Happy Diwali!

Yesteday was Diwali. Its the day that marks the end of the year in the Indian calender, it was Vikram Samvat 2064, and marks the beginning of the Hindu new year. This is a very auspicious day for all, other than business schools I think, because for most of us, it is another day to reinforce the importance of hard work and education. I had two exams before the day, and three exams after the auspicious day. There will be plenty of opportunities to celebrate in our lives, but those were not yesterday.

That is not to say I am a disappointed wreck. I had lots of fun, a great dinner, took part in a Puja and burst firecrackers. Studying for the exams? Hmm, now that you mention it.............

Diwali is what turns around our market, with every trader praying to Lakshmi ji for her blessings. Of course, the run up to this Diwali has been brutal, and we could really use some divine intervention to sooth our wounded sentiments.

I was on the rooftop of the rooftop, a beautiful place on top of my hostel which commands the best view of campus and the best breeze on a beautiful evening, and taking in the scenery. There were rockets lighting the late evening sky all around me, and the bursts coming in from every direction, in every intensity. It was bright, noisy, and I hadn't felt such exhilaration in a very long time. You know, there are a lot of things about my country, my system and my society that frustrate me, and I too am giving to whining and bitching about anything and everything at times, but last night, sitting on top of my perch, everything seemed perfect. We really are a great nation with great traditions. In our pursuit of a lifestyle of others, let us never forget who we are and where we are coming from. The joy, the enthusiasm, the brightness and the sounds reminded me of all that, and I felt content. Its good to be home.

Desperate times call for......

This being summer internship season in many business schools, we get to hear from a lot of companies who visit our campus and tell us about themselves and what they are looking from us when they hire us.

So a very big iBank came visiting today to loud thumps, and reiteration of the love they had for us and our institute had for them. Eventually things moved onto what they do, and how they survived the markets and the sentiment. Things got interesting in the questions and answers round, and people had a lot of questions about the changes in their work culture now that they are under different regulatory control in the United States, because obviously things will be different. Somebody asked a question about the survival of the big western companies and the western governments coming together to save them, including buying their bad assets and taking stakes in them. The speaker remarked that desperate times call for desperate measures. That is when the thought struck me - There is a system that everybody believes in, and the system messes up. Now the believers of the system will go against the very tenets of the system to get back to the system that messed up.

Let me repeat it again, the believers of a system that fucks up will go against exactly what the system says to come back to the system.

Also, apparently President Sarkozy, in a 'summit' of great European powers, has called for a sovereign wealth fund of the European nations to fight back the "foreign predators." Who are the foreign predators? The people who the western man buys his oil from. I don't want to sound like a bleeding heart anti-globalization leftist, but I think this is exactly how i feel about the way western capitalism works - they will do business with the third world, but only on their own terms. How many instances can I line up - their stance at the WTO, their economic clarion calls against their good jobs going to the developing world, and now this - how dare Arab money enter the western bastions of economy and commerce, they are only good till their oil lasts.

Some economic system this. What I liked best about the presenter's words was when he said in reference to the world's economic scenario, that India will fight its battles, but not this way, and it will win it's battles. Amen to that.

we're going to the moon!

Wednesday, October 11, 2008

India has launched the Chandrayaan 1, our first unmanned mission to the moon. It was a textbook launch. In this doom and gloom surrounding our daily lives, at least the greatness of ISRO is a constant. God bless India.


Picking up data from the Mangalorean.com website:

India's maiden moon mission on track as rain stops

As the fully-loaded 44-metre-tall 316-tonne rocket, the Polar Satellite Launch Vehicle (PSLV C11) stood at the second launch pad of the Satish Dhawan Space Centre (SDSC) in Sriharikota, off the Andhra Pradesh coast, 80 km north of Chennai, a meteorogical officer at the spot told IANS: "Though rain is likely at the launch, there is no cyclone threat forecast".

As the PSLV holds aloft the 1,380-kg lunar orbiter Chandrayaan, waiting for the ignition command at 6.20 a.m. Wednesday, the top brass of the Indian Space Research Organisation (ISRO) decided that "two or three hours before liftoff, met experts will analyse the weather data once again to ascertain possibility of lightning striking the rocket or the spacecraft", the official added.

Still very much within the earth's atmosphere, the spacecraft was sitting protected by the rocket's 3.2-metre bulbous heat shield Tuesday evening as the weather office in Chennai also told IANS that the chances of a cyclone affecting the launch were slim.

A confident S. Satish, director, Publications & Press Relations of the Indian Space Research Organisation (ISRO), told IANS: "Eighteen minutes into the flight the rocket will sling the spacecraft into the 255-km perigee (nearest point to earth) and 23,000 km apogee (farthest point from earth) path to script a new history in the annals of India's space odyssey,"

From there the spacecraft will be taken into more elliptical orbits, firing its onboard motor - technically called Liquid Apogee Motor (LAM) - towards the moon, 387,000 km from the earth.

Once the spacecraft nears the moon, the LAM will be fired in reverse to slow it down to enable the moon's gravity to capture Chandrayaan into an elliptical orbit around the lunar poles.

Thereafter the spacecraft's orbit will be gradually lowered till it is 100 km above the moon's surface. That is expected to happen around Nov 8.

On Nov 14 the spacecraft will eject an important piece of luggage on to the moon's surface - the Moon Impact Probe (MIP).

The spacecraft cameras and other instruments that would do the intended tests for the next two years will be activated after that.

The 11 experimental instruments carried by the spacecraft are from different sources - five Indian, two from the US, three from the European Space Agency and one from Bulgaria - and each has a different purpose.

"Designing the spacecraft that would fit these pre-built instruments was a challenge which was overcome with Indian ingenuity," Mylswamy Annadurai, project director, Chandrayaan, told IANS.

Indian space scientists may not face such problems in Chandrayaan-2 as they can stipulate the payload specifications.

The Indian government has sanctioned Rs.4.25 billion for the second moon mission that is expected to happen sometime in 2011.

That mission will have the Russian Federal Space Agency as a partner which will provide the moon rover.

Looking forward India may plan missions to Mars, Venus, Mercury and also an asteroid or comet flyby mission.

finance, markets, banks, currency, debt, assets, risk......

As a business student, such words are supposed to on the tip of your tongue most of the times, and in an economic environment such as this, I have been spending a lot more time with these words, their sources, and their brothers and sisters.

"Die two months ago, and not forgotten yet? Then there's hope a great man's memory may outlive his life half a year." (Hamlet, Act III, Scene II)

I quote one of my favorite pieces of literature to contemplate about the fall of the global economic order. We're still feeling the reverberations, in fact, we've been feeling it a lot more since my last post. First the Americans took the hit, with their companies failing and merging and being nationalized, and then it spread to Europe! I use the exclamation mark because those guys seemed so much more socialist and regulated than North America, yet it looked to me that they took a much greater hit than the US. Anyways, both the "old world" and the "new world" (to quote a fallen neocon of President Bush's entourage), are doing what they have derided the developing world for indulging in for so long - nationalization. Its not the government's job to run banks and institutions, its not the government's job to take care of the market, but of course, you tell that to my innocent pet dog sitting at home and even he wont believe you. Well, what can I say, welcome back to the fold, friends, I guess!

I read this joke on the internet, that people still do not realize the gravity of the situation when a country like Iceland (given their size and importance on the global economic stage) can fail! Pardon the bad joke, but things do look bad. Millions of blogs are probably writing better and more details opinions about the whole thing right now, so let me try to just stick to my own thoughts.

On another note, all the market and investment hullaballoo has done nothing to mitigate the craze for investment banking in Indian business schools. I have had all the big banks you hear about in the news personally tell me (and my group of friends of course!) that everything is fine and they are still open for business and still offer you a great career and all that good stuff. Somehow, I doubt if the model of doing business (as one of the big banks told us) will not change. I think a lot of things will change, if the intention of the US Government and other world governments is right, and they have any intention of making things better in the long run, rather than just focusing on getting liquidity back into the markets at present and not focusing on the fundamentals. After all, apparently it takes two Goldman Sachs executives to do right the wrongs committed by their company. Talk about conflict of interest!

Anyways, the fundamentals need to change, and I think the western economic orders needs to change the way it does business. I mean, how much debt can the saving economies of the world provide to the west to live its luxurious lifestyle? The bad news is that the lust for the same lifestyle of living beyond ones means has snared countries like India and China, which are leading the consumption pack.

With my limited knowledge, I felt that the Indian economy was more than eager to embrace the American way even when they can see it front of their eyes that it can't be sustained, but hey, why wouldn't I want a Mercedes Benz?!

Anyways, I suppose globalization is the way to go, and not the one way globalization that we have seen, but the two way street that sees the exchange of money, ownership and sharing of resources. I have already griped on my blog so many times about how its perfectly acceptable for western companies to take over resources and markets in the third world but its perfectly unacceptable when an Indian takes over the white collar job of an American, for example. In fact, I am completely with India's stand on the WTO for that matter. Apparently the third world has no right to question America and Europe's massive farm subsidies, but we also have no right to question their insistence we open our markets for the same, jeopardizing our own agriculture in the process. Ha ha, this world isn't a fair place, it never was!

Lets not miss the silver lining here. The developing world is where its at, and I feel that the global economy is slowly losing its polarization, with us having a greater say and more leverage to take our decisions. And this is without India being any more capitalist than it currently is. Recently Jet Airways fired around 800 of its employees on probation because the company couldn't afford to keep paying them. The employees went to CITU, the commie trade union, and Raj Thackrey! It led me to believe that no matter where you go, violence is the only language that works in India. Apparently now he is the saint of the economically aggreived. Of course, they were hired back a few days later, because poor Naresh Chandra couldn't sleep at night after the decision! Of course, no pressure. No pressure at all.

The bottom line is, lets bask in the protectionist and old world economy of ours, folks, its the only system that seems to be working right now!

Commie Time!

It is so hard to resist reading or posting about the absurdities that the commies of India indulge in every day.

First things first, the Tatas are out of Singur. God bless the Common Man! What a great day against the capitalists, I say!
Now the Tatas will most probably park themselves in Kutch in Gujarat, close to the Adani port where they already have substantial stakes through their raw material import. Of course, let me add that this is only strongly rumored, and some parts of the media say that the official announcement will only be out in a week or two. In the meantime, media is giving good airtime to the efforts of the Karnataka CM in bringing Tatas to their land, the north to be precise, as well.

I guess the entire blogworld is following the collapse of Wall Street right now, and media is awash with news. The big news is that the fire has spread to Europe, and seems to be raging with equal intensity there. Fortis is a huge bank and insurer in West Europe, and just recently, has been nationalized by both the governments of the Netherlands and Belgium. Simiarly, Germany is looking to bail out its second biggest lender, Hypo Real Estate Holding, which could require almost $50 Billion in bailouts! Bradford and Bingley, a lender in the UK, has already been nationalised!

Sorry, so coming back to the crux of my post, here is some more hypocrisy by the commies

CPI-M takes mutual fund route for better returns

The Communist Party of India-Marxist (CPI-M) and the Bombay Sensitive Index (Sensex) have never been mutually dependent.

But now the CPI-M is taking the mutual fund route to build its cash reserve even as global markets are in a tailspin and the US financial crisis is looking grim.

Even as the party continues to berate Union Finance Minister P Chidambaram for not taking the cue and being obsessed with stock markets, it hasn’t been able to entirely shun the lure of greater returns.

The income tax returns filed by the CPI-M from the year 2002 to 2006 shows a substantial income from interests and dividends.

When the markets were bullish in 2006 and the Sensex crossed 14000, the party got Rs 1.92 crore from interest and dividends and a good part of it were earnings from investments in mutual funds.

So why the doublespeak?

"I don't think there is anything wrong in party investing money in mutual fund because mutual funds give more interest than the banks. We have invested only in public sector," MK Pandhe, General Secretary, Centre for Indian Trade Unions, said.

Pandhe’s explanation is interesting given that the same logic of greater returns was rejected by the Left when the government decided to park 30 per cent of surplus funds of Navratna and Miniratna PSU's in equity-based mutual funds.

The Left Front was up in arms and their opposition to exposing employee provident funds to the vagaries of the stock markets is well documented.

"Without earning more, pension quantum will not be higher and that is what we are worried about," Pandhe explained.

Importantly the Left made substantial investments in the US-64 scheme of the UTI and like many others had their fingers burnt in US-64 fiasco of 2001.

But when it comes to money, the communists are also saying its money, honey.

ha ha, a bunch of bastards.

doom and gloom

before anything, just want to congratulate my team, Philadelphia Phillies, on winning the National League East division for the second year in a row. Now simply losing out in the playoffs and still calling it a great season will not do, and we must be at the top. If we win it all, of course, I will be crying tears of blood for not being in Philly at the time.

Coming to the other things, seems like the collapse of Wall Street, and the subsequent failure of the US bailout failing to clear their Congress has overtaken every other news. Of course, our own BSE fell around 6% because of the news, the worst hit being ICICI Bank, which is exposed to around 80 million dollars of bad assets, but in a fickle investor environment as ours, it is enough to kill investor confidence. In the meanwhile, Wachovia Bank, pretty big in Philly too, got brought out by Citigroup, after its shares fell around 90% in just two days. The stock was brought at a dollar! The only connection I have with Wachovia is that I had applied for their credit card, and got turned down. I thought at the time that it was because I wasn't a high net worth individual, or my good credit rating wasnt good enough for them, but I realize now that it was probably because I was a foreigner.

Anyways, even with all the news of economic doom around me, I keep hearing conflicting stories still. The one story I hear, in many variations, is that this is a cycle, and I read about the resilience of the 'free markets' to come back from the dead. Actually, I have heard a lot of iBankers call it a cycle, and how there is still lots of money in it. Of course, they're telling me that because I am training to be an MBA, and if my biggest priority in life isn't money, then there is something wrong with me. Anyway, that is not the point here. The point is that will things really change in the near future, will we see a paradigm shift in the way the western world, particularly the United States, does business? Or will things be back to normal and people will look back and laugh at 2008? I really cant say.

So what if Lehman Brothers failed? So what if Washington Mutual filed for bankruptcy. Its not as if large American corporations haven't failed in the past. Enron failed, so did Worldcom, so what is different this time? Maybe a lot. For one, AIG is one of the world's largest insurance companies, and it is being propped up by the government now. The biggest mortgage lenders of the country, Freddie Mac and Fannie Mae, are under government control, we have already seen three big mergers/takeovers, all of them government sponsored I may add, and finally, the big $700 billion dollar bailout which I hear may rise to over a trillion. Let me add the support systems that the European governments have set up to save their own lenders and institutions. Maybe things are changing for good, and people are actually calling for a change in the way the western world lives, but these calls have been made a lot of time before, and I am only posting them here for posterity.

So what happens to the India growth story? We still need capital, which may be squeezing out now for all the reasons, but the bottomline is that India is still growing and needs more money. So what happens to our own financial systems, and the way we run the economy? I dont know if we will see any major changes, and if the risk appetite of Indian companies is lessened by any degree, but it is still too early to call it the bottom of the market, as I heard an iBanker say, justifying their desire to buy into Indian real estate. Lets wait and watch, while the Tatas slowly shift out of Singur and set up plant elsewhere, most likely Pantnagar in Uttarakhand.