment advisory arm of Power Trading Corporation of India made my ears perk up.

Now PTC is a public private partnership venture to develop a power market in the country. I was beginning to think if the argument of non-Indian entities owning our infra assets is actually valid. Think of the following situations

You belong to country A. Country A and country B are equal in economic power/progress.

1> A's firms buy into B's infra assets.
2> B's firms buy into A's infra assets
3> There are no holdings either way.

Which one would you prefer?

I would think most people would answer 1 or 3. 2 is really rare, and would require additional explanation in most cases. Now what if A is weaker than B? What happens to the answer? While we may think PPP on the power sector is so-wanted, is it advisable to sell equity to foreign players. Is it not a "strategic" sector?

Having said that, it is also true that the situation of power in India is critical and liberalisation and deregulation, especially of distribution, is wanted. If there are foreign risk takers, while there is no appetite internally, then so be it. The age old debate continues. Given Indian risk takers, my decision would be skewed towards them. Is this nationalism versus globalisation? What would your opinion be? Answer them assuming you belong to A. Given the lack of long term equity capital in infra, foreign players would find it easy. Although I hope, sitting at the board of a power company and expecting high returns as a PE player would not squeeze the power out of the rural bulb.

Talking about power, what happened on the US-India nuclear agreement was disastrous. Forget the favorable terms of the deal. We lost a lot of face for further deal making.

Indian Caste system - An economic analysis

2007-10-16T09:59:00.000+05:30

Quick link thanks to the New Economist Blog:
> The caste system in India has been dated to approximately 1000 BC, and it still affects the lives of a billion people in South Asia. Why so persistent? A recent paper by Northwestern University's Kripa Freitas offers an explanation.

Here is the paper.

Abstract:

This paper formalizes a model of the caste system
to better understand the institution and the reasons for its persistence. It argues that the caste system provided a tool for contract enforcement and facilitated trade in services, giving an economic reason for its persistence. A caste is modeled as an information-sharing institution, which enforces collective action. Trade is modeled as a version of the one-sided prisoner’s dilemma game, where the consumer has an opportunity to default. Consumers who default on a member of a caste are punished by denying them services produced in the caste. Various features of the caste system like occupational specialization by caste, a purity scale, and a hierarchy of castes are shown to be equilibrium outcomes that improve the efficiency of contract enforcement. The implications of the model are tested empirically using unique
census data from Cochin (1875), Tirunelveli (1823) and Mysore (1941).

The essentials of backpacking in Europe

2006-12-10T17:53:00.000+05:30

Cheap pizza at Railway Stations, Lonely Planet, warm clothing
(Not included in the photo: money, and first aid)
Above pic taken in Berlin Haupbahnhof

An update

2006-12-10T17:09:00.000+05:30

Cool things that have happened since the last post

1> Solo backpacked through Austria and Germany in 10 days. Places visited includes Vienna Salzburg Innsbruck Friedrichshafen Munich(Dachau) Berlin Heidelberg Stuttgart. Exactly in that order.

2> Stayed in Vienna with friends for 3 nights and attended the weekend opera titled La Sonnambula ("The Somnambulist"). I hope to write a review of the Opera experience as well. I also interviewed for an engineering position in Vienna.

3> Visited the Mercedez Benz museum in Stuttgart

4> Met a school friend after 7 yrs in Heidelberg with whom I went to the Merc Museum.

5> Met the following people on the solo trip:

Karlsruhe - 3 girls who were learning chocolate making in Dusseldorf and were on a weekend trip to Vienna and Innsbruck. One was Indian and is the franchisee of the Wrangler jeans shop at Forum.

Salzburg - 1 Austrian girl who was learning English and Geography and was planning to become a teacher. She walked me to the hostel for about 4 kms from the station and showed me the Christmas markets.

6> Spent a night at the Liege railway station. The station closed at 1:30 am and I was kicked out. I stayed with the other homeless people till my first morning train to Leuven. It was terribly cold in the open, I was tired but could not sleep. I could not even sit on the cold floor. I was also afraid of getting mugged and stuffed my money in my socks. Quite a night.

7> Attended the SinterKlaus breakfast at the hostel. This is the father of the Santa Claus.

8> Learnt how to read piano notes from Marie, the Belgian girl who stays 2 doors away. Maajor fundaes were acquired and a few hours were easily and fruitfully spent. She played the digital harpsichord reading from the notes and put fundaes on interpretation: Dissonance, building up, the crossing over of hands etc., Plus made me listen to a pro artist with the notes of the song by Felix Mendelssohn in hand. Strong.

In return, I put semi-equivalent fundaes on raaga, thaaLa, swara, and shruthi, and made her listen to sAma gAna lolane by Bombay Jayashree. She liked it more than brochevArevaru rA. Music also shall be exchanged, hopefully soon. Particular questions were asked about the sound of the 'shruthi pettige', and the pitch funda was clearly and easily understood.

Incidentally she studies medicine at the university and has practised the keyboard for 9 years.

9> Developed an excel macro model for price forecasting based on the book by Paul de Grauwe. It incorporates behavioral finance, and I am currently testing it for stocks. Lot of further work is required.

10> Now while I was traveling, my team back home put in a lot of effort for some competitions in IIMA. The team has made it to the top of the charts for overall best teams! The link is here. Please note I didn't have much work in this. So no treats shall be given.

11> Saw the movie The Third Man, set in Vienna. It is a murder mystery by Graham Greene. This was courtesy Mukka.

Now for the uncool thing: I have an exam on Tuesday afternoon. I have to mug. So long then.

Select detailed posts shall be posted in due course of time.

At Karlsruhe station: The three girls in the post.
Marie and Simon at the Sinterklaas Breakfast at the hostel
The Vienna Opera House

Mercedez Benz Museum, Stuttgart (Architecture is deceiving (Helical) and it has more than 3 floors)
Salzburg castle from the Weihnachmarkt (Christmas Market)

Current Music: Fantasie impromptu - Chopin :)

Guess the title of the photo.

2006-11-23T08:03:00.000+05:30

It is called 'The girls are wild about me' from Flickr. Particulary raunchy, I say.

About Aids in Africa and the need to create a blog "bubble"

2006-11-22T19:30:00.001+05:30

Topic 1: Aids in Africa

On the lines of Freakonomics, and from its blog, comes the research on Aids in Africa. Its an Esquire article, and is from Emily Oster, another UChicago economist with unusual interests. She has attempted to analyze AIDS in Africa. It is difficult to tract in the large continent, with some countries like Botswana having 30% infected (according to UN estimates which Oster has refuted.) The article itself is a good read though I dont know about the paper.

Her research leads to the following conclusions:

1> It's the wrong disease to attack.
AIDS spreads in Africa because people have a higher probability of actually transmitting it through sex. Many countries have higher percentages of other sexually transmitted diseases, which cause open sores on genitalia, thus leading to higher transmission rates for AIDS through sex.

2> It won't disappear until poverty does.
No, its not because rich people dont have sex. She opines that it is more from a cost benefit analysis - the number of fruitful productive years that you are gonna give up if you have AIDS.

3>There is less of it than we think, but it's spreading as fast as ever.

Topic 2: About this blog

People, I do believe I have a handful of readers. It would be interesting if we could have a dialog sometime. I dont have an agenda for the rate of page hits, but still if you could kindly drop in a comment with your name on the bottom, it would be helpful.

I mostly know the few people who read this blog, and I do think much of it may be interesting to one and all. Sometimes, the comments could add much value to my inane posts!

I have looked to start a healthy interesting debate on many occasion, but to no avail :(

I was thinking of the number of ways I have to popularise this blog. Start by:

1> posting the url on my orkut page. (and such other blatant advertising)

2> Comment with my blogger id after having logged in on eminent blogs.

3> Spread the word that my blog is gaining page hits at a very high rate, and I have received lot of invitations from newspapers and asian blogger groups to join them. (create a blog "bubble"!!)

I will try the last one, though.

Carnatic music

2006-11-20T00:26:00.000+05:30

Listening to Carnatic music on musicindiaonline.com. Thought I should put the vernacular lyrics down, but I won't. You can read it online. I am currently listening to brochevArevaru rA. The translation of lyrics and meaning is here.

Artist: Subbulakshmi M S
Ragam: Kamas
Thalam: Aadi
Composer: Mysore VasudevAchArya

And to think that the vernacular in India is dying pains me.
------------------------------------------------------------
My diction is inadequate even to praise and sing your story, I am in such a poor state. Please clear my worries and grant my wishes and save me.

Friedman: A Relook

2006-11-19T02:31:00.000+05:30

Found this video summarizing Friedman's thought on CSR, the much bandied about term in business circles these days: The urge for businesses to be socially responsible and relevant.

An article of the exact connotations, I fondly recall, was prescribed for the BGS course, first module, first term, by Prof Rajeev Gowda. Have fun.

Re-edit on 20th: Had sent this video link to Prof Gowda and got a swift and typical Gowda-esque reply: "This is cool!" Makes me feel that the effort was worth it.

Milton Friedman passes away

2006-11-17T04:30:00.000+05:30

The news is just out: The grand old pioneer of the Chicago school and the pioneer of the monetarist school breathed his last. NYT has a good tribute.

I remember Prof Vivek Murthy's fascination with the ideas of Milton Friedman, the rigidities in the labor market contributing to the long term vertical Philips curve, and the monetarist paradox explaining deviations from the predictions of the short term Philips curve. My fascination with Friedman only started then.

Friedman's original thoughts leading to revolutionary changes in the way Govt policy affects national economy, and ultimately the health and prosperity of the society got him the Nobel Prize in Economics in 1976. (and to think that I was talking abt regulation from a game theory perspective recently only makes this more relevant for the blog). This was of course followed by a series of Nobels year after year to the UChicago and MIT economics schools.

Friedman was also instrumental in moving the Bretton Woods exchange regime to a freely floating regime governed by free markets. He was also instrumental in South American turnarounds in Chile under Pinochet.

To summarise, if I understand right, Friedman's thoughts
1> Govt policy for demand stimulation can only do more harm than good. Let the markets take care of themselves and of the society.
2> Govt policy from a money supply perspective is important since it affects inflation.

From a Vivek Moorthy's RBI paper online:
Milton Friedman's (1967) natural rate (of unemployment) hypothesis: there is no long-run trade off between growth (or unemployment) and inflation, although there is a short-run tradeoff. The combined long and short-run responses of an economy with a natural rate (i.e. supply) constraint imply Friedman's (1967) monetarist paradox: an easy money policy leads to high interest rates and vice versa for a tight monetary policy.

Milton Friedman was the G O D of gods. In the way he might have liked to say, capital G, capital O and capital D. My total respect and humble salutations.

The Indian Economy Blog has a few video links.
---------------------------------------------------

Russel Crowe as John Nash in the Beautiful Mind:
"Find the truly original idea - that's the only way I will ever distinguish myself - it's the only way I'll ever...matter."
"I don't have time for these classes and these books, memorizing the weak assumptions of lesser mortals."

Art valuation- a model

2006-11-15T21:30:00.000+05:30

The inspiration comes from a NYT article titled: The art of pricing great Art. You would normally consider this as a specific case of asset pricing, but there are some problems:

1> Normal pricing or valuations derives fundamentals from future cash flows, or income to the owner. You cannot price art this way, because there are no income streams from art. (Talking of collectors, not museums, or other rent mechanisms)

2> You have a benchmarking mechanism in most cases: Valuing stocks and securities- you have comparable ratios, comparable companies etc., For firms as well, you know recent M&A valuations for comparable firms and industry benchmarks. The problem is not of pure liquidity: it is not only because a piece of art is traded less frequently than securities that it is difficult to value. It is also because there are no benchmarks whatsoever. The same artist can be traded widely, or the same art can be valued differently at different times.

So what is the true value of art?

The author draws attention to a study where he points out that painters come up with their best art either in the early beginning or late years. Yes, there are anomalies; but they are just that - anomalies. So the painter has a single peak age of outburst where his art will be valued high.

I can think of a simple polynomial model of the form

P = a - b*(Age - h)^2 + epsilon

Age = age of the painter when painting was produced. This curve has single maximum at Age = h; the artist's prime age. epsilon, of course, the random term. Parameters a, b, and h can be estimated by regression data. We know prices of art that has been traded, the age of the painter when the painting was produced. We need a few paintings to regress and find how significant this is.

a itself is the maximum price that has been paid among all the painter's art, and b is how significantly fast or slow the painter's inspirations and growth were. Since we may not have a lot of data points, we can examine epsilon's normality (which is assumed). If it is more normal and mutually independent, then we can be more accurate abt the valuation.

Epsilon, itself, can be interesting. It is logical that epsilon is autocorrelated or a function of P(i-1). In the sense that, the price at which a Botticelli was sold last time determines the price it is sold now. Collectors have memory, and they would price an art which is currently popular at a higher level. Epsilon could also be subject to clustering (remember vol clustering?) where recent high valuations of a da Vinci will bump up any daVinci around. This probably can be examined post release of the daVinci code. I dont know if art collectors considered the book to be popular, but I am just giving leads.

Any comments?

A revision of Game theory

2006-11-15T21:15:00.000+05:30

As I was thinking about the problem of solo backpacking versus travelling in groups, I realized it is a subset of the problems concerning Nash Equilibria. Or rather, disequillibria. If any of the parties in a backpacking trip has a payoff significantly different from the rest of them, then he has an incentive to deviate. And go off on his own. Thus Nash equilibrium fails to exist in this case. Further thought left to the readers.

I was beginning also to recollect what Prof Rajeev Gowda wanted to teach in his Business, Government and Society sessions about the need for Government regulation. When there is a problem of the commons, free markets bring about suboptimal social outcomes. Government regulation is extremely important in this case. This is also the case when Nash equilibria is not unique, or does not exist. Government regulation drives towards Nash Equilibria in the case when there is a problem of the commons. (Fondly recall a train discussion with Mukka abt Indian Govts protectionism on free markets, limited capitalism, etc., The question was: Will India ever reach the state of development of Europe? In public transport, etc)

Interestingly, regulation also prevents Nash equilibria in some cases. It skews payoffs so that the equilibrium is not reached. Specific case is the Competition Law. You do not want companies to collude in a free market environment. Collusion is Nash equilibrium but socially suboptimal. So, competition law (anti trust laws, M&A regulations etc) prevents this sort of equilibrium to be reached.

Any comments?

Parisienne walkways - 2 and Italy

2006-11-15T18:36:00.000+05:30

The second day in Paris, October 29th, was dedicated to the Louvre. Friends coming from Paris time and again had told me that a day in the Louvre is a minimum and a must. It was easily the highest point of my stay in Paris so far. I am yearning for a second visit. And to say that I could not visit the Musee d'Orsay (paintings from 1850s onwards), I am disappointed. All the time I spent in the Louvre was spent in the French paintings section on the top floor. 4.5 hrs and I had to rush at that. I had seen Flemish masterpieces in Brugges already. There is much scope for learning art history. I only know and have heard names. Its a delightful thing to sit in the museum and stare at stuff you are enchanted by. You dont even have to be an art buff.

I caught the metro to Gare du Lyon and caught the train to Lausanne at 5:40 pm. Train reached Lausanne at 10 pm. Train to Rome was at 11:20 pm, so I began chatting to the guy next to me on the platform. It turned out to be quite an interesting conversation.

The chap was an Italian who was working in Paris since Jan 2005. He was on his way driving to Rome for a meeting. As bad luck would have it, he oversped, and worse than that, he got caught. Polizie fined him, took possession of his car for 2 months!! Now he had to be in Rome that day, so he was taking the Paris-Lausanne-Rome route just like me. Now, we started talking about Italy, and India and things obviously drifted to the equilibrium where both of us were comfortable: the common things abt Italy and India. We started with Fiat. I was under the impression that the Fiat group was pulled out of bankruptcy chiefly because of the Punto. He was nodding and explained to me that they started raking in additional revenues from other divisions, and also closed down Fiat Aviation (I didnt know that Fiat Aviation existed). He told me that he was working in Fiat before he quit and joined a auto components manufacturer in Paris. More surprises were in store. We talked at length about auto components manufacturing in India, Chennai, and markets. He was evidently impressed by what he called the 'success' of Piaggio in India (which I refuted) and might consider India for manufacturing. It turned out, also, that he was a CFO at the Paris firm! Rather, Directeur Administratif et Financier at Allevard Rejna. Ah, talking to CFOs while stranded on Swiss railway platforms at night is quite different from clamoring for attention from HLL execs in crowded IIM alumni parties and banquets. The conversation drifted to manufacturing in China, and I was fresh from International Finance. So we were soon talking abt RMB revenues and EUR/RMB Forex risks and hedging! Anyway, he said they borrow RMB straight from China for financing, so that settled it. (RMB is pegged to the US Dollar, so they would have to hedge EUR/USD really. It was an interesting conversation really)

Alberto Marastoni, as his name turned out, advised me not to come to Europe for good. As he ominously said - Europe is not called the Old Continent for nothing - low growth rates, and labour issues make it difficult for business. The future as he saw it, lay in China and India. He said the people he had posted to take care of the Chinese operations in Shanghai were very happy with the culture and resources and had settled there for good. We spoke also about Austria and he said the Germans and French were quite distinct - Germans are noted for strict authority, and respect for hierarchy, while the French were more like the Americans, or the Brits. Austria belonged to the former category.

All this elite conversation happened in the midst of his constant cribbing about his obstinate wife (he said so, in so many words). Strong conversation, at the end of which, we exchanged cards and I pitched about the indian education system, and IIMB. I am sure that IIM grads wont need his job offers, but building brand equity is always good. The Rome train rolled by on the platform.

I reached Rome next morning to the waiting gaze of the three from Bordeaux: Hari, Swaroop, and Shashi. After expressing mutual love and affection, Hari gave me a quick guided tour of the Roman Forum, the ruins of 2000 yr old Rome. Antiquity, stone ruins, Church taking over 'Pagan' temples, are the keywords. Colloseum also happened. I wont say more lest it may be travesty. After a long stroll, we had a Pizza (stuff sold by weight: 2 Euro /100gms), got lost, reached the Trevi fountain, presidential palace, passed by innumerable fountains that form the Piazzas, and met the other two at the mutually agreed place: Piazza di Spagna.

The next day we went to the Vatican museums including the Raphael rooms. High point: The Sistine Chapel. Michelangelo. The Last Judgement. The Creation of Man. I am being silent because it is impossible to describe the feeling of standing in the Chapel and stare at art with a gaped mouth. It is so around you that you are overwhelmed. Pictures, cameras, movies, all of them fail. We could possibly try with a 3D movie. This was the quintessence of Europe. Italy and art.

From Rome, we went south to Naples, stayed overnight, debated business plans, Adi Shankaracharya and monism, love, life, Einstein, Gauss, String Theory, and Irodov under the stars. In hindsight, it only reflected the lack of knowledge in any of the above. We saw Pompeii the next day and left to Florence. Florence was of course, the very heart of Renaissance. Hari and moi put trip to the Uffizi Gallery. I will only stop by saying that it is one of the must dos in Italy. It is overall missable in Europe, but you can be excused only if you do the Louvre for a couple of days. From Florence, we went to Pisa, the modestly looking Leaning tower, and then to Genoa. We hung around the sea for a while, sat down at a nice jetty structure on the port, and chatted for 2 hrs. After some elementary coca cola snacking, we caught the 4 30 ish train to Nice. We caught the overnight train to Bordeaux, from where I went to Paris and then to Brussels. Then Leuven, home. Quite an extended weekend.

ps: I wont mention abt that famous da Vinci painting here. It will corrupt the quality of the rest of the art mentioned here.

As they say after long documents: Appendix

Church of Marie Maggiore

Monument of Vittorio Emanuelle II

The temple of Saturn (?), Roman Forum

Francois Biard - Magdalena Bay

Flemish perspective paintings: Hendrick Steenwyck (deliberate asymmetry in photo)

Tour Eiffel

Georges de La Tour - Magdalene of the Night Light (Carravaggism - skull representing the death of Christ)

Indian Economy Round up

2006-11-12T03:31:00.001+05:30

Found this Indian Economy Round Up in the Hindu. Normally I don't mark such things, but this is an extremely well written article. Comparable to the Economist or FT's Articles on the US economy.

Notre Dame from the bridge on Siene

2006-11-11T21:31:00.000+05:30

I am bad at shooting video, so you will have to tolerate my lack of skill.

Cathedral Notre Dame Facade

2006-11-11T21:21:00.000+05:30

Parisienne walkways

2006-11-11T19:50:00.000+05:30

So this one took time coming.

The last weekend of October was the first time I could take off from Belgium. Hari and co had informed me on Monday that they would want to do Spain. I said I was in anywhere they go over the weekend. By Wednesday, they said they had more time, and wanted to do that holy source of art called Italy.

The initial plan was to meet the group in Nice on Friday morning. Then we would take the train to Venice along the riviera. And then, lo, Italy. To reach Nice, I left Brussels by the 5 40 pm TGV Thalys to Paris. I got the reservation done in Brussels. But the helpful lady at the counter told me that she could not book that night's Paris to Nice train in Belgium. I had to do that in Paris only.

I reached Paris Nord promptly at 7 00 pm. I had to book the train to Nice and stood at the counter. The lady at the 'English' counter told me that the train to Nice that night was impossible. Then, I enquired about any train going to Venice directly, and she said they were full too. Then, I enquired about Milan, and they were full. I asked for Rome, and she said the next possible train was only on Monday. She told me to pack my Italy plans and throw them since it was impossible to reach Italy over the weekend. It was still Thursday night 8 30 pm. So I would be stuck in Paris, so to say, alone for a weekend. I initially thought it would be fun, but only if I could find accomodation. Dugar and Nikhil 'Razz' Rajmohan had to be in Paris, I hoped. I had their address, and walked across to their place using a map. It took all of 15 mins. But, as it turned out, they were out for the weekend already. So, there I was, in Paris alone at night 9 pm without accomodation. I walked back to the station, and took out the bible: Lonely Planet. After some reading, I squared in on one of the Auberg de Jeunesse (hostel of youth) which LP claimed was the largest hostel in Europe, with multiple storeys. There was also an agency which LP claimed could find accomodation 'anytime', but it wasnt true. It was 9 25 pm and they close at 5 pm. The Auberg de jeunesse I chose was far away, tucked deep in South East Paris. As I would discover, I had to change 2 Paris metro lines to get to Port de Bagnolet and then walk for 5 mins. But that was my only bet at finding accomodation on a weekend night in Paris. And it thankfully worked.

After a brief talk with the ultra-beautiful girl at the reception, I was handed the keys to a dorm room in the third floor. I went up, and after brief reading of LP, decided what to cover the next day in Paris. Then sleep happened.

When I woke up, the Chinese, black guy who spoke English, and the other French guy had already disappeared. It was 7 30 am. After a quick breakfast at the hostel, I headed out. I reached Gare du Nord and pained the lady at the counter. This time I said, give me the earliest ticket going to anywhere in Italy (preferably Rome). I was handed a Rome ticket for the Saturday night train via Lausanne. It was Friday morn 9 15 am. So I had 2 days in Paris. The main attractions of Paris were covered that day. Highpoints were the Sainte Chapelle, Royale Palais and Eiffel tower in the night. Photos are on Flickr. As it turned out, the Royal Palais was hosting a modern art exhibition that happens once a year for a week. The Frenchman in front of me in the queue said I shouldnt miss it, as even Parisians consider it a must. Fee: 20 euros!. Heck, I was already in the queue. I paid and entered. I was satisfied at what I saw.

The above 2 pictures are long exposure shots on full moon nights. The entire lighting is moonlight, and it looks like afternoon. Photographer: Darren Almond

Love: White/Blue/Red; Waddington Galleries; Artist: Robert Indiana

Artist: Subodh Gupta

Landau Art Gallery, Canada

Artist: Andy Warhol (typical:which you can probably recognize even without seeing the name)

Many more are in my treasured laptop. Anyway, another interesting incident - As I was strolling along, I saw a good looking Indian girl with a bag doing the rounds alone. And the same rounds as mine. So after a while, made eye contact, and started chatting. Just to make it interesting and make myself eminently 'raggable' and look puerile, I will put it in conversational format.

Me: Hi, you are Indian?
Girl: Nods
Me: So.., you are from one of the IIMs or something?
Girl: Laughs and says no
Me: Ah, ok; There are many Indian students here from the IIMs on exchange programs.
Girl: Ok; So you are from which IIM?
Me: Bangalore
Girl: Oh, even I am from Bangalore; (smiles)
Me: Thats nice. So you are an art student or something?
Girl: No.. (laughs again)
Me: Oh, ok. So you are studying here?
Girl: No. I am travelling here. In France.
Me: Hmm... Good

And then a couple of lines, we bid adieu. No names, no phone numbers or contacts exchanged. As Vishnu angrily put it later, I had 'blown' it. I was unpardonable because even when given such a glorious chance, I had walked off. Had it been India, we would definitely have not talked. The thought of talking to a girl in India generally implies (in India) that you are hitting on her. Firstly, if she's 'good' (by Indian definitions), she would not speak to a stranger man. If she does, then she is called 'easy'. And the man is considered unchaste, and flirtatious. This girl was 21-22 and from Bangalore. The way the conversation was going, we could have peacefully chatted for atleast another hr. What had made me approach? The fact that she was Indian, and alone, definitely helped. Plus, I hadnt talked decently to a human being for the past 24 hrs. Plus, it was the Paris Art Exhibition.

Definite things to think about:

Is it wrong to approach a lone girl?
What constraints bind men to be attracted to only one woman?
Is it wrong to have dated more than one woman before marriage? (even with no physical relations)

This sojourn gets interesting once in a while. I am also aware that on the surface, my questions seem not worthy to think about. For many Indians, it is a foregone conclusion. Find one. Marry one. I have been forced into deeper excursions on this topic these days. Thought processes have been interesting.

(Particularly in the Indian context, it seems firm that people do not accept such thinking; or even think of it as libertarian, and debaucherous. On the other hand, it seems justified in India because absolute loyalty is ensured, and commitment is not questioned. Fundamentally, it seems that men should expect the same standards from their wives, as they subject themselves to. In that way also, Indian thinking is justified.)

Comments welcome as always. I will write about the rest of Paris and Italy in another post.

Blogging on Beta

2006-10-25T15:09:00.000+05:30

Boo Hoo! The God heard my plea! After all the hallaballoo about tagging, Blogger team gave me migration access today! Did they read my blog? Anyway, I can tag my posts now. In the meanwhile, I had gone ahead with the Technorati userscript but I was very unhappy with the results. I wanted something which I can browse my own posts with.

And now Blogger gives me click and modify layouts! Away with the CSS and HTML! I will shift but I will back this template. Good stuff!

Technology Upgrades and Indian flavoured business

2006-10-25T06:17:00.000+05:30

After all the jazzing up of the blog, I decided it would be nice to have tags on my blog. It turns out that Blogger has launched a Beta which does have 'labels' (they HAVE to call it differently: user experience and loyalty compel them to do so). The problem, however is that I will not be allowed to migrate now with the same blog.

I decided to explore other choices. But it soon occured to me that the webpages that Blogger publishes currently are written as static HTML and are idle till new posts are written. Thus, when Blogger does not provide me with online space, I cannot maintain a database file of tags and link blogs to each other. Its disappointing but I have to work with it.

In this upgrading spree, I also upgraded my Firefox to 1.5.0.7. and installed add ons and extensions. So far, it doesnt seem slower. With this, Firefox is proving better than Opera which I have been using as the primary browser since 5 months. The notes taking facility is replicated by the 'Clip' add on and it has a 'Sage' feed reader which renders post in a well behaved manner. These were two utilities I appreciated Opera for, and now that Firefox has it, I will be bidding adieu to Opera. In further exploring the tagging features, I found that I would have to run user scripts to modify my blogposting page to accomodate tagging form fields. For running userscripts, I also installed GreaseMonkey. Now, I can potentially tag the posts, but they will be in the technorati cloud. That is, I cannot browse my posts with the tags but I can browse what all other people of the world have written with those tags. Quite useless when I wanted tagging to be for better browsability of my blog. Since I do not have space on the web to put up a page where I can catalogue my posts, I have abandoned the project till Blogger comes to my rescue and grants migration to Beta.

I have also upgraded my del.icio.us bookmarks. New links are mostly on economics, finance, mathematics or computer science. You can find it on the sidebar. On the personal front, I am tending to reconsider the academic option post MBA. It is lot of fun to learn new things. I am doing courses on Game theory, economics of information, and even transition economics here and finding it extremely interesting. I am also trying to read up on my own, the historical development of economic thought. It is liberating to find yourself learning without pressure or fear of the future or of grades. Friends back in IIM are not that lucky. On a mathematical modeling front, I finished reading a book on Behavioral Finance modeling of Exchange Rates. I proposed to the professor about modeling stock prices similarly and he seemed interested. He has given me access to the basic model in Matlab.

I do follow Web 2.0 stories fairly eagerly. No I am not talking YouTube.This time, I am talking of niche social networking sites that have emerged from India: two of them Yaari and Minglebox. Considering that 1 in 6 people of the world is an Indian, it makes sense to have an Indian flavoured Orkut. Is Indian social networking different? Well, the sites could target the segment with more focus - Deliver Indian related content. With young adults taking to the internet and with rising disposable incomes, social networking looks like a damn good idea for a business in India. It would ride on the back of a booming economy (heard about 8% GDP growth?) and a demography fine tuned for such businesses. With VCs pitching for good ideas, capital is also not hard to come by. And with these Web 2.0 sites, more capital is required only for scaling. Seed capital is not much and is usually from 'bootstrapping' (Family, Friends and Fools- The three F's :)). Revenue models, however, are unclear. Subscription or ad revenue? Both or neither? It is an interesting question to be answered and the following years would probably keep these businesses occupied with questions like these.

On the downside, they would have made a better splash if they had arrived before Orkut. I fondly recall learning that in information economics, the first mover makes the most of the market, because of network externalities.("Winner Takes All"). It would take a good marketing machine to cause customers to switch from Orkut (because it has strong disincentives for switching).

Keeping this in mind, it seems odd that Prerna Datta is seeking to "grant access to the right kind of people". I do not exactly know what the ramifications would be. If Yaari has to get customers, wouldnt it make sense to open it to everyone based on invitations, rather than screen those invitations as well? Is it what Yaari is doing? Or is it brand building, and creating hype so that more people would want to join? I can clearly understand the invitation mechanism, but are the invitations also selective?

Kaveri Iyer of Minglebox has been interviewed on PodTech.net here. Another story is that of Guruji.com with the same theme: Indian flavour, but this time, a search engine. It imitates the simplicity of the google page and gives Indian related content. It is started by an IIT D grad and incorporate complex 'crawling' algorithms to identify Indian content. Or atleast, this is what I gleaned from my reading. It is also interesting to note that Sequoia Capital has funded $7m (they funded Google and YouTube).

CNN Money's Business 2.0 Blog just adopted the More the Merrier way. They have now rechristened it as "The Next Net" and are bringing many other bloggers into the fold. Continuing on the Indian theme, I found a desi - Saheli Datta who blogs on "Soft Gadgets and Hard Numbers" in the Next Net blogsphere. Her focus is on apps, user friendliness and utility.

Namur and Dinant - Oct 13th and 14th

2006-10-15T19:23:00.000+05:30

The following photo posts register my strong protest at Flickr, which has imposed upload limits on photos (for non-pro accounts: obviously makes business sense, but a customer can protest only by subscribing to its competitor's products). I uploaded on Picasa web albums as well, but after Flickr, I find it boring. This has led me to post photos on this blog.

Hope you find the following photos interesting.

October 13th and 14th saw Simon, Nandita, Nikhil and I (henceforth, us or we) travel to the Belgian Ardennes, the southern hilly ranges extending from Champagne in France to Germany to the East. We stayed overnight in the Youth Hostel at Namur, a picturesque place set on a riverside.

In the otherwise dull flat topography of Belgium, these parts educate us of Belgium's natural beauty. The region has seen several wars because of its strategic military importance and the citadels and destroyed forts bear testimony to the intentions of the incumbent rulers.

Ballpark Age: Namur Citadel: 1690s, Louis XIV; Dinant: Mid 1400s or earlier

2006-10-15T19:21:00.000+05:30

The cathedral of Dinant and the Citadel on the rock face

2006-10-15T19:19:00.000+05:30

The night in Namur (Leffe Braun and Kriek)

2006-10-15T19:18:00.001+05:30

River Meuse, Dinant (You can see the Notre Dame dome on the left)

2006-10-15T19:18:00.000+05:30

The couple and their antics

2006-10-15T19:17:00.001+05:30

River Meuse, Namur (Edited this photo on Picasa)

2006-10-15T19:17:00.000+05:30

Mulling over Trappiste Beer (Rocheforte)

2006-10-15T19:16:00.002+05:30

Let there be light, and there was light! (Tried this with a 5 second exposure. )

2006-10-15T19:16:00.001+05:30

Nikhil, Simon and Rachit, Namur Citadel

2006-10-15T19:16:00.000+05:30

River Sambre and Skyline, Namur

2006-10-15T19:15:00.000+05:30

Nandita, Namur Citadel

2006-10-15T19:14:00.002+05:30

Kiss

2006-10-15T19:14:00.001+05:30

River Sambre, View from the Citadel

2006-10-15T19:14:00.000+05:30

Natural shot - Namur Citadel, Simon, Nandita, and Nikhil

2006-10-15T19:13:00.001+05:30

Flower

2006-10-15T19:13:00.000+05:30

Autumn leaves and the park next to River Meuse

2006-10-15T19:12:00.000+05:30

Namur.

2006-10-15T18:50:00.000+05:30

Riverside Cafe Leffe at Dinant

The trip to Brugge

2006-10-01T22:08:00.000+05:30

Its a rainy Sunday night, and I returned just now from Brugge (1hr 30 mins). Before I forget, the expenses:

Return weekend ticket from Leuven: 13.40
Bus ticket in Brugge: 2.00
Wafel with chocolate topping and Mars on my way back : 2.80
Groendelend Museum: 5.00
Canal tour at Brugge: 5.70

Total expenses: Euro 28.90 (Thats a lot of money spent)

Picture of the day: T'Zand, Brugge

Room for further improvement, but for whatever it is worth, I produce a Sepia toned one here.
This is Centrum Markt, Brugge
The freedom of solo exploration is one which should be experienced. I am pumped up for more.

The story: Nikhil, Nandita and Simon decided that they were going to a beach town Oostende and wanted me to accompany them. As I was guilty of having spent a Saturday in Leuven, Sunday had to be productive. Initially having agreed to join them, I later changed my mind and decided that I would visit Brugge. The reason: partly because I did not want to visit beaches here for a whole day and the rest being because Brugge was in my mind for quite a while.

Brugge is another of those exceptionally beautiful town cities. Architecture and art dominant, Brugge (Bruges) is particularly famous for the art museums and the canal ways. Lonely planet claimed that the canal tours were a must, and so I didnt look at the cost. I must admit it wasn't a great experience. It was Belgium's way, perhaps, or imitation, of distant Venice. It does not work. What I gained, though, was an idea of the layout of the town.

I visited the St Salvator's Cathedral, and walked around the canal ways, and entered the Memlingmuseum. The museum is a part of Sint-Jan's hospitaal and houses some of the noteworthy paintings and works of Hans Memling (late 15th Century)- depicting the legend of St Ursula. The most striking piece was the St John altar piece - the richness of colour stunning and depiction so intricate.

From there, I visited the Groeningemuseum - the high point of Hayden the day. It traces Belgium's history of art - from Memling and van der Wayden to modern surrealist artists tracing art through the centuries. There are also representative pieces depicting the Last Supper from the extremely rare Laetham School of art. Too much to take in one day, with hazaar fundaes on the basic pieces of Christ's life - from the adoration of the Magi, to the Lamentation, and even the notion of the appearance at the Final Judgement, St John's vision on the Aegean sea of the apocalypse, his beheading etc

I havent seen such colour, and I must admit, I would have needed another 2 hrs to be satisfied with them. Even with all this, I had to be shown the door with the Groeningemuseum closing at 5 pm. I had also permits for the city hall and the arentsmuseum but they close at the same time. City halls are many and I would probably see them.

I saw another interesting piece of work by Joseph Suvee. Christened The invention of the art of drawing, it takes its inspiration from the anecdotes in Southern Europe, where young girls used to draw the outline of their sweethearts when they part, for war or otherwise, for the sake of antiquity.

The web gallery of art has this to say:

In the painting traditionally titled The invention of the Art of Drawing, Suvée tells the well-known story of the daughter of the Greek potter Butades, who draws the shadow silhouette of her lover. This rational, balanced composition can be seen as a symbolic illustration of the Platonic aesthetic theory that underpinned classical art - art as shade of reality.

In retrospect, I feel that the canal tour and the visit to the cathedral could have been avoided without much loss; although fundaes on neo-gothic architecture style were taken.

Points to further research on (note to self): Jan Provoost, legend of St George, St Catherine and her mystic wedding to Christ (?!), Laethem Group, Joseph Suvee, Emile Claus, constructivism.

ps:

For 'Da Vinci coders', I did see 'Saint' Mary Magdelene's portrait, holding what a cup (does not resemble the chalice). It was by the Flemish painter Ambrosius Benson.

Comments welcome

Watch my flickr space

Fountain overlooking the Belgium National Assembly

2006-09-30T18:41:00.000+05:30

Fountain overlooking the Belgium National Assembly, originally uploaded by rachitprasad.

Testing Blog posting from Flickr. It turns out that I will have to edit the size.

Assorted photographs

2006-09-25T11:46:00.000+05:30

Palais de Justice(?), Brussels

Cinquantenaire Arch, Brussels

Main Church at Leuven

Overlooking the National Assembly of Belgium, Brussels

Antwerp Cathedral

Outside the Antwerp Cathedral

Bistro near the town center, Leuven

Reached Leuven

2006-09-23T12:45:00.000+05:30

The flight to Paris was delayed by an hour. It would now take off at 3 15 am, so told my travel agent. After security checks and answering questions such as 'How did you get into IIT?' (The emphasis being on IIT), I waited at the gate for a couple of hours.

The Airfrance A330 took off on time (albeit the delayed one) and I thankfully had an aisle seat next to the window situated on the wing of the aircraft. The window seat was occupied by a Philips engineer Padmanabh Holla going on training to Headquarters Amsterdam. In flight entertainment was good with about 5 movies, and a lot of comics and games. It didnt matter to me since I slept through most of the journey, to be periodically awakened by the lady Indian akashvaNi alerting me on the lines of "seat ki patti dabake rakhe".

It turned out Charles de Gaulle (CDG) was thick in fog and the captain made a total instrument landing. I couldn't see the starting of the wing when he made the touchdown, and I am certain the pilot couldnt have seen the runway either.

At CDG, I changed to the TGV (The Thalys Aeroport CDG 2 TGV terminus) and arrived in Bruxelles Midi which is the South Station. From here on, I changed another train to Leuven, and thence took the number 2 bus going to Heverlee Campus and got down at Naamsestraat. To be brief, I met the housing service personnel and moved into American Hostel. I occupy room 230. Subsequent days have kept me busy with insurance, housing contracts and the like, most of it hardly any work.

Food is OK, obviously expensive, like anything here. Thankfully, people do understand what vegetarian is, and I have had bread, submarines, salads, boiled potatoes and the like for the last few days. The variety is commendable,vis-a-vis my life in HK. There is a Maharaja cuisine restaurant, with Pulao costing 13,50 euros. I'll have bread, thank you very much.

The town is a classy architecture laden university campus, with young faces all around. The pride of the town is the Stella Artois, one which I havent had the opportunity to try yet. They have one of Europe's largest breweries outside the town. The center is the Church, with the university departments, shops, eateries and the rest spread around arbitrarily.

Here's how I look :). I havent changed to white, really.

Here is one to business

2006-08-18T22:47:00.000+05:30

The list of links I promised. Some news are old. Bear with me. I am a busy man.

Indra Nooyi gets appointed as PepsiCo CEO. IIMC Celebrates.
Apple files patent for touchscreen.
Nature talks on the Future of Computing
When 99% of the world worries how to make money, here's Gates Foundation trying to figure out how to spend it. It will be an interesting case to see how charity of such unprecedented magnitude affects life. Buffett donated $31b of his money.
Credits to a IIT B female's blog (Amrita if I remember her name right): Google Trends compares searches. The classic comparison search: love v/s sex. Do look for India.
For all men who complain what women do in all ads, even shaving cream ones, here's an offbeat article about women's innerwear ads.

Internet Businesses

After an over-the-table conversation with my brother in law at a restaurant, I have been wondering deeply about the way Web 2.0 works. His question was simple: How does Orkut make money? The question of how to make money on the internet, Web 1.0 or 2.0 or whatever, is still open and the solution is not unique.

In this context, I found an interesting article in a prof's blog about how to make technical software open source, and still make money. Traditional, well-known, but a good laundry list.

Web 2.0, I realize, is just leading to a convergence of media, communication/wireless, internet and entertainment/gaming industries online. The rules of the game are being defined. And the student has much to learn.

Knowledge at Wharton had a strong analysis of the Music Industry (online). It was pretty much a solution to the case we had for the end term exam Strategy and Environment course in Term 3. Its a must read for all students of strategy.

Despite all the money, gaming is still largely for the geeks and the teenagers. NYT suggests positioning problems for the industry in this article.

CNN had the best Web 2.0 businesses captured on the moneycontrol website. And CNN calls it the World's Hottest Startups.

If you still don't get what I am driving at, then here is one for you. CNN Money takes on Jack Welch on his old rules.

Fun Find of the month

And after all this browsing, you still have a mood to play around, try Musiclens. Its one of the most user friendly, chic and innovative music organizers/players I have seen. You can specify the mood or quality, and it pulls up appropriate songs from its playlist. Its definitely worth a wow!

Shell Shocked

2006-08-18T22:38:00.000+05:30

Photo courtesy: NY Times: Sometimes you see the shell coming. But the shock leaves you reeling.

PJ of the day

2006-07-12T22:48:00.000+05:30

To my room neighbour who has been weakened by bouts of dysentry in the recent past

Me (naughtily laughing): Hey, How is your dysentry coming?
Hari: Oh Crap! Its going down!

Sandeep Singh gets PPO

2006-07-05T23:07:00.000+05:30

This one is about inspiration. Read the story of a guy from rural Bihar who is in the top 10 of IIM Bangalore currently and has got an offer from Citibank London (investment banking). I am unashamedly a fan. Though not a regular blogger, you should read this post, a vivid story-telling about his early life. Makes great reading. Even if you do not know him.

Mangwaar –> Madhupur –> Birpur –> Hazaribag –> Patna –> IIT Kharagpur –> Kolkata –> IIM Bangalore –> London

Hail democracy! Hail opportunities! Hail hard-work! Hail life!

Salutations to the principles that my Mom taught me ages ago; I seem to have forgotten them.

Collage of the Hampi tour

2006-06-24T00:58:00.000+05:30

While you can browse through the authentic photos on Puru's blog, I will leave you with a collage of photos from the Hampi-Badami-Pattadakallu visit. The B/W photo with me in it is courtesy Puru. The 18 hand naTarAja at the bottom right is a unique piece with 9*9 = 81 mudrAs of the bharatanAtyam described. The top right is the anantAsIna vishnu (the only vishnu on the nAga who is sitting.. compare ranganAtha) . Row 2 Column 1 is Lotus Mahal, Column 2 is the Elephant's stable at Pattadakallu. Row 3 Column 1 is Hampi Vijaya Vittala temple and then, of course the bAdAmi naTarAja.

Last week of May

2006-06-23T23:28:00.000+05:30

In the dizzing flurry of the last weeks of the internship, I failed to cover a few details. I will attempt to cover these in chronological order.

Final year days at IIT had seen me watching the Civil Engineering Documentary on Hong Kong. Thus, I was introduced to the longest rail-road suspension bridge in the world. Once here, I was disappointed that all the 7 weeks I had had to roam around the islands but never had reached the bridge. One fine night, I set out, after Zen's square refusal to accompany me, to the Tsing Ma (pronounced: Ching Ma)Bridge. I took the Airport Express train but got off at Tsing Yi station and then took a cab to the Lan Tau Link View Point. The pocket HK Tourist guide told me that this would remain open till 12 midnight and I was very hopeful about the place.

The first sight of the bridge was one of awe. It could have been of love, if not for the toll fee. I would have definitely stopped in the middle of the bridge and gaped around. It is 2.2 kms long and as you can see, quite fully lit in the night.
It was quite a scary experience as I realized there was no one around for miles of the viewpoint and no taxi stands/bus stands nearby. Tourists either seemed to have come as couples and they were very few in number. They did not anyway know the language. Thus perturbed, I walked to the security and dumbly explained to him my predicament. He wrote out cab and number on a sheet of paper and I nodded. He then called a taxi and signalled me to wait nearby. I stood dumbly and took a couple of pictures, one of which I use here.

I took the MTR back to HK Central Station and walked back home.

HK has a unique holiday phenomenon - On weekends and all public holidays, hordes of Filipino women collect to play cards, have lunch, dinner and make a lot of noise. They are to be seen everywhere - they spread out clothes, and bags on pavements, walkways and even main roads. Thus, the rear road leading to my office in Central is blocked and I can't take a bus to office on Saturdays. I have used a pic showing Filipino women assembled at HSBC building basement on a weekend evening

I submitted the final draft of the Quantitative Algorithm Trading Report to the VP (C) who was impressed with it. Whether it gets published in The Asset remains to be seen.

Back home, I rolled around for a few days and a casual comment by my Dad to visit Belur pricked me to consider it seriously. Thus, 4 days in Bangalore, I was already making plans to Hampi, the architectural paradise representing the Golden Ages of Karnataka, as it were. I did manage to contact Puru and off we went to North Karnataka, along with my cousin Sridhar. More of this later.

I am now on campus and the post I was thinking of is finally materializing. The fachchas (first-yr innocent lads/lasses) have arrived, much to the comfort of many of my batchmates. So the story continues. So is life reduced to a bunch of resume bullet points.

Lot of Honkies spent - but worth the pay

2006-05-14T19:54:00.000+05:30

Great weekend.

It all started with Zen's sudden absence. Last week, as I treated him in Bombay dreams, he was talking about having met his CEO "couple of times". Little did I realize that that probably meant that he was flying amidst the upper echelons of the investment banking community. Thus, on this Friday night, he was absconding, and he hasn't replied to any of my mails.

Having decided to make the most of my weekend, I left, armed with my camera to the Victoria Peak for a second trip, this time alone. The first trip was a washout because of 2 reasons: company
(too many people, and people with 'I want to tell my friends I was on the peak' attitude.), and no one was interested in walking beyond 15 minutes.

I took a cab up the peak and started straight away on Lugard Road. It is a 2.8 km fitness trail known as the Lung Fu San trail and has a stunning view of the northern coastline of the HK island and just across, the Kowloon peninsula as well.

I began my walk at 4:25 pm and kept walking from view point to view point, until I came to a smaller deviation where a sign said Pok Fu Lam Reservoir Road. Much enthused by the prospect of water, even the sight of it, I took a detour. Little did I realize that the road would end in a small park and a further hiking trail for another hour to reach water. I got into the trail, and soon faced directions which said the reservoir is 1.5 kms away. I had not eaten anything since the past 6 hrs and I was thirsty. Cursing myself at having lost an opportunity to buy water at the start of the walk, I turned back, and walked back up to the place where the detour began. It was 6 pm already and I trudded along sipping the liquid I went in search of, having bought the same at the detour intersection.

Soon, I had a clear view of the reservoir from above, and was delighted that I didn't continue on that trail. It is as big or meaningful as the one in Lalbagh.

The trip was a test to both myself and my camera. There was a thick layer of pollution in the sky and the cab-driver had already given me a warning. I could not get good pictures but anyway accustomed myself to the camera.

Walking alone is an entirely pleasurable experience, felt by a lucky few. Most people I know would rather sit at home with TV rather than go to the peak alone.

Having rediscovered my predilection for touring alone, I dared to explore Lan Tau today. Lan Tau has the largest outdoor bronze Buddha in the world. It is something like Deutsch Bank claiming that they are the best in credit derivatives in Germany. I mean, there would be only DB doing that anyway. After exploring the nearby Po Lim monastery, I went in search of the wisdom path.

The wisdom path is a series of wooden inscriptions that stands in the form of an infinity. Ironically, it apparently reflects 'nothingness'. The Buddhists traditionally believe that nirvANa, or 'salvation', is the state of realizing that there is no 'reality' or that reality is 'nothingness'. In the post- Buddha era in India, the Buddhists were called proponents of shoonyavAda (advocates of the Zero), but this is quite unrelated to the western concept of nihilism. There are multiple schools of thought within the Hindu fold, which more or less tend to the concept of the Buddhists, but are regarded as minor, because of lack of intellectual rigor. Few analogous Buddhist schools are prominently recorded during Shankara's time (Adi ShankarAchArya - refered to as Shankara in the philosophy brotherhood). One of them that I recall with reference to the shoonyavadis are the kshaNika viJNAna vAdis who argued that by nothing, they mean nothing constant. That is, they believe that life is a flux, and flux is the reality, so to say. To make it simpler, they would ask, 'Who are you? Are you the one who was born, the one who is now, or the one on the deathbed years later?' And the disciple would say, 'I am all of those'. And the master would laugh and tell him: 'How can you be all of those? obviously body has changed in form and content; and so has the mind. Then how can it all be the same?' And the student would realize kshaNika viJNAna.
More extreme schools exist within the Hindu fold itself. The most often regarded one is the one propounded by sage GauDapAda, years before Shankara. In his mAnDUkya upanishad kArikA, he propounded the idea that you are only fooling around saying there is reality. His whole argument is on the word 'is'. The idea is, there is no reality, and you are only imagining it. And so are you imagining that you are reading this article and so on. The confusion created by this, the degraded forms of mahAyAna Buddhism and the tantric practices it adopted in the eighth century paved an easy market, so to say, for Shankara's advaitha. VidyaraNya, the court poet and counsel of the Vijayanagar empire, records eulogically and conveniently in the Shankara dig-vijaya, that GauDapAda blessed Shankara as the capable person to further explain his philosophy. But Shankara takes the segment of the market that has no product and bridges it with much success. The Brahma Sutra's commentary begins with the statement : Thus, we start questioning/(getting curious) about Brahman. (athato Brahma jiJNAsa). Shankara starts by saying that, there is the belief that Brahman exists. So the discussion begins. I cannot claim to understand even one page of the commentary because of the technicalities involved. It can only be understood correctly in Sanskrit.

On the one hand, he proposes that there is only one reality, and it has no form, and on the other, he writes Bhakti poetry of the Reality with form to the masses, leading to renunciation and the like. Strikingly, Shankara's integrity and intellectual rigor stands out just as the dripping Bhakti poetry.

Coming back, I went to the Tung Chung Town Center, which has obscenely tall and congested residential buildings, the likes of which I have seen only 'artist's impressions' before. I took the MTR back to Hong Kong station and then walked back to the Indian Village where I had grub and I am back. All alone. Freedom.

MTR is a unique HK phenomenon. A tip must be paid. It is the superfast subway system that makes life comfortable for people in HK island and anywhere on the HK area. At central, it has three lines, going one over another. That is, it has three 'floors' beneath the ground. If you 'appreciate' engineering, then you would fall for this one.

(Just for the record, the cabs in HK are Toyota Crown Comfort. And they can make Amitabh Bachhan feel at home. I can stretch my legs and still cannot touch the front seat.)

Far away, in a distant land, my friends are meeting in Chennai, and are treating themselves to GRT desserts while I am going hungry. And I am burning. Even as I had my food today at the Indian Village, the 'Baghon mein bahAr hain' song reminded me of Ravi's imitation and irritation at the female saying 'Na na na ' when the guy asks 'Tumko mujhse pyaar hain ?'. And to think, all the old wingies may as well be watching a movie is a disaster. I am going to forget it all by burying myself in sleep.

My flickr photos can be accessed here. Please note that my parents can also access the photos. Exercise prudence. And dont forget, Satya Smriti does not exist on Flickr.

Thus I came, I wrote and I slept.

On my first Camera

2006-05-13T20:05:00.000+05:30

Warning: Owners of some cameras may be deeply offended. To them, I would like to say that, if you do happen to get offended, this post is on my camera that I bought with my first salary and on my blog. I mean, you can still get offended. Its a total brag-and-rip-apart post a la South Park.

I bought a digicam on 6th May. Its a Sony DSC H2 - a 6 MPix with t-w-e-l-v-e X zoom. I am shooting stars these days. If you want to jump to direct specs, here it is. Pics of the camera can be found here. Price: 3340 HKD. Place of purchase - Mong Kok.

My Purpose of buying DSC-H2: Learn photography.

The camera is exactly positioned for the user who wants to go semi-pro to pro, with all features to learn, and fiddle with. At the same time, it is not a SLR, but can shoot as great pics as any other camera.

To begin with an online review,

The Cybershot DSC-H2 is highly recommended for travelers who are more particular about image quality and functionality over outright portability. Though lightweight, the H2 is by no means a pushover where camera functions and image performance are concerned. Test pictures attested the H2 as a competent prosumer camera capable of taking sharp pictures with accurate color reproduction.

The following is a take on slim camera advocates - like the ones owning and advocating 8 Mpix with 3x zoom.

Some comments

1. Slim Cameras:

Mine is NOT a slim camera that can be put in a pocket. I hate slim cameras which can take only 2 m range shots with 3X zoom.

I have, till today, not published even an A4 size photograph. And you need 2 Mpix max for such ventures. That means, I will not need more than 4 MPix in any way. So 8 MPix is insane, not necessary, expensive, and with only the lousy 3X zoom.

Slim cameras are meant to take your kid's photos when it first starts to walk. And I am not married. Yet.

Final word on Slim: Slim maybe 'in', but I don't really mind cute and chubby.

If you doubt what t-w-e-l-v-e X means, refer to previous post. It should settle all matters.
And if you think 12X is not necessary, you haven't traveled enough. I have known the frustration of standing at 13000 feet holding a KB10 in my hand wondering if the effort of lifting my hand to take the picture is worth it. More often than not, it was not. And I realized it only weeks later.

2. Functionality

Slim cameras: fire and forget. It means, forget the pictures. Photographer takes what the camera gives.

HSC D2: Along with the auto mode, I have shutter speed control, aperture control, exposure, white balance, sharpness, contrast, and multiple focus control.

Like I can tell my camera, for example, 'Dude, I want you to determine exposure based on centre of the range finder object alone. For a change, you can see the entire picture and determine exposure'. Or even sing:

'Little Johnny's outline in the night isn't all that right; can you sharpen the outline?' You should try that with your Johnny. With the slim camera, I mean.

3 Bracketing
Like I can ask my date to flash her charms, and desperately tell my camera: 'Brother, friend, supreme soul, please please don't spoil this one'; and it will bless me with a range of pictures, with different exposures. All in one click. Of course, the feasibility of such events (like date, flash, charms etc) occuring are to be disregarded.

4 ISO Sensitivity
And since I normally hope to be with dates in slightly low lighting conditions, how do I get a good picture? There is something called ISO sensitivity. Heightened sensitivity to low lighting. Simply put, camera is on its high-alert mode. Even low lighting does not matter. Mine has ISO 1000. Does your camera manual mention the word I-S-O?
One thing desired: the RAW mode. But I would have had to buy a Digital SLR. Since this is the first salary, I am tied.

5 Known Problems:

Malfunctions with non-Sony memory devices.

Effect:

Bah! (Dogbert style) I am going to use only Sony memory devices. And I don't buy them like weekly vegetables anyway.

Background music: Simon n Garfunkel : The 59th Street Bridge Song (Feelin' Groovy)

Quite appropriately for the camera and photography moment, the lyrics read

Slow down you move too fast
You got to make the moment last
Just kickin’ down the cobble stones
Lookin’ for fun and feelin’ groovy

Hello lamp post
What-cha knowin’
I’ve come to watch your flowers growin’
Ain’t-cha got no rhymes for me?
Doot-in Doo-doo
Feelin’ Groovy

Got no deeds to do
No promises to keep
I’m dappled and drowsy and ready to sleep
Let the morning time drop all it’s petals on me
Life I love you
All is groovy

12 X zoom - Camera Arrives - Peak Tests

2006-05-13T19:54:00.001+05:30

The Tallest Building in HK - Two International Finance Tower - With no Zoom.

What 12 X zoom can do? Well, see the picture below.

Forget Picture quality. Place was very cloudy. Not a good time to take pictures.

First Salary

2006-05-06T22:16:00.000+05:30

It was the Tuesday - 2nd May 2006. Salary was out. Finally. Bought a good dinner. (346 Honkies - Bombay Dreams - With Zen, treat).
First purchase - Creative Mp3 Player + Recorder + FM player + Mass Storage (1GB) device. 800 HKD.
As they say, good shit. More coming. Obviously.
Music - Lukka Chuppi - Rang de Basanti

2006-05-01T10:37:00.000+05:30

River Rafting in the Teesta - June 2005

Honk Honk - part 2

2006-04-16T08:07:00.000+05:30

Day 2 of the long weekend was also fun. Zen and I, having tacitly decided to stick around each other for some time, atleast till we found better companions, left for Stanley market. Zen was pestering me to show him the long escalator-dominated walkway and I obliged. Having reached Central, Bus Number 6 conveniently opened its doors and we climbed to the first floor of the double decker.

The ride to Stanley was quite amazing since we began to pass by roads on the same level as the top of those skyscrapers and I was peering down, in vain, to spot the Grund-schoss. Hong Kong has a very corrugated coastline (Very dense Fractal) and consequently has a number of inlets (bays) which look like those in postcards. One had a golf-course, one had a beach, one was a yachting paradise, and one was taken over by fishermen.

The markets at Stanley are a souvenir-collector's paradise. All sorts of Chinese totems, tawdry jewellery, large stone carved Buddha faces, and even mystic fortune tellers. Zen even found a Zen Master robe which he was very excited about - but the lack of liquid securities and the fact that they fit smaller bodies deterred him from going forward, or rather, into it. The other side had a Buddhist temple facing the rocks and the sea and a walkway that led to nowhere.

Another surprising thing for me, is that Chink couples are much bolder than European ones, even if they are not from Hong Kong. This particular remark set off Zen and he began accusing me of jealousy, desperateness, and such other unmentionable attributes I would rather claim to be unfamiliar with. I even proved my point by mentioning him about the guy-biting-girl's cheek in the center of the market- incident, but he seemed only to increase in temper. He, however, agreed that in those leading-nowhere-paths and small beaches, a *lock-in* candidate (Zen is a geek and a despo-code writer and an IT management guru) is a *necessary and sufficient condition* (I am a want to be-science/math geek) for complete and all-round enjoyment.

We met Raj on the bus. He is a California based healthcare consultant who was stopping over in HongKong before going on a holiday to Mumbai. He apparently graduated from IIT Delhi in 1998 which led me to wonder whether 'Raj' and 1990's go together (Only my classmates at Bangalore would understand this). He said he was disappointed with the consultant life and wanted to get out. He looked around 40 to me but the 1998 fact seemed to prove otherwise. Stress and the City, I guess. As Zen tried desperately to control his sleeping-bobbing head by holding onto the front railings, there was some more small talk about the IIMs as he tried to show me the 'tallest building in HK'. After learning that the Zen Master works in such levitating heights, he tried to hide the embarassment and was saved as we turned into the Central Bus Stand.

Zen and I returned to my room and we watched a movie : Stay. It prides itself on the cast, Naomi Watts, to begin with, and Kate Burton, Ewan McGregor and Ryan Gosling playing the central characters in the plot. I didn't understand a thing in the movie and subsequent searches for movie reviews only confirmed my belief that no-one had, either.

I spoke to my Mom over GTalk and she seemed happy. Some notes and doubts were clarified. Some questions asked and answered. Then, I left for the Indian Village for dinner. I bumped into H, and little did I know that I would have a long and interesting chat with a guy I have little in common with. It lasted for 2 and 1/2 hrs.

(If you do not understand anything in the following, ignore it. I don't, either)
H is an Associate in the investment banking business at Nomura Securities. He works on Indian deals only. We started off on the same-old i-bank life story but this time, he gave it personal touch and it was damn interesting.

H, like all other loyal guys, wants to marry a girl (needless to say) he has been seeing since 5 years. The girl apparently came from the US last year to stay with him for some time (*exactly 10 days* were the words). Unfortunately, Nomura also equally liked our investment banker and wanted to ship him off to Japan. Our man thought of all possible strategies to avoid such contingencies, but when Nomura's liking turned into love, he opted for a face-off. He told his manager (Indian) about his predicament and the manager agreed to let him go away for half-a-day. Nomura made the Japanese offer to another loved one and the lovers were spared in HK.

H, on another occasion (*after having put a harrowing number of hours at the office* were the words) went to Singapore for a holiday. The kind manager, who knew about this, called H at 3 am when he was in a pub in Singapore, and asked to take the early morn flight to HK. H, for once, was upset (*very upset* were the words), and showed his manager three central fingers and asked him to read between the lines: rather, the equivalent of that over Blackberry. H, even now, is alive and well in Nomura and is getting married this year.

He also mentioned about a peculiar incident in HK where a ML banker was assassinated by his wife. Here are the details. H's take was that it had nothing to with the wife and everything to do with the husband. He expressed a tacit love for his life and said he was trying to shift to Private equity in the Middle East before he gets married.

I returned to my room having poached the book Monkey Business from H. He said it is an interesting read and it has been, so far. Thus was Day 2 of the weekend. I may not be updating the blog for quite sometime after this. So. Amen.

ps: Excerpts from the book

For the recruiting banker, the ideal analyst candidate is somebody with above-average intelligence, a love for money (or the capacity to learn that love), a view of the world conforming with that of the Marquis de Sade, and the willingness to work all night, every night, with a big grin on his face, like the joker from Batman.

The analysts are at the bottom of the shit heap. They are the algae under the rim of the public toilets at the Port Authority bus station, the scum below the scum at the bottom of a beer keg. They'll spend two to three years being mentally, emotionally, and physically abused, and for that benefit they'll be well trained and extremely well compensated. No matter how things get, they'll never have anybody lower on the corporate totem pole to whom they can off-load their misery.........
....Sometimes, though, from the assoicate's perspective, it seems like there are just three levels in the banking hierarchy: analysts, associates, and everybody else. After all, anybody senior to an associate has the institution's divine sanction to shit on the associate's head, and if you're the one getting shit upon, there isn't usually much reason to further subdivide the hierarchy of those doing the shitting.