A good article here mentions about the top 10 reasons why the Euro will fail.  You can supplement these theories to other economies too and see why the fundamental argument for a common currency is a non-starter.

1. One interest rate cannot be suitable for everyone

Quite simply if there is a single currency there must also be a single interest rate set by the European Central Bank.  For the single currency to work, this single rate must be suitable for all member states.  It is difficult to see how a single rate could possibly be suitable for all of the economies in all foreseeable situations.  Take for example Germany and Ireland in 2001.  The German economy is on the brink of recession while the Irish economy is booming.  The Germans would ideally like a low rate while the Irish needed a higher rate.  The compromise rate is not suitable for either Ireland or Germany.  This shows that in the long term the result is painful for both countries as both countries have an unsuitable interest rate. One size cannot fit all!

Read the full article here

Above picture courtesy: Bized

+++

“There is a drop both in the number and the quality of Ph.D. applications, more noticeably in the last two years.” says Anand Sivasubramaniam, professor of computer science and engineering, Pennsylvania State University (Penn State). “This year, of the more than 700 applications we received from prospective graduate students worldwide, the number of applications from top Indian institutes such as the IITs and IISc was in the single digit. Less than three years ago, this number was in the double digits,” he says. An article this February in The Chronicle of Higher Education reported a 50 percent decline in the number of new Indian graduate students this Autumn at the University of Georgia. The computer science department at California State University (Long Beach) saw a spate of prospective master’s students from India abandoning their application process midway.

“It’s the beginning of a trend, an indicator that something is happening and that Indian students are not coming here like they did in the past,” laments Dr. Nathan Bell, director of research at the Council.
You don’t have to look far to find the reasons for this. With the US economy in a shambles, there are severe budget cuts at state-funded universities. The prospects of obtaining a full waiver of tuition fees are slim. Dwindling grant money also means that local students stand a better chance of getting a research fellowship than foreign students. So, many Indian students end up working for free. Last semester, Atulya Prasad, a master’s and Ph.D. candidate in biomedical engineering at New York’s Stony Brook University, worked as a research assistant sans the stipend.

The situation doesn’t improve upon graduation. The growing political backlash against the loss of American jobs, and the rising anti-immigrant sentiment means that getting a work visa — let alone getting a job — is as tough as it can get. So much so that now, even the lure of a US-located son-in-law is starting to fade. “The classic America-educated son-in-law syndrome is almost nonexistent as students, especially from tier 2 schools, hardly get jobs in the US after they graduate,” says Satyavrata Samavedi, a Ph.D. candidate in tissue engineering at the Virginia Institute of Technology (Virginia Tech).

Full article here

Above picture courtesy: Associated Content

+++

While dealing with terrorist supporting countries like Pakistan, an aggressive covert assassination program can go a long way in controlling the terrorism perpetrated by Pakistani supported terrorists on India.  Taking out select leaders of the rogue intelligence agency, ISI sponsoring the terrorism and leaders of JuD, LeT etc should be actively considered by India.

After the disastrous policy by the ex-Prime Minister IK Gujral who shut down the Counter Intelligence Teams of R&AW, its time India flexed its muscles.  A few targeted killings will send a strong message across to our neighbours that their transgressions will not be tolerated anymore.  The only way to stop terrorism is to increase the cost on the sponsors.  They slap you and you gouge out both their eyes and bash their face up badly.  That’s how you respond to terrorism and not by getting apologetic about it.

But it needs leaders with guts and conviction to take up such measures.  Do we have any of them?  Our leaders are either busy dividing us on caste, religion, region etc or sucking up to minorities.  Anyone out there who can implement these measures?

According to a report in the Telegraph, the group, which included a woman, entered the hotel dressed as businessmen and tennis players, and managed to strangle Mabhouh inside his room. The assassins arrived in Dubai carrying French, German, Italian and Swiss passports, and checked into different hotels, says the report. They used fake names like Gail Folliard, Kevin Daveron and Peter Elvinger.

They met later at a shopping mall, and communicated with each other before that via a ‘command centre’ in Austria, says the report. Traveling under the alias of Mahmoud Abdul Ra’ouf Mohammed, Mabhouh was spotted at the Dubai airport by a member of another surveillance team, who had waited hours for him.

Meir Dagan – The current head of Mossad

After he checked into the al-Bustan hotel, one of the hit squad dressed as a tennis player accompanied him in the lift, and followed him to his room, the daily said. The information was then passed on to Elvinger, the group’s leader, who promptly checked into the room across the corridor from Mabhouh, says the Telegraph.

Soon, another surveillance team arrived to keep a check on the target, who left the hotel half an hour later. The group tried to take advantage of his absence and attempted to break into his room, while the woman and Daveron kept a look out for other guests. The police have not released footage of what happened next, but the assassins somehow managed to force or fool Mabhouh into opening his door, and suffocated him, said the paper. They then locked the door from inside and left.

The team left Dubai on different flights over the span of the next 12 hours, and fled to various destinations including Frankfurt, Hong Kong and South Africa [ Images ], said the Telegraph. Mabhouh’s dead body was discovered over twelve hours later, and his killers, ‘a professional team that is highly skilled in these kinds of operations’, were thousands of miles away by that time, said the daily.

Read the full article here

And now, Dubai has threatened to issue an arrest warrant against the Prime Minister of Israel, Benjamin Netanyahu if Mossad’s complicity in the assassination is proved.   It would be good for Dubai to first explain as to what the leader of a global terrorist organisation was doing in its country?  It would be better for even Britain who is now blowing hot and cold against Israel to see why most of the terror plots in the world today are being hatched on their own soil and why most of the terrorists seem to have some connection with Britain?

Countries like Britain and Dubai seem to be in the crosshairs of global terrorism and it would be good for these respective governments to get their houses in order before pointing their fingers at others.  As for Mossad, its job is to keep its people and country safe.  And to chase down anyone who hurts their people/country and kill them like dogs.  Three cheers to Mossad for a job well done.

Some good reading on Mossad in the Telegraph paper here – “Mossad’s license to kill“.  How i really wish our so-called external intelligence agency, Research and Analysis Wing (R&AW) would grow some balls and do their job properly than being caught with their pants down.

Above pictures source:  FPP & Wikipedia

+++

1. Games Indians Play – Why We are The Way We Are

If you are someone who easily gets offended by criticism, this book is surely not for you.  If you are someone who believes in chest thumping patriotism, the kinds we find in Sunny Deol – Anil Sharma movies or the kind of person who likes to forward chain mails which proclaim that 35% of employees working in NASA, Microsoft etc are Indians, then this book is not for you either.

Games Indians Play is a hard hitting look at the way we Indians manipulate our way around the system, looks at reasons why our cities are dirty, creaking, why our roads are full of potholes, why our system, law and order machinery is corrupt, why we keep raking up examples of our thousand year old culture and morals, but are the worst behaved, immoral and culture-less people around.

The author, V Raghunathan uses game theory to explain the ills of India, as to why we are free loaders, corrupt and do not stand up to our rights etc.

Though the author goes great lengths to analyse the problems facing India, he doesnt suggest ideas or solutions to mitigate the problem.  That i believe is the only negative point about the book.

A few comments on the book that i found at Amazon website reinforce the author’s point of view

“It’s a very interesting book and does a great job of explaining some of the bizzare things that go on in India and why people say “it’s like that only”. As an Indian living in US for two decades, I can relate to author’s observations about Indian and western societies. I have been puzzled by some of those things over the years but couldn’t figure out why it was so.

And to Mr. Raghunathan: Lots of Indians/asians in US don’t behave much differently. Just go to any temple and you can see a pile of shoes/chappals on the floor right next to empty shoe shelves & just below the sign “please don’t leave your shoes on the floor”. Or visit any south asian grocery store and you can tell instantly if they sell “paans” by looking at stains all over the parking lot.”

“As an expat currently living in India, this book affirmed what I’ve found difficult and perplexing about living in New Delhi. The constant helplessness, petty jealousies and a sense that some of the observed poverty is just another one of India’s treasured rackets (an alternative route for their bizarre and seemingly increasing corruption) is overwhelming and frustrating to watch on a day-to-day basis. I enjoyed this book immensely as it helped me to understand the behavior I see around me, why it continues without change (or question) and in the end, why and how others perceive their continued benefit from this seemingly irrational paradigm (from a Western view point).

Listening to Indians and the media in India, there is a view that Westerners are selfish, lack connected communities and have no “family values” or “morals” (whatever this means by whomever defines it). It’s almost as if Indians have it reversed from Westerners. In particular, Americans who value personal independence coupled with a sense of civic duty and responsibility to others whereas Indians emphasize family and communal relationships to guide their behavior and actions but do not necessarily extend their concerns outside their immediate circle.”

“The author postulates that it is ‘Supreme Selfishness’ which drives every Indian. The author then creates models of everyday situations using principles of Game Theory to explore how Indians react to such situations given that they are driven by ‘Supreme Selfishness’. For example, the author uses Prisoner’s Dilemma to model the common situation every Indian faces while emptying his trash can every morning – should I empty the bin on the road or should I have to walk two hundred feet to the nearest municipal waste bin?”

Games Indians Play
Author – V Raghunathan
Pages – 170
Publisher – Penguin Books

2. Germany – Cultures of the World

I have a good collection of the Lonely Planet series.  But they are books for the hardcore traveler.  Though i love to travel; finances, time and other considerations deny me that pleasure.  I love reading up on the countries, their cultures, people, society, food etc, but i find the Lonely Planet series of books too bulky to read and i find its a book good for people who like to micro-manage their travels.  As for me, i like to take the leisure way out and i just like to do a broad research of the place before i travel.

Europe is a dream destination for me.  Germany is one of my most admired countries and i happened to chance at this book in the library.  Its small, concise and covers all aspects of the country just the way i love it.  The book covers the geography, government, culture, food, people, cities, environment, politics, history etc in a precise manner.

3. Hiroshima – Story of the First Atom Bomb

Its a pretty small book, mostly for kids which traces the dropping of the first atom bomb on Hiroshima.  Capturing mostly pictures of both before and after of the destruction and a few explanations about the bomb, the politics behind it.  The book is mostly about Manhattan project, nuclear theory, progress of World War II, Truman’s decision to use the bomb, the mission of Enola Gay, results of the Hiroshima explosion and the subsequent use of the bomb on Nagasaki.

Above picture source: Amazon & Nowpublic

+++

Yup, its the 60 years since India became a Republic.  Have we gone the right way or wrong?  Well, there is still time for such discussion.

Meanwhile, best wishes of the day.

Above picture source: Santabanta

+++

In an innovation increasingly evident, the government has been weaving strategy with hospitality to decide its chief guest for the Republic Day. So in the 60th year of the republic, as it gets ready to host chief guest and South Korean President Lee Myung-bak, New Delhi has given the final environmental clearance to Posco, the South Korean steel giant, to set up a $12-billion steel plant in Orissa. The project is the single biggest foreign investment in the country.

There are other reasons as well for India to extend this year’s honour to Lee. South Korea is an influential player in the Asia Pacific Economic Cooperation forum where India has a growing stake, because of which New Delhi feels the need for a greater engagement with APEC member countries.

Read the full article here

Pictures courtesy: Wikipedia & 26alphabets

+++

The tallest building, the biggest man made island, the biggest snow world in the midst of a desert, the largest mall in the world, the glitziest and grandest hotels in the world…the list of biggest, largest, tallest was never enough for Dubai to conquer.  And in this context, the tiny city state of Dubai over leveraged itself and built an empire of debt.  A debt that is bigger than its GDP now.

For a country that hardly has any oil, it had to build its future on something else than oil.  So, the charismatic ruler of Dubai, Sheik Mohammed bin Rashid Al-Maktoum decided to move to finance, tourism to hedge its economy.  Good vision no doubt, but its the execution where the fault lay.  Mindless borrowing was fun and fine till the economic collapse happened in the USA.  With the collapse of Lehman, Merrill Lynch and a host of big banks, the easy money dried up.  And it was just a matter of time before which this was to happen.

Just three days before Eid, the Dubai government’s announced a six-month reprieve on debt repayments. This  sent shockwaves through the world markets, as it raised doubts over the Gulf emirate’s ability to meet its financial obligations.

Dubai is being crushed under a mountain of debt. The emirate has a debt in excess of $80 billion which it incurred by expanding in banking, real estate and transportation. Dubai World with $60 billion liabilities has sought a six-month standstill on its debt repayment to all its lenders.

The Dubai government requested the creditors of Dubai World (one of three conglomerates that are backed by the emirate), to agree to a ‘standstill’ on repayments until May 30 2010.

On one hand the Finance ministers and bankers are saying that the markets are behaving erratically.  But believe them at their own peril.  These are the same people who just days before the collapse of the American banks proclaimed that all was well.

For most of this decade Dubai has been the Victoria Beckham of the Arab world–the biggest, glitziest, most heedless spender. It’s been the sort of place that invests $7.6 billion subway system few of its 1.6 million people are likely to use, the sort of place that builds artificial islands in the shape of palm trees, the sort of place that builds the world’s tallest skyscraper, the sort of place that sells designer seat-belts to encourage drivers to be safer in the very cars it wants them to trade in for a subway ride, and the sort of place where office buildings have been the Gulf’s most copious crop of the decade.

Dubai hasn’t limited its excesses to its corner of the United Arab Emirates. Through Dubai World, the Emirate’s investment arm, it partnered with MGM Mirage and invested in such projects as Las Vegas’ City Center, a 67-acre development that includes a 4,004-room hotel-casino, 2,400 high-rise residential condos, dining and entertainment venues and its own retail district. At $8.5 billion, it’s the most expensive privately financed construction project in the United States.

Now the bad news.

The Dubai subway has been running since September, albeit to empty quarters. A quarter of Dubai’s office space is vacant. Workers have taken salary cuts of up to 30%. The Emirati government is in debt to the tune of $80 billion to $120 billion. CityCenter? It’s “worth about half of what it cost MGM Mirage and Dubai World to build the massive Strip development,” the Las Vegas Review-Journal reported in October. lost half its value. MGM Mirage took a $1 billion write-down already, Dubai World ate a $348 million loss (so far).

Read rest of the article here

So, does that mean that the Dubai dream is all over?  Not really.  Am sure the more conservative cousin of Dubai, Abu Dhabi will come in with its oil money to rescue it.  But Abu Dhabi has conveyed that the help will on a case to case basis.

That would mean that we would see lesser flamboyance from everyone associated with Dubai, at least for some time now.

More articles on the Dubai mayhem

Recession and debt dissolve Dubai’s mirage in the desert
Dubai’s Debt Troubles: Beginning of the Next Leg Down?
Dubai: an emirate in crisis
Sober ruler of Dubai whose vision is crumbling in the face of the storm

The deal by India’s largest private sector company controlled by Mukesh Ambani, if closed, will make it one of the largest petrochemical outfits in the world. It will also be the second largest overseas acquisition by an Indian company, after Tata Steel bought Corus for $13 billion in 2007.

RIL has enough money power to make the deal happen. It has $4 billion in cash and $8 billion in treasury stocks, besides a favourable 0.35:1 debt-equity ratio. It also raised $660 million through treasury stocks sale recently.

In the year to October, Indian comanies acquired overseas assets worth $586 million, a sharp fall from the $13.06 billion in the same period a year ago, according to data from Grant Thornton Deal Tracker.

HSBC believes outbound activity will bounce back. About 70 per cent of HSBC’s pipeline is outbound transactions, which has remained the same as the previous year’s.

Tarun Kataria, managing director and head of corporate, investment banking and markets at HSBC, says India is sitting on the cusp of rapidly growing cross-border M&A activity.

“Indian firms are now well capitalised, are trading at circa 20x multiples, offshore markets are trading at a discount to India and financing is more readily available to Indian corporates than to competing offshore acquirers.”

Rest of the news here

Overall, it was fun.  A massive tree has been setup outside ION Orchard.  You can go inside the tree and see the lightup. Its simply awesome.

Tangs as usual takes the cake for the most opulent and innovative kind of decorations. Like always, they are simply over the top.  The shop gets a total golden makeover.

Putting up a few pictures here.  Once all have been uploaded, will put up a link here.

+++

Wipro said it had signed an agreement with UK-based Lornamead group, which owns the Yardley brand, for the businesses in Asia, the Middle East, Australasia and some African markets. The transaction is expected to be completed by mid-December, it said in a statement.

Lornamead’s global turnover is estimated to be close to $650 million. Its portfolio straddles various categories of personal care products including hair-care (Brisk, Aqua Net and Vosene), cosmetics and skin-care (Amplex and Handsan), oral care (Brilliant and Goldspot) and home care brand Stergene.

Tura is a significant player in soaps and skin care in Nigeria, with an annual turnover of close to $50 million.

This is Wipro’s second big buy-out in the FMCG space in two years. In July 2007, Wipro had acquired Singapore-based personal care products manufacturer Unza Holdings Ltd for $246 million (Rs 1,010.2 crore) in an all-cash deal. That deal with Unza’s portfolio of shampoos, creams, lotions and detergents had marked Wipro’s big plunge into the global FMCG space.

Full article here

+++