Sunday, November 30, 2008

Beyond rage: action

Finally, I am in a condition to put my thoughts together in a coherent manner. The murder and destruction at the Taj, the Trident and the Nariman House - the pictures, the videos, the stories, the soundbites - they have shocked all of us in Mumbai, India, and the civilized world.

Now, the blame game, the rolling of heads, the scoring of brownie points have started. From the POV of political parties, this is a great time to do this - elections are just a few months away.

But what of us? What do the citizens India, who happen to live in Mumbai, get out of this? Another round of unkept promises? Another round of mumbled words and meaningless gestures passed off as action?

We won't be fooled again. Not any more. In the Mahabharata, Vidur tells us that one of the six things a man should avoid is "a king who fails to protect". We are now livid and we want to get rid of the kings and queens who failed us.

What do I want to see thrown out from our country and our system?

  1. cynical corrupt politicians
  2. inept politicians and bureaucrats who have corrupted our systems, by making 'politically convenient' appointments at top levels in our security and police forces
  3. ineffective politicians who hold positions as rewards for services rendered to their power mentors in their parties
  4. criminal politicians with track records, and underworld connections - banned for life
  5. a government that has demoralised our defence forces - the whole row about pay for our soldiers is an incredible and outrageous farce. Our soldiers are a million times more dedicated to our nation, and a million times more valuable, than our politicians
  6. accountability which is now to the party bosses and not to the electorate

What do I want to see happening now?

  1. Public and published accountability of all politicians - what have they accomplished against their promises? Public review to be held every six months, and each candidate will be given one grace period of another six months, if he's failed against his promises. If their is shortfall of performance after this grace period, we the public will physically and through media agitate for his removal.
  2. Meritocracy, and only meritocracy, in senior security (that include police) appointments.
  3. Removal of all security appointments from political influence. To start with, ensure that the federal investigation agency is itself free from political interference
  4. Removal of political interference in the day to day functioning of all security and police forces
  5. Publicly punish all politicos with criminal records and connections with the underworld. They cannot be allowed to participate in political life ever again.
  6. Strengthen our laws and our security forces equipment and training - it's pathetic that Mumbai policemen died after being shot through the head, while he was wearing a helmet. Surely, somebody took a bribe to accept low quality helmets which is supposed to save lives!
Utopian? Maybe. Too drastic, too draconian? Absolutely. We have been mealy-mouthed and polite and gentlemanly for far too long. Now, our blood is up, and we want change. We MUST have change, and nothing short of big, dramatic change for the positive will satisfy us any more.

Sunday, November 23, 2008

The time to reap what you sow

On Nov 22, 2008, the New York Times this article on Citigroup: http://www.nytimes.com/2008/11/23/business/23citi.html?pagewanted=1&_r=1&ref=business

As usual , NYT does an excellent job of description, analysis, and collecting together various strands to make up this long article. As an ex-customer of Citibank, and one who has had long associations with Citi staffers in India and a few other countries, I can only add some specific comments and observations to the NYT story.

My customer experiences as well as those dealing with the Citi staffers have given me two clear impressions about Citibank (maybe it's true of Citigroup as well):
  • a culture of risk
  • a culture of short-changing the customer to the point of being dishonest
My experiences convinced me that Citi has created and rewarded a culture of lack of integrity - lying is a part of its DNA. And I don' t like being lied to. I am not alone in my low opinion of Citi - just check out the numerous blog entries from customers who think they've been cheated by the bank.

The culture of risk also runs contrary to my expectations - I always believed that banks have to run on two principles: prudency and conservatism. After all, a bank runs its business on money taken from depositors, who expect their money to be safe in most cases.

The NYT story I have mentioned above tracks the sorry tale of Citigroup from 2007, or thereabouts. NYT also carried a story four years ago, on November 7, 2004, (http://www.nytimes.com/2004/11/07/business/yourmoney/07citi.html), which tells us that the brass at Citi knew that a lot was rotten in the state of Denmark, and one person - Charles Prince - was given the job of cleaning up.

How does one person change a culture created over decades? The NYT commented in the Nov 2004 article: "
Whether or not Mr. Prince succeeds will speak volumes about how effectively a chief executive can change the culture of a company as large as Citigroup, as well as offer a test of whether the bank can still dominate markets and rake in profits without crossing regulatory and legal boundaries."

Obviously Mr Prince failed in that job. Maybe he was destined to fail - unless he could replace a whole generation of managers overnight, he couldn't have changed the culture. Maybe he didn't want to succeed - he was being advised by Robert Rubin, and here's NYT from the Nov 2008 story:

“Chuck Prince going down to the corporate investment bank in late 2002 was the start of that process,” a former Citigroup executive said of the bank’s big C.D.O. push. “Chuck was totally new to the job. He didn’t know a C.D.O. from a grocery list, so he looked for someone for advice and support. That person was Rubin. And Rubin had always been an advocate of being more aggressive in the capital markets arena. He would say, ‘You have to take more risk if you want to earn more.’ ”

Rubin was the Treasury Secretary during the Clinton administration, when he "helped loosen Depression-era banking regulations that made the creation of Citigroup possible by allowing banks to expand far beyond their traditional role as lenders and permitting them to profit from a variety of financial activities. During the same period he helped beat back tighter oversight of exotic financial products, a development he had previously said he was helpless to prevent." Looks like Rubin is one of the architects of the mess that US banking is in now.

Now, I read that he is (was?) an advisor to Barack Obama during the period of transition. If he continues to advise the new President of the USA, God save America, and more importantly God save the World! Nothing short of divine intervention may suffice.

Wednesday, November 5, 2008

The Promise

I never thought it would happen in my lifetime. I wanted it to happen, but at the back of my mind, I believed that Bush and his Republican bunch of thieves would steal the electoral college away from Obama, like he had done to Gore eight years ago. 

But I am glad I was wrong. I am glad I over-estimated the powers of the greedy military-industrial complex commanded by the Republicans. I am glad that Americans finally stood up and voted to get a new man into the White House - Barack Hussein Obama II. 

He couldn't become the Prez of the US, right? He's black, with a Kenyan father, and his name is all wrong. It's not British Isles - like Kennedy or Clinton or Bush. It's not a German or a Dutch sounding name, like Eisenhower or Roosevelt. It's not North European at all. And worse, it's got Hussein as the middle name! 

Anyways, when it came to the chase, these didn't matter. What mattered was what Obama stands for, and his ability to inspire the grassroots to come out and be counted. 

He's got his job cut out for him. The US has become the most disliked, and indeed possibly the most hated nation on earth, for some years now. That doesn't stop people from migrating there - it still is a nation of opportunities, and doesn't discriminate against you when you are making money for yourself and others. But, outside of the US, most of the world tends to bridle a bit about the US. Many, including me, believe that there is only one rogue state in the world, and that's the US; it's still the most powerful nation on earth, and we can't ignore it, even if we wish to. That image is not a nice one to begin with - and Obama has to change that. 

Having lost political credibility in the world, it is now losing economic credibility thanks to the meltdown of Wall Street, and the ham-handed efforts of Paulson and the Bush administration to save their rich cronies, and let the taxpayer go to hell. Again, not nice for a new Prez. 

The promise is that Obama will tackle these with the basic values of humanity, which belong everywhere to everyone. Decency, honesty, prosperity WITHOUT greed, respect for others which breeds others' respect for you, and working together for a better world.

Sounds idealistic? Utopian perhaps? Maybe, but that's what Obama has done to me. Like a old diehard romantic idealist, I believe there is space in the world for ideals, and that you can live your life by your ideals, and that you can inspire others to share in those ideals. 

And Obama has the next four years, at least, to show that ideals can make a big difference to the world. Tough, but I believe that he can do it. At least, now there's somebody in power in the US whom I like and can support. 

Monday, October 27, 2008

"Indian media one of the best in the world"?! Surely you jest, Ms Sen!

While reading the DNA newspaper a few days ago (Mumbai edition, October 26th, 2008), I was stopped by a text box in a piece by Ms Antara Dev Sen. The text in the box read “Indian media is one of the best in the world. Our press is critical, combative, entertaining, thought-provoking, and free.' 

This box really got me, not least because I have long held a pretty dim view of Indian media (which includes our press). Now that we are in the midst of the Diwali vacs out here in Mumbai, and the family is busy with whatever keeps them busy and me out of their way, it seems like a good time to put down my thoughts, and mayhap share them with Ms Sen.

I am not making a distinction between press and media – in this day and age, TV, and increasingly the Internet are asimportant as print. Also, I must confess that I watch about 6 odd TV channels, including one in Bengali, read some 5 newspapers (4 in English, and one in Bengali), and 3 magazines all in English - the sum otal doesn't even begin to be representative of all Indian media. But, I think this net is representative of the English media in India. 

“Critical” – sure, the Indian media is critical of everything, and not necessarily supportive of much that needs to be supported. I was a member of the studio audience the other day – they were taping a show on the impact of Raj Thackeray on Mumbai, for the We the People show on NDTV. Quite naturally, the audience, and the panellists, were anti Raj Thackeray’s party for the violence and fear his party has inflicted on North Indian labourers in the state. This, of course, has received widespread and highly well-deserved condemnation in all media vehicles.

The audience and the panellists, though, were uniformly supportive of a key plank of the MNS – preference for the bhumiputra for unskilled jobs in the state. As an Indian born in Kolkata, Bengali by birth and upbringing, resident in Mumbai since 1973, and proud to call himself a Mumbaikar, I too support this plank – this has to be a priority in all states of India, and not just Maharashtra; otherwise the local governments will have failed in their very purpose of existence. But I don't recall much media coverage on this need for the benefit of any state, and the failure of governments and industries to put in place a strategy for large scale local employment. 

I have not seen much coverage in media about two things – first, that the Railway Board examination papers were not made available in Marathi, but were available in other Indian languages; second, past records of similar examinations show that there is a very high percentage of passes from candidates of one state, and a very low percentage from Maharashtra – the difference is so huge that it begs the question as to whether the whole examination thing was a fraud in the first place.

In short, these two things indicated to me that had the Railway Board, or a higher authority, had conducted the whole exam process in a fair, just and transparent manner in the first place, one key reason for Raj Thackeray’s party to go out rioting would have vanished into thin air.

And I should have expected the ‘critical’ media to have taken this up and ‘criticised’ the Board, the Railway Ministry, etc to ensure that there is a thorough overhaul of these and similar other processes for large-scale recruitments.

“Critical?” Of course, but selectively so. If there’s an easy target, great. If it’s an issue which looks likely to live beyond a few days, then perhaps not; after all, the whole world is after the short-term, so why bother about the long-term?

“Combative” – yes, of course, so much so that the Shiv Sena mouthpiece is called ‘Samna’ (confrontation) and Narayan Rane’s paper is called ‘Prahar!’ Anyways, let’s be serious. Combating who or what is what I’d like to ask. Whenever I see Karan Thapar on TV (thankfully, not very often), and I see him contracting his eyebrows, and chewing up the words in his teeth, he seems to be ‘combating’ the interviewee rather than an issue,  a point of view, or a policy, or something more substantive than just the individual. His heroes are, presumably, Larry King, or maybe David Frost; in any case, someone should tell Thapar that he will always remain a disaster by comparison – his research is minimal, his body language abrasive, and his mannerisms irritating.

Rajdeep Sardesai of CNN-IBN is so combative that he shouts every time he’s doing the news, as if he wants to be heard by his audience without the help of broadcasting technology. Surely, he is combative. So is Arnab Goswami, who sometimes is combating his own ground reporter, live on TV! I kid you not! There was one story he was doing himself on Times Now TV, in which he asked his London reporter about anti-Asian racist feelings in the UK, triggered by a local event. The reporter asked him, what did he mean anti-Asian feeling, there were none that he had been told by those he had met. Arnab insisted that there were such feelings, and cut out the reporter. Was Arnab ‘combating’ his own staff, because he had decided that the racial angle is what he’s going to follow, whether there’s evidence for it or not? 

“Entertaining”. You’re bang on the button, Ms Sen, absolutely right on this. I always watch TV news in English and Hindi, mainly to be entertained. The English news channel Headlines Today seems to cover only Bollywood, fashion shows, parties, etc – I love this, since I don’t get invited to these parties, I feel like a guest who’s successfully sneaked in past the guards. Most of the Times of India is entertainment – the City Times (as in Mumbai Times, Delhi Times, etc) section is all entertainment, and you can get covered if you pay for the space. The editorials are also entertainment since most of the times, they are written by Jug Suraiya and Shobha De; it’s been such a long time since I have read anything by the editor that I don’t even know if they have an editor any more. 

News media became entertainment the day the Times of India decided some years ago that news is trivia, and trivia is news. That’s the whole paradigm shift that’s taken place over the last decade in India. To prove my point, let me present to you India TV – this one beats all the entertainment channels for sheer fun, joie de vivre, and in proving the eternal truth in P T Barnum’s words: “There’s a sucker born every minute.” 

When I checked it out in July, the main story every evening was that aliens have landed, have set up camp on the moon, they’d done it years ago and when Armstrong et al had dropped in, they’d been told by the aliens that they can go back and tell their masters (Armstrong and company's) that they should never come back to the moon. 

A week later, the story changed – 8th of August 2008 is the day on which the world will come to an end. The ancient Mayans, or the ancient Egyptians, or someone equally ancient had said so, and one current Godman appeared on TV to tell all and sundry that the world was surely, definitely, absolutely positively, without fail, going to end on 8-8-8.

Another week later, I was really glad to know that we’ve all won a reprieve; the destruction of the world had been postponed. To 21st December, 2012. But this was the final date, no postponements, no more reprieves, no use praying, no use weeping, nothing. On that date, time not specified yet, we shall all be cast to the outer darkness where there is weeping and gnashing of teeth.

If this doesn’t beat saas-bahu dramas, I don’t what does. Properly packaged and presented, this could even beat twenty20 cricket.

“Thought-provoking”. Mmmmyess, really Ms Sen I would agree with you here too. Indian media does provoke a lot of thought, like

  • Why is it so short-term in its outlook?
  • Why doesn’t it investigate and talk of the larger and deeper issues?
  • Does the media, by and large, actually recognize and understand what are the larger issues?
  • Why is there so little research in their ‘stories’?
  • Why does it love sensation? If there a video of someone throwing a stone, why is this shown 300 times on the day, and another 100 times in repeats over the next few days?

I haven’t been able to figure this out, so I take refuge in Doordarshan and a few selective TV and Internet news channels – and particularly agency reports. In these channels, they’ll tell you just flat what happened. They don’t get into interpreting, analysing, root cause, etc, etc – everything that you would expect from the ‘one of the best media in the world’. And thankfully so – at least DD and the agencies tell you what actually happened instead of trying to push its own agenda on you.

To come to the last adjective used by Ms Sen – “free”. Absolutely right, too. This is the really good thing about Indian media – anybody can say any old thing, and frequently everybody does. This is to me the healthiest thing about Indian media – no shackles, no gags, no censorship. Sure, ownerships will colour the news and angles; media has to pay the price for patronage, political or otherwise. But overall, we are lucky to have a free media, where most of the world does not. And I really mean this without sarcasm or cynicism. 

Does all this make Indian media one of the best in the world? Not by a long shot, Ms Sen. I accept that there are many countries where media is shackled and forced to state a point of view presented by the governing powers. And freedom of the press is one of great achievements of modern India. But I would love to see three characteristics in Indian media, before I start using epithets like “one of the best in the world” – a deep understanding of the real issues that affect the well being and prosperity of our people; the ability to do high quality research into these issues; and third, the knowledge that media has the power to shape thinking and action, and hence that power should be exercised towards the good of the country and its people.

Not there yet, not even half there, Ms Sen. 

Monday, October 13, 2008

Bengali poem

Just got this by email. A prayer to Maa Durga:

Chaturthi-te ‘nano’ galo,
Ashtami-te Saurav;
Ake Ake jachchhe chole
Banglar sob gaurab.

Dohai ma tui rehai de re,
Aar kichhu ma nis na kere,
(Shudhu), ‘Mamata’-ke uthiye ne tui,
Banchuk Bangla natun kore.

Rough translation:

On Chaturthi, Nano went. On Ashtami, Saurav went (he announced his retirement from international cricket on that day). One by one, all the things that made Bengal proud are going away. Please, Maa, please take pity on us, please don't take away anthing more from us. Just take away Mamata, and Bengal can live once more.

Don't know who the author is, but so totally heartfelt!

Finally! I got it figured!!

What was it that the old adage said - I am slow, my boss is thorough!

Right, I am slow, but I am also thorough! I have finally figured what was it that led to the global financial meltdown. Here goes:
  1. you buy a lot of stuff which is of zero value
  2. you sell these for a price to a bunch of people
  3. these people then sell them off to others at a slightly higher price
  4. and this goes on ad infinitum
So, it's all a matter of maths really - the equation would go something like this:

fn (wealth) = (value of initial stuff bought) to the power infinity

In elegant mathematical symbolical representation, the equation looks like this:

fn (W) = (0) ^ ∞

The whole problem was a misunderstanding. If you solve the equation, do you get 0 or do you get ∞?

Now, to wait for my phone to ring to tell me they're giving me the Nobel! In the meantime, I am open to offers of lectures and keynotes.



Tuesday, September 30, 2008

The bailing out of the bailout

The story of the bailout of Wall Street is becoming curiouser and curiouser. The President is a lame, or perhaps even a dead, duck. Democrats or Republications, all of them, want to come out looking like Superman after rescuing a dying patient - but they are terminally afraid that the other guy will steal there thunder. Main Street is worried about their future - and all, repeat all, common men and women on the streets hate the bankers and financiers who created this godawful mess, and want to walk away with their bonuses and leave the crap with the government - read, the tax payer.

Not just common men, either. Joseph Stiglitz (awarded the Nobel Prize in Economics in 2001), has this to say here (http://www.guardian.co.uk/commentisfree/2008/sep/30/marketturmoil.wallstreet). Excepts from his interview:

"To be sure, the rescue plan that was just defeated was far better than what the Bush administration originally proposed. But its basic approach remained critically flawed. First, it relied – once again – on trickle-down economics: somehow, throwing enough money at Wall Street would trickle down to Main Street, helping ordinary workers and homeowners. Trickle-down economics almost never works, and it is no more likely to work this time.

Moreover, the plan assumed that the fundamental problem was one of confidence. That is no doubt part of the problem; but the underlying problem is that financial markets made some very bad loans. There was a housing bubble, and loans were made on the basis of inflated prices.

That bubble has burst. House prices probably will fall further, so there will be more foreclosures, and no amount of talking up the market is going to change that. The bad loans, in turn, have created massive holes in banks' balance sheets, which have to be repaired. Any government bail-out that pays fair value for these assets will do nothing to repair that hole. On the contrary, it would be like providing massive blood transfusions to a patient suffering from vast internal hemorrhaging.

Even if a bail-out plan were implemented quickly – which appears increasingly unlikely – there would be some credit contraction. The US economy has been sustained by a consumption boom fueled by excessive borrowing, and that will be curtailed. States and localities are cutting back expenditures. Household balance sheets are weaker. An economic slowdown will exacerbate all our financial problems.

We could do more with less money. The holes in financial institutions' balance sheets should be filled in a transparent way. The Scandinavian countries showed the way two decades ago. Warren Buffet showed another way, in providing equity to Goldman Sachs. By issuing preferred shares with warrants (options), one reduces the public's downside risk and ensures that they participate in some of the upside potential.

This approach is not only proven, but it also provides both the incentives and wherewithal needed for lending to resume. It avoids the hopeless task of trying to value millions of complex mortgages and the even more complex financial products in which they are embedded, and it deals with the "lemons" problem – the government gets stuck with the worst or most overpriced assets. Finally, it can be done far more quickly."

For more about what the Scandinavians did, go here (http://www.reuters.com/article/reutersEdge/idUSTRE48M9ON20080923?sp=true).

What was it that someone had said - those who refuse to learn from history are condemned to repeat it? Probably I got that somewhat wrong, but anyways, you get the point.