Slumdog Millionaire – A Must Watch

This past week, I had a chance to watch Slumdog Millionaire. Though I heard a lot about it, I was a bit skeptical going in as I am more than aware of the hype Indian movies generate and seldom do they actually deliver...But I could not have been more surprised.

Slumdog Millionaire follows Jamal Malik, a teenage orphan from the ghettos of Mumbai who is one question away from winning 20 million rupees on the Indian version of the trivia game show Who Wants to be a Millionaire. The movie starts off with Jamal getting tortured to get him to confess how he cheated, to his appearance on the show. The cops simply can't believe a kid who grew up on a garbage heap would know anything about anything, and tortures the kid in the hopes of getting a confession. The only snag is Jamal isn't lying and he didn't cheat. We learn the history of Jamal and the other principal characters in flashbacks, as Jamal answers questions on the TV show not from book knowledge — he has none — but his own life experiences. The movie takes you back to the various events and phases throughout his youth that led to him to really knowing the answers to the questions.

The scenes that take place in the slums are so real and it shows a level of poverty and misery that's almost beyond our imagining - and yet so real. The only let down is that by a wild coincidence, the quiz show's questions, taken in order, correspond chronologically with traumas in Jamal's young life and not to mention a fantastic actor like Irfan Khan has been wasted in an insignificant role. But the movie as a whole is a compelling piece of entertainment and is a modern version of the Cinderella story with some spicy food. The other surprising element about the movie is the music. AR.Rahman has given a smashing soundtrack and M.I.A.’s “Paper Planes” is prominently featured in the film. Only after seeing the movie did I connect the dots.

The movie is filled with humor, romance and suspense, and is easily one of the best films I have watched this year. I highly recommend it.

Where are you Mr.Raj Thackeray?

Where is Raj Thackeray and his hoodlums who claim to own the city when the city is burning?

It is indeed ironic that Raj who claims to love Mumbai, was nowhere in sight as Mumbai was attacked. I am not trying to start an argument or create any animosity but rational Indians will understand that the plain truth of the matter is people like Raj Thackeray can only survive by resorting to the 'Divide and Rule' politics. He is maintaining silence when terrorists have attacked Mumbai, but he roars with political speeches against North Indians and resorts to killing, starting riots over petty issues, throwing stones and breaking public transportation because a board has not been written in Marathi. When Mumbai has been hit by a real confrontation and faces a very real issue, he has gone into hiding. Why? Well, simple...When the people unite he loses and has nothing to say.

Not only Raj, but all the politicians from Mumbai have proved to be a pathetic lot in this crisis, right from Chief Minister Vilasrao Deshmukh and his Deputy R R Patil. Deshmukh was in Kerala and it took several phone calls for him to finally realize the gravity of the situation. On his part, his Deputy did even worse. Asked how could such a big incident happen in Mumbai, he said, “In big cities, such small incidents do happen.”

Coming back to Mr.Raj, I want to know what he is going to say to the NSG commandos who fought the terrorists. Should they not have been allowed into Mumbai because they are all from the North and South India? Mumbai was not saved by his marathi goons rather it was saved by Indians. Raj Thackeray has clearly proved that he is a politician, and a cheap one at that...definitely NOT a leader.. All he can do it taunt the innocent and poor people who come to Mumbai to make a decent living.

The whole country has come together to support Mumbai Mr.Raj...Where are the son's of the Marathi soil hiding? Are you abroad on holiday or unwell? Or are you missing because the election dates in Maharashtra haven't been announced as yet? You are not scared of terrorist gunfire and bullets, or are you? Come out and pay homage to the people who laid their lives fighting the terrorists and by the way, none of them are Mumbaikers...

Citi - Finally Going To Sleep

$3.77 – Closing price of Citibank today. Investors have seen similar stories this year, with Bear, Lehman, Merrill, and the endings are very unpleasant when consumer confidence falls. Looks like the end is in sight for yet another great American company: Citigroup, once the biggest U.S. financial institution of them all, looks like it is dangerously close to merging, tanking, folding, failing, falling or however else you want to say it. The shares fell today to a 12 year low even while there was a big rally in the market.

Citi Never sleeps - The once famous phrase used to describe the company may just be used for the last times in the coming weeks (or should I say days) Looking back, I guess the whole idea behind Citigroup was flawed from the start. Unbeatable scale in financial services? Forget it. We now see the good Citi's size has done for investors: the company has an unworkable business model. It is run by a senior management team that's largely unproven, with scant experience operating a large financial institution. And the company's risk controls (if the past few years are any evidence) are hopelessly inadequate to the task. While the conventional wisdom says Citi is too big to fail, the reality is it's too big to manage. As a result, the company has become a publicly traded incarnation of Murphy's Law: anything that can go wrong almost certainly will-and probably sooner rather than later. And $25 billion in TARP money isn't going to do much to turn things around. Worries about Citigroup’s problem assets will continue to weigh down investor confidence. Citigroup’s shares have traded as high as $35.29 in the past 52 weeks. It closed today under $4. Its market capitalization (market cap) – the actual value of a publicly traded company – has plunged from $195 billion at the stock’s 52-week high to just under $21 billion today.

I think it is better for the management to move quickly to sell parts of the company or merge with someone else (Goldman and Morgan Stanley have been mentioned).Citi has notched losses in each of the past four quarters, including a $2.8 billion loss in the third quarter, and has taken in excess of $40 billion in write-downs. With news like 52,000 job cuts and slash expenses by 20% just weakens the confidence and is not helping its stock. Most institutional investors and pension funds are barred from owning stocks below $5. So if Citigroup's stock remains below that level, it could trigger a wave of selling that would send the share price even lower. Though not immediately, the money managers have to get out before the end of the quarter if the price does not bounce back.

On the upside, Citi does have a strong franchise overseas and there is no sign anyone is making a run on the bank. It has sufficient liquidity and is in a comfortable position capital wise. All the institutional traders are still doing business with the bank. But the question is, can Vikram Pandit withstand the pressure or will he give in and do a deal or even sell of pieces of the company to appease the public sentiment.

It's getting to the point where it's make-or-break time. The only thing going against Citi is the loss of confidence and it may just be strong enough to bring the behemoth down to its knees. If today is any indicator, Citibank in its present form cannot, and almost certainly will not, continue to exist.

The Big 3...or Just 3

There has been so much drama over the last 2 weeks focusing on Detroit. GM, Chrysler and Ford (or the Big 3) wants a government bailout (heck why not, everyone else on Wall Street is getting free money for screwing up) but no agreement has been reached so far. The democrats flew to Detroit, headed by Pelosi, and met the big guns and promised them a bailout. The big three came back to Washington and in their private jets (what were they thinking) and asked for a 25 Billion package and said Bankruptcy was not an option for them. Then the lame duck congress rebuffed them and now the democrats have given them until 2 Dec to submit a viable turnaround plan so assistance can be given to them. Phew!!

I guess in this economy it is all but boiling down to consumer confidence. And make no mistake, it will get worse and fear has already taken over the entire country. But giving the auto industry a bailout does not solve anything. Assistance of some, shape or form will probably be worked out by the new administration, but my point is nothing is going to change until the American auto industry fundamentally changes its current practices. GM, Ford and Chrysler may ultimately receive loans or other financial support from the U.S. government, although the form, timing, and magnitude of this assistance are difficult to predict. The govt will probably give billions without knowing what it is getting into (read AIG, after announcing a $85 billion bailout, the govt increased it to $140 billion and still no one knows what’s going on there). Anyways, it is important to stress that such assistance will only buy more time for these companies rather than as a solution to their fundamental business risks, which will remain no matter how much money they are given.

If any bailout is given, there should be a lot of strings attached. First, Detroit’s huge disadvantage in costs relative to foreign brands must be eliminated. There needs to be a fundamental shift in the cost burden weighing down the industry and the cumbersome contracts with UAW that make work rules a constant challenge. The American car companies are unable to compete as they are not able to align pay and benefits to those of competitors like Honda, Nissan and Toyota. Also, the existing management must be shown the door. None of the CEO's want to step down and take responsibility but all of them want a free pass (read tax payer's money). Rick Wagoner has been the CEO for the last 8 years at GM and he literally has nothing to show for it. I wonder what change he is going to bring once he gets our money. If he was going to bring the change he is promising, GM would not be begging for assistance. Robert Nardelli who heads Chrysler took a $210 million package from Home Depot last year and landed this job. Wonder what real incentive he has to bring about any change. Alan Mullaly, CEO of Ford, has indiscriminately fired his workforce in the name of cutting costs and Ford literally has no one left to bring about any change no matter how much money they receive. The stakes are high. The Detroit automakers employ nearly a quarter-million workers, and more than 730,000 other workers produce materials and parts that go into cars. About 1 million more people work in dealerships nationwide. They burned through nearly $18 billion in cash reserves during the last quarter - about $7 billion at GM, almost $8 billion at Ford and $3 billion at Chrysler. GM and Chrysler have said they could collapse in weeks. So no two ways about it in my opinion. The existing management has to be fired if any meaningful turnaround is to be achieved in the Auto Industry.

There is another interesting question which the big three are asking to make a case for their bailout stating that Consumers will not buy cars from a bankrupt company. But at this point they have all accepted that they are burning through cash at an alarming rate and GM has publicly stated it may not survive for long as it has no liquidity. Interestingly, while all of them want money, none of them have anything to say explaining how the money will be spent. Though it is a tough decision, filing for Chapter 11 and/or an organized bankruptcy may give them the best chance of re-structuring and re-negotiating existing thorns and ultimately re-emerging as a stronger player.

Where Will It End?

I got an interesting email from my sister this morning and she could not have summed up the pain and frustration everyone is feeling any better. So with her permission, I am putting up her email on my blog. So here goes.....

Are'nt we all getting tired of this recession? Yeah yeah there are a bunch of you out there who are still in denial about the country being in recession, but whatever you'd like to call it, are'nt we just beat, bored, broken down, burned out, distressed, drained, exhausted, fed up, pooped, worn out and just dog-tired of what’s going on? Yes the down turn is in its peak, yes the government has no money, yes people are losing their jobs and yes we're scared to spend in the fear of losing our jobs. 2008 saw the fall of the bank and 2009 is going to see how this translates into core industry. A couple of weeks back there was a surge of hope when the American folk went and voted for the the golden boy .... but the stock market has accomplished stripping us of all traces of elevated spirits after that.

The DOW closed under 8000 yesterday and while it sounds about right, there’s a part of me that wants the DOW to plummet to its lowest ....TODAY! At least we can move on after that. But the other part of me knows that we can’t drop too fast either. We need to feel every pang of misery, slowly and painfully, so that we rid ourselves of all our sins and make for a fresh start.

The dot com bust and the govt surplus during the Clinton administration was reason enough for the recession to set in (its a zero sum game people - surplus with the govt means no money circulating amongst the public - well more or less), but that recession was one that should have been worse than it was. The super hero of the moment was Alan - Visionary - Greenspan. When Clinton shouted 'Affordable Homes for all Americans' Greenspan should have stepped down and let the monkey run the Fed in the hope of a random lucky move that monkey might have made. Instead he sealed the fate of the economy with his monetary policies. Affordable homes indeed.... all for about 2 seconds.. then they became unaffordable again when the 'visionary' raised interest rates and forced the American to default. Lets not forget the banks.. now now how could we forget the greed that this industry so beautifully camouflages into helpful stances for all common man! You're worried about Wall Street - HA! Main Street feeds Wall Street's avarice!!

So where are we now? The American man cant pay back his home loan - so banks don’t have any money - so corporations cant borrow money - so corporations cant start new projects - so corporations have to let go of workers - so workers cant pay their mortgages... what a cycle!.. and once started we cant stop the downward spiral. And not to forget the derivative markets that have exploited every single portion of this cycle. Now with everything failing, is there a floor? We thought banks might see their write-off floors when the government proposed the buying of troubled assets. Banks could sell their troubled assets for eg. 40 cents on the dollar (whatever the amount - we don’t know) and they would not have to write off more than the left over 60 cents. Banks would rake in the 40 cents as capital and life was supposed to move forward. The $700B bill struggled initially but finally went through both the Senate and the House and Henry Paulson took possession of the first $350B to start his clean up work... We've seen the stock markets rally and spiral a few times since then and we've also seen the new president-elect create waves.. but we haven’t seen the buying of troubled assets. From his statements, it seems like Hank's changed his mind. Bank stocks are plunging again and we have no idea what the floor is. Whatever it turns out to be, lets hope we don’t see it higher or sooner than it should be. From the policies during the last recession, Greenspan created a huger monster that is the down turn now.. With all the bailouts and the bandaging and caretaking the Feds are doing, lets hope we're not creating an even bigger mess.

Go(O)bama

I must admit, being a conservative and a supporter of Bush so far, Obama certainly grabbed my attention ever since he began his run for presidency. The way he ran his campaign was admirable and he never hit anyone below the belt. He always emphasized on hope and made the country feel inclusive in all his messages. I stayed up watching TV and when the winner was revealed, it was certainly a profound moment. Given the history of the country and where we have come, I was reassured that the American Dream is real and alive.

I guess the over-whelming reason Barack won is because the whole country wants someone to desperately restart the country, from the economy to the living standards, from education to health care and of course the foreign policy - everything appears to be currently broken. The country gave a clear mandate as they see in Obama what they wanted to see - Hope. No one trusts Bush anymore (even me) and the republicans were sent packing as they should have been. To Obamas credit, he had perfect execution of most of his themes and he hammered a home-run with his campaign’s ground game. McCain and Palin..Well, I won’t go there but after she shopped for $150k, I knew it was totally over for both of them.

People have voted for change - What change Obama can bring and the direction of the change remains to be seen. I will pray he is a successful president as America really needs a new direction.

Remembering My Father

My gratitude to God for my father. I am blessed to have known him, loved him, and been loved by him since the day of my birth.

My father has always been a very special person...flawed and imperfect, as we all are, but loving and generous. Today is my dad's 4th Death Anniversary. The man who had the most influence on the man I became passed away on Oct. 22, 2004. He succumbed to a heart attack at age 52 and It was one of the saddest days of our lives. My whole family was stunned as he had never been previously diagnosed with any heart conditions and it was a shock beyond words can describe. It has been said that the loss of a parent is one of life's most traumatic events. I now know the devastating truth of that statement. My dad was a very important person in my life, and he still influences me in his death. I am grateful for all of the things he did for me. I know now how right he was even when I thought I knew everything.

The last time I saw my father was a warm night in mid march, 2004. He dropped me off in the airport where I was scheduled to catch a flight back to NYC. He gave me a big hug and wished me well. He said he was proud of me and told me to take care of myself. To this day I can never forget those last moments and keep re-living them every time I close my eyes.

My father was a prideful man, but not like most would think of it. He was proud of the achievements of my mother and myself; Though my brothers were young, he always encouraged them to dream and achieve. He was proud of the achievements of everyone in our family; he was proud of the accomplishments of his friends and everything in my father's life centered on caring about others. My dad never let a friend ever be forgotten, no matter where he was, and that's a major tribute to the kind of man my father was.

My dad was a genius when it came to movies. He loved watching movies. In fact he was crazy about them. I remember he would stay up till 3.00AM watching movies almost everyday and he used to write reviews which were published for various magazines/papers. He had this knack of knowing what will click with the audience and he served as a story editor, writer and gave creative inputs for dozens of films. I remember a lot of producers and directors used to come to my dad for ideas around story and screenplay. When he listened to a story or a song for the first time, he used to say immediately if it will be a hit or flop and sure enough he was never wrong. And even now, when I watch a film or a show, the first thing I think is how he would critique it.

With my dad, every Sunday was 'Breakfast Day'. He used to take me, my brothers and all my cousins to have breakfast at our favorite drive in restaurant. I remember the first watch he bought me at Alsa Mall. To this date, I guard it with my life and wear it on every important occasion in my life. He also bought me a He-Man toy every month and I always think of him every time I look at my Castle Greyskull and remember how he used to play with us sometimes.

My dad was also a teacher early in his career and I remember all the lessons he used to give me when I was young. He used to be very strict with me when it came to studies and I remember every time I flunked, he would take extra time to tutor me and teach me the lessons again. I greatly enjoyed our time and after a while I began flunking on tests in 5th grade on purpose and would proudly come home and demand that he tutor me again.

I remember my dad taking me to learn how to drive. I got my earliest driving lessons from my dad in his white ambassador. I was so excited that he actually allowed me to get behind the wheel of his car and the more I got excited, the more paranoid he got. This one time, I remember getting into an accident as I misjudged the distance and rammed into a truck. Luckily no one was hurt and my dad was sitting next to me and had the presence of mind to handle the situation, while I was still sitting quite stunned.

Most of all, though, I remember my dad coming to the airport to pick me up and drop me off every single time I came back home. Ever since I left home, he had not even missed coming to pick me up and drop me off even once and I can still almost see him every time waiting for me when I go back home. Next was his belief in his God; belief was important to my dad. He used to make a trip to Tirupathi every year without fail even if he had to go alone.

I learned from his strengths; I learned from his weakness and it is all those strengths and weaknesses that has taught me how to be the person I am today. I was only 26 when I lost my dad and I so desperately to tell him how much has happened in the last 4 years since he has left us. I want to wrestle with him on the floor, I want to watch him working from afar. I want to fly him around the world and take him to all the places he always wanted to go but never had the time to. Though there are a lot of things I will never be able to share with him, he has left me with a life time of memories.

I never fail to think of him even though I know that he is not there anymore. Sometimes I pretend he is still there and talk to him. Over the last few years I have discovered many ways I am similar to my father, but it was not until this year that it really struck me just how many similarities there are. I cannot of course speak of them, but I just wish dad is still here with us to share our successes and happiness.

Miss you dad and we love you and I know you are watching over us and guiding us wherever you are!!

Wall Street Words

CEO --Chief Embezzlement Officer.
CFO-- Corporate Fraud Officer.
BULL MARKET -- A random market movement causing an investor to mistake himself for a financial genius.
BEAR MARKET -- A 6 to 18 month period when the kids get no allowance, the wife gets no jewellery, and the husband gets no sex.
VALUE INVESTING -- The art of buying low and selling lower.
P/E RATIO -- The percentage of investors wetting their pants as the market keeps crashing.
BROKER -- What my broker has made me.
STANDARD & POOR -- Your life in a nutshell.
STOCK ANALYST -- Idiot who just downgraded your stock.
STOCK SPLIT -- When your ex-wife and her lawyer split your assets equally between themselves.
FINANCIAL PLANNER -- A guy whose phone has been disconnected.
MARKET CORRECTION -- The day after you buy stocks.
CASH FLOW-- The movement your money makes as it disappears down the toilet.
YAHOO -- What you yell after selling it to some poor sucker for $240 per share.
WINDOWS -- What you jump out of when you're the sucker who bought Yahoo @ $240 per share.
INSTITUTIONAL INVESTOR -- Past year investor who's now locked up in a nuthouse.
PROFIT -- An archaic word no longer in use.

Mark-To-Market - Hero or Villain?

The financial markets are getting clobbered everyday to a point where it makes no sense anymore. It is not a question of 'Will', but 'When' the next write down is coming. If it not really ‘If’ but ‘Who’ will be the next bank to fail. One of the biggest problems is being blamed on the "Mark-to-Market" accounting rule. Mark-To-Market (MTM) accounting rules have turned a large problem into an ever larger one. MTM also known populary as ‘Fair Value’ accounting is facing opposition now from all quarters as it is forcing financial firms to treat all potential losses as if they were actual cash losses. i.e. this rule assumes that what people are willing to pay for an asset is always the same as the asset's value. This means that companies must value the assets on their balance sheets based on the latest market indicators of the price that those assets could be sold for immediately (read today). Under such a rule, declining housing prices don't just reduce the value of defaulting mortgages. They reduce the value of all mortgages and all mortgage-related securities because the housing collateral protecting them is worth less. For e.g. lets say the mortgage was sold at X today. But when the value of the house reduces (especially now with the credit markets frozen up) and someone is only willing to pay X-5 for the same mortgage today, the rule says the firm must immediately write down a loss of 5 as the mortgage can be sold for X-5 today.

Its a tough rule since there is no market to establish the real value and not all assets that have no trading market are bad assets. Moreover, the firms do not have to sell them today itself, so does it make sense that they really have to value them at the prices they fetch today? Even if the firm does not sell at the low price, and even if the value of these assets is above the price at which others are willing to pay today, the firm must record them as losses on the books - the sole reason which is causing write down after write-down, thereby violating capital requirements causing the equity to tank and in turn the stock prices to fall. Once panic sets in, we have seen what can occur with Bear, Lehman and ML - people simply start panic selling, even when they know the underlying business of the company is fine. It looks like a vast majority of mortgages, corporate bonds, and structured debts are still performing. But because the market is frozen, the prices of these assets have fallen below their true value. Firms that are otherwise solvent are bring forced to price assets at fire-sale values chasing away capital and leading to a further decline in asset values. All the banks have taken a hit because of this rule.

Further confusing investors, the rule has inconsistent application across industries and companies. MTM favors private companies over public companies. As the government is being so aggressive with the use of these capital regulations with the banks, we can see just about the only transactions taking place in the sub prime marketplace have been sales to private equity firms that do not have to mark assets to market prices.

Banks, though, are subject to regulatory capital standards and therefore can be rendered insolvent overnight based on an accounting write-down. The same is true of what happened to Fannie Mae and Freddie Mac, which had positive cash flow when they were nationalized by the Treasury. Here's something you won't believe: Fannie Mae and Freddie Mac have not drawn a dime from the Treasury's $200 billion facility that was created to bail them out. It was the use of mark-to-market accounting that allowed Treasury to declare them bankrupt. On a cash flow basis, they were solvent.

Because of all this, Washington finds itself in a somewhat awkward position in that its own rules is rendering many financial institutions insolvent in a manner which does not reflect their true value. A lot of big banks (Actually all of them) are currently lobbying heavily in Washington to get rid of the MTM accounting rule. But I think a mere accounting rule change won't reduce foreclosures or raise home prices -- then again, if spared drastic write downs, banks might be more willing to lend, raising home prices and reducing foreclosures. The economy might just jumpstart but at this point my guess is as good as yours and the truth is no one knows how things are going to play out.

The $700 Billion Dollar Question

The stakes are clearly huge in the Treasury's proposal to stabilize the US financial system. It looks like the treasury secretary, Paulson, has become even more powerful now with $700 billion at his disposal. I think the plan which promises to buy up to $700 billion of a variety of troubled assets (read mortgage-related securities and loans) will at least enable financial institutions to restructure and recapitalize their balance sheets. But while Wall Street may be bailed out, i still question the impact to Main Street. But a lot of critical answers seem murky or unanswered like what the real prices for these distressed assets are or how these assets will be valued. Also, who is going to manage them and is the government really going to hold them till maturity like it claims to.

The participating financial institutions can dispose of their troubled loans and securities closer to their intrinsic value..this means that all the problem assets will be flushed out and the banks can resume getting back to normalcy. This would go a long way to restore confidence since there won’t be any 'write- downs or losses' every quarter.

Here are some questions for which I think we need some real answers.

How will prices be determined? - This will totally make or break the success of the bailout. With all the write downs as any indications, setting the purchase price is not an easy task. The pricing at which Treasury buys the assets will likely become the benchmark pricing for all mortgage assets.

How will banks decide whether to participate in the Treasury program? - This is weird as participation in the Treasury asset sale program is voluntary. Banks can keep mortgage assets if they consider Treasury asking prices out of line with intrinsic values, taking into consideration ultimate losses from defaults. Again, goes back to the previous question, if prices are not set correctly, banks simply won’t participate.

What will be the impact of such sales to capital base? - This is kind of a double jepordy as the impact on financial institutions' capital will depend on the price levels at which the Treasury makes its purchases. Even if the firms choose not to participate or sell assets into the program may also need to mark down assets based on newly established benchmark prices, leading to erosion of their capital....there by coming out with more 'write-downs'

Is $700 billion enough? - This is the golden one. $700 billion is a lot of money. It is much greater than the $85 billion loan to AIG plus another $38 billion they are giving AIG (just announced today), and the $100 billion of capital support to Fannie Mae and Freddie Mac or the $29 billion to JPMorgan deal for Bear Stearns.

This bailout seems like an extraordinary governmental intervention - although it will provide important short-term relief, does not look like a complete solution to the financial markets. Again make no mistake; the plan will help the banks. I don’t see how the common man is going to be really benefited. To think that the ex-chairman of Goldman will be handing out $700 billion to other wall street banks... It just seems like wall street's his inner circle will benefit from all of this even more... Just barely was the plan announced and he already tapped his favorite banker from Goldman to be his adviser. I just question why the taxpayers money is being used to make wall street CEO's more rich and help them get bigger tax breaks.

Saying Ta Ta to TATA

Oh! What a circus it has been. Will they? Won't they? Will they? Won't they? This has been the question on everybody's minds over the last 4 months. TATA is being forced out of West Bengal (well they better leave if the highly anticipated Nano is ever to see the light of day) and to add insult to injury, their deadline to meet the Nano roll out seems all but impossible...and the first year target of 3 lakh cars, well, lets not even go there. The ongoing impasse at Singur has also made Tata Motors' top vendors extremely uncomfortable, prompting many of them to either announce a pullout or a significant scaling down of operations in West Bengal. Bengal stands to lose not just the mother plant but 56 ancillary units and the jobs they would create as well. The agitation has also resulted in the scaling down of Nano targets for this calendar year.

The Players

• Mamta Banerjee- Who leads Trinamool Congress is leading the protesters and farmers and has demanded the return of 400 acres of land
• Ratan Tata - Chairman of Tata, who must be wondering what the hell he was smoking when he decided to set up shop in West Bengal
• Buddhadeb Bhattacharjee - The CM of West Bengal who has made a total mess of the situation and is helplessly seeing other industries pull back from his state
• The Farmers - who are blindly following anyone who will give them money for their land

Agitation and Political Drama
The Govt of WB acquired around 1000 acres of farmland in Singur so the Nano plant could be set up by Tata. The trouble started after the Left Front-led Government offered compensation in return but some villagers complained that they had not received their dues. Sensing political opportunity, Mamata Banerjee jumped in to score some political points and she started demanding the lands be returned, which she alleged was forcibly taken from "unwilling farmers" to build ancillary industries adjacent to the main plant. The government is countering that it is too late to give the land back, that the project is too important for the state economy, that giving hundreds of acres back would essentially close the Nano project at Singur. In all, around 400 acres of land is still being fiercely disputed out of the 1,000 acres acquired by the State Government. Violence was encouraged and the farmers unwittingly became pawns in the political drama that has been unfolding over months and which only seems to be getting nastier by the day. Demonstrations and indefinite protests were staged and Tata's employees were attacked as the whole country watched with surprise as to what was happening to one of India's biggest corporations.

Give us the Money - Strangely it looks like over the last 2 weeks, more and more farmers are just collecting cheques from the state govt and giving up their land. Then there are many more who are trying to re-negotiate their land prices and want more money. At the same time, Mamta Banerjee is throwing more tantrums and staging more protests. She has even set a one week deadline for the govt to resolve the issue and is calling for the govt to step down since it has failed. While the farmers want money, it looks like mamta wants as much political mileage as she can get while claiming to fight for the unwilling farmers. Unwilling farmers?? What unwilling farmers.

This is certainly a strange case as it looks like the left, which has historically been against changes, are in front championing investment and reform, while the opposition (read Congress and BJP), who have always complained against the leftists for being against reforms, are trying their best to stop the development of the project in the state. As I write this, it looks like TATA has been offered 1000 acres by Karnataka in addition to Maharastra aggressively courting them as well. In all, 12 states have rolled out the red carpet to TATA, while the govt and opposition are continuing to fight with each other demanding the other step down.

This critical issue can only be solved by politicians with a commitment to India’s development and not by opportunist politicians who are just raising slogans to score quick cheap points. We need good opposition just as much as we need good government. At this time, I don’t think we have either...at least in the state of West Bengal.

Around The World...Banning Short Sales

It is amazing how much controversy there is surrounding the ban on short sales. While the decision has drawn relief from some quarters, let there by no doubt that there are quite a few people who are unhappy with SEC's decision. While UK took the first step to ban short sales and added pressure on other markets to respond, the US followed suit shortly. And now it looks like the entire world is jumping on the bandwagon with Australia, Taiwan, Netherlands and Germany also confirming the ban of short sales in their respective exchanges.

I suspect that the ban was done to appease the common investor who has probably been wiped out in the ongoing financial tsunami and as the politicians realized they have to do something to make themselves look good. The Fed and SEC have clearly indicated with this decision, that they are and will go to any lengths to preserve the US financial system collapse including changing the rules midway through the game, with no public comment or participation if required. Note that the ban on short sales does not mean that stocks will only go up. China's market has fallen by more than 50% this year alone even though short selling is not allowed at all.

By banning short selling world over, it looks like what the governments are clearly worried about is the fine line between "freedom" and "manipulation". I personally think that there is nothing wrong with borrowing stock to short, but given the sensitiveness in the global market, the worry is that even a small/negative sentiment can cause a big shift in markets which in turn can cause greater panic worldwide. Note that there can be 2 kinds of short selling. Normal short selling occurs when investors borrow shares and sell them, hoping the stock will fall and they can buy back the shares at a lower price. Naked short selling occurs when an investor sells a stock without first borrowing the shares, and that practice allows investors to flood the market with sell orders, potentially driving down share prices.

Why the ban maybe difficult to enforce

• First off, this is only a temporary ban. Let’s wait and watch if the ban is made permanent. If it is, it will significantly change the rules of the game
• Over the past few years the options market has grown to reach the ordinary investor. There is nothing that short selling provides which cannot be done through put options, albeit at slightly higher cost, due to the options premiums and the bid/ask price spread.
• Volumes in credit-default swaps and other derivatives trades and options are likely to rise in the wake of the short-sale restrictions - This is likely to cause a bigger headache as these complex derivatives are not subject to full disclosure and they are not publicly traded
• This will cause the traders to start focusing on non-financial stocks which can still be shorted via ETF's etc.
• Hedge Funds will be unable to hedge large positions and will likely take some hits. (Not sure what the impact will be to the broader markets once hedge funds start to fail)

Disclose Positions?
Apparently just banning short sales was not enough. After the announcement, pressure mounted for the SEC to do even more as its counterpart in London increased its regulatory responses. By evening the SEC came up with a new surprise – It required investment managers to publicly report their short positions weekly. Though I believe the SEC has every right to obtain and review information about short positions for market surveillance purposes, but forcing public disclosure will have serious consequences for the market. Companies will most definitely retaliate against short sellers. Portfolio and fund managers will lose their ability to manage assets without revealing their strategy. Once someone is short selling a security, other traders will simply do the same thing adding more pressure and this may trigger panicky selling if an investor sees that noted short sellers have shorted the stock.

These are extraordinary times and agreed that we need to support the govt’s efforts to ensure that fraud and manipulation have no place in this market. But the confusion and scapegoating that has ensued may well do more harm than good. Short selling or even naked short selling cannot destroy a company that has any real underlying value to it. Bear, Lehman and the other financials didn’t getting pounded because of short selling. They got pounded because the leverage game was over. I think because of the temporary ban, there is going to be a big rally - albeit an artificial one - which will end by still not revealing the true intrinsic value of the stocks.

And Then There Were None

As the Fed is rushing to pass the 700 billion bailout in Congress, the last remaining 2 investment banks Goldman Sachs and Morgan Stanley have been transformed into bank holding companies. This completes the decimation of the good old investment banking model and re-writes wall street as we know it.

Well, what this mean for Goldman and Morgan - they will be able to begin taking deposits like traditional banks which will increase their cash balances. In return they will be subject to far greater regulations and look more like commercial banks. They will also need to hold higher capital reserves and take less risks. And in return to subjecting themselves to more regulation, they will get full access to the Fed's lending facilities and discount windows which should help them avoid a Lehman like situation.

As bank holding companies, the two banks will have to reduce the amount of money they can borrow relative to their capital. That will make them more financially sound but will also significantly limit their profits. They are both highly leveraged compared to traditional banks. Today, Goldman Sachs has $1 of capital for every $22 of assets; Morgan Stanley has $1 for every $30. This will have to come down for both. By contrast, Bank of America's has less than $11 for every $1 of capital.

So, now that the stocks of GS and MS will trade like banks, are they really worth $130 and $27, respectively? I doubt it. But we might not know what the market really thinks about all this until the ban on short-selling is lifted.

Here we go..From 5 to 2 in 6 months!!

A perfect Storm.. Return of the Black Monday...Wall Street Hurricane.. Financial Tsunami..

These are some of the terms that are being coined to describe the unprecedented chain of events that have occurred over the last 24 hours. Lehman Brothers has collapsed and Merrill Lynch has agreed to be taken over by Bank of America. The events of Sunday September 14th and the day before were extraordinary. The weekend began with hopes that a deal could be struck to save Lehman. However, as the weekend progressed, it looks like the fed drew a line in the sand citing moral hazard and BOA and Barclays balked at the idea of having to takeover Lehman with no Fed backstops.

Around Sunday evening the chatter began that Lehman would not survive and late Sunday came the stunning news on the Lehman website that it had filed for Chapter 11. Though founded in 1800's, Lehman is not 158 years old as many people believe. Lehman is a 14 year old investment bank with a 158 year old name. Though the bank has access to a Fed lending facility which was introduced after Bear’s takeover by JP Morgan Chase, the collapse of its share price left it unable to raise new equity. At the end of August, Lehman had $600 billion of assets financed with just $30 billion of equity. Even a 5% decline in assets would wipe out the value of the company, which investors saw as a real risk due to the company's billions of dollars of mortgage securities. S&P lowered its long-term counterparty credit rating on Lehman to 'SD' (selective default, meaning payments may not be made on some financial obligations), from 'A'. The rating actions followed Lehman Brothers Holdings Inc., the parent/holding company of the Lehman Brothers group, filing for Chapter 11. At this time, it is not clear whether Lehman will default on its holding company senior and subordinated debt obligations. It is also uncertain whether the proceedings will ultimately include some of Lehman's affiliates in the U.S. and in other countries or whether regulators will take over those entities. Where bankruptcy protection leaves Lehman employees remains unclear. Although some are thought likely to pack their stuff up and ship out Monday, the fact is that the broker-dealer and investment management units are not included in the filing. Lehman has also filed motions to continue paying its employees in the meantime, though large scale layoff's are expected anytime.

The government's refusal to help with a bail-out of Lehman will strip many firms of the benefit of being thought too big to fail and with these developments the crisis is entering a new and extremely dangerous phase. The biggest worry now is the effect on derivatives markets particularly the credit-default swaps. Lehman is a top-ten counterparty in CDSs and holds contracts with a notional value of almost $800 billion. With Lehman left dangling, official attention is now turning to putting more safeguards in place to soften the coming shock to markets and the economy. The first step has been to encourage Lehman’s counterparties to get together and try to net out as many contracts as possible. It also has over 100,000 creditors. The inability to find a buyer is a huge blow to Lehman’s 25,000 employees, who own a third of the company’s now-worthless stock; On Sunday the Fed also expanded the list of collateral it will accept for loans at its discount window, to include even equities; and dealers may lend any investment-grade security, not just triple-A rated, to the Fed in exchange for Treasury bonds.

Merrill’s rush to sell itself was motivated by fear that it might be next to be caught in the stampede. Despite selling a most of its rotten assets recently, the market continued to question its viability. Its shares fell by 36% last week, and hedge funds had started to move their business elsewhere. John Thain went right ahead and struck a deal before markets reopened. Despite what people say, I think it’s a smart move as Mr Thain has not only managed to shelter his firm from the storm but he has also secured a price well above its closing price last Friday, $29 per share compared with $17 close. How he managed that in such an ugly market is not yet clear. Ken Lewis, BofA’s boss, is no fan of investment banking after he was stung by losses and openly declared he is pulling back. Having failed to build his own investment banking unit, he coveted Merrill’s formidable retail brokerage and got it all. It will be a logistical challenge all the more so since BofA is in the middle of digesting Countrywide, a big mortgage lender. Commercial-bank takeovers of investment banks have a horrible history because of the stark cultural differences. And it is not clear if BofA has a clear picture of Merrill’s remaining troubled assets.

The takeover of Merrill leaves just two large independent investment banks in America, Morgan Stanley and Goldman Sachs. Both seem to be in better shape but this weekend’s events has undoubtedly cast a shadow over the standalone model.

Even if markets can be stabilized this week, the pain is far from over—and could yet spread. The foreign markets are in the red and the Dow has crashed more than 500 points as I write this – its worst performance in 7 years. Worldwide credit-related losses by financial institutions now top $500 billion, of which only $350 billion of equity has been replenished. This $150 billion gap, leveraged 14.5 times (the average gearing for the industry), translates to a $2 trillion reduction in liquidity. Hence the severe shortage of credit and predictions of worse to come.

As spectacular as this weekend was, more drama is on the way as a Category 5 hurricane is testing the strength of the Financial levees.

Hasta La Vista…Musharraf!!!

After months of going back and forth, the Pakistani ruling coalition has began its crucial session and seem to be getting ready to impeach Gen. Musharraf for alleged misconduct, violation of the Constitution and financial irregularities and any other charges they can tack on to ensure that he is voted out. Although Musharraf has vowed to slug it out in parliament, he is expected to step down voluntarily as there are rumors of secret negotiations to give him immunity from prosecution if he does so.

The government has been mulling this move for months as Zardari and Sharif have been at loggerheads as to how to proceed with the impeachment process. Zardari’s and Sharif’s cooperation is purely driven by political missteps on both sides. PPP has historically been anti-army and once Zardari decided to work with the general at America’s urging, he immediately drew criticism. Sharif seized the opportunity and took an anti-American stance and boosted his popularity at home. The only thing they have in common is the mutual hatred they share for the general. Musharraf threw Sharif out of the country in 1999 and imprisoned Zardari for 6 years before letting him leave the country in exile. So they both have come together now realizing the only way both can survive is by ousting Musharraf first before they can get into the boxing ring to fight each other. The general for his part did not help himself by starting a war in his own backyard by asking the military to kill his own countrymen. This has made him so unpopular that Washington has decided to step back realizing that they cannot support him anymore for the risk of alienating the democratically elected government. At least a working relationship with the new government would be better and is necessarry for the US considering bin laden is probably holed up somewhere on the borders of Pakistan.

The impeachment is a numbers game. Both houses of the Pakistan’s parliament have a combined strength of 442, and the motion will have to be passed by a two-thirds majority or 295 members. The coalition claims to have enough numbers but the result will depend on the independents who could be swayed by the ISI. Though the army chief is Musharraf’s handpicked successor, it is unlikely he will intervene as he too has realized that any army intervention will only make Zardari and Sharif stronger.

At this point, it looks like Musharraf will be packing his bags and heading out of Pakistan...for good!!! The US may try to ensure he gets out of the country without facing any treason charges. Incidentally, the impeachment proceedings against Musharraf have been initiated on his birthday.

I am sure Bush must be saying Hasta La Vista…Baby!!! Or at least thinking of it.

Let The Games Begin!!

The date of today's Opening Ceremony was carefully chosen. The number eight is considered lucky in China so 8-08-08 is a particularly auspicious date. Beijing has stunned the world with its opening ceremony which began at 8:08 pm orchestrated to perfection. The US has dominated the medal count for the past 3 Olympics, but this year, most people believe they will be given a run for their money.

With 302 gold medals at stake over 22 days, let the games begin.

The 7 Year Talk (That Failed)

As I was reading the papers this morning, I realized that one piece of news dominated all the papers. The global trade talks, or the so called Doha, failed after 7 years of on-again and off-again negotiations, as none of the countries could reach an understanding. But all the articles I read blamed primarily India and China. I was laughing to myself as it looks like not many people have an understanding of the real reasons of why the talks failed. Why blame India and China?? The US is probably frustrated that they are not able to impose their will on the entire world anymore given that India, China and Brazil have emerged as trading powerhouses. The Doha talks aim to open markets for farm, manufactured goods and services around the world but have struggled to overcome differences between rich and developing nations.

The issue at hand was simple. Developing countries like India and China were asked to reduce tariffs on agricultural and industrial goods, which in turn would allow developed countries like the US, France and Britain to gain access to these markets. India and China however wanted a safeguard clause that would allow them to raise the tariffs in case there was a sudden surge in imports which would threaten their farmers in the domestic market. The US wanted to set the trigger at 40% while India and China wanted it to be set at 10%. No one could agree on the SSM (Special Safeguard Mechanism) and the talks broke down.

The criticism may sting, but the two Asian giants are not likely to succumb to overseas pressure. Both countries enjoy high economic growth, thanks to overseas demand for their manufacturing and outsourcing services. One fact that no one is talking about is that in 2003, the US did the same thing i.e. they invoked a so-called “safeguard” rule to prevent an increase of Chinese textile imports that threatened to put the US manufacturers out of business. So when India and China now want the same safeguard clause, the US is refusing to accept the Chinese and Indian position. Indian and Chinese leaders also have to worry about economic hardship of their farmers as they have struggled to compete against imports from the U.S. and other countries. It's interesting that China and India are being blamed for the failure of these negotiations - the real culprits are the massive farm subsidies in the US and Europe. The playing field is heavily biased in favor of developed nations which give out subsidies to their own farmers while trying to pry open markets in poorer parts of the world. The Americans and Europeans were pretty much asking weaker countries to dismantle their own protection measures without doing the same in their own countries. I'm glad India, China and Brazil had the clout to say no.

While the US has a mere 2% of its population who are farmers (and even they are rich), India has more than 50% of its population doing agriculture and earning less than $2 a day (There are 700 million people who directly or indirectly depend on agriculture in India).China has approx. 500 Million people living in countryside with no basic amenities. Lowering tariffs and giving subsidies will pretty much bring more than half the population in these countries to their knees.

America having the biggest economy in the world was making its own rules through the WTO and was changing them as they saw fit. Again, nothing wrong with that but as China and India builds a larger economy, expect them to do the same.

Iran and Its Missiles

It appears that Iran has put out a fake photo of their recent missile launch, showing four missiles shooting through the air rather than three. Though it can’t be said with any certainty whether there is any official Iranian involvement in this drama with a funny twist, but the image released by the State showing Iran firing its missiles was “apparently digitally altered”. The fourth missile “has apparently been added in digital retouch to cover a grounded missile that may have failed during the test”. Early this week, Iran said it test fired a series of long range and medium range missiles escalating the tension over its nuclear program. I guess Iran is just trying to send a signal to the rest of the world about their capabilities but it looks like they are grossly exaggerating their strength.

I guess the whole purpose of these launches was to demonstrate Iran's capabilities and a photo showing one out of four rockets failing doesn't have the intended impact, but hey, at least we know Iran’s state media uses Photoshop.

Oh Barak!! Are You Running to the Center?

With both the DNC and RNC just over a month away, the battle lines are being drawn. However, it looks like it will be the independents who will decide who will take oath in the white house next year. Obama, the presumed Democratic presidential nominee, has interestingly begun taking centrist or even hawkish positions in recent weeks on foreign policy, trade, the death penalty and other hot-button issues as he introduces himself to independent and swing voters, many of whom know little about him or have heard criticisms that he is too liberal or that he is a muslim. While Obama is making a play for centrist voters, McCain's strategy seems more geared to catering to the conservative base, as he has steadily moved to the right on a range of issues.

But as both Omaba and McCan try to appeal to the idependents, both are reversing or flip-flopping (Since that seems to be the popular term) on almost all of their policies on which they won the primaries. However, it is Obama who is beating McCain to the punch as he is moving so quickly to the center that he has irked some of his supporters, well actually a lot of his supporters.

In the primaries, Obama supported pulling out of Iraq, called the DC gun ban constitutional, backed the subjection of telecom companies to extensive lawsuits if they cooperated on terror surveillance program, opposed welfare reform, criticized free trade deals and pledged to renegotiate NAFTA and fiercely opposed it and was strongly against the death penalty.

However, he has now almost taken a different path and deviated on all his own stances. He told Fortune magazine he believes in free trade and does not want to overturn or pull out of NAFTA. On Iraq, Obama said that his upcoming trip there might lead him to refine his promise to quickly remove U.S. troops from the war and he will now listen to the general (we all know how that goes). Obama also extended his support for the government's eavesdropping program as the spy bill passed the senate today. After the Supreme Court overturned the District of Columbia's gun ban, he said he favors both an individual's right to own a gun and government's right to regulate ownership and declared himself a "supporter of the Second Amendment". Obama also became the first major- party candidate to reject public financing for the general election after earlier promises to accept it. He not only embraced but also promised to expand Bush's program to give more anti-poverty grants to religious groups, a split with Democratic orthodoxy. The most surprising stand was when he objected to the Supreme Court's decision outlawing the death penalty for child rapists, drawing attention to his support for the death penalty if used only for the "most egregious" crimes.

With today's gallop poll showing Obama leading with just 48% - 43%, I think he may be risking his reputation for truthfulness. If he loses his reputation, he certainly does not have time to gain the voters trust with just 3 months before they go to poll.

Time to Wake Up Mr.PM

India is a maze of conflicting rules, regulations and corruption that twists democracy to produce a constant squeeze on companies to appease the rules and tossing a bone here and there to the massive welfare state through taxation, employment demands and playing the old game of "west vs. east" in the political and economic arenas. I have always wondered what the current Congress govt has done for the last 4 years or so. I mean what is their real achievement. In a word, NOTHING. They can claim credit for a lot of things, but everyone knows that India's real so called economic boom started long before this govt took office.

The weak central government, which is run by an uneasy coalition between the Congress Party and the Left Front, is solely contributing to the unrest where prices are spiraling out of control and it is getting more and more difficult for the comman man to afford anything really. The inflation has jumped to 11.42% and the prices of food and manufactured products and the govt is unable to take any steps to control it...just blaming rising global oil prices. For five years starting from 2007, the Planning Commission has targeted Indian economy to grow at 9% with the last year delivering a growth of 10% . The current rise in inflation and high interest rates have already left a dent on the industry and the production growth rate of the country has substantially slowed down in the past four months. Inflation was at a modest 3% at the end of the year 2007, and is at present hovering over 11 per cent mark, the highest level in 13 years. This year the forecast for economic growth or GDP has been reduced to 7.3%.

The rising corruption is an new issue altogether that people are being forced to deal with. The 'India Corruption Study 2007', brought out by NGOs Transparency International India (TII) and Centre for Media Studies (CMS), found that about one-third of Below Poverty Line (BPL) households in the country bribed officials to avail a total of 11 services -- from police to PDS. According to the survey, which covered 22,728 households in all states and Union Territories, Rs 8,830 million (Rs 883 crore), in all, was estimated to be paid as bribe by BPL households last year. Its a shame that government officials take bribe from people who cant even make a decent living.

The Govt also has failed on the policy front. With the only aim of staying in power, the govt is totally dependant on all its so called coalition partners who all seem to be more keen on opposing everything that the govt does and threatening to pull out of the coalition. It is sad to see that the politicians are more keen to stay in the headlines rather than tackle the real problems that the country is facing. It has become amusing to read about the nuclear deal and what every party has to say about it. Indeed Mayawati from BSP took the cake when she said the deal is' Anti-Muslim'. Not sure what the deal has to do with religion but it proved there is no end in sight if Mr.Singh wants to please every tom dick and harry in the country before he actually acts. The PM, instead of leading the country is begging the various party leaders for permission to conduct the affairs of the state.

Time to wake up Mr.PM and do something real for the country, even if it means you lose support from your so called coalition partners. The drubbing you have taken in the last 4-5 states should tell you that people are in no mood to put up with the games the Congress is playing.

Talking about Inflation!!

The Indian people and the government are both quaking with fear with inflation hovering at around 8%. The people can barely make two ends meet with prices soaring, and the government knows that if prices don't fall, the government will.

But India is not the only nation grappling with rising inflation. Even people from wealthy countries are crying everyday over ever increasing prices of bread and vegetables. However, they can all thank their lucky stars cause they are sitting pretty compared to Zimbabwe.

Do you guys want to even guess the inflation rate in Zimbabwe??

355,000%!

No, it is not a typo. The inflation in Zimbabwe for the month of March/April 2008 rose to 355,000%! Yes, 355,000 per cent! It more than doubled from the February/March figure of 165,000%. Currency traders ceased operations last week on Thursday and Friday because of the free fall of the ZWD and annual inflation certainly exceeded 2 million percent.

It is indeed a miracle that the Zimbabwean economy is still surviving as the prices seem to be rising to unprecedented proportions. Inflation surged between February and March following the sudden rise in money supply that flooded the economy to finance the 2008 elections.

The economy is in real free fall right now as inflation accelerates rapidly making life almost unbearable. It is predicted that by the end of the month, prices could be doubling everyday. Almost 80% of the nation is unemployed. The Zimbabwean central bank has introduced $500 million bearer cheques (or currency notes) for the public, and $5 billion, $25 billion, $50 billion agro-cheques for farmers. As the consequence of this devaluation, huge anomalies are developing in the system and prices, charges, service fees, etc can be dramatically lower than the next simply because the organizations have not had time to adjust their costings or figures.

Mr. Mugabe has certainly upped the ante by coming out and publicly saying he will not give up power even if he loses. He has openly promised 'War' if the opposition wins. That indeed poses serious questions as to weather the economy can be contained anytime soon. A sausage sandwich sells for Zimbabwean $50 million and a 15-kg bag of potatoes cost Zimbabwean $260 million.

Phew!!!

Indiana Jones and a Total Letdown.

I watched Indiana Jones and the Kingdom of the Crystal Skull this weekend. I was really excited as the last weekend when I tried to go for the movie, it was sold out and this of course raised my expectations. As someone who grew up watching the first 3 Indy movies over and over again, I was totally thrilled and excited to be able to re-live a brand new adventure.

.....Boy, did it turn out to be a total letdown.

I must say i am still shocked to think that all that Steven Spielberg and George Lucas could come up with such a shallow story...and they took 19 years for this?? Don’t get me wrong, I am a big fan, but one cannot help thinking that after a classic like The Last Crusade (Which i still watch to date every 4-5 months), all they came up with was a cockamamie story involving aliens and the lost golden city of El Dorado. However, kudos to Harrison Ford who has proved he can still deliver even after almost 2 decades since he donned the famous hat. But there is not much he can do if the story is so weak. As for the Villain....Yawn!!!

The movie is watchable but provides no real excitement. Though there are some fun moments and chases, it never really got me hooked like the first 3 movies did. It was a weak movie strung together with some good sequences.. That’s the best way I can put it. For god's sake even Nicholas Cage's National Treasure kept me more engrossed. I hope the next time (If there is one), George Lucas finds something more interesting for Indy to go after. Sure the movie will be a money spinner, but I am keeping my DVD collection limited to the first 3 Indy movies for now.

Verdict: Sub-Standard but a total letdown for a Classic.

Bho Shambho

Bho Shambho - Nice devotional song on Shiva. I tried to listen to this song online but found that its not available to listen to for free on most sites. So I am putting it up for everyone to enjoy!!!

Euro English!!!

The European Commission has just announced an agreement whereby English will be the official language of the European Union rather than German, which was the other possibility. As part of the negotiations, Her Majesty's Government conceded that English spelling had some room for improvement and has accepted a 5-year phase-in plan that would become known as "Euro-English".

In the first year, "s" will replace the soft "c". Sertainly, this will make the sivil servants jump with joy. The hard "c" will be dropped in favour of "k". This should klear up konfusion, and keyboards kan have one less letter. There will be growing publik enthusiasm in the sekond year when the troublesome "ph" will be replaced with "f". This will make words like fotograf 20% shorter. In the 3rd year, publik akseptanse of the new spelling kan be expekted to reach the stage where more > komplikated changes are possible. Governments will enkourage the removal of double letters which have always ben a deterent to akurate speling. Also, al wil agre that the horibl mes of the silent "e" in the languag is disgrasful and it should go away. By the 4th yer peopl wil be reseptiv to steps such as replasing "th" with "z" and "w" with "v". During ze fifz yer, ze unesesary "o" kan be dropd from vords kontaining "ou" and after ziz fifz yer, ve vil hav a reil sensibl riten styl.

Zer vil be no mor trubl or difikultis and evrivun vil find it ezi tu understand ech oza. Ze drem of a united urop vil finali kum tru. Zen ve vil rul ze world!!

SriMan NaraYana

SriMan NaraYana

Some Real Tounge Twisters!!!

1. If one doctor doctors another doctor does the doctor who doctors the doctor, doctor the doctor the way the doctor he is doctoring doctors?Or does the doctor, doctor the way the doctor who doctors doctors?
2. A Tudor who tooted a flute tried to tutor two tooters to toot. Said the two to their tutor, "Is it harder to toot or to tutor two tooters to toot?"
3. A bitter biting bittern Bit a better brother bittern, And the bitter better bittern Bit the bitter biter back. And the bitter bittern, bitten, By the better bitten bittern, Said: "I'm a bitter biter bit, alack!"
4. A tree toad loved a she-toad Who lived up in a tree. He was a two-toed tree toad But a three-toed toad was she. The two-toed tree toad tried to win The three-toed she-toad's heart, For the two-toed tree toad loved the ground That the three-toed tree toad trod. But the two-toed tree toad tried in vain. He couldn't please her whim. From her tree toad bower With her three-toed power The she-toad vetoed him.
5. Silly Sally swiftly shooed seven silly sheep. The seven silly sheep Silly Sally shooedshilly-shallied south. These sheep shouldn't sleep in a shack; sheep should sleep in a shed.
6. You've no need to light a night-light On a light night like tonight, For a night-light's light's a slight light, And tonight's a night that's light. When a night's light, like tonight's light, It is really not quite right To light night-lights with their slight lights On a light night like tonight.
7. The twain that in twining before in the twine, As twines were intwisted he now doth untwine; Twist the twain inter-twisting a twine more between, He, twirling his twister, makes a twist of the twine.
8. If a Hottentot taught a Hottentot tot To talk ere the tot could totter, Ought the Hottenton tot Be taught to say aught, or naught, Or what ought to be taught her? If to hoot and to toot a Hottentot tot Be taught by her Hottentot tutor, Ought the tutor get hot If the Hottentot tot Hoot and toot at her Hottentot tutor?
9. Once upon a barren moor There dwelt a bear, also a boar. The bear could not bear the boar. The boar thought the bear a bore. At last the bear could bear no more Of that boar that bored him on the moor, And so one morn he bored the boar--That boar will bore the bear no more.
10. If you stick a stock of liquor in your locker, It's slick to stick a lock upon your stock, Or some stickler who is slicker Will stick you of your liquor If you fail to lock your liquor With a lock!
11. Mr Inside went over to see Mr Outside. Mr Inside stood outside and called to MrOutside inside. Mr Outside answered Mr Inside from inside and Told Mr Inside to come inside. Mr Inside said "NO", and told Mr Outside to come outside. MrOutside and Mr Inside argued from inside and outside about going outside or coming inside. Finally, Mr Outside coaxed Mr Inside to come inside, then both Mr Outside and Mr Inside went outside to the riverside.
12. We surely shall see the sun shine shortly. Whether the weather be fine, Or whether the weather be not, Whether the weather be cold Or whether the weather be hot, We'll weather the weather Whatever the weather, Whether we like it or not. watch? Whether the weather is hot. Whether the weather is cold. Whether the weather is either or not. It is whether we like it or not.
13. Mr. See owned a saw. And Mr. Soar owned a seesaw. Now See's saw sawed Soar's seesaw Before Soar saw See, Which made Soar sore.Had Soar seen See's saw Before See sawed Soar's seesaw, See's saw would not have sawed Soar's seesaw. So See's saw sawed Soar's seesaw.But it was sad to see Soar so sore Just because See's saw sawed Soar's seesaw

Oil - Up, Up and Away

The price for a gallon of gas has been setting new record highs averaging around $3.7. Well, if you are in California, there is a good chance that you are paying more than $4 already. If all else is not enough, Goldman Sachs predicted on Tuesday that oil could soar towards $150-$200 a barrel because of a lack of adequate supply growth. Supply is up, demand is down, yet the price is soaring. So what is the deal with oil??

Crude prices have more than doubled in the last one year causing pain to millions around the world. Many analysts believe the dollar’s protracted decline over the past year has much to do with the doubling in oil prices since May of last year. Another school of thought thinks growing demand in rapidly developing countries such as China, Brazil and India, is the primary factor driving oil higher. Others have also attributed speculation in oil and a wave of fund money pouring into commodities, given the weaknesses in other financial markets.

What effect does the falling dollar have on the price of crude? Most oil price contracts are denominated in dollars. The dollar has fallen in value by more than 30 percent against a Federal Reserve index of major currencies since 2002. This means that the price of imports, including oil, have gone up. That brings us to speculation. Since September 2003, the total number of open crude oil futures and options contracts rose by 364 percent. Meanwhile the global demand for petroleum rose by just 8.2 percent. So the futures and options market has become more important than the physical supplies in driving the price. We are seeing investment flows into the oil market that don't have anything to do with the demand and supply of oil. Investors are treating oil as a hedge against inflation and a falling dollar. Oil markets are part of a negative positive feedback loop in which higher oil prices contribute to higher inflation, which in turn lowers the value of the dollar, which boosts oil prices, and so forth. In other words, the oil market is coming to resemble the gold market (which has also been soaring).

Economists also note that in the short run oil prices are very inelastic: A large change in price produces only a small change in demand. If the price of gas goes up a dollar per gallon overnight, you still have to fill your tank to get to work. However, over the long run, consumers and producers respond to higher oil prices. For example, Americans are driving less and have switched to buying more fuel efficient cars. Higher prices are no doubt encouraging innovation.
Oil companies have a two-pronged approach when it comes to innovation: seek alternative sources of energy that will both (1) reduce dependency on trouble-some, oil-rich nations and (2) utilize this energy in a manner that will still reap windfall profits. Although ideal in theory, it’s much tougher to implement in practice since renewable energies are just that - renewable. When products are renewable, profits go down since consumers purchase less. There is no doubt that several companies have already innovated alternative fuels, however these will take years before reaching a scale of production where profits can be made from them.

So what will happen to oil prices over the next few years? No one is predicting $10 per barrel oil. However, it sure seems to be the right time to give up that Hummer and switch to hybrids as this problem is not going away anytime soon!!

NY Mom

And the Campaign Continues...

It looks like the democratic primary race is over. After last night's overwhelming win in North Carolina and surprising close contest in Indiana for Obama, it looks increasingly difficult for Clinton to convince people why she is still running.

Oh..what a difference a week makes. April 28 was only last week but it feels like ages ago. That was the day Obama got hit by a one-two punch. First, his former pastor dominated the airwaves with his offensive rant. The same day brought news that Hillary had decided to join McCain in calling for a summer gas tax holiday, sure to be popular with voters angry about high costs at the pump. But in the end Obama seems to have come out on top as he took a more rational principal stand on the gas tax issue backed by the countries economists and made Clinton look like a political opportunist as she aligned with McCain.

Well, with only 6 contests remaining and a reducing pool of voters to help Clinton, there are potentially no more game changers left to turn the tide in her favor. Last night's results were decisive on their own: They offered Clinton her last, best chance to turn the tables on her rival, and she didn't even come close. To be sure, Obama is still struggling to win some demographic groups, notably blue-collar white voters, who are a key component of the Democratic base.

The pressure is on Clinton now to convince the super-delegates, who are the only ones who can change the game, why she is better than Obama. With a lead in pledged delages, popular votes, number of states won and caucuses, Obama seems too close to the finish line not to win the nomination. And last nights results diminished Clinton's rationale for urging Democratic superdelegates to override all his leads and give the nomination to her.

Well, the campaigns may continue, however it looks like the contest is over!!

Putting the Brakes on India's Growth

India continues on its high-growth trajectory, with GDP expanding at or about expected rates. However, the economic data have weakened in recent months, causing worry for many people. This of course reflects the impact of the sharp appreciation of the rupee during 2007. The rupee has stabilized now, but other factors like high prices and rising commodities are starting to cause worry. It was widely agreed that RBI's policies for the last 2 years was based on the judgment that the Indian economy was overheating, as demonstrated by the 9% growth rate and higher inflation. However, the expected moderation doesn't appear to be too severe as the economy appears to be cooling, albeit from other concerns.

Sharp appreciation in the rupee in the first half of 2007 resulted in a significant decline in the growth rate of exports and the stronger rupee also contributed to the slowdown in industrial production during the second half of 2007. The currency has since stabilized, as the central bank has returned to its previous position of a tightly managed gradual appreciation. However, the overall economic situation has started to have its impact on what looked like India's once unstoppable economic growth.

However, even as growth slows, risks to inflation are still significant as a result of elevated global oil prices and, increasingly, rising global food prices. Its interesting to see that the central bank hasn't yet responded to the prospect of growth slowing to a level that might not be acceptable to below-trend level.

GDP growth reached a peak of 9.8% during 2006 thanks to strong growth momentum in services and industry. The services sector has been growing at a persistently high rate since the late 1990s, and the industrial sector has accelerated sharply from a relatively sluggish phase during 2003 and continued to gain momentum until 2006. However, after peaking in early part of 2007, industrial production decelerated steadily, which clearly seems to have translated into lower aggregate growth.

The difference between growth rates of GDP and industrial production is the result of continued momentum in the services sector, which has not displayed significant sensitivity to either rising interest rates or an appreciating currency. Changes in the macroeconomic environment have undoubtedly affected certain activities such as currency appreciation and growth slowdown in the services sector. However, the aggregate continues to grow at rates that reflect both expanding domestic demand and highly competitive exports. Agriculture also contributed significantly in 2007, which currently bodes well for food prices.

Rising Inflation Could Make It Difficult For The Reserve Bank To Cut Interest Rates - The economy's vulnerability has been highlighted as there has been a sudden change in food supply due to rising prices. Call from the CPI and Left to withdraw support to the govt (Again!!) has made many people sit up and realize the problem has gotten bigger than we would have liked it to. However, the combination of slowing growth and persistent inflation threats from the supply side, for both food and oil, poses a significant challenge to monetary policy.

The Rupee Will Continue To Appreciate, but gradually. The most significant development on the exchange rate front was the large and rapid appreciation of the rupee during the second quarter of 2007. This was followed by a change in the RBI's policy. Previously, the RBI accumulated the balance of payments surplus as foreign exchange reserves. But the inflationary consequences of persistent reserve accumulation in the face of a dramatic increase in the balance of payments surplus motivated the change in policy stance. A sharp surge in capital inflows early in the first half of 2007 made continuous RBI intervention unsustainable. As a result, the rupee rose at an uncontrolled pace in the second quarter of 2007. However, in the third quarter of 2007, the central bank seems to have reverted to its stance of controlled appreciation.

The Biggest Threats To India's GDP Are At Home. India may be the world's largest democracy. But it also comes with a costly tag of not being able to move quickly on taking decisions unless a consensus has been reached among all of India's political parties. This does put India at a big disadvantage as it almost always causes one to miss the bus and act only after the fact instead of being able to take decisions at the right time. Because of this it should be pointed out that domestic factors are the main cause of this deceleration. Because the recent growth has been driven by domestic factors, India is relatively insulated from a mild U.S. and global slowdown.

India's growth and GDP is expected to fall to 7.5%-7.8% in 2008 from the 8.7% growth it enjoyed in 2007.

H1-B (2009) - And the Rush starts now!!!

Last year, the visa cap for H1B petitions was filled on Day 1. Though no numbers were released officially, it is estimated that USCIS had in fact received about 150,000 applications and thus resorted to ‘lottery’ (Random Selection) to pick up eligible applications. Many applicants had to wait longer just to know if their application was selected. Also, due to sudden rush, many had to wait for months to receive a status on their accepted application as well.

Now with just 2 more weeks left to go before USCIS accepts applications for 2009 H1B Quota, it looks like last years rush is about to repeat this year as well. Here are few things that may affect the drama this year and may change the stats a little bit.


Recession, Slowdown and Layoffs
It has already been widely acknowledged that the US economy is not in its brightest spot and we are already in a recession. Though some optimists are declaring just a slowdown, rest assured with recent announcements of another full percentage point rate cut looming and stagflation fears, the economy is in trouble. This puts direct pressure on all IT consultants and prospective H1B consultants for year 2008. Some may be reminded of the "dotcom" bust in 2001, where 1000s of IT consultants lost their jobs and had to leave for India after spending months searching for their next gig. For H1B consultants, this is a lot more serious issue, as if they loose their job or their project ends, they almost immediately have to leave US or be 'on bench' with no pay. Question is how long can people survive with either of those scenarios?

A Game of Chance...
Just like last year, it is almost certain that visa cap will be reached on day 1 and USCIS may again resort to ‘random selection’. That would mean, there is no guarantee and chances are completely based on luck rather than a consultant’s qualifications and specialization. Given here is a link with statistics released by USCIS as to the number of H1-B approvals for last year.
http://www.businessweek.com/table/08/0305_h1b.htm

New Competition for H1B Holders
July 2007 was a historic period of the year in the sense that in a sudden and surprise move, all visa status became current for green card applicants from India and almost all submitted their I-485 applications. All such applicants received EADs for themselves and their spouses. Spouses of many of these applicants who were on dependent visas like H4 became suddenly eligible to work without any restrictions. That brought in a totally new breed of workforce to the already downsized market for 2008. This additional supply of workforce surely puts more pressure in the job market especially when there are fewer jobs out there and now H1's are competing with EAD's.

Numbers this year...
The official H1B quota still stands at 65,000. There is no news about any possible increase and increases in caps looks unlikely with recession. The actual number of visas available is infact about 58,000 once you subtract the visas reserved for Singapore/Chile. For those who received or receiving Graduate Degree or any other Advanced Degree from US Universities, there is an additional quota of 20,000.

H1B Abuse - Yes it happens every year.
If you look at the statistics link above, it gives you an insight as to who is getting the most H1's. There is no doubt that the outsourcers are abusing the H1B visa program. Companies such as Infosys and Wipro are undermining the American economy by wiping out jobs. The companies bring low-cost workers to the U.S., train them in the offices of U.S. clients, and then rotate them back home after a year or two so they can provide tech support and other services from abroad. At the end of the day, an employee of Infosys or Wipro who manages to get a H1 stays in the country for maybe 2 years or so on an average of 6 years thereby denying the visa to someone graduating from an American university who truly needs the visa. The numbers released by USICS clearly shows the visa is not being used for what it was intended for. The outsourcing companies also prefer H1’s to L1’s or B1’s as once an H1 is stamped for an employee they can fly out overnight (whenever the client wants them onsite) and also there is less legal costs involved. Since their tactics have now been noted by USICS, it will be interesting to see if the outsourcing companies get the same number of approvals like last year.

Whatever the case may be, as the filing date approaches, the H1 B visa rush starts NOW!!!