Hope...

Hope is the biggest energizer & I happened to notice the beauty of hope when I met this tiny, little 4-year old girl in my neighborhood. The girl lives away from her mother as her mom is studying medicine in the US. It is really sad and touching to see how badly the little one misses her mother and how her room is filled with pictures of her mother instead of dolls and teddies.

The girl misses her mother so much that she is learning how to write - just to communicate with her mother. She talks to her mother on the phone daily. But she hopes that that the written form of communication will help convince her mother to come back.

The little 1 thinks that it was a written letter (the admission offer letter) that made her mom go to US and so a comeback-request letter written by her will make her mom back soon. Hence she is eagerly learning alphabets and words when most kids avoid all this at this age. It's amazing to see how her faith keeps her going.


On the same lines all that I have is also just a ray of hope... Yes I am well past my teen age but pimples are still one of my life’s biggest problem.. Grrr... But I am still hopeful that I’ll have a flawless skin 1 day... some day :D :D

Rahul Gandhi is the new Mother Teresa

(Yeah right & I am the New Barack Obama!)

ToI reports that a Reuters report has said that Rahul Gandhi has managed to rebrand himself as the “biggest champion of India's impoverished masses” since Mother Teresa died.

Yes of course he is a champion of masses; India’s new ‘Poverty – Tourist’ ambassador!

Also read: http://www.indianexpress.com/news/lets-stop-this-poverty-tourism/412069/

Me thinks it’s all a part of his stupid political gimmicks. Continue reading here :D

IIM L-oving it

So here’s a news - I am joining IIML finally after years of falling in love with the ‘CAT’.
Suddenly everything is looking beautifully colorful (notice the new blog header :P).

You can say that an IIM (that too an L,I,K) is not a big deal. IIML is not the best B-school with the best placements. Intellectuals don’t behave like that; they don’t write such crappy posts on their IIM admits on their blogs. Why are u so insanely happy? Why??

I say “screw you”. I am loving it totally & here’s why:

One, I want to be happy in life. I want success not for the sake of success but for the sake of happiness. If I cannot be happy with an IIML after 2 years of tears and toil, I can never be happy. Wotsay?

Two, there is nothing like a best business school or a best college. People call some schools (generally their own schools :P) the best, just to boost their false egos. Every place has something unique that no other place has, right? Right! For instance IIML has the best reptiles ;-)

Coutesy & Credits to http://itsmeadi.blogspot.com/2006/10/wildlife-of-iim-lucknow.html

Three, I am happy to be back to my home town again. I know some1 who loves me madly is waiting eagerly for me… My Grandmother it is :) :) I chose IIML over any A/B/C school, any day :P

& Last but not the least, I will be an MBA 2 years down the line (most probably or so I hope). Yeah, no1 will call me a "mediocre" now; instead I'll be a "mediocre-but-arrogant". yay!!

P.S: I thought I wouldn’t do "this" to my blog. I never wanted my blog to be a personal diary, but I guess we all like to talk about ourselves :-)

Slumdogs Rejoice

All you folks who are thinking that Obama may chop off our ‘thanks-to-outsourcing' type of jobs, SMILE. Top RJ in US calls Indian BPO workers ‘slumdogs’.

I think it holds true for a lot of non-BPO jobs also.

Relief for us slumdogs :P

Criticism expected (winks)

Choices in DemoCrazy!

Yes, we are soon going for the 15th Lok Sabha Elections in this country. And with all the hoopla this time around “we must vote” – some people with a different take, make me pause & ponder that “yes! we must vote – but for whom?” This I don’t know… B’coz I am really confused with the great choices that we have this time.


Opinion polls feel that Aam Aadmi’s party can come to power again. Great! That would be best for the entertainment of people in these sad times. How? For starters, Aam Aadmi’s Party manifesto, released this week, is the biggest horror flick I have ever seen. Threatening the nation with so many weapons! Awesome!! First being reservation in private sector & reservation for minorities. Followed by promises of generous but slightly ill-planned subsidies for the poor... (now whats perfect you'll say?) The suspense & thriller angle to Aam Aadmi Party's national entertainment flick - the manifesto has no answer how a nation like ours, dying under a gigantic fiscal deficit & credit rating deterioration threats afford all this? Keep guessing.


And then there is BJP & the Third Front. These parties will at least ensure that we remain united as one nation. Didn’t you just hear a young BJP leader, much like the older BJP leaders, described himself as a Hindu and a true Indian. (Bythe way, I loved this post on Gandhi Cousins & others. Mast Read)


And of course the behenji from UP with her lovely slogans and statues is also a perfect PM material.
Another option could also be “ Is baar, Sharad Pawar” - for the sake of Maharashtra! Man, the choices in DemoCrazy!

P.S: Do leave a comment and help me decide :-)

The Japanese Slump - Lessons for US (& me:)

I was asked this question in one of my IIM interviews:

“The economist Dornbusch said sometime back that ‘watch out for Japanese consumption’ to Fed. What did he mean?”

I said that - "he (Dornbusch) probably meant that US cannot consume more than its income for a very long time, and referred to Japanese economy of 1990’s which was in recession too. Their MPC (propensity to consume) was also high like that of US till 2008 crisis..."

Well, this is the wrong answer. In fact contrary to US, the savings rate in Japan was very high and this perhaps, is at the root of Japan’s woes, as my analysis suggests. After 2 weeks of giving this question a thought, I think I have figured out the answer somewhat. So please read my analysis (I know it’s nerdy & verbose) but let me know if it makes sense.

Now it is important understand what a recession is – essentially a blip in the economic activity. Why does this happens? Do factories suddenly become non-functional? Do the sophisticated machines suddenly rust? Does technology abruptly becomes redundant? NO.

In fact recessions happen because of the constant interplay of the demand and supply. And they deepen because policy makers intervene with all the wrong tools. Japan is a classic example of this.

Now the Japanese economy is/was a great economy, look at the facts below:

1) The second largest economy of the world at the end of 1970s
2) Blessed with an educated, skilled & hard working population, modern technology & capital
3) Blessed with a stable government
4) (Still) A creditor nation, not dependant on whimsical foreign capital like Latin America or most East Asian countries.

Yet it spent the entire 1990s in a ‘growth recession’ (meaning literally no growth). Real GDP in Japan grew at an average of roughly 1.5% per year between 1991-1999, compared to a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s.



Why did this happen? Well when Japan’s economy grew spectacularly in 60s, people attribute this to various factors like:
a) sociological factors (the Japanese were extra hard-working)
b) Good fundamentals (high savings rate, good infrastructure, good educational institutes, etc.)
c) A new superior form of capitalism was established in Japan (later this system was labeled as ‘crony capitalism’ and the bane of Japan!)

Paul Krugman (in his book “The Return of Depression Economics”) says that these factors were present but the fundamental reason for Japan’s initial success was because of the Govt. of Japan’s strong role in directing the bank loans and import licenses to favored industries. Moreover, Japanese firms were not concerned with short-term profitability pressures. They got bulk of their capital though the Keiretsu system. & this system only fuelled the bubble economy of Japan.

In fact the Japanese bubble was so huge that at the beginning of 1990s the market capitalization of Japan Inc. was larger than that of the United States, which had more than twice the GDP of Japan. But sooner or later, bubbles always burst. In the early 1990s the Japanese government raised interest rate to deflate the bubble and with that started the downward spiral in Japan. Investors started losing confidence in the economy and the miracle like growth story of Japan became a thing of the past.

As is the present case with US, the Japanese govt. also tried all remedies to cure recession during this period, but kept failing.

->Japan started systematically reducing interest rates to revive the economy. Interest rates became zero & yet the economy didn’t take off. Why? Well Krugman thinks that the ageing population of Japan and the general sentiment of nervousness in Japan, made the public less and lesser willing to spend and hence idle capacity became the norm in Japan due to deficit demand.

-> Japan tried the Keynesian medicine of giving fiscal stimulus to the economy. This led to short bursts in growth but they also simultaneously increased the fiscal deficit in Japan which reached 4.5% of the GDP in 1996. This triggered panic in the Japanese govt. which could not afford huge fiscal deficits as it had a growing population of the aged people who needed fiscal support & who could not service future debts. So the govt. increased taxes. This option failed as well.

The economist’s concluded that Japan had fallen into the “Liquidity Trap”. The only way out could be an artificially inseminated inflation into the economy to spur demand. Well, that didn’t happen of course.

And finally Japan started showing signs of recovery in 2003. How? Well, by this time the deficit consumer demand in Japan had found a big consumer – US. Japan’s exports to US increased. Moreover the growing Chinese economy also imported a lot from Japan – which ended a decade long slowdown in Japan which finally touched a 2% growth in 2003.

So basically the flamboyant US economy helped the Japanese economy recover somewhat. But just as Japan started recovering from the liquidity trap, US started falling into the debt trap. And we all can see the result today.

Perhaps Dornbusch, had sensed this at the right time and had given the signals to Fed – who chose to ignore him. (No citations here, couldn’t find any!) So while Japan had a deficit domestic consumption, US had too flamboyant consumption levels.
Even in the 1980s, Dornbusch had been vocal that the US was incurring huge trade deficits vis-à-vis the Japanese economy. But some timely & precious warnings always go ignored.

______________________________________________________
Source: The Return of Depression Economics (Paul R. Krugman)
http://spice.stanford.edu/docs/122
http://www.druckversion.studien-von-zeitfragen.net/Japans%20Bomben.htm
____________________________________________________________

Who's Failing - JEE or CAT?

Two exams in India enjoy the collective fantasy of millions of students. One of them is the IIT-JEE (Indian Institute of Technology- Joint Entrance Exam) and the other is CAT for IIMs (Common Admission Test for Indian Institute of Management).

Both the exams are tough in the sense that only one percent (or lesser) of the test takers finally manage to get an admit into these institutes through their entrance exams.

This means that if conducted properly both the tests should be able to screen out the best talent for their respective institutes & fields through these tests. Right??

Now the aim of IITs (as per my interpretation of IIT Delhi’s mission statement) is to impart higher technological education to students with a flair for science & technology and teach them principles of basic and applied research. So basically IITs are trying to nurture people who have the potential to become future technocrats & scientists.

IIMs on the other hand are trying to gauge the people who have a flair for management, people who possess qualities like managing people and resources creatively, people who can take risks, people who may not be geniuses but people who can certainly make a great business proposition out of a simple idea.

To put it in simple words, IITs are looking to train the best people among the category of people who generally have introverted intuition or thinking (ISTP type or INTJ type). & IIMs are looking to train the best people among the category of people who generally possess extraverted thinking with introverted intuition (ENTP types or ENTJ types).

And these personality types are very different from each other. So exams that have a huge talent pool to chose from, like JEE and CAT should be easily able to screen the most talented people in their respective categories. Students without these abilities should not ace these exams no matter how "well prepared" (read well coached :P) they maybe. But unfortunately this it is not the case.

The talent pool of IITs and IIMs is greatly overlapping. IITians get into IIMs in huge numbers. IITD has an entre hostel each year full of call getters. There are no statistics to prove this for sure but my intuition and experience (:P) suggests me that there are quite a few IITians in IIMs. Only IIMC specifically tells that for one of its courses (PGDCM) there are 32 IITians in a batch of 58 students.

However, don't you think that logically speaking the raw materials for these two institutes (of great national importance) should be different. This means either of the two institutes is failing in its screening stage, ‘coz the co-existance of an Ambani and a Kalaam in the same person should be a rare event and not an event with highest probability.

And maybe that’s why the best scientists and engineers of this country like APJ Kalaam and E. Sreedharan are not from IIT and of course the list of business tycoons not from IIMs is endless; running into pages and pages.

So who’s failing in sourcing its respective talent type – JEE or CAT??

Some points to note:
1) I am only pondering & arguing about the existence of IITians in IIMs. Engineers can, and engineers should be present in management’s Mecca like IIM. But IIT is where only the so called best-of-the-best science students get into, so by definition these guys would generally not posses the best managerial skills.

2) Of course we do have talented tech guys who have made it big in the commercial sphere as executives like Bill Gates and Larry Page & Sergy Brin. But aren’t these exceptions? Moreover these people had exceptional inventions and 1 great guy with them in their initial days who had a great business acumen.

Satyam - Total Falsehood!

The revelations by Satyam’s promoter Ramalinga Raju, come as a big blow not only to the company’s shareholders and employees but also to the Indian IT sector and the Indian stock markets and brand India Inc. at large. I do not have much knowledge to comment or write something noteworthy on this event, but I would like to post these 2 links that discuss this issue in entirety…

Huge fraud in Satyam Computers: Dr. Krishna has analysed thoroughly and objectively each and every implication of this episode and given his views regarding the steps to be taken by common retail investors. Must Read!

He had also earlier written about 15 stocks that may require regulatory authority’s inspection - 15 Indian Stocks that may shock you!!! Again, a must read for all, esp. our policy makers and regulators :P

Everyone is writing now that India has/had a great image in terms of corporate governance standards; but I wonder whether these soothsayers ever did a reality check. KPMG released its Annual Fraud Survey in 2008; sometime in Sep-Oct; it had clearly reported that corporate fraud is a constant threat to businesses in India.

Over 80 percent of respondents (which included top executives at top companies) recognized that fraud is a major challenge in corporate India. Moreover, almost 70 percent of the respondents believe that fraud in India may increase in the next two years. 60 percent of the respondents experienced fraud in their organization in the last two years. Out of these, 14 percent experienced more than 10 instances of fraud, whereas 75 percent experienced a maximum of five instances.

I know that Satyam accounting scandal is a big incident with huge implications but I don’t know if it is really an exception and a standalone event – as some people are saying. It may just be the first scam to come in the news.

P.S.: Just stumbled across this blog by Bernard Madoff!!! - "I'm Bernard Madoff--I'm Telling All. Right Here. Trust Me." Maybe we can find Raju also blogging on similar lines very soon....