tag:blogger.com,1999:blog-5730416143627007192024-03-14T03:22:21.731-07:00Trend CenterSindhu Subramaniamhttp://www.blogger.com/profile/09426043808886874328noreply@blogger.comBlogger24125tag:blogger.com,1999:blog-573041614362700719.post-4643850841570888502010-07-29T04:10:00.000-07:002010-07-29T07:02:54.711-07:00The India Story - Part 1<div style="TEXT-ALIGN: justify">The other day, I had an opportunity to listen to a talk on entrepreneurship. The India story is being touted all over the place. Everyone perceives the West - US and Europe included as aging tigers with the BRIC nations, particularly India and China as the two young raging tigers poised to pull the world out of the mess created by the sharks of capitalism. This two part post is a calculated look into the plausibility of that claim.<br /><br />Now, before anyone begins to assume a socialistic or communist tone to this post, my belief system is rooted in meritocracy and capitalism. So no worries on that count. But whether the Indian story really deserves such mention is something one needs to sit up and think about. For starters, just to put things in perspective, California's economy alone is worth $ 1.8 trillion, which is much larger than Russia's economy! India's GDP in relative PPP terms stands at $ 3.53 trillion, hardly twice that of California! So is it really such a big deal?<br /><br />The Indian and Chinese story are intense to say the least! And one thing we must remember is that a growth story like the Indian or the Chinese story perhaps has no precedent. A growth of such scale and magnitude - unforeseen. If pulled off, like George Mallory's feat in the book 'Paths of Glory', the kudos would be tremendous. And if we flounder, the results would be disastrous.<br /><br />For starters, let's talk advantages. </div><div style="TEXT-ALIGN: justify"></div><div style="TEXT-ALIGN: justify"><em><strong>Government</strong></em> : The first and biggest point is Democracy. No matter how dysfunctional it may be, the world respects democracy, almost in an anti - Socrates way! Somehow a population of a billion being led by a democratically elected government is an achievement. The country looks dependable. And the developed world that follows a democracy identifies with the concept. And somehow a sense of stability is associated with the nation. Classic democracy implies that if a government does not deliver on promises it can and will be replaced. And that adds come credence to the country.</div><br /><div style="TEXT-ALIGN: justify"></div><div style="TEXT-ALIGN: justify"></div><div style="TEXT-ALIGN: justify"><strong><em>Population</em></strong>: India has a huge population. Billion mouths to feed, billion aspirations, a billion people learning about the wondrous ways of the West. Huge opportunity indeed. The Indian population would be young too, with an average age well below 40! So, huge, earning, productive population. Fourth, we have a lineage. A history of being achievers. Right from the Tatas and Narayana Murthy to Lakshmi Mittal to the Ambanis. From Dipak Jain and Nitin Nohria to Raghuram Rajan, we have an imprint in industry, academia and thought leadership per se. </div><br /><div style="TEXT-ALIGN: justify"></div><div style="TEXT-ALIGN: justify"><strong><em>Labor :</em></strong> One implication of population and a model we've mastered so far is making our labor efficient. At least in terms of cost. So our service sector is well developed - almost to the extent of providing us a competitive advantage. In addition, our urban population is competent in English and so, we have yet another competitive advantage! Also, our education system, for the larger part is strong. So the number of A class engineers, doctors and managers India churns out, provides a strong, capable population that can carry India's progress on its young shoulders.</div><br /><div style="TEXT-ALIGN: justify"></div><div style="TEXT-ALIGN: justify"></div><div style="TEXT-ALIGN: justify"><strong><em>Location:</em></strong> India is situated neatly in the middle of the world. So, our proximity to the Far East and Europe at least in terms of time zones is an advantage! </div><div style="TEXT-ALIGN: justify"><br />But if the achievements are intense, the issues are even more glaring. Next up, we look at the issues. </div>Sindhu Subramaniamhttp://www.blogger.com/profile/09426043808886874328noreply@blogger.com0tag:blogger.com,1999:blog-573041614362700719.post-68405535310315192182010-03-19T07:09:00.000-07:002010-03-19T07:59:02.837-07:00Retail in India - what is different<div align="justify">Retail is quite interesting as a business concept, especially in India. The whole concept is developing every day and at the same time the Indian consumer is quite different from her counterparts elsewhere in the world. India itself has grown fast, and the exposure of the urban Indian to Western methods has also been immense. Such a growth story, and I speak not just of the growth numbers or the speed of growth, but also the circumstances of such growth are unprecedented. And the beauty of retail is the fact that you get to seen an application of consumer behavior almost blatantly in everyday life. Shelf space politics, as I'd like to call it, product placement, loyalty programmes, discount schemes, sales, are all studied assiduously in terms of their efficacy and the impact of behavioral sciences on such decisions. And these may be research topics, but the beauty is that you experience these and can relate to the ideas much easily! A while back, when Ikea had initiated and killed plans of setting up shop in India, I'd put in a post on that plan - <a href="http://finonomics.blogspot.com/2009/06/ikea-pulls-out-of-plans-to-set-up-shop.html">'Ikea pulls out of India'.</a> And that event was a clear example of how cultural and behavioral attitudes influence retail decisions in India. So, these posts here on Indian retail are going to present the retail industry as it pans out in India. I am sure, several years later, a look at the retail journey here would be worth an interesting read.</div><br /><div align="justify"></div><div align="justify"></div><div align="justify">So today, I look at the way retail used to be early on in India. And I am going to talk mainly about the post-reform period post 1991, so that the relevance of foreign players and entry barriers also come into the picture.</div><br /><div align="justify"></div><div align="justify"></div><div align="justify">The future of Indian retail is often discussed to a very great extent. The rapidly developing industry is studied with care, and based on past models that have panned out in other countries, people guess what the direction of Indian retail is going to be. For instance, take grocery retailing in India. Now, over the years, the Indian consumer has been used to the small mom-and-pop store around the corner for satisfying her grocery needs. The model was built on relationship, trust and knowing the shop keeper. To the extent that in school, till about 15 years ago, the word 'mall' was never in use in India. It was always grocer, green grocer, shop keeper and so on. Retail as a concept in India has several unique attributes that have defined Indian retail since the past. Shopping for the household was an errand run by the kid of the house to the nearby shop, and would be unplanned typically. Elaborate beginning of month shopping would be conducted with a long list, and the shopkeeper would have a person deliver the goods at home. In several areas, credit would be extended, and the outstanding amount would be settled at the end of the month. Such a format can still be seen in several parts of rural India and to some extent even in tier 3 cities in India. </div><br /><div align="justify"></div><div align="justify"></div><div align="justify">Many other trends can be noticed, and you might find an example by looking around various localities in an Indian city. So much for an intro. So, next up, we can look at the face of retail in various categories. Retail in groceries, medicines, apparel, durables and so on.</div><br /><div align="justify"></div>Sindhu Subramaniamhttp://www.blogger.com/profile/09426043808886874328noreply@blogger.com0tag:blogger.com,1999:blog-573041614362700719.post-10619351667501515772010-01-29T05:27:00.000-08:002010-02-02T05:30:29.398-08:00Success and Excess II<p>Somehow success and excess always seem to go hand in hand. A while ago when the China - Arunachal Pradesh conflict was at its peak, the visa issue, the rock painting fiasco and so on, elicited <a href="http://the-lilac-avenue.blogspot.com/2009/11/power-politics-success-and-excess.html">'Power, Politics, Success and Excess'</a>. A talk about ethics and transgressions and how you always have a choice came out in '<a href="http://the-lilac-avenue.blogspot.com/2009/11/how-much-is-too-much.html">How much is too much</a>'. And today, again, on the topic of where to draw a line, here are some thoughts.One of my professors mentioned a very interesting trend in hedge funds . He said, "Some firms are engineered to blow up." He spoke of LTCM and Bear Stearns' 2 funds that were forced to fold. LTCM failed in a macro sense because of a black swan that no one expected. No one dreamt that Russia, America's cold war nemesis and erstwhile feared superpower would default! But one can always argue against such exigencies and ask why risk management practices weren't more robust to prevent even the rarest of rare events from causing damage. Then when we speak of Bear Stearns that broke because of massive exposure to subprime lending and the subsequent drying up of credit markets, one asks again, isn't it a manifestation of excesses? Why didn't people stem the exposure long before the situation went beyond salvage? Take GM. Why do entities need to blow up to 'bailout size' and then justify bailouts saying that they are too big to fail?</p><p>Take hedge funds again. We came to know that John Merriweather of LTCM, recently floated his third or fourth fund after busting subsequent funds! Who would have lent him money, you ask? Well, every fund makes some money for some (to the tune of several millions) and loses money for some others. Those who make money, do so thanks to discerningly or luckily removing their money from the fund at the right time and they will lend to these fund managers in their new escapedes, despite the previous fund's having folded! They get the guts to lend again, thanks to the confidence built by having several million dollars of disposable income! The poor, loyal, unsuspecting bunch end up on the left tail of the bell curve, and these are the scapegoats who bear the brunt of irrational exuberance displayed in excesses by successful managers, or they are unfortunate souls who think that their pot of gold just needs an ounce more ! And these people, well, many-a-time, aren't able to reach even 50% of their starting baseline level of affluence! And the story goes on and on. </p><p>So more often than not, success leads to excess and this excess can catapult some to untouched heights, while thrusting some others into the chasms of lonely failures. So is regulation the key? Now apparently there are thoughts of regulating some hedge funds by a central authority. Being a strong proponent of efficient markets and classical economic theory, all I can say is - entities that have thrived through self regulation are better off being left alone. Humans never interfere in the laws of the jungle, but somehow, a justice system exists and functions (more efficiently) in the wilderness. So we are better off observing the beauty of self-regulation, Darwinian theory of selection, machinations of the wheels of fortune and the extremes of successes and excesses playing out in front of our eyes, rather than pillage the same with concrete barriers that can destroy this beauty. </p><p>Such are the ways of the world. Every black has a white, every God has a satan, every right has a wrong and every winner has a loser. </p>Sindhu Subramaniamhttp://www.blogger.com/profile/09426043808886874328noreply@blogger.com2tag:blogger.com,1999:blog-573041614362700719.post-55183009900591570752010-01-09T05:30:00.000-08:002010-02-02T05:35:53.572-08:00Biting more than they can chew? M&MIs Mahindra really biting more than they can chew? That is the question here. Just last year, they took over the dubious Satyam. Experts say that big clients are still wary and are still keen on pulling out of Mahindra-Satyam because there is still some murkiness as regards Satyam's books. People are still unclear of how <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjt6NkwTTDSttyKMGV9q4KVPU4l8bEuai1GeRPkGowaiph-edw2F43fOnbQPQNi-6kNoEm8-6fgUfKXT0FmIx2RpkHdsLDV-4RcFh9NocCzupIQ6KoUBMyFmbl1Ws42L29V5uf2GplgVOo/s1600-h/MM.jpg"><img id="BLOGGER_PHOTO_ID_5424671937723916210" style="FLOAT: right; MARGIN: 0px 0px 10px 10px; WIDTH: 277px; CURSOR: hand; HEIGHT: 162px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjt6NkwTTDSttyKMGV9q4KVPU4l8bEuai1GeRPkGowaiph-edw2F43fOnbQPQNi-6kNoEm8-6fgUfKXT0FmIx2RpkHdsLDV-4RcFh9NocCzupIQ6KoUBMyFmbl1Ws42L29V5uf2GplgVOo/s320/MM.jpg" border="0" /></a>far the virus has spread and what other skeletons could emerge from that closet. And after over 6 months, the jury is still out on whether Mahindra-Satyam was indeed a marriage made in heaven. At a time of such uncertainty, Mahindra's announcement of a vision to equal Brazilian Embraer is nothing short of stumping! In December M&M acquired a majority stake in Aerostaff Australia and Gippsland Aeronautics in forming what became Mahindra Aerospace. Aerospace is expensive, and such diversification even before the previous debt-laden acquisition (Satyam) could get consummated is looked upon by many as being risky. True, markets thumped Mahindra on the 7th when he announced his plans at the Auto Expo in Delhi. But can we really write off the plan?<br /><div></div><br /><div align="justify">Well, this is India - an Emerging Economy. Emerging economies are called so because in a way they are highly unpredictable - a euphemism for the unpredictable third world if I may say so. The ways of the land, the way people conduct business there and almost everything about these countries is different. Even typical Government bond rates are higher! Risk is higher as well, which is why during the Asian crisis, although the problem was mainly with the Thai Baht, the contagion spread through Malaysia, Korea all the way to Brazil, since everyone was bundled under the mysterious ways of the 'emerging land'. So conventional wisdom really doesn't apply to doing business here. Besides, Mr Mahindra is known to have walked away from the JLR deal when he realized that he might have to end up paying too much. So one can eliminate the possibility of managerial hubris in his operational methods. Besides, M&M is known to operate a strategy of initiate, incubate and cash in on any venture. So, given their past successes, one is tempted to think that some serious thought has gone in to making this decision. </div><br /><div></div><div align="justify">Traditionally observers are averse to change. Mahindra brings to mind tractors. We can imagine the Tatas to be everywhere from telecom to steel to autos to IT. But imagining another global conglomerate spanning autos, IT, aeroplanes and more is tough. Come to think of it, it really isn't a highly unrelated diversification. Although capital intensive, they are moving from one kind of autos to another - in a broad sense. So, I guess we need to watch M&M for a year and see whether Mr Mahindra is a calculative businessman, or whether M&M has displayed classic irrational exuberance. In the same breath, another thing to watch out for is Bajaj. Many spoke of their plan of hiving off the scooters in favor of motorcycles as being flawed. They said why kill the goose that laid golden eggs in favor of an unknown swan? In both these cases, the business leaders have shown immense guts, believing the fact that fortune favors the brave. Whether this tenet holds in business, especially in Indian business in the wake of a fragile, just improving economy is what we need to wait and watch. </div>Sindhu Subramaniamhttp://www.blogger.com/profile/09426043808886874328noreply@blogger.com0tag:blogger.com,1999:blog-573041614362700719.post-27851485500221828762010-01-08T05:39:00.000-08:002010-02-02T05:40:02.385-08:00Right time to withdraw the stimulus???So now, when we speak of India, we have the debate on whether it is too early to withdraw the stimulus package. India’s stimulus had a lot less to do with pumping money into the system than it had to do with tax cuts to the industry, lower interest rates and so on. So now, many feel that the recovery has been fragile and so stimulus should continue at least till September 2010. I am tempted to call in my great <a href="http://the-lilac-avenue.blogspot.com/2009/12/band-aid.html">‘Band Aid’</a> concept here :) . Are the wounds still green? And would prematurely pulling off the band-aid hurt? Observers and analysts feel, yes. I ask, was there a wound in the first place? What recovery are we talking about? We never slipped into negative growth, that defines a recession. We went from 9% GDP growth to 5.5% and now we are back at 7.9% GDP growth. Even this quarter the growth is expected to hover around the 8% mark. So, I ask – stimulus for what?<br /><br />China entered into a stimulus since her economy was steeped in exports to the developed world and when the developed world was hit, it stopped consuming. And so China’s bread and butter was stolen away. But we are not so dependent on exports. And we can’t say that just because everyone in the world is stimulating themselves, we need to continue as well. If we keep up stimulation when the economy looks good to go, we’d be fuelling inflationary pressures. Through easy credit we’d be stepping into callous lending! At an extreme, we could be stepping into sub-prime territory in lending! Stimulus packages are a burden on the Government kitty and they divert funds away from much needed developmental expenditures. If India has been less hit by the Great Recession, we must thank our economy for having been resilient. We must thank the policy makers for quick action. And we must capitalize on this resilience to bounce back and out of stimulus-induced growth. The leading economic indicators spell cheer for India and so now is the time for the stimulus to be slowly decreased and eased off. This may be a bold step, but extreme times call for extreme measures.Sindhu Subramaniamhttp://www.blogger.com/profile/09426043808886874328noreply@blogger.com0tag:blogger.com,1999:blog-573041614362700719.post-83826012209986335022010-01-07T05:40:00.000-08:002010-02-02T05:41:11.791-08:00Air India - the blunder of the decade!<p align="justify"><a href="http://the-lilac-avenue.blogspot.com/2008/11/bail-out-to-sail-outhow-much-is-too.html">‘Bailout to sail out’ </a>spoke of bailouts and how economically they are wrong since they in a way condone wrongdoings and mismanagement. When GM asked for help, everyone was up in arms against the whole way in which they refused to change according to the times and still produced the fuel guzzling behemoths that consumers had fallen out of love with. ‘Why should taxpayers’ money go into rescuing a Jalsaghar (Satyajit Ray’s epic on pride and ego in spite of decadent poverty)’ was the question everyone asked. But then the ‘too big to fail’ card was played and the cascading effect a GM failure would have on Detroit, Ontario and the employment of millions was brought to light. I remember reading an article around 2008 Christmas in The Globe and Mail, about this family that lived in Ontario, where the only breadwinner was a 55 year old lady who had worked all her life in GM. She chronicled how her life and career had revolved only around GM, and at age 55 she wouldn’t find work anywhere. ‘Maybe this is the last Christmas we can spend together as a family, for next year perhaps we all need to move out of here to find jobs in order to survive’, she lamented. Such stories resulted in GM being bailed out, GM filing for Chapter 11 and so on. </p><p align="justify">Believers in classical economics, (me included), feel that free markets should be allowed to decide who is good and who is bad and poor performers should be penalized. Yes jobs would be lost, and there would be intermediate pain. But in the long run the cobwebs would be dusted off and quality would prevail. Keynesians believe that the State is present for a purpose and when corporate mess up, they are deigned to step in and clear the mess. So ‘the too big to fail’ funda has been bandied about and the verdict is still divided on whether it is the right thing to do or otherwise.</p><p align="justify">So speak of Air India. They have paid € 5 million to enter the Star Alliance group and another € 5 million is to be paid. They are in doldrums. They have a liability of Rs. 16,000 crores on their balance sheets. They asked for 5000 crores as Government bailout and <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjPYc96d9-2f1SE16l744a7K4wRzxRNJGcyAJX6E4IzQLMX3nHyZEq-MCXmYNl5ZZevrljH_uEYrqNju7BqAJJ-rMBFb_hBDg8w9NdpHuUv_kLQi7TeIaVnEQlhAM33h5ASa6HOoG8av04/s1600-h/plane.jpg"><img id="BLOGGER_PHOTO_ID_5423893940328700610" style="FLOAT: right; MARGIN: 0px 0px 10px 10px; WIDTH: 320px; CURSOR: hand; HEIGHT: 180px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjPYc96d9-2f1SE16l744a7K4wRzxRNJGcyAJX6E4IzQLMX3nHyZEq-MCXmYNl5ZZevrljH_uEYrqNju7BqAJJ-rMBFb_hBDg8w9NdpHuUv_kLQi7TeIaVnEQlhAM33h5ASa6HOoG8av04/s320/plane.jpg" border="0" /></a>got only 800 crores approved! And now they have engaged McKinsey at a whopping 14 crores to pull them out of this mess. Accenture and Booz Allen are already in the fray to rescue them and McKinsey has jumped on the loss maker’s band wagon as well. It really reminds of the Ferrari racing team between 1979 – 1999 when ace drivers and engineers joined the money bags team, milked it for big bucks and left without achieving that all elusive championship victory! What is the outcome of this massive bunch of blunders? Accounts payable amounts would increase albeit to consulting firms now, fat reports on glossy solutions would increase but implementation bugs would continue to persist, since clearly AI’s management team has management issues! And when AI goes beyond salvage, the eternal money bags – the Government would be called upon to HEEEEELLLLLLLLLLLLLP!!! The saga would just continue. I wonder what steps are going to be taken next in this biggest blunder of the last decade which began with the IA-AI merger, which sought to rationalize operations and ended up just spending more on painting all planes with the new logo! Integration went for a toss and from then on AI has been on a nose-diving tailspin! Perhaps its time to stop heeding the SOS.</p>Sindhu Subramaniamhttp://www.blogger.com/profile/09426043808886874328noreply@blogger.com0tag:blogger.com,1999:blog-573041614362700719.post-11032785092290465022010-01-01T05:41:00.000-08:002010-02-02T05:42:17.378-08:002009 - a year that was<div align="justify">Ok, almost everyone chronicles the past year. On thing I like, is the <a href="http://en.wikipedia.org/wiki/2009">one liner event history </a>that figures on Wikipedia or the year round-up in the economist. But for me, the events come to mind at the top of my head at the end of the year, hold most consequence. Here's the roundup of things that defined the past year - </div><br /><div align="justify">This year marked many things. It began with a bush fire in Australia and surprisingly ended with one in the same place as well - almost setting the tone for the fiery year in politics and the world ahead. Barack Obama became the 44th US President - after a well crafted, technologically and ideologically vibrant campaign. Although post election a number of factors have called into question the success of his presidency. Parleys on whether we were looking at a recession, or a depression, or whether countries like India were in a recession at all, occupied intellectual coffee table talks for a greater part of the year, while countries like Iceland collapsed, Dubai stared at sovereign default in the face, China boosted spending and India recorded 7.9% GDP growth. </div><br /><div align="justify">Some things stayed staid, with a miscarriage of democracy in Iran and Afghanistan, which felt as though democratizing the Middle-East, an area famous for its tribal population suddenly were forced into something that they did not know how to handle! The Israel - Palestine conflicts continued. Zimbabwe saw the semblance of order with the power sharing deal to form a government, before a deadly car crash wounded the new President and killed his wife. The LTTE was finally defeated with the death of Prabhakaran, thus ending decades of civil war in Sri Lanka, opening a new can of worms related to human rights violations, displaced Tamils and alleged excesses by the Sri Lankan army. The Air France flight from Rio crashed into the middle of the Atlantic in one of the worst air crashes in history, killing all of 228 on board. The UNESCO launched the World Digital Library. Michael Jackson is gone - the music scene will never be the same ever again. This year also marked the 20 year anniversary of the fall of the Berlin Wall, which was much less the fall of an Iron Curtain, as it was the triumph of capitalism over communism.</div><br /><div align="justify">Typhoons and hurricanes continued. India saw drought in the first half of the year followed by terrible floods in South India that almost wiped out portions of age-old villages. Climate change was becoming a reality and countries had to act really fast. Copenhagen came along, resulting in an eyewash of a climate treaty, which many hailed as at least a step in the right direction. Whether tangible benefits would come out of it, or whether the 'cold' war on who needs to blink first between the developed and the developing world would continue remains to be seen. </div><br /><div align="justify">Sport faced several disgraceful moments with Lewis Hamilton and McLaren caught spying on Ferrari's technical documents, Flavio Briatore and Nelson Piquet Jr caught in crashgate, only to be topped by the great Tiger Woods proving he loved something more than the 18 holes of golf! Then again, the FedEx - Nadal duel got better, with Fed-Ex snatching sweet revenge thanks to an out of form Nadal. The Indian cricket scene never looked better, but the overdose of the willow implied that cricket now became almost akin to a 9-5 corporate job, with weekends off!! And then came the icing on the cake - the final and sure return of Michael Schumacher to competitive racing, thrilling several Schumi fans across the world. </div><br /><div align="justify">2010 is not just a new year. It marks the start of a new decade. A decade that began with a promise post Y2K, saw the rise and fall of several governments, terrorism rise to its peak, economic crises of enormous proportions, a new Pope, an American President from a minority community, Saddam Hussein, Benazir Bhutto gone, shards of democracy in the middle east, strife in Pakistan, growth in the BRIC nations, the sudden rise and rise of China, the lost decade in Japan and a lottttt more. I could go on and on, but I'd perhaps reserve all that for another post. That said, hopes abound for 2010. Hope the economic downturn swings into an upturn. Hope there is peace in this world, with none of the disgruntled nations engaging in conflict. Hope that the blue moon that showed its face in India yesterday heralds a new beginning for everyone. Happy New Year everyone!</div>Sindhu Subramaniamhttp://www.blogger.com/profile/09426043808886874328noreply@blogger.com0tag:blogger.com,1999:blog-573041614362700719.post-82977967463693237912009-11-30T06:03:00.000-08:002010-02-02T06:03:33.852-08:00How much is too much?<div align="justify">They say that a sinking ship exposes the rats on board. Likewise, it takes a crisis to expose fraudsters and unethical entities who thrive on a system while it flourishes. So the Madoffs, Rajus, Kenneth Lays and Thains of the world come into the open only when the system is drained of all the water that had been providing refuge to their unethical activities for so long. Almost all of us know what ethics are all about. Soon after the financial crisis began, people raised a finger against B schools, saying that a code of ethics is missing amongst the current breed of profit-seeking, dollar-hungry set of B school products. And so, most big B schools embarked on a mission to rethink their offerings to prevent unethical entities from entering the system.</div><br /><div align="justify">Yes, schools do have a role to play in shaping individuals. That is why we had penalties in school for cheating on an exam. That is why we had harsh punishments for cheating in sport at school. But all humans are presumed rational, and we all know the distinction between right and wrong. A school can give us a code of ethics but internalizing it and making the distinction between what is acceptable and what is not, is a confluence of the ethics code and our own ethical appetite. We all wenr in arms when we heard about the fraud committed by Ramalinga Raju. We all watched with disgust as the crookedness of Bernie Madoff came into the open. We exclaimed how brazenly unethical their acts were as the swindled millions and millions of dollars. These were huge transgressions. But think of this. You break a traffic signal, and the cop stops you. How many times have you given a bribe just to get out of the situation fast? Why? Isn't bribery a form of corruption? And isn't corruption unethical? But then, this was a minor transgression, and a small bribe never killed or hurt anybody, right?</div><br /><div align="justify">But who is to decide what is major and what is minor? And how difficult is it to make the move from good to bad, like the transformation of Anakin Skywalker to Darth Vader? Another point to ponder is that what am I to do if everyone around me is involved in an unethical practice, to book gains? By being ethical, I clearly end up losing. So, should I adopt the rational approach of maximizing my economic value or should I revert to the conscientious approach and believe in a cosmic justice and be satisfied with my being able to sleep peacefully at night, my losses notwithstanding? </div><br /><div align="justify">I definitely do not have the right or wrong answers to these points. Because actually these are all decisions steeped in shades of gray. At the end of the day, it is a weighted average of your basket of priorities and only you are the judge of the weights to be accorded to each priority to come to a decision metric. The only argument I have is that quick gains are seldom ever sustainable and for me personally a spiky chart is worth much less than a steady level of success and satisfaction.</div>Sindhu Subramaniamhttp://www.blogger.com/profile/09426043808886874328noreply@blogger.com0tag:blogger.com,1999:blog-573041614362700719.post-10897355922182941742009-11-14T05:42:00.000-08:002010-02-02T05:43:20.462-08:00Power, Politics, Success and Excess<div align="justify">Lord Acton said, 'Absolute Power corrupts absolutely'. I couldn't agree more. And I somehow see some correlation between power and success. Now which follows the other is purely subjective, since some argue that success corrupts a person by making her believe that she is invincible and her confidence alone makes her feel powerful and so wield power. Some others argue that when power is on your side, success verily follows since the power to tilt balances in your favor lies with you. Regardless of which explanation we choose, one must really watch out for the event when power in success moves over to power in excess.</div><div align="justify"></div><div align="justify"></div><div align="justify"><br />Take China. Undoubtedly she is a superpower. And rightfully so. She has taken all the right decisions, made the right economic moves at the right times. At a time when the world is grappling with dwindling exports, she still registers positive GDP growth. This is power and success. But push the lever a bit further and China presently sits on 2.1 trillion dollars of foreign reserves. The world wants the Yuan to be revalued. The world wants a level playing field, where market forces dictate export competitiveness, not Governmental controls which choose arbitrary exchange rates. But given China's power in the T-bill market, no one dare push her too hard. Now that is power in excess.</div><div align="justify"></div><div align="justify"></div><div align="justify"><br />Take China again. Post the second World War, when the UN came into being to prevent hostile take overs of other countries' territories, people felt that there would never be anything like the rise of the third Reich. But take India and China since 1962. The bloody Sino-Indian war, where India lost a portion of it North Eastern part of Kashmir. And now, with the Chinese Government going all out to claim ownership of Arunachal Pradesh, Chinese Troops entering Indian territory and painting rocks red, dam construction on the Brahmaputra (which the Chinese bluntly deny... well, I wonder how can someone fudge satellite images then???), it really feels like a push of power to the side of excess.</div><div align="justify"></div><div align="justify"></div><div align="justify"><br />But then again, economic might can do many things to many people. It is up to an economic power to exercise restraint and be responsible, since those one bristles on the way up are sure to keep watching and waiting on one's way down.</div>Sindhu Subramaniamhttp://www.blogger.com/profile/09426043808886874328noreply@blogger.com0tag:blogger.com,1999:blog-573041614362700719.post-45987896421262456402009-10-06T06:07:00.000-07:002010-02-02T06:08:21.353-08:00Confucius and Climate ChangeThe weather is beautiful. The skies are cloudy, the winds are cool. The atmosphere is absolutely intoxicating. The fresh smell of rain-soaked mud, the pitter-patter sound of raindrops, everything 'perfect' in the eyes of a romantic.<br /><br /><div><div>Would have been perfect, if only such a weather had existed in July, <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjz8EvAj8VosVmZPBAYf79rowSk-ULLtszFeTPKJHcELjN9g3vaCXPU6K2Rsqf0OC9WPjWTRpXODgNQLTi8FDC0ECjKqKldJQN3gz_77YKbkRI_S9KVPXlwL-xC3H2cagRpfhBbRTm5Uxg/s1600-h/SOS+earth.jpg"><img id="BLOGGER_PHOTO_ID_5389438478620986690" style="FLOAT: right; MARGIN: 0px 0px 10px 10px; WIDTH: 146px; CURSOR: hand; HEIGHT: 141px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjz8EvAj8VosVmZPBAYf79rowSk-ULLtszFeTPKJHcELjN9g3vaCXPU6K2Rsqf0OC9WPjWTRpXODgNQLTi8FDC0ECjKqKldJQN3gz_77YKbkRI_S9KVPXlwL-xC3H2cagRpfhBbRTm5Uxg/s320/SOS+earth.jpg" border="0" /></a>rather than October in Mumbai. <br /><br /></div><div></div><div></div><div></div><div></div><div>2009, was declared a drought year. Cut to June- July 2009. Crops failing for want of rain, pictures in newspapers of farmers looking skywards, expectantly, all portrayed an image of the India of the 1950s. It looked rather sad, since those vivid images were a stark contrast to the image of emerging India that we generally perceive. <br /><br /></div><div></div><div></div><div></div><div></div><div>Cut to October 2009. A deluge in South India. A catastrophe that has not been encountered for over 100 years. Villages submerged, people dead, crops devastated, the rice bowl of India affected adversely. Before I was to leave Hyderabad, I was not too kicked about leaving behind a perfectly cool climate, to come to Mumbai, which I knew would be in her 'midsummer blues'. But I was also relieved to finally be able to travel at a time when there would be no flight delays thanks to bad weather in Mumbai. And surprise surprise, all such expectations were killed, when we were told that BAD WEATHER in Mumbai had delayed the incoming flight. All of us were stumped, since it is rather uncharacteristic for 'bad weather' to prevail in clear skies October! But then again, this whole confused weather pattern is unprecedented. Right from the frigid winter of 2007, in Mumbai, to the current rain patterns, it is bizarre! As though the Earth were screaming for help, by sending these incomprehensible signals.<br /><br /></div><div></div><div></div><div>And as though on cue, we have this whole impasse on the climate change dialogue. Confucius once said, " He who does not economise will need to agonize" Seems apt in the light of our current climate issues. I'd put in a post earlier (<a href="http://the-lilac-avenue.blogspot.com/2009/06/of-outcomes-and-interests.html">of outcomes and interests</a>) on how expecting the emerging world to co-shoulder the climate change burden in a 50:50 manner along with the Americas and Europes of the world was almost certain to lead to a deadlock, with no amicable solution emanating thereof. And now, the UN General Assembly meeting has achieved just that, with everyone playing the penguin game - one where everyone waits for another to take the lead. In a classic case of what psychologists call 'mistaken attribution', the focus was more on WHO was responsi<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdJmogLOAgr13mlEulBIjyTak0i1hAlThdpat91_LorBCQ41Fe926CY2BZiKW6xMbCCvIvLlXqGhmJ7u5LRqr5W6R-1M87eCmOAq5OnLZvIHBmyZVQYbHIKK0Xm-usCUAGsZf5TWDRDvs/s1600-h/map3.jpg"><img id="BLOGGER_PHOTO_ID_5389438200055778354" style="FLOAT: right; MARGIN: 0px 0px 10px 10px; WIDTH: 320px; CURSOR: hand; HEIGHT: 215px" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdJmogLOAgr13mlEulBIjyTak0i1hAlThdpat91_LorBCQ41Fe926CY2BZiKW6xMbCCvIvLlXqGhmJ7u5LRqr5W6R-1M87eCmOAq5OnLZvIHBmyZVQYbHIKK0Xm-usCUAGsZf5TWDRDvs/s320/map3.jpg" border="0" /></a>ble and WHO was not doing what was to be done, than on a clear idea on WHAT needs to be done to tackle the challenge as a global community. Here are some statistics in the map to prove why such circumlocutory behaviors are circumspect! The logic / rationale behind the developed world blaming their laggard approach on the lack of 'co-operation' from the emerging world is absolutely not justified.<br /><br /></div><div></div><div></div><div></div><div></div><div></div><div>The fact remains that the world is screaming for action. We need to act before it is too late. Mumbai, on the west coast of India is served by the South-west monsoon winds from June to September. Geography lessons in the lower classes had taught us that India has 3 main seasons - summer, winter and monsoon. And we also had specific months when these seasons would prevail. But imagine a classroom conversation of the future, if we don't take the cries of nature seriously - <br /><br /></div><div></div><div>"Teacher when do we have summer in India?" </div><div>"I can't say with certainty".</div><div>"Teacher how do crops grow?"</div><div>"Only with the blessings of God, since rains are never dependable"</div><div></div><div></div><div></div><div></div><div></div><div><br /><br />What can we as the next generation do? Well, the usual stuff that we already know of, cut auto emissions, since that is the one portion of the emission story that is clearly in our hands. And on another level, we must use climate change idealogies as a guiding factor while choosing our elected leaders.</div></div>Sindhu Subramaniamhttp://www.blogger.com/profile/09426043808886874328noreply@blogger.com0tag:blogger.com,1999:blog-573041614362700719.post-22969519865254365802009-10-02T05:43:00.000-07:002010-02-02T05:44:09.608-08:00The Maoist MassacreThe scene was straight out of the Sippy flick - Sholay. Families massacred. Little kids targeted. The first reports called it a Maoist attack in Bihar. Later we realized that it was a fight - a casteist fight that resulted in such picked-out killings. And almost in immediate succession, just we heaved a sigh of relief, that Maoist rebels were not really wreaking havoc on civilized society, came news about the ruthless beheading of a Jharkhand cop by Maoists. For someone sitting in another part of this country, it felt revolting. What on earth is Maoism? And does it really promulgate violence targeted at children? Well, elsewhere in the world, such acts would be termed 'dastardly acts of terrorism', but ask the perpetrators here and they may as well say that this was their cry against the 'establishment'.<br /><br />Studying developmental figures for the erstwhile 'BiMaRu' states, the plight is understandable. With a Gini coefficient at 0.318, the inequality in Bihar is stark. Reminds one of the situation during the French Revolution where the rich got richer and the poor got poorer. The state keeps screaming for all-inclusive, pro-poor growth. But when the law and order system is crippled, and the number of convoluted, inter-twined problems is humongous, the system takes some time to unlearn and relearn and implement. Granted, unemployment is high. Granted the poor are poor. Granted, the inequality is high as well. But the truth is, that efforts are being taken, and the results will show, sooner rather than later. That said, if the issue is with the Government, why not try to sort things out amicably? Killing children will almost certainly not endear the perpetrators with others who are suffering similar plights. If not anything, just like how the killings of innocent people by terrorists dilutes the so called 'cause' in the eyes of the common man, making the distinction between villainy and martyrdom even more stark, even if the Maoists, as per the original Mao Zedong doctrine are fighting for the rights of the poor peasant, they will be viewed with disgust and perceived to be another bunch of inhuman, insane, indoctrinated, inglorious, murderers and villains.<br /><br />Whatever the cause may have been nothing justifies ruthless killing - be it the killing of children or of a law-abiding officer. More so, on or after Gandhi Jayanti, where the world celebrates the winner who never won, of the Nobel Peace Prize, a man who famously declared that 'an eye for an eye makes the world go blind'. A man who abandoned a rather successful non-cooperation movement after a retaliatory attack at Chaurichaura, just because the retaliation violated his principles of non-violence. If the Maoists were trying to send a message, I guess all of young India, (and I take the liberty of speaking on behalf of all other young like minded people like myself), feel that a message has been conveyed, of course, but a message that is horribly wrong, and completely contrary to the kind of picture the perpetrators wish to project.Sindhu Subramaniamhttp://www.blogger.com/profile/09426043808886874328noreply@blogger.com0tag:blogger.com,1999:blog-573041614362700719.post-83322028690566179532009-09-07T05:44:00.000-07:002010-02-02T06:01:32.566-08:00Manic Monday - Are we Indians truly worth it?Andie McDowell, Aishwarya Rai and Eva Longoria look us in the face and say - 'Because you're worth it'. But are we really worth it??? India is reeling under swine flu. That said, I just saw some reports of Chikungunya cases being reported in AP. Even a bustling metropolis like Mumbai was not spared. Pune and Mumbai became swine flu spots. And the administration received well deserved flak for not having a proper process in place to check the pandemic! We are supposed to be the sunshine country of the future. Linked with China, poised for growth, harbingers of the world economic order! And here we are faced with drought, (which climatologists claim is a natural occurrence once every 5-6 years, scientifically), a pandemic, the world economy is hit and all hell has broken loose!<br /><br />Dr. Amartya Sen in his book Development as Freedom has compared the India-China story and described how the Communist, populist regime of China pre-reform focused on 'people development'. One can attribute some level of the people-centric policies to the Chinese culture, where education and all-inclusive health care are principles ingrained into their psyche. Chinese and Japanese were supposed to be the lodestars of human civilization and culture in the ancient times, after all. So, an offshoot of this deep culture, stood them in good stead, whereby by the time China got ready for reforms in 1979, they had a prepared, educated population all set to exploit the reformed economy to the fullest and steam roll their way into the future.<br /><br />Could we perhaps even attribute this process to communism? Communism, as a philosophy speaks of <span id="fullpost">'down with the owner-worker relationship' 'everything belongs to everyone'. So could it be that these deep populist, equitable distribution seekers could allow this philosophy to creep into the realm of governance and ensure all inclusive provision of basic facilities? Take Cuba, for instance - it is supposed to have the best education and health care system in that part of the world. The statistics speak for themselves. 4th highest in literacy rate, with literacy rate almost reaching 80%. Before the Cuban Revolution, Cuba had the third-highest number of doctors per capita in Latin America, the mortality rate was the third lowest in the world, infant mortality rate was the lowest in Latin America and the 13th lowest in the world, and life expectancy was some ten years higher than the Latin American average. Kerala - the Indian state with the highest literacy rate, and maximum institutional births in India. Although industrial growth has been dismal, quality of life for the people is rather high in comparison to the rest of India. The key again was inclusion in provision of health care and education, that resulted in overall upliftment.<br /><br />So, while China was prepared for the liberalization movement, India in contrast, when she liberalized her economy, opened up the economy to grossly under prepared people, who were still majorly illiterate and perhaps never understood the modalities of a liberal economy. As a result, to a very great extent, it appears as if the whole liberalization regime was either too premature, given India's gross lack of preparedness to rise up to the challenge, or the developmental part has a lot of catching up to do, to make up for the lost ground.<br /><br />That said, it is perhaps not enough to just develop pockets. It doesn't make sense to have the most opulent sea facing mansion on one end, and Asia's largest slum on the other end of a city's spectrum. Unfortunately, this spectrum is indicative of the pattern existing in India as a whole as well, with interior India still struggling for electricity and water, while some other regions grapple with issues of floods. It is all a bit murky, and a lot of sorting out needs to be done. But at least the administration seems to have its heart in the right place. There has not been a famine in India since 1947, and Dr. Sen attributes this to the fact that we have a democracy, that ensures that vote bank politics prevents governments in office from not taking adequate steps to arrest famine in the wake of food shortages. One just hopes for words to get translated into actions and we hope that a sunshine nation like ours may not still, after 62 years of independence, grapple with issues like drought, policy initiated 'food crises' or curable diseases turning into pandemics!</span>Sindhu Subramaniamhttp://www.blogger.com/profile/09426043808886874328noreply@blogger.com0tag:blogger.com,1999:blog-573041614362700719.post-20979524977417748372009-08-07T05:45:00.000-07:002010-02-02T05:45:55.835-08:00Friday Funda : ProtectionismRemember the in-flight safety video? Where the oxygen masks drop during turbulence and you are told to mask yourself first and then help others out? Well, economic recessions and fluctuations are a lot like mid-air turbulence. They throw all sense of routine and uniformity out of balance and every one's life is thrown in disarray. At such a time, is it wise for a country to take on a similar 'protect yourself before you protect others' approach when it comes to economic growth?<br /><br />The answer, I felt till a very long time was yes. Each one for himself. Tough times need tough action. And if I don't safeguard myself, how can I expect someone else to safeguard my interests?<br /><br />As it turns out, this idea is wrong in a globalized world. Given the current economic downturn, many nations are feeling the pinch of recession, and are scrambling to save themselves from collapse. Underdeveloped nations that depend on the developed world for survival have had to bear the maximum brunt of the recession. But what is surprising is that in spite of the degree of development achieved by the developed world, in spite of the cushion of comfort the numerous years of growth have afforded them, the developed world also tried to scramble for cover! A glaring example is the 'Buy American' clause in the rescue package of the American government. I happened to see the hue and cry against this clause in Canada, whose dollar value of trade is the largest with USA, and it was then that the full force of the argument hit me. Look at it this way. The world is going through turmoil. Internal consumption is hit badly. So, to keep the economy afloat, you need to look outside - trade. And if your counter party (who happens to be an economic superpower) in the whole trade equation turns away, to protect his own interests, where else do you go? Superpowers are afforded that status for a reason - the immense accumulation of sustained growth over the years is actually supposed to put them in a position to help other 'comparatively needy' countries out in times such as these.<br /><br />I remember having read an article once, when the whole cap on H1 visas came out in early 2009. The article spoke about parochial decisions that make a government want to look inward and at short term political benefits while forgetting about the long term implications of its actions. In other words, the article went on to say that in a recession, where a sudden spurt of growth through innovation is the need of the hour, if a country like US were to shut its door to skilled labor, they are in a way missing the forest for the trees! And later, when the recession goes away, the opportunity cost for the skilled labor may not be incentive enough to make them want to go to work in the US. At such a time, the long term picture would have effectively been ruined on account of protectionary tactics of the past.<br /><br />Funda conclusion - Protectionism - not good. A superpower must use her superpowers to elevate all those suffering under recession, and such a mass elevation can alleviate every one's issues collectively.Sindhu Subramaniamhttp://www.blogger.com/profile/09426043808886874328noreply@blogger.com0tag:blogger.com,1999:blog-573041614362700719.post-38835737175385941772009-06-11T05:45:00.000-07:002010-03-19T07:17:48.174-07:00Ikea pulls out of plans to set up shop in India - Retail, the big pictureRetail in India, I feel is a totally different story, as compared to retail in any other country. It is more of a cultural aspect than anything else, according to me. We as Indians are wired differently and for us, a shopping experience is not more about finding everything under one roof, as it is about going from shop to shop. Tell me, do we, and I speak of the ardent shoppers, feel happy and content after making a bulk purchase at one single shop? I, for one, don't. I feel like I have let go of some opportunity, in picking up all my bargains at one single shop. For this reason, I feel that retail in India is an all new ballgame, with the players needing to concentrate on how to break into the Indian psyche, and make a point.<br /><br />Take for instance shopping malls in India. A typical mall in a foreign country has a whole host of shops that sell anything and everything from clothes to coffee to sweets to jewellery. And in India, that concept somehow doesn't seem possible, since for many jewellery shopping doesn't begin and end at People's, but rather begins at Zaveri Bazaar, goes all the way through Tanishq and ends perhaps at the place suggested by so and so's grandmother, since that shop is very conscious of quality.<br /><br />How do we go shopping for clothes? We segregate our purchases into good clothes and replaceable clothes. So, the good clothes are bought at an upmarket place, while the use and throw variety is generally picked up anywhere. Likewise, furniture. The whole concept of assemble-it-yourself furniture is unknown to us. We need a cabinet made, we call Pandu the carpenter, who brings along another helper and wham! a cabinet is ready in 3 days, and the cabinet fits snugly into the 2 feet by 3.75 feet nook we pointed out to Pandu. So, that Ikea pulled out of its plans to enter India, is not very surprising to me.<br /><br />Malls have mushroomed in India, more so in Mumbai over the past few years. But the funniest part is that some of these malls have sprung up in the heart of the 'flea market' shopping districts. I speak specifically of a couple of malls in Dadar in Mumbai. I, for one, could not understand why someone would set up shop while in direct competition with the road side shops who care two hoots about long term sustainability and margins. All they need is to turn in a profit for that day, so they can eat that night! Tomorrow is a new story that can be tackled separately.<br /><br />What poses a question to me, rather is what the nature of retail in India, really is? Will malls continue to be looked upon as places to hang out in and nothing else? Will Mumbai see the closing down of many more of the mushroomed malls, like it happened with Crossroads? Will the Indian consumer get out of the traditional mindset and look beyond the shop around the corner? And also, what is the scope of organized retail in India, say retail through the internet, and what can incentivize the Indian consumer and hence the retailer to pursue the same goals?Sindhu Subramaniamhttp://www.blogger.com/profile/09426043808886874328noreply@blogger.com0tag:blogger.com,1999:blog-573041614362700719.post-72325602955362040392009-02-07T05:47:00.000-08:002010-02-02T05:48:10.401-08:00Duplicitous protectionismThe Groundhog is supposed to be the harbinger of spring. Once the groundhog is sighted on Groundhog Day people rejoice, since spring is round the corner and the dreary winter is almost over. Likewise, in case of a forest fire, the rhino is rumored to run out of the forest as though its own tail were on fire, and this sort of gives a cue to other animals to grab their coats and run! Then again, before Mt. Vesuvius erupted incinerating Pompeii, the legend goes that dogs all over the town howled, and acted crazy. Precursors, forebears, harbingers, whatever.<br /><br />You might wonder why I am saying these things. Because I feel that we should have read the signs long ago. Remember how Mumbai and Maharashtra was held to ransom a few months back on the whole North Indian v/s Maharashtrian story? Well, now, with the global economic meltdown, British are out on the streets protesting and urging the government to provide them with right of way when it comes to jobs in their own country. Now, the US House wants to ban American companies that employ people on H1B visas. The bailout has fine print that reads - 'Buy American'. Why? because they want food cooked by the family to be eaten by family first before being given to the poor. Curb internal unemployment. Encourage indigenous industry first and prevent internal enterprise from being devoured by cheaper Eastern-world substitutes. Are they right? Who knows? One may argue that American tax payers' money had better be used to encourage American industry. But this argument never surfaced when the world was busy buying American debt. People call this 'Protectionist policies' when they are the victims. But the same people call this phenomenon 'protection of self interests' while they act as the enforcers of such policies. Duplicity? Indeed..............<br /><br />Parallels exist everywhere. It is up to the informed, aware individuals to decide which way to go. Why not let the market decide which way to go, since history has proven time and time again that markets are by and far the most righteous, and fair entities in the game called life. Let the markets decide whether to 'buy American'. Let 'American' be competent enough to compete on the world stage unaided. Let the market decide whether a Jha or a Jadhav gets an opportunity. Let each compete on merit. This is the only way we can achieve overall development of our core competence.Sindhu Subramaniamhttp://www.blogger.com/profile/09426043808886874328noreply@blogger.com0tag:blogger.com,1999:blog-573041614362700719.post-15794237049061375792009-01-27T05:48:00.000-08:002010-02-02T06:01:32.567-08:00The Audacity of greed'These are extraordinary times and they call for swift and extraordinary action' Man of the moment, Barack Obama made this statement this morning at the White House, while discussing the need for energy independence. America is now on the threshold of being the leader of energy thrift going forward. As a person watching the economic crisis from the sidelines, albeit apprehensive, that the rapidly unfolding mess, which shows no signs of having been completely unraveled, I can only watch, and watch with hope that the measures being taken by various economic superpowers to try and extricate the world from depressed gloom might actually work.<br /><br />But every now and then, there are reports of how the top management of big firms squandered precious money, and how these excesses would have practically gone unnoticed, had it not been for the economic crisis.<br /><br />Topping the list is John Thain - Merill Lynch CEO, who spent $1.2 million to redecorate his new office. His splurges include - $2,700 for six wall sconces, $5,000 for a mirror in his private dining room, $11,000 for fabric for a "Roman Shade”, $13,000 for a chandelier in the private dining room, $15,000 for a sofa, $16,000 for a "custom coffee table", $18,000 for a “George IV Desk", $25,000 for a "mahogany pedestal table", $28,000 for four pairs of curtains, $35,000 for something called a "commode on legs", $37,000 for six chairs in his private dining room, $68,000 for a "19th Century Credenza" in his office, $87,000 for a pair of guest chairs, $87,000 for an area rug in Thain's conference room and another area rug for $44,000, $230,000 to his driver for one year’s work, $800,000 to hire celebrity designer Michael Smith, who is currently redesigning the White House for the Obama family for just $100,000.<br /><br />He apparently signed off on a check for $3000 for labor for replacing the light bulbs on those sconces! It is appalling, since Thain (ex-director of NYSE and former Goldman Sachs employee) was the man appointed to turn Merill's futures around. Yup, turnaround alright! From bad to non-existent! Hurried bonuses for top executives, not disclosing the full measure of the rot to Bank of America before the buyout, and grossly stupid excesses define the Bank of America - Merill Lynch union!<br /><br />This is just one case. Just before the Street came crashing down, <span id="fullpost">at the start of 2007, Todd Thomson was ousted as head of wealth management at Citigroup since tough times called for cost-cutting and Todd's excesses came out into the open! Apparently the office boardroom, which was almost exclusively used by Thomson, had marble flooring and polished wood cabinets. His main office had a house for Flipper, which is fine, except that it was a tropical fish-tank. The office took on a more Forrester Creations look with Persian rugs and a giant wood-burning fireplace. Mr Thomson also ruffled angry feathers with his use of the corporate jet, relegating other executives to 'cheaper' transport, (which I am sure would have been nothing short of First Class on some high priced airline) for the return leg of a visit to China so he could travel alone with CNBC's Mario Bartiromo. Excesses indeed!!!<br /><br />Next - AIG. CDS took AIG under. And while AIG went sputtering, gasping for help, 70 employees had been rewarded with a week-long stay at the luxury St Regis Resort in California. The bill? $440,000. And look at the audacity of greed (good title for a new book... I stake my claim on that title) , a week later, it came out into the open that the company was planning another trip – but executives cancelled that one.<br /><br />Finally (hopefully) - Bear Stearns. This story just is the crown jewel of the excesses saga. Jimmy Cayne, long standing chairman of Bear Stearns, wanted to be Tiger Woods one day! He stressed more on Golf practice, and seldom ever came to work on Fridays. When I hear about investment banking jobs from my friends, I get the picture of 20 hour workdays, ears stuck to the phone, fingers glued to the blackberry, divorces, what not! But 'let the company go to hell while I play golf', seems like a fun occupation for earning 8 figure salaries! Even working days called for golf. Manhattan traffic? well, there's no one up in the sky! Helicopter rides to the green - well, golf was an addiction indeed. Nero fiddled while Rome burnt. Well, Cayne putted when BS went under. Apparently when two of his flagship hedge funds toppled, Mr Cayne was very much on course, I mean the Golf course! And when BS finally said goodbye, he was at Detroit at the North American Bridge Championship. Much like the case of old man Thain. While Bank of America implored Congress for additional taxpayer bailout, with Ken Lewis working overtime to resolve the mess, each day discovering new black holes, which Mr Thain had never mentioned, Thain was busy skiing in Aspen Colorado!<br /><br />India is seeing its worst disgrace ever. Satyam, one of India's largest IT services provider has been embroiled in a dirty fraud. Latest news says 2 PWC partners in India have been put behind bars along with the perpetrators - B Ramalinga Raju and his brother Rama Raju. The fraud? Siphoning funds from the publicly listed Satyam (shareholders' money) into Ramalinga Raju's son's firm Maytas, while falsely depicting augmented cash and reduced debts. Sounds Thainy to you? Very much indeed, except that Mr Raju unfortunately has a prison loo at his disposal.<br /><br />Extraordinary times bring out extraordinary stories indeed.....<br /></span>Sindhu Subramaniamhttp://www.blogger.com/profile/09426043808886874328noreply@blogger.com0tag:blogger.com,1999:blog-573041614362700719.post-35675853555358262512009-01-10T05:50:00.000-08:002010-02-02T05:51:39.720-08:00India's Madoff - Made off with the millions - but how???Satyam is a rude shock. In ways more than one. There are some key questions everyone wants to ask. Some key points that Indians need to ponder. This whole fiasco can be described in a few short stages. Satyam, a listed IT company wanted to acquire huge stake in Maytas, which is owned by the Satyam Chairman's sons, without so much as a shareholder consent. After investors raise hue and cry, the deal is called off, but an even bigger can of worms is opened, after a startling confessional by Mr Raju, about massive fraud in their books, causes India's fourth largest IT major to collapse like a pack of cards.<br /><br />The key points to ponder here are first, how did seemingly independent directors approve unanimously the Satyam - Maytas deal? Did everybody forget that every shareholder whether he holds a million shares or just one share, is still an integral part of the investing body and has a right therefore, to know what is happening to his money? Second- what was the role of PWC? It is indeed one of the big 4 and it has a massive reputation and an even bigger credibility to live up to. Was it condoning the massive fraud? If not, then how did Satyam (whoever may be involved - CEO or CFO or Chairman or anybody) cook up such a fairy tale balance sheet. And manage to pull it off for not one or two years but 10 years??? Most importantly, how did auditors find evidences for the non-existant Rs. 5040 CRORES and the non-existent accrued interest of Rs 376 crores and the non-existant debt of Rs 490 crores????? And, how did they not find evidences for a liability of Rs.1230 crores?<br /><br />We can consider this scam to be the worst in years, almost to the scale of the Madoff swindle! And, somethings need to be addressed and acted upon very fast. First, we would need to understand how such dubious figures were concocted. ICAI would need to rework the accounting rules to prevent frauds of this scale. Extreme freedom to capitalism leads to greed, as it happened in the US in the run up to the credit crisis, and extreme regulation will lead to a contrived economy like that of China or erstwhile USSR. Clearly self - regulation with independent directors need not necessarily imply a clear, transparently governed corporate entity. A certain degree of government interference is needed. In the case of Satyam, the FIIs dumped shares to express disapproval, and hence the Satyam-Maytas deal fell through. But is the retail investor and indeed the FII as concerned in case of all other listed firms? Case in point Sterlite's attempt, in September 2008, to transfer the high-quality aluminum business and merchant power to Malco, in return for the low-quality, high cost, copper Konkola mines, going through without shareholder approval. Does that mean that only Satyam lost out for not having been smart enough???? Morbid indeed. And finally, what does this bode for Indian IT? And indeed for India, since although this scam is compared to Enron in US, its impact will be far more debilitating to India than Enron was for the US, since IT is India's primary key to growth and economic success.<br /><br />Here is my summary of the whole Satyam story so far - <a href="http://zizuspicks.wordpress.com/2009/01/11/the-satyam-story/">Satyam Saga.</a>Sindhu Subramaniamhttp://www.blogger.com/profile/09426043808886874328noreply@blogger.com0tag:blogger.com,1999:blog-573041614362700719.post-74441950674842039682009-01-08T05:52:00.000-08:002010-02-02T06:01:32.567-08:00Of frauds and scandals - Wrong thing at a wrong timeIt wasn't a premonition that made me write about Satyam yesterday. But it is a demolition that has made me write today. Satyam, one of India's strong IT firms has reported fraud. Fraud of the first kind. Reported cash where there was none, and reported under exaggerated spending figures. Wait, it got worse. This has not been a trend of the past year or two, but of the past 10 YEARS! And the worst part is - PWC audited them and Satyam was ranked one of the top 50 companies of all time in corporate governance. Well, a rude shock indeed.<br /><br />When the world is reeling under a credit crisis, stock markets are spiralling to hitherto unknown depths, the mayhem is spreading to other sectors after affecting manufacturing and housing, unemployment in the West keeps augmenting, general investor sentiment is to hoard cash under the mattresses, the world needs some strands of hay to cling on to! Unfortunately, now, since freely flowing credit has dried up, all the skeletons are coming out of the closet, much like the bones on a riverbed can be seen during a hot summer as the river dries up! First - Bernie Madoff - a classic 'iski topi uske sar ' story. Remorseless profiteering, using unfair means. Now, Satyam, whose woes began with a crazy diversification of stockholders' money into a family enterprise finally leading up to the opening of the ugliest can of worms India has ever seen since Harshad Mehta.<br /><br />This has loads of implications and repercussions. India has a rather strongly regulated banking sector. So, India was spared the debilitating effects of the credit crisis the world now faces. IT and IT services are India's main USP. But India is still a young nation. We haven't even reached a 3 digit figure for years after independence. So, facing fraud in the sector that in a way differentiates India from other emerging markets is, tough and sad to say the least. Investor and client sentiment would decidedly begin to spiral down. Where can India then move to find its elusive economic stronghold?<br /><br />So much for India. A bigger repercussion according to me, is the dent on the credibility of the Big 4, at least in India. Auditors are historically feared by all firms, big or small. Now, if a huge auditor has not noticed anomalies for not one, but 10 years, its like the 'Dark Ages' all over again. Who do we believe? Madoff has sparked off fire on the SEC in the US. Will Satyam cause ICAI to re-visit its processes? Must SEBI also stop resting on its laurels and begin to ensure that the prices of stocks are truly aligned to the core competence of the listed firms? But then again, will an over-reliance on external governance result in contrived growth on account of controls based on extreme caution and suspicion? Will this eventually turn the whole world RED?????Sindhu Subramaniamhttp://www.blogger.com/profile/09426043808886874328noreply@blogger.com0tag:blogger.com,1999:blog-573041614362700719.post-87306174056559884692009-01-02T05:53:00.000-08:002010-02-02T05:54:07.782-08:00Terrorism in India - It is a management case study2008 was a bloody year. Literally as well. Carnage everywhere. The mayhem in Iraq and Afghanistan continued undeterred, while the world continued to burn elsewhere as well. South Ossetia, DR Congo, Zimbabwe, Pakistan, Tibet, Israel, Sri Lanka, India (all over - Jaipur, Delhi, Mumbai, Guwahati) and now Palestine. The color of the flame however was the same - a violent yellow, with splashes of blood red everywhere.<br /><br />I wrote a lot during the Mumbai carnage. A lot is an understatement. Well, when your manager asks you and your team to please work from home (since people are their most valuable capital), TV is on a terrorism overdrive, Gtalk conversations revolve only around the 'dastardly' acts of violence inflicted on Maximum city, anxious clients send emails asking us to be safe and please not worry about work deadlines and going out is ruled out, since for family, we are the only one of the kind, annnnnd, the only tool at your disposal to vent out the thoughts stacked up inside your mind is something.blogspot.com, you, tend to write. And write I did, like <a href="http://the-lilac-avenue.blogspot.com/search/label/Terrorism">here</a>.<br /><br />The thoughts ranged from anger to frustration to outrageously enraged to plain stumped. Now that the dust has settled and the Mumbai terror attacks have formed the topic of discussion for Indian diplomats and foreign ones with an Indian interest, all that is left is retrospection and a push for urgent action.<br /><br />Why do we need immediate action after Mumbai? India shining. Over the last decade, India was a glorious investment destination for people across the world. As recession began to hit the big boys of the world economy, many looked to the east for support. India-China. But soon, the hyphenation with Pakistan (India-Pakistan, a dreaded term from which India had managed to slowly but surely move away), sort of managed to preponderate over the hyphenation with China. I had an opportunity to speak to a person who invests in real estate in the US. With the real estate bubble bursting with disastrous effects in the US, he looked to invest in Indian housing. But one statement he made was, 'How can India expect investment in the country when the country's own peaceful existence is perennially threatened?' Ouch! On that score, our nefarious neighbors with hostile 'non-state actors' seem to have dealt a massive blow. A recent article in the economist underlined this fact, and <span id="fullpost"> this sorry event has effectively dented international confidence in India. Do I feel bad? Yes. Can I blame the international community? No. How many invest in Rwanda? Or Zimbabwe? Or Sudan? Unless India gets serious about internal security, we cannot aspire to become the world leaders, torch-bearers who can and will bring the world out of economic gloom. Also, India has historically been a patient nation. We have put up with multiple insurgencies by our neighbors (a whole post was dedicated to our 'honorable neighbors' <a href="http://the-lilac-avenue.blogspot.com/2008/11/pakistan-our-worthy-neighbors.html">here</a>). But this time, with the terror attack reaching horrendously evil limits, everyone is scared. What happened in Mumbai can happen anywhere. Suspicion will abound, since every commuter with a big bag sitting next to me in a subway, will be looked at with a million thoughts and images in my mind. People are scared. Real scared. They are more disgusted with the failing system that failed to avert this attack, than with the terrorists.<br /><br />What kind of action can be taken? US has imposed a 46 year trade embargo on Cuba, because Castro overthrew the America-backed dictator Batista. Can the world community do the same to Pak? Will that help? Well, for a country that has always been sending defence ammunition meant for a war on terror, to the perpetrators of terror, how long will it take to find another means of propping up the already failed economy? Like the filmy dialogues by our Hindi movie villains - 'I wasn't born a criminal, Samaj ne mujhe aise banaya', a trade embargo could perhaps send Pakistan further into the clutches of terror. When Mumbai happened, the youth urged for war. A surgical war even. That was the anger translated into a wish for immediate action. Look at Israel and Hamas. I for one feel that the Israel-Hamas conflict is akin to India-Pak. Nefarious, meddling neighbors, perpetrators of crime and terror, disturbing peace in the region, making the everyday man worry whether he'd be alive the next day. Too many similarities right? The recent conflict - Israel has launched an all out war against Hamas. Is Israel really to blame? Granted Hamas was elected to power in Gaza. But the elected government had resorted to trouble making. Rockets in the backyard everyday, killing a handful of Israelis almost daily. Israel, has historically never been a calm and patient country. But nevertheless they put up with the shelling and killing for a while. At one point, like the protagonist of a Premchand novel, one would want to just pick up a stick and hit back. And hit they did, BIG TIME! But what happens? A personal evil agenda, of a handful of terrorists (in this case Hamas) who operate from the cushy comforts of their safe havens kills hundreds. The retaliatory effect is disastrous. Is war, no matter how surgical, an answer? I think, No. Terror is a new enemy, and we need to think out of the box to cure this canker, before the 'eye for an eye' strategy renders the world blind. <br /><br />India has chosen the diplomatic route against Pakistan. Piling pressure through US, UK, UN. This pressure has so far only resulted in eyewash. There are hints of imminent war. Only hints. Since only God knows the effect of war between two nuclear powered nations in a precarious place like the Asian sub-continent, whose Middle eastern part has been ravaged by war and violence for ages. But can Satyagraha help against barbarians? I don't know. I, for one have always felt that Gandhiji won independence for India, because the British were still civil and cultured. But this time, the enemy is evil, and barbaric. Another kind of a fight is needed here. <br /><br />But one thing we ought to notice in this whole carnage story, is the fact that only Israel or USA or Russia can actually launch an all out offensive against another country. Why? They have the political and economic power in whatever way that may be, to face the world after their 'job' is done. So, like I'd written in one of my earlier posts, there are only two things that we can do, in the immediate future. Beef up internal security - cameras, spot checks, tight intelligence, civilian alertness, breed suspicion. Yup! Breed suspicion. It's better to be suspicious, than dead! Second, build the economy and the political system to a level of strength, so strong, that like the world fears action against Israel or China, for the numerous ills they may harbor, we Indians become a true force to reckon with, and we don't need the intercession of any other country into our 'personal affairs'.<br /><br />Perhaps what happened in Mumbai, can actually influence the thinking millions in India and across the world to perhaps put on their thinking caps and find a solution that could really work and in Pranab Mukherjee's words produce 'tangible results'... What say?<br /><br /></span>Sindhu Subramaniamhttp://www.blogger.com/profile/09426043808886874328noreply@blogger.com0tag:blogger.com,1999:blog-573041614362700719.post-58580038473006240542008-12-31T05:54:00.000-08:002010-02-02T05:55:02.246-08:002008 : The year that wasIt is almost new year and for many, this is a year better, best forgotten. The world has been hit by one of the worst ever economic crises since decades, with no clear sight in view, about when the mood will begin to be bullish again. However, this has been a year that can actually be remembered for some good reasons as well. So while we do indeed have the bad news, we do have the good news as well.<br /><br />The start of the year, for Indians began with a slump in GDP. Perhaps we should have taken a hint from that piece of news, but we were quick to reassure all and sundry that everything was fine. The months went on, and as America sneezed, everyone in Asia began slowly catching the bug.<br /><br />Britney Spears went through an awful year swinging in and out of insanity.<br /><br />The American Presidential election became <span class="blsp-spelling-corrected" id="SPELLING_ERROR_0">prime time</span> watch for people all over the world. Lipstick, <span class="blsp-spelling-corrected" id="SPELLING_ERROR_1">pit bulls</span>, war veterans and the bridge to nowhere became commonplace topics to talk about.<br /><br />The Indian embassy in Afghanistan was bombed and 44 were killed and another 140 innocent civilians were injured. Terrorism still showed that it had the upper hand in the world.<br /><br />Madonna divorced Guy Ritchie and paid a fortune in settlements!<br /><br />The phenomenon called the Olympics happened. In China. People had finally awakened to China. The arrangement and the organization was phenomenal. The gross disregard for human rights was totally condoned. But this was China. How could anyone care?!? India as usual went in with a teeny tiny contingent, in gross discord. Not even a uniform dress code!<br /><br />But who cared about Ms <span class="blsp-spelling-error" id="SPELLING_ERROR_2">Mirza</span>? We won one GOLD in shooting courtesy <span class="blsp-spelling-error" id="SPELLING_ERROR_3">Abhinav</span> <span class="blsp-spelling-error" id="SPELLING_ERROR_4">Bindra</span> and two bronzes. Boxing and wrestling - <span class="blsp-spelling-error" id="SPELLING_ERROR_5">Vijender</span> <span class="blsp-spelling-error" id="SPELLING_ERROR_6">Kumar</span> and <span class="blsp-spelling-error" id="SPELLING_ERROR_7">Sushil</span> <span class="blsp-spelling-error" id="SPELLING_ERROR_8">Kumar</span>, respectively. Consistency was missing, since <span class="blsp-spelling-error" id="SPELLING_ERROR_9">Rajvardhan</span> <span class="blsp-spelling-error" id="SPELLING_ERROR_10">Rathore</span>, failed to impress.<br /><br />Consistency showed elsewhere, since <span class="blsp-spelling-error" id="SPELLING_ERROR_11">Nadal</span> won French open and an Olympic Gold. AND ALSO WIMBLEDON. In matches that can thrill generations of <span class="blsp-spelling-corrected" id="SPELLING_ERROR_12">YouTube</span> watchers, history was written. <span class="blsp-spelling-error" id="SPELLING_ERROR_13">Federer</span> displayed chinks in his armor, but still went on to win the doubles gold at the Olympics.<br /><br />The Marriott in Islamabad was bombed my suspected Al <span class="blsp-spelling-error" id="SPELLING_ERROR_14">Qaeda</span> operatives with a truckload of <span class="blsp-spelling-error" id="SPELLING_ERROR_15">RDX</span>, killing foreign nationals, and destroying the building. <span class="blsp-spelling-error" id="SPELLING_ERROR_16">PoK</span> was shook by a massive earthquake that killed thousands. <span class="blsp-spelling-error" id="SPELLING_ERROR_17">Zardari</span> became President. (I don't know whether I can say elected, since democracy and Pakistan don't sound good together). Musharraf had to run for his life, (expected).<br /><br />THE DARK KNIGHT RELEASED. A cult film by any standards, setting a new threshold for <span class="blsp-spelling-corrected" id="SPELLING_ERROR_18">villainy</span> in the late great Heath Ledger. A terribly underrated actor, who starred in <span class="blsp-spelling-error" id="SPELLING_ERROR_19">Brokeback</span> mountain and A Knight's tale, The Joker was a new high for him. Unfortunately another form of going high, killed him, and the world lost a fine actor.<br /><br />Barack Obama became President. Racial prejudices went to the dogs. Analysts, <span class="blsp-spelling-error" id="SPELLING_ERROR_20">bloggers</span>, people all wondered whether America would be able to take a wise well-informed decision, and no one was ready to bet either way. The economy by election day was teetering on the edge and no one knew which way the scales would tip.<br /><br />Michael Jackson became <span class="blsp-spelling-error" id="SPELLING_ERROR_21">Mikaeel</span>.<br /><br />The world lost Lehman Brothers. Merill Lynch went to Bank of America. Bear <span class="blsp-spelling-error" id="SPELLING_ERROR_22">Stearns</span> was gobbled up by <span class="blsp-spelling-error" id="SPELLING_ERROR_23">JPMC</span>. <span class="blsp-spelling-error" id="SPELLING_ERROR_24">AIG</span> almost went kaput, only to be rescued by the government.700 billion dollars was earmarked as a TARP bailout fund. We still don't know how that will be spent. American auto manufacturers are now paying the price for not having been prudent by going green and small. They now beseech the American Congress to bail them out.<br /><br />Lewis Hamilton won the F1 World Championship. I don't want to speak much on that, since I still feel that was unfair.<br /><br /><span class="blsp-spelling-error" id="SPELLING_ERROR_25">Mumbai</span> was attacked by terrorists who actually ran <span class="blsp-spelling-corrected" id="SPELLING_ERROR_26">amok</span> <span class="blsp-spelling-corrected" id="SPELLING_ERROR_27">wielding</span> AK-47 weapons and killing innocent people in a train station, and in key five star hotels in <span class="blsp-spelling-error" id="SPELLING_ERROR_28">Mumbai's</span> posh South <span class="blsp-spelling-error" id="SPELLING_ERROR_29">Mumbai</span> area. This set into action a whole host of events right from restructuring by the government to key steps to up the security in the country.<br /><br /><span class="blsp-spelling-error" id="SPELLING_ERROR_30">Vishwanathan</span> <span class="blsp-spelling-error" id="SPELLING_ERROR_31">Anand</span> retained the World Champion crown. <span class="blsp-spelling-error" id="SPELLING_ERROR_32">Yay</span>!!!<br /><br />Thwarting appeals by separatists to boycott elections, a 62% voter turnout in J&K showed the triumph of democracy. I kinda feel proud of that. In spite of all kinds of nonsense, Indians still have the power to elect their own leaders.<br /><br />Israelis launched an all out yet retaliatory attack on <span class="blsp-spelling-error" id="SPELLING_ERROR_33">Hamas</span> in the Gaza strip, in one of the bloodiest attacks of all time.<br /><br />Ugandan rebels are being fatally tackled in DR Congo. Zimbabwe is going through an economic breakdown with a terrible attack of cholera debilitating the country. Almost all of Africa is going through a humanitarian crisis.<br /><br />A student was accidentally shot dead by police in Greece, and riots are still on in Athens. I guess the simmering dissent just needed one tiny burst of the bubble to just erupt like a volcano. A youth was killed in Bangalore by army personnel in a case of mistaken identity. Nothing happened.<br /><br />India beat the Brits in the test series that comprised an almost lost test match as well. Australia lost the Boxing Day test to South Africa in a thrilling encounter.<br /><br />Bittersweet year? I guess. A great year for Obama, sport in general, and a terrible year for the economy, Africa, Mumbai (thanks to BSE and the terror attacks). How will next year be? Who knows! But what else can we do, except look to the new year with hope and anticipation for a new beginning. Happy New Year everyone......Sindhu Subramaniamhttp://www.blogger.com/profile/09426043808886874328noreply@blogger.com0tag:blogger.com,1999:blog-573041614362700719.post-66587063513831447222008-12-28T05:55:00.000-08:002010-02-02T05:56:05.384-08:00Boxing Week 2008It's Boxing Week. Well, all along, I thought that Boxing Day (day after Christmas) held some historical significance in terms of the sport called Boxing, and hence is celebrated as such! Only later did I learn that Boxing day is when Christmas presents are to be unopened and kept / exchanged / returned. The 'boxes' represent the 'Boxing day'. Simple? Oh yeah! This whole week is Boxing week. All malls, shopping places run deals, good deals. Loads of discounts, since this week traditionally invites shoppers in hordes! There have been stories about stampedes outside malls on Boxing day, that apparently even killed a store employee! Now, people spend a lot before Christmas. They spend to buy presents for everyone. And Boxing week is like a bonanza, more like a ritualistic shopping expedition, as a means to add cheer to the white holidays. Basically, Boxing week is like shopping week, in a greater part of the Western World. <br /><br />This year though, the story has been slightly different. Given the economic slowdown, analysts, economists, retailers have all been speculating on how the mood would be this year. Given the fact that people need to spend in order to boost the economy, the economy watchdogs were actually 'watching'. They wanted to see where the consumer would go, whether he would head to the shop or whether he would hide money under the mattresses. To lure customers almost all major shops advertised 50 - 70% discounts. They advertised freebies, and what not! Just to make the consumer come out and spend.<br /><br />This time, with loads of people being laid off, mounting debt, lack of free funds to spend coupled with a general sense of uncertainty over where the economy is heading and when the bear would hibernate giving way to the bull, people were not really in a mood to splurge. No stampedes at Wal-Mart, only marginal queues. To make the crowds look bigger, some cash registers were closed off. Many people said that they had exhausted their budgets buying Christmas presents and so, did not wish to spend more in Boxing week. Some were prudent to keep aside buying a much wanted item like a pair of shoes or a bag for Boxing week, just because of the favorable deals. But that's it. No splurge shopping. Some were restrained because they did not feel right shopping when so many people were being laid off or were facing the brunt of the economic slowdown. The only contrasting report however was about Amazon reporting 73 deals per second on day 2 of Boxing week. Heartening to know. But a conspiracy theorist inside me asks whether this was a media byte to boost consumer confidence.<br /><br />While some actually took pains to go and buy something, some others chose to window shop, for sake of the ritual. So Boxing Day actually took on the significance I first thought it to hold - Boxing... Only this time, fighting the urge to splurge in favor of a bit of prudence......Sindhu Subramaniamhttp://www.blogger.com/profile/09426043808886874328noreply@blogger.com0tag:blogger.com,1999:blog-573041614362700719.post-81653831444500509622008-11-26T05:56:00.000-08:002010-02-02T06:01:32.568-08:00Bail out to sail out....How much is too much?Help!! SOS!!! Bail me out! These words resound all over the place. A month ago, the biggies of Investment Banking - Bear <span class="blsp-spelling-error" id="SPELLING_ERROR_0">Stearns</span> was the first to buckle. Then, Lehman, Merill Lynch and JP Morgan, saw the red. Black rock became <span class="blsp-spelling-error" id="SPELLING_ERROR_1">DSP</span> Black Rock. <span class="blsp-spelling-error" id="SPELLING_ERROR_2">AIG</span> was 'rescued'. Lehman became '<span class="blsp-spelling-error" id="SPELLING_ERROR_3">Nomura</span>'. It was a massive bloodbath - so to say, with other global biggies clamoring to devour the spoils. There were talks of people wanting to purchase the hardware assets of Lehman - the servers, routers, cables, <span class="blsp-spelling-error" id="SPELLING_ERROR_4">et</span> <span class="blsp-spelling-error" id="SPELLING_ERROR_5">al</span>. Understandable, since <span class="blsp-spelling-error" id="SPELLING_ERROR_6">IB</span> needs a robust infrastructure, and so decidedly these 'assets' would fetch a lot more. Clearly that was true, since all said and done, these were tangible assets, unlike the banks' prized high priced assets called Collateralized Debt Obligation instruments - which actually brought about the mayhem. The economy showed signs of collapse, recession - of global proportions. The pillars of economic boom crumbled like a pack of cards. And before one could blink, the symbols of growth and economic prosperity were gone! At the threshold of B school, people dream of a job at Lehman or <span class="blsp-spelling-error" id="SPELLING_ERROR_7">JPMC</span>. And now, those entities are gone without a trace. The feeling is akin to that felt by one who flew out of NY on Sept 10, 2001 and came back on Sept 12, 2001.<br /><br />So the banks are down and out, people are seeing the value of their real estate assets plummeting earthwards, the stock markets that hold a greater part of the Western World's hard earned money are <span id="fullpost">going through negative uncharted territory, people are losing jobs, uncertainty prevails. Human nature - when it is uncertain whether I would have a job tomorrow, I wouldn't wish to go buy Jimmy <span class="blsp-spelling-error" id="SPELLING_ERROR_8">Choos</span>! Oh, well, I may wish, but I wouldn't get myself to go buy em! So no one wants to invest in investment bank funds and portfolios. They demand <span class="blsp-spelling-corrected" id="SPELLING_ERROR_9">capital</span> protection. They do not want 'negative' ROI - at least. So, when no one buys, who buys? Uncle SAM!!! The result - bailout packages for <span class="blsp-spelling-error" id="SPELLING_ERROR_10">AIG</span>, nationalization of Freddie Mac and Fannie Mae, 700 Billion dollars worth of taxpayers' money forms the Herculean backbone against which the crumbling pillars of the American (I'd rather say Western - <span class="blsp-spelling-error" id="SPELLING_ERROR_11">Barclays</span> was rescued as well) economy. <span class="blsp-spelling-error" id="SPELLING_ERROR_12">Citigroup</span> is the newest entrant into the '<span class="blsp-spelling-error" id="SPELLING_ERROR_13">Bhikmangoo</span>' group, screaming, "Rescue me, I messed up!!" At the end of it all, it seems like Lehman and <span class="blsp-spelling-error" id="SPELLING_ERROR_14">JPMC</span> were not favored! But how long can the government condone 'overdrives', mismanagement and a gross lack of prudence?<br /><br />Incidentally I seem to have overshot my credit card limit while I was busy being fascinated (read enchanted) by Louis <span class="blsp-spelling-error" id="SPELLING_ERROR_15">Vuitton</span>, and Jimmy <span class="blsp-spelling-error" id="SPELLING_ERROR_16">Choo</span>. Can the government bail me out as well? Please?<br /></span>Sindhu Subramaniamhttp://www.blogger.com/profile/09426043808886874328noreply@blogger.com0tag:blogger.com,1999:blog-573041614362700719.post-85432142366896279052008-10-27T05:57:00.000-07:002010-02-02T05:59:00.585-08:00Global economic meltdown - a new dimensionThere have been loads of reports in the newspapers these days on how the global economic meltdown is affecting shoppers. There have been reports on how people are cutting down on spending, on account of the terrific uncertainty in the markets. In just a matter of 8 months the Bombay Stock Exchange - BSE Sensex (for sensitive index... Man! it seems more sensitive than a Cancerian woman!!!) has tanked almost 13000 points! 20,000 to 7000, and still nose-diving! So most urban Indians whose wealth is locked up in the markets are a little wary about spending. To the extent that on Dhanteras, when people generally buy gold or some other valuable - considered auspicious to do so, many refrained from purchasing anything other than essentials! So sellers want to lure people somehow or another.<br /><br /><span id="fullpost">Now, as we face a bust everywhere, with real estate prices going for a correction, the stock markets diving deeper and deeper, people do not want to invest any more, at least not to the extent that can hold up the exaggerated property prices. So builders who embraced the whole 'redevelopment of old properties' concept face either unfinished projects, with huge outflows or finished buildings with no takers! The result - they have had to slash prices and also offer freebies!!!! Buy a house, get a car free. Buy one house, get one free. Bizarre how things have shaped up in just a matter of months.<br /><br />But the most bizarre thing is, that this dire attempt to lure customers has hit other markets as well. Just this evening, while I was at a food mall, there was an announcement - "Buy half a kilo brinjal, and get another half kilo absolutely free."<br /></span>Sindhu Subramaniamhttp://www.blogger.com/profile/09426043808886874328noreply@blogger.com0tag:blogger.com,1999:blog-573041614362700719.post-2347576965027674292008-10-04T05:59:00.000-07:002010-02-02T05:59:54.014-08:00Tata says tata<div align="justify">Tata leaves Singur for greener pastures – literally. As a rather strong proponent of capitalism, like most of the younger generation these days, I feel vindicated again. For enterprise to grow and thus foster growth of a nation, the answer does not lie in Communism! Look where Left Bengal has gone!<br /><br />Politics is a media circus. The whole US Presidential election 2008 replete with moose, pigs, makeup, racial sentiments, feminism, and blockhead politics is testimony to that fact. But that a political party would ditch potential growth for those measly 15 seconds of fame, leaves me wondering whether India has been hit by another syndrome post the global economic meltdown. A syndrome called ‘idiocy in politics’!<br /><br />The scene in West Bengal - A friend of mine who has lived his life in Calcutta says that the sleepy city is in no way comparable to a metropolis. He’d been to Cal for around 10 days on an assignment, and when he came back, he said that he was happy to be back, since had he continued there, he would have become lazy and lethargic. His case you can argue, is an exception, but who can argue against the number of stirs and strikes that are commonplace in WB? Every other day, shutters are down for some reason or the other. But with a growing population, and more number of graduates the dearth of jobs is a reality. Where do they go? Move to other cities. Brain drain on a smaller scale. But what does that do to the state and its infrastructure? Every state, no matter how small or inconsequential, has state machinery that needs to run. And for that the state needs investment. An investment to the scale of the kind that Tata envisioned, would have opened up the floodgates of investment. Maybe Reliance, Vodafone? Daimler Benz for all you know??!!!?? Ironically ,<span id="fullpost">the Communist government in WB noticed that fact, which Ms Banerjee chose to ignore. She went on and on hammering into the heads of anyone who would listen and also those who wouldn’t, that she wanted to protect the farmers, whose rights had been cruelly snatched by the alligators of corporate capitalism! Whoa, and this poor alligator could have given jobs, much needed tax revenues to the desirous millions in West Bengal. India is an agrarian economy, no doubt, but somewhere one needs to move on. Agriculture alone cannot feed, clothe, house and develop the zillions of people. Khmer Rouge and Polpot had such nefarious intentions – a complete regression to farming and the ways of the olden times man. The result – a wipe out of a whole generation in Cambodia. Which again brings me back to wonder how one woman could have been so foolish???<br /><br />Two instances make me believe that perhaps West Bengal is opposed to anything new. They abhor change of any sort! Traditionally the Left with roots in West Bengal, have been very good ‘opposition’. No, I don’t mean it as a compliment to their political methods, but they operate in the true sense of the word – oppose anything that comes your way. The government said – ‘Without nuclear energy we would literally be left groping in the dark. So support the nuclear deal’ The Politburo said – ‘we hate America and all things American. So shoo the nuclear deal.’ I wish someone had then told them that nuclear energy does not belong to one country! It is property of the world community, scientific community, rather. Second, an Indian company made bold and decided to set up shop in WB. Two years ago. Why did the agitation begin to reach feverish levels only just now? Where were the protests before this? Save for a few breaks of the gate and screams here and there all this while, why protest now when the plant is at a stage where relocation costs are exorbitantly high? Where were these disgruntled farmers for so long? Spending the money they received as compensation? And when the moneybag ran dry, they found a reason to ask more? Has greed reached such abysmal levels? Ms Banerjee perhaps never imagined that the man of steel – Ratan Tata would move lock stock and barrel. She thought she could formulate a truce plan that would benefit her so called oppressed farmers and also bolster her long lost plans of becoming the CM next year. Unfortunately, the whole plan backfired. Now the youth are aghast, since much needed employment is gone. The state as a whole is disgruntled with her, and the glacier between her and the ruling government has received 10 more layers of ice! And irrespective of what Mr Tata may say to anyone, any future investor would think a billion times before embarking on a project in hinterlands of Mamtaland.<br /><br />The biggest loser, however is West Bengal. They were legendary for being thought leaders. Rabindranath Tagore, Shantiniketan, Bengal Chemicals, a majority of the freedom fighters, all have their roots in West Bengal. With the advent of the Left government, the state started sinking into the oblivion. Blame it on policies, or the lack of it, reticence towards development, a cushy comfort in the status quo or whatever. But now, such cruel selfish politics has managed to sound the way downward for one of India’s once most illustrious states. </div></span>Sindhu Subramaniamhttp://www.blogger.com/profile/09426043808886874328noreply@blogger.com0