A load of crap from an idle brainPersonal, Movies, Music, IT, India, Singapore, Politics, Fun

Took a week off from work to rest, relax and recharge my batteries.  We are already into the 8th month of the year and i had yet to take a single leave this year.  Not to mention haven’t fallen sick for more than 18 odd months and (touch wood), would like that to remain that way for a long long time to come.  It means that i hadn’t been taking any break from work.

Work has been too tough and nerve wracking ever since i moved into the new department more than 5 months ago (ya, time flies), not to mention colleagues who are of no use to the team but somehow manage to survive at work inspite of doing nothing productive. Ya, life is a big bunch of surprises.  The ones who work are questioned when there is a lapse on their end, but some people just laze around at work and unashamedly take the salary at the end of the month and no one even bats an eyelid.

Anyways, over a period of time have steeled myself to ignore such characters and sideline them.  There are others who are enthusiastic about work and they are the ones who really encourage me to look forward to going back to work daily.

But this week off was a much needed one.  Have been doing nothing but having good home cooked food, having my regular post lunch naps, wandering aimlessly around the city, reading books on the couch and most importantly watching the financial markets melt the world over.  Watching this self inflicted wound by the US not only to itself but criminally exporting its problems to the worldwide economies is simply mind boggling to watch.  Not to mention morons like Alan Greenspan openly bragging that this debt ceiling is of no issue to the US as they can print as much dollars they want.  Now beat that.

The funniest part of the whole debt problem is the reaction from China which blasted the US for its uninhibited funding of its consumerism by debt.  But why is China so worried about the debt downgrade of the US from AAA to AA+ by S&P ?  Its because China holds more than a trillion dollars worth of US debt.  The more irony comes from the fact that just a few months ago, some so-called Chinese thinkers were threatening to dump dollars that China is holding in the form of its foreign reserves to show who the boss is.  Which makes one wonder, if China dumps the dollar, which moron in the world wants to buy it?  And if it dumps the dollar and the value of the dollar takes a nosedive further eroding the value of the reserves its holding, who is China threatening in the first place?  Its like cutting the nose to spite the face.  The whole fracas reminds me of the saying that i had posted sometime earlier in this blog….

“If you owe the bank $100 that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.” – J Paul Getty

China today finds itself between the devil and the deep sea.  On one hand it needs to keep the yuan weaker by buying up all the dollars else the export oriented economy that China has carefully built up over the decades will collapse.  With thousands of riots happening countrywide, the Communist government doesn’t want another disaster on its hands.

And its not easy to make a complete turnaround of the economy from an exporting one to a local consumer led economy.  The transition takes years to happen. So, it keeps buying up dollars to keep its own currency cheaper and with the US dollar collapsing to newer lows, everyone is at their wits end trying to hold things together.

So, what to do now?  Nothing much..if you have money sit tight or start buying into blue chips in small tranches.  For the ones who sold off their equity holdings a few months earlier, i have nothing but admiration for your foresight.  For those who plan to sell during the collapse now, there is nothing more foolish decision than that.

Gold is scaling new heights daily as the US dollar loses its value.  Its gonna be a turbulent few months ahead.  Sit tight, there is much more trouble ahead.  Like the Oracle of Omaha, Warren Buffett once said…

“Its only when the tide goes out that you learn who has been swimming naked”

Pictures courtesy: Now Public, Guardian, wmpoweruser

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Over the weekend watched a movie, “Inside Job“.  A movie that tracks the collapse of the Wall Street in 2008 which caused the worldwide recession from which the world is yet to recover.  It tracks and interviews many of those responsible for the financial crash.  Many financial behemoths like Bear Stearns, Lehman Brothers collapsed.  Many were taken over by other financial firms like Merrill Lynch bought over by Bank of America, Wachovia by Wells Fargo, Bear Stearns by JP Morgan etc.

The whole collapse was fueled by the excesses of the financial institutions and the professionals who were a part of them.  Technology ensured that that complex financial products like CDOs were sold to institutions, retail investors.  People with no jobs were given loans to buy property, excessive salaries for brokers, heads of major financial companies only made them greedier leading to more and more desperation in inflating sales so that they could take a bigger and fatter pay packet at the end of the month.

Prostitution, fake bills, consuming cocaine and other forms of drugs, splurging on luxury goods, bay-front properties, casinos etc was the order of the day for the bankers, brokers employed in these institutions on Wall Street.

According to this list provided by the Federal Deposit Insurance Corporation, more than 370 banks have closed down since the beginning of 2008. An estimated $14 trillion was lost because of the crisis.  And that is just a lower estimate.  The true cost of the whole crisis might never be known.  Millions of jobs lost, tens of millions of people pushed back into poverty.

All those responsible for the crime were never brought to justice, nor will they ever be. Some of the ones who violently opposed any form regulation of the financial industry which was the basic cause of this financial crisis are now sitting comfortably in the seats of power.  They are today part of the government.  Alan Greenspan, Ben Bernanke, Timothy Geithner; everyone contributed their part to the crisis not to mention Dick Fuld (Lehman Brothers), Angelo Mozelo (Countrywide Finance), Hank Paulson (Goldman Sachs & Treasury Secretary in 2006), George Bush, Bill Clinton etc were in some way or the other responsible for the mess we find the world in.

During the boom years of the 2000s, there were lots of people hectoring the Reserve Bank of India (RBI) for taking a conservative stance and blaming the RBI for not opening up the financial markets to the so-called reform that the US was doing. Its that same conservatism that shielded India and its banks from getting smashed up by the tsunami created in the US and world financial markets.

For years, the Wall Street had been my dream place to work.  I loved the whole idea of minting money the way the bankers made.  From the late 90s till the collapse in 2008, i had a rosy idea of these places. In fact, my dream job would have been working with Lehman Brothers, Merrill Lynch etc.  As i kept reading about the collapse in 2008 and the circumstances that lead to it, it not only crumbled my dreams but also made me think if i could have handled such a life of debauchery & lies that were commonplace in this industry.

Would i be able to mis-sell a product to a retail investor and then go home and sleep peacefully?  The movie raises a lot of questions about morality and your job.  For every parent who wanted their kids to join the financial industry and make tons of money, this movie is an eye opener.  Money is there in abundance, but what we need to realise is if there is the moral compass that can guide us when the excess money flows in.

Are you an investor in real estate, stocks, bonds, mutual funds etc?  Are you planning to make a career in the financial industry?  Do you know someone who works there?  This movie is a must watch and the book “The end of Wall Street” is a must read.  Roger Lowenstein writes a blow by blow account of the last few days of the collapse of the Wall Street.  Its a riveting read.

And yes, if this doesn’t outrage you, nothing will.  Because in the world of finance, there is something called TBTF (Too Big to Fail).  Just become big by hook or by crook and then the government will ensure that you will never fail.  They will always bail you out no matter how big an asshole you have been.

“If you owe the bank $100 that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.” – J Paul Getty

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The chickens have finally come home to roost.  After decades of national policy of fomenting terrorism in the neighborhood, the snake fed and protected by successive Pakistani governments, Army and their masters, the rogue intelligence agency, ISI have finally started to bite them.

The terrorists born and bred under the patronage of the Pakistani military which was pursued as a strategic interest has now attacked the PNS Mehran naval base and destroyed 2 P-3C Orion maritime patrol aircraft (bought from the US as strategic interest against India).  Ironical how one strategic interest is conflicting with the other.

After being kicked in the butt by the US who unilaterally took action to kill Bin Laden in Abbotabad, now Pakistan has run to its other “all-weather” friend China.  What is funny is how Pakistan has no qualms prostrating itself in front of anyone who can give it alms.  There is no shame or determination to take the country on the path of economic development or spine demonstrated by successive governments.

The begging is what takes the cake.  After leeching off almost $15 billion from a naive American government post 9/11 in the guise of “war on terror”, they have run to their other friend, China who has over the decades not even given $500 million in aid.   In an effort to pitch one superpower against the other, Pakistan is now trying to threaten US that if it doesnt stop the attacks on its soil, it will run into the willing arms of its rival, China.

Pakistan is like the country who keeps a gun to its own head and threatens everyone else.  Its high time the US government calls its bluff and cuts off all aid.  Then see how long Pakistan can sustain itself.  You will soon see the Pakistanis grovelling on all fours and coming back apologising.

One is confused if one should sympathise with the thousands of innocents being killed in Pakistan by suicide bombers and other terrorist acts.  The Indian government’s constant harping that a peaceful and stable Pakistan is in our own interest is nothing but hogwash.  A stable and peaceful Pakistan is nothing but a bigger headache for India than one that is broken up into a few pieces and let all the pieces either live in peace of fight amongst themselves.

The earlier the Indian government realises the folly of engaging the Pakistani government or its masters (their Army & ISI), the better it is for them.  I rather the Indian government put their energies in building better relations with Bangladesh, Bhutan, Nepal, Myanmar & Sri Lanka.

For starters, how about throwing open our economy to the above mentioned 5 countries for free trade.  Its time we stopped behaving like a big brother in the neighborhood and display our large heartedness to these countries who are more worthy of our time, money and friendship.

Above pictures courtesy: NDTV

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Finished reading this book almost a month ago, but due to paucity of time almost forgot to write about this book.

This book is a look into the next 100 years by George Friedman (no relation to Thomas Friedman of the New York Times).  George Friedman is the chief executive of STRATFOR, a private global intelligence firm he founded in 1996. He has spent more than 20 years teaching political science and has commented extensively on security and defense issues.

Though its difficult to accurately predict what can happen next year, Friedman lets his thoughts into the next 100 years based on the situations and issues that have shaped the past 100-200 years.  Based on this he comes to the conclusion that in the next 100 years, the major powers of the world would be (hold your breath) USA, Japan, Poland and Turkey.

He goes on to describe that by the end of the current decade (2020), China would have disintegrated and Tibet liberated with active participation by India and China will either go back to its closed doors policy or become a non-entity.  Yes, China has to keep up its blistering growth or else there could be serious trouble among its population which has no other outlet to express its disenchantment against the communist government.  But to think that the communist government hasnt thought about it and doesnt have a plan B is difficult to imagine.

The author asserts that the United States power is so extraordinarily overwhelming that it will dominate the coming century, brushing aside Islamic terrorist threats now, overcoming a resurgent Russia in the 2010s and 20s and eventually gaining influence over space-based missile systems that Friedman names battle stars. Friedman is the founder of Stratfor, an independent geopolitical forecasting company, and his authoritative-sounding predictions are based on such factors as natural resources and population cycles. While these concrete measures lend his short-term forecasts credence, the later years of Friedmans 100-year cycle will provoke some serious eyebrow raising. The armed border clashes between Mexico and the United States in the 2080s seem relatively plausible, but the space war pitting Japan and Turkey against the United States and allies, prognosticated to begin precisely on Thanksgiving Day 2050, reads as fantastic (and terrifying) science fiction. Whether all of the visions in Friedmans crystal ball actually materialize, they certainly make for engrossing entertainment.

source: Amazon

There are a lot of issues on which i dont agree with the author of the book.  Other than a few instances, Friedman makes no mention of India in the whole book.  He says that India would be a regional power with no impact on the global affairs.  I cant understand how he manages to just discard a country that could have 1.5 billion people by 2050, the world’s top 5 standing army, one of the best airforce and naval power, not to mention an economy of at least $ 20 trillion by 2050 (conservative estimates).

I tried making a small comparison chart of the countries that are supposed to be significant players (according to Friedman) in the next 100 years versus India.  A cursory glance at the figures and its easy to see why the book is way off on its prediction.

* Data belongs to year 2009
** All figures are in US dollars
*** GDP & per capita is PPP
**** Data sourced from CIA website

But he goes on and on about Turkey and Poland being significant leaders in Europe who will militarily crush the rest of Europe.  There is hardly any mention of France or Britain.  Germany according to Friedman would be on the decline.  Agreed on that, but to dismiss the German power with regards to Turkey and Poland is simply too far fetched.

He also speaks a lot about Mexico which could be the top 10 economies by 2050, but no mention of India which could be the top 3 economy by 2050.  The author looks too enamoured by USA and believes that they will maintain status quo into the next 100 odd years.  Of course, no one believes that US will just lie down and die, but to imagine that the disastrous economic policies pursued by USA would have no impact into the future is a bit too far fetched to believe.  As for Japan, its negative population growth combined with its insignificant economic growth for the past 20 odd years have dented its abilities both on the economic as well as military front.  As a country that doesnt encourage any form of immigration, Japan will be in deep trouble as it has to cope with a rapidly graying population.  If it opens its doors to immigration, its will have to face a lot of social tensions.

The book is a good read, if you are into fantasies and would love to have a good laugh.  Surely not a book to be taken seriously.

The Next 100 Years: A Forecast for the 21st Century
Author – George Friedman
Pages – 272
Publisher – Doubleday

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Its a nice 3 day weekend for this Diwali.  Here’s wishing all of you and your loved ones a Happy & Prosperous Diwali in advance.

Say no to crackers that cause noise and air pollution.  There are better ways of celebrating the festival with family and friends.

We are in the final 2 months of the year.  2010 seems to have sped past even before we could realise.  Some bumper performance by the companies pre-Diwali and am sure when the 3rd quarter results are unveiled, there could be even better performance to see.  Not to mention, Obama making his trip to India coinciding with the festival.

Enjoy the holidays and stay safe.

Previous Diwali posts of 2009, 2008 & 2007

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