Friday, September 25, 2009

It takes a Deep Recession to replace 7 with 20!

After years of dominating the whole world, 7 is being replaced by 20 to make sure that the representatives become all encompassing.

This Recession which began in US had a huge impact across the globe, but is felt the most in the developed part i.e. the group of G-7.

So forced to give-in the supremacy, the G-7 is now trying to accommodate the developing nation into the elite group.

Us, which is blamed for all its greed and other activities that have taken a dent on its image, is surprisingly the one which has initiated this process of giving more power to G-20.

At times one may wonder if the EU is the actual culprit in the world economic forums, not not US as is perceived.

Not that US can be said as a great proliferator of free trade especially with the recent 35% import duty on Chinese tyres.

Getting back to the topic, Iam sure there would be huge reluctance from the G-7 to give-in to sharing of powers with the G-20 which make the forum all the more dynamic.

Iam not sure if there would be any backing for this group from the existing elite panelists.

Successful case studies..err..are they? (Should have been Published atleast a month ago!)

Remember all those case studies done in MBA about Japanese Car makers' plants in USA revolutionizing the automobile processes.
I was just going through the latest news and I came across an article which is a big news in certain circles for sure.
Toyota is closing down its first plant in USA, the plant in California. What does this indicate?
Besides the fact that California is no longer the destination for investment, this is the first time that Toyota has ever closed a plant.
The plant in USA, especially the one in California initiated the successful journey of Toyota in USA. Last year it replaced Ford as the largest selling car marker in USA.
During the MBA course curriculum, The Toyota plant in USA along with the plant of Honda in Ohio were a part of the major case studies discussed for "Corporate Strategy" and also for "Operations management" to understand its "Lean" processes. The success stories of one time are no longer the ones sought after.
Similar is the case with the Honda's Ohio plant in USA. It started manufacturing motorcycles in USA in 1976 and heralded Honda as one of the best motorcycle manufacturers. But in 2007 Honda decided to stop the production of the motorcycles in USA from spring 2009, bringing an end to the success story.
When the decisions taken by a company are analyzed in a case study, the circumstances and the timing of the study become crucial, since the success story may not remain eternal.
The facts presented in a case study are mere numbers and a better perspective can be acheived by interacting with the actual people involved in the decision making process being discussed in any case study.
Take the example of "Subhiksha", the erstwhile one of the most sought after retail company in India for performing case studies. Every one realizes now that "Subhiksha" is in troubled waters. But the company is trying its best to get through the rough seas.
So, things do not remain stable and hence case studies may never become perpetual and may not remain as successful case studies for learning purposes. So do not worry too much about not pondering about too many case studies ;)

Tuesday, July 07, 2009

First steps back to barter..May be!

The major headline today in Nytimes was "U.S. Considers Curbs on Speculative Trading of Oil".

I felt very happy to look at it. For once oil & gas trading will be restricted mostly to the people actually use oil but not the financial institutions and non-energy based organizations which trade in oil like any other commodity.

Some of the trends of oil movement make no sense nowadays. There is no good news in the world economy, but still oil prices jumped to $70/bbl. Even even during the earlier so called "bull run" the movement of oil to $140 was way beyond the understanding of many experts.

But everyone agrees to the involvement of speculative trading in all the commodities.

US for once is thinking about some restrictions on the free market phenomenon by putting curbs on the involvement of these speculative traders who are there to just make money and let the others go for a toss.

I hope similar things should happen even for other commodities. I know of my colleagues who have nothing to do with commodities but trade in them as if they are another set of financial instruments. Why should someone have a look at food as a financial instrument? Doesn't everyone understand that there are certain things which money can't buy? Am I getting a bit emotional. Ok. Let us just stick to economics.

I guess finally more than business sense, social sense is prevailing in Obama's administration!!

Monday, June 29, 2009

Who cares if it is not my money!

I give you billions of dollars to fend off common enemies. What do you do with that money?

You siphon off more than $5 billion to build your nuclear empire. Not bad Pakistan!

Iam a tax payer and through every penny that I earn, I pay a percentage to you to provide me with good infrastructure. What do you do with that money?

Build a gigantic monument of your own statues by consuming money worth Rs 2000 crores. This happens while most of the people you are ruling are below poverty line. Kudos to Mayawati, CM of Uttar Pradesh.

I am a tax payer and I want to make sure that you govern well. What do you do with that money?

Amass thousands of crores of assets for your son and yourself, and also get a chartered flight so that you can boast of better coverage. This in a state where there are huge suicides of farmers and mill workers because they cannot earn even Rs 20 per day :(.. Jai ho Mr. Rajasekhar Reddy, CM of Andhra Pradesh

Of course there is another person, the boss of all these people. He said he will give huge returns for all the investments, but I can only have investments of at least $100 million or more. What does he do with all that money.

Create the largest ponzi scheme ever in the history worth $65 billion. What do the losers get in return. A 150 year jail term for the scamster and $80 million of his assets. Where did all the money go, no one knows. Awesome Mr. Madoff, you rock!!

And finally there is the person found the company "Satyam". "Satyam" stands for Truth. But this person made sure that he did many things which are everything but "satyam". He created the largest corporate fraud in the history of India for close to Rs8000 crores. But at least he seem to have a lot of it in the form of assets which hopefully will be used to pay back the investors. You almost did it Mr. Ramalinga Raju. Better luck next time.

Once again, who cares if it is not one's own money:)

Thursday, June 25, 2009

Migrate from "Live and let live" to "Live and not let live"

I was just browsing through some articles about the aviation industry. The industry is obviously going through a tough time, but I just happened to look at two airlines which are almost on the verge of bankruptcy.

British Airways(BA)
Air India(AI)

Both are government operated airlines and are equally famous for their misdeeds.
British Airways was very famous for its baggage mishandling and the much crowded Heathrow airport in London added to its chaos..

Air India has been always famous for its irresponsible behavior with its customers and what not.

But the interesting topic to discuss is the way the employees of both these organizations are behaving during the present crisis.

BA employees have voluntarily agreed for a paycut or an unpaid leave instead of mass layoffs. They are trying their level best to keep the company up and floating.

AI employees on the other hand are about to go on a strike demanding that they receive all their salaries on time. They are in fact asking for a package of Rs15000 crores to ensure that the company remains afloat.

Goddamn it, 15000crores for 30,000 employees so close to Rs 0.5 crores per employee is being asked for in a country where the per capita income is around Rs30,000 per annum.

I do not know the problems that the employees are facing on a day to day basis but they are not doing anything to ensure that the company remains in safe hands, but are demanding for money without any change in the way company runs.

I've traveled with AI couple of times but though it wasn't a bad experience, but the air around it is always as if you are being dealt with as an obligation. There is no intention of serving the customer with a wholeheartedness that you otherwise encounter in other international airlines or even for that matter in the other domestic private airlines.

It'd be interesting to see how the company comes out of this issue and this may give an indication about the willingness of the government to ensure that even government companies will be run professionally

Sunday, June 21, 2009

Ghanan ghanan ....

India is just believing that it is recovering from the financial crisis.

But one thing that has been supportive to India for the past couple of years may play the spoil sport.

It is the monsoons!

Being in Mumbai, where monsoons create a havoc because of their downpour, there is hardly any rain and we are already into the last week of June.

Already in Mumbai alone the rains are down by atleast 40% in the month of June and close to 70% of the reservoirs across India are running under deficit water.

If the situation continues then any respite to the GDP growth will evaporate with the hopes of the farmers.

Good monsoons add atleast 200-400 basis points to the GDP.

So all the eyes should be glued towards the skies and pray for the rain god!!

BTW, Saina Nehwal won the Indonesian badminton championship, making it the best performance by any Indian woman ever.

You deserve it!!

One is a country which has just completed a bloody battle within the its boundaries and completed a civil war which lasted for close to 30 years but are still worried about the humanitarian crisis.

Another country is battling with its own survival because of various reasons and is also facing the worst immigration crisis after its birth.

Both the countries are heavily battered, and need something to really cheer about.

The countries are Pakistan & Srilanka respectively.

Sports have had the reputation of making people happy through major wins and hence I hope Pakitan can clinch the ICC 20-20 2009 wolrdcup series, for which the final match is going to be played today between Pakistan & Srilanka.
Both the countries have played well to reach the finals.

But amongst both the teams I cheer for Pakistan because of the position of its country right now. THere is hardly any news that will make Pakistan happy. Day in and day out all the Pakistan is able to see is crisis all around.

Winning this match can mean the greatest contribution of this cricket team to its war-ridden nation. A perceived foe of my nation, Pakistan for all the miseries it is facing now is not because of the layman living on the streets, but it is the same person who is facing the wrath of the internal crisis with Taliban. It is for this layman that Pakistan should win the match and make him cheer for atleast a while.

Inspite of all this, may the best win the match, but let the god's be on Pakistan's side today!

How much does space mean?

How much does space mean?

I've been looking out for apartment in Mumbai for close to two weeks now, and Iam not satisfied with the response that I got so far.

We are being asked too much for the kind of facilities that are promised.

I felt like a refugee when I looked at some of the apartments.

We are still scratching our brains if the no. of people to stay in an apartment is "n+1" or will "n+2" or "n+3" is also ok..where "n" stands for the no. of bedrooms in the apartment.

So much so for the refugee talk...

I just realized what it takes to lead a life like a refugee.

75 people including women and children living in three rooms and a single toilet.

People sleeping in hand-mouth conditions that one cannot see the ground on which they are sleeping.

This is the situation in Pakistan who is tormented by the flood of refugee from the tarnished areas of Swat valley.

The Pathans so famous for their hospitality, generosity are being stretched to the limit to accommodate the people who have fled from the Swat valley. 

Can you imagine giving out half of your home for strangers and asking your folks to stay at relative's place so that you can accommodate more strangers who are in dire need of help? 

It infact takes a mighty heart to do so. Hats off to the hospitality of those people!!

I just got a call from one apartment owner that he is willing to offer me an unfurnished 3 bedroom apartment for 40,000 INR. Earlier the same owner was asking us for 55,000 INR for a furnished apartment. 

Considering the dismal life that many humans live in, may be it is worth paying so much for the apartment. But is it really?

May be Manmoham Singh could have extended a warm tap on the back of Mr. Gilani instead of a simple handshake.

It is time to reduce the space between our hearts rather than trying to decrease the area that we live in.

Done with this blog and let me dedicate my time in addressing the energy issues which are crippling many parts of my part of the world.

Oh God! Give every one of us enough courage to solve each other's problems.

June 1st, the big day

June 1st, the big day
On this day Iam beginning my career as Management Trainee in Feedback ventures Energy division. Finally my shift to energy has been a grand success.
It is infact a big day to me considering the fact that this profile is what I wanted for quite sometime and also that Iam into the elusive Energy sector.
But today is also a big day for a country atleast 6000 miles away from us.
GM is about to file bankruptcy on June 1st. A company that celebrated 100 years last year and the one which has been the pride of US for such long time is finally biting the dust.
Though the talks of bankruptcy have been lingering around for quite some time, to see that one of the world's first and biggest car manufacturing companies is going down in this fashion is seldom a good feeling.
Hopefully this day will prove to be a much needed transformation for GM.
I pray to god that this journey of mine will make me feel happy about all the decisions that lead me into this.

Sunday, March 08, 2009

Real consumption vs Consumption vs population

Stimulus bills, stimulus bills and more stimulus bills to revive the collapsed economies all over the world.

What do these stimulus bills do? Try and increase the economy by increasing the money flow in the economy and make people CONSUME more.

So, it's all about consumption. Oh, I forgot that the world over which tries to imitate the US style follows the Keynesian pattern, where consumption is the most crucial thing.

So, more consumption and hence better growth rates. Without Keynesian way system India would never have clocked the rates because much of its growth is bellowed by the internal consumption. For that matter US will not retain its status as the world's economic power but for the mammoth per capita consumption that its population have.

But this consumption, which most of us should/would have realized by now should be the real cause of worry because we have limited resources or limited access to them. Hence in the long run consumption has to be reduced.

I do not want to attach negative adjectives to "consumption", but it is the real consumption which matters to me much more when it comes to sustainability.

What is "Real consumption"? I do not know if this term exists, but I'd like to say it as the consumption of natural resources to produce finished goods. If "Real consumption" of a society increases then it should be a cause of worry. And yes, the consumption that we have now is largely real in nature i.e. we are increasingly consuming more natural resources.

If only recyclable materials are developed and used for finished products, the "real consumption" will go down. Say, if recyclable materials are used for electronic goods, it will reduce the plastic consumption by a huge percentage and hence the consumption of natural resources will also go down. So, "Real consumption" which is the variable that defines the way our natural resources are being consumed can be reduced in two ways:
a) Reduce the per capita consumption-Real
b) Reduce the overall population

I want to understand the "population" aspect much more than the per capita levels. Since much of the human population aspires to grow up the value chain ladder their consumption levels are going to increase, hence it becomes imperative and Utopian that the population levels have to go down.

On the contrary businesses believe that the high population in countries like India and China have helped them lately. I agree to that because we are still relying on "Keynesian economics" with emphasis on services and consumption levels. Even with very low per capita consumption levels, with such huge population businesses can make merry with huge volume driven sales.

So, the huge population and the population growth are one of the major problems. However, we may think that it has helped us, the huge population has actually deprived the earth and the future generations of so many resources that it is hard to understand that population is a boon.

And in no manifesto of any political party is an emphasis on family planning or population growth control. I used to and still say that economics will make sure that family planning is implemented. Nowadays, how many nuclear families can afford three children. So, as the inflation levels increase people will automatically shift to smaller families. But, this would be true in a free market scenario.

But, in the protective environments that are prevalent during these recession times, people who get the subsidies and other benefits without effort will never appreciate the fruits of family planning. I'd not be surprised if the population growth during the recession times in protected economies is more than the boom times.

It'd be good to have the access to resources to every one, but let's ensure that we make this statement truth for the futuer generations, by reducing the overall real consumption.

Friday, February 20, 2009

Shopping spree

$2 trillion in what should one do??

Go shopping of course!! because only if an entity with such huge savings goes on a shopping spree can the world have something to cheer about.

But instead of terming "shopping", if it translates into "investing" it would make much more sense for both the consumer and the producer in the long run.

China with huge forex reserves has started its strategic acquisitions in this downturn where the commodity prices have gone down tremendously. Till recent times when people resented investments from China because of the negative image about them, but everyone is welcoming them with open hands. Obviously anyone would latch onto any country/person willing to extend capital in these very tight credit times.

China has spent $41 billion in last week alone..some of the things in its shopping list are:
a) Venezuela received a $6 billion loan from China and agreed to increase its oil exports to China
b) China Minmetals Corporation bid $1.7 billion to acquire Australia’s OZ Minerals, a huge zinc mining company. This is also a strategic acquisition considering the huge appetite of ores and minerals to support its high growth rates.
c) In Brazil, China signed a $10 billion “loan-for-oil” deal that guarantees the country up to 160,000 barrels a day at market prices.
d) China agreed to loan Russia’s struggling oil giant, Rosneft and Russia’s oil pipeline company, Transneft, $25 billion in exchange for 15 million tons of crude oil a year for 20 years.

Though japan has highest forex reserves, the country is in a dire situation considering the fact that its internal consumption can never achieve the levels that would support its supremacy. China on the other hand can generate enough internal consumption to sustain high growth rates and at the same time continue to flourish. I wish India can also come up with some actions that everyone can look up to!

Thursday, January 29, 2009

Hopefully history will repeat on Sunday

Guess what this is about, the potential clash between Nadal and Federer in the Australian Open Finals on this sunday. Federer defeated Roddick in straight sets and has taken a seat in the finals. And in all probability Nadal, who looks in sublime touch as well may get into the finals.

Some of the shots that Federer plays look vintage, classic...there are those gems that sometimes we can witness from the willow of Laxman, the cricketer from India. You know from the sound of the bat hitting the ball that, yes! that shot is a winner.

Today Federer seems to have got back some of his game that he seem to have kept in the back burner in the last year. But, even today he wasn't looking at his best. Roddick was no where close to putting any pressure on Federer. It was like Ivanisevic playing against Pete Sampras. THe former had one of the best serves but no rally game. But Sampras always matched ace to ace with his opponent. Similar was the situation today. Roddick was banking on his service alone which Federer could negate quite easily. Hence Federer's game wasn't tested to its limit today.
But Nadal will sure test Federer, for, Nadal's reach and his cross court movement is quite fast. He seems to have been successful in disrupting the game plan of Federer. But I hope that Federer will come up with his master strokes on Sunday and may he retain back the glory that he deserves. Amen!!

Tuesday, January 27, 2009

What did Bush intend to do?

How ever considerate I wish to be about the policies of Bush he always surprises me with more and more acts that seem to take the common man's life for a toss. I came across this article in NYtimes about the acts that Bush pushed during the last stages of his government. Here are some of those acts...

Health care: One particularly objectionable rule took effect the day President Bush left town. It gives an increased number of medical institutions and a broad range of health care workers the right to refuse to provide abortion referrals, unbiased counseling or emergency contraception, even to rape victims — further restricting women’s rights to health care. The administration should suspend enforcement and craft a new rule.

Gun control: A new rule would end a 25-year ban on carrying loaded weapons in national parks, which are among the safest places in this country. Before that changes, the administration should overturn this rule.

Workers’ rights: Revisions to the federal guest worker program would weaken wage protections and housing standards for temporary agricultural workers, who already have far too few protections.

The environment: The Bush administration worked overtime in its waning days to weaken protections for the air, water and endangered species. Representative Nick Rahall, a Democrat from West Virginia, plans to invoke the Congressional Review Act to overturn an Interior Department ruling that carved out significant exceptions to required scientific reviews of federal projects that could harm threatened or endangered species.

These acts have been the ones which came into picture during the fag days of the Bush administration. But even during his first tenure of 4 years, the tax breaks that he declared gave more than $50000 into the pockets of the rich and relatively a fewer amount to the people at the bottom of the pyramid.

There were things that he probably intended to be good like increased consumption, but that in fact has triggered the creation of bubble, which has taken most of the world down along with its demise.

I wonder if anyone would ever want to follow the footsteps of Mr. Bush. No wonder his brother has opted out of the senator's race because of the worst ever ratings to the Bush family. May sanity prevail in everyone's brains!

Sunday, January 25, 2009

Finally violence seems to have paved some way

Srilankan military stated that it occupied the final bastion of LTTE, the dreaded area of Mullaitivu. What does mean to the region?

Finally people in Srilanka can breath free. tamils who were initially supportive of LTTE's cause slowly realized that it was another person's fervour towards power. Many things which start for a good cause seems to be lost in the frenzy of power.

But let me NOT draw any conclusions towards the approach of LTTE and military. LTTE may have started for a good cause, but the bloodshed for such a long time was not justified. This is one example for various states that partition will not satisfy any thirst. People should continue to live in harmony.

The future certainly looks good for Srilanka. I wish all the Srilankans all the very best for their future. They certainly have set some example about the way to fight internal threats and the bigger cause of the nation always should take a precedent.

I wish India extends and continues good relations to Srilanka and helps Srilanka establish itself as the destination for future.

I loved the beaches in Colombo for sure and I was very happy with the hospitality of them. I hope that the trade between the two nations will bring the much needed peace to this region.

They came for me, but no one is left to look after me...

Ever wondered what can be the cost of a foolish decision!

A decision taken by Musharraf has just taken a toll on 1.3 million people in Swat valley
[details about the swat valley]

Taliban has almost taken its control over swat valley and people over there are being made to do the things that they never thought they would have to worry about. This reminds of the famous philosopher against the nazis..

They came for the communists and I ignored, because Iam not a communist
They came for the Jews and I ignored, because Iam not a Jew
They came for the Russians and I ignored, because Iam not one of them
And finally they came for me, but there was no one to rescue me...

Similar is the situation for people in Pakistan...they ignored the raising threats from Taliban and ignored all the crimes that they performed all this while and now the Taliban came for them and they are helpless..

Police is complaining of lack of equipment and will from the government to take the highly trained and motivated Taliban.
After bearing the misuse of funds for a long time by Pakistan, USA now is going on its own pursuit against the militants and that's not helping the cause of Pakistan.
After all which country would accept their boundaries being bombarded by another nation. But Pakistan is having to see the result of its own actions.

In the course of all this, young people especially girls and women are suffering the most. Understand the situation of the girls there...14 girls had to face acid attacks because they planned to go to school!!

What aspect of a religion preaches all this??

I was trying to understand the "sharia law", which defines the rules of Taliban. It seems that a woman wearing high heels will cause sexual inclination in men and hence she should not wear high heels. Woman should not read because that may make them more liberal. Many of these rules appear so weird that I can't understand why educated muslims believe in all this and go and kill the people.

All that Iam doing is raise the voice against that through this blog, but not doing any thing concrete to help the cause. May be I myself am one of the culprits! :((

Sunday, January 04, 2009

Situation is same, but this time atleast the causes are bigger...

I was just wondering about the major international headlines in this first week of the year and the topics that have created furore

a) Israel attacks on Gaza
b) Sri lankan soldier's attacks on LTTE

These two are marking more violence at the dawn of the new year. But hopefully this may actually close the violence that has been prevalent for quite some time. So, Iam still debating myself whether these fresh attacks are an indication of a concrete end to violence but beginning of more.

If the former is the fight over land, then another news is happening due to the fight over resources.
Gazprom, the oil major in Russia, threatening Ukraine about gas supply: This major company has been threatening Ukraine because the latter hasn't paid some of its bills. If Gazprom curtails its supplies then many people in EU will be freezed to death since 25% of EU gas supplies are through these pipelines.

These two major headlines, ignoring the others, are an indication of the wars that have been happening since ages: the war on land and that on natural resources.

This time atleast the issue of war continue to linger but atleast the reasons behind those issues appear to be bigger.

So on a controversial note I end this blog. "May peace prevail!!!!"