Comments for 6 AM Pacific http://6ampacific.com Basab Pradhan's weblog about business and life in a 'flat world'. 6 AM Pacific is the best time for a global conference call. Fri, 06 Nov 2009 08:40:10 -0600 http://wordpress.org/?v=2.8.4 hourly 1 Comment on My Government School by Rumu http://6ampacific.com/2006/11/11/my-government-school/comment-page-1/#comment-16477 Rumu Fri, 06 Nov 2009 08:40:10 +0000 http://6ampacific.com/2006/11/11/my-government-school/#comment-16477 Hello Basab Hope you remember me. I'm yr classmate Rumu Chand. I had a similiar experience when I visited Hisar 10 years back i.e in 1999. i think we should do something as alumni. While going thru this page so many memories of school came to my mind . I don' t know where are our other classmates. I've contact with namrata, meenakshi, tara sethi & renu tayal. Two years back during Divya's visit to India we had a get together at meenakshi's place. Hope your parents are fine. Hows Rob? If you have time pls write. Rumu rumuchand9@gmail.com Hello Basab
Hope you remember me. I'm yr classmate Rumu Chand. I had a similiar experience when I visited Hisar 10 years back i.e in 1999. i think we should do something as alumni. While going thru this page so many memories of school came to my mind . I don' t know where are our other classmates. I've contact with namrata, meenakshi, tara sethi & renu tayal. Two years back during Divya's visit to India we had a get together at meenakshi's place. Hope your parents are fine. Hows Rob? If you have time pls write.
Rumu
rumuchand9@gmail.com

]]> Comment on Wall Street Bonuses are Not the Real Issue by Basab Pradhan http://6ampacific.com/2009/10/29/wall-street-bonuses-are-not-the-real-issue/comment-page-1/#comment-16475 Basab Pradhan Fri, 06 Nov 2009 05:08:51 +0000 http://6ampacific.com/?p=530#comment-16475 Radha - I am not saying that Capital Markets don't add real value. Allocating capital where it is most efficiently used is of enormous value to the economy, even though it may be perceived to be just "moving money around". But there is something going on, which is probably regulatory in nature, which has allowed it expand unfettered. For instance, the regulatory framework protects the three credit rating agencies which allows these analyst firms make lots of money on debt instruments when their counterparts in the equity markets make much less in a highly competitive industry. Sometimes the regulatory structure of an industry can cause it to expand without any resistance. Healthcare is one such example. Is Wall Street another? That's the question Radha – I am not saying that Capital Markets don't add real value. Allocating capital where it is most efficiently used is of enormous value to the economy, even though it may be perceived to be just "moving money around". But there is something going on, which is probably regulatory in nature, which has allowed it expand unfettered. For instance, the regulatory framework protects the three credit rating agencies which allows these analyst firms make lots of money on debt instruments when their counterparts in the equity markets make much less in a highly competitive industry.
Sometimes the regulatory structure of an industry can cause it to expand without any resistance. Healthcare is one such example. Is Wall Street another? That's the question

]]> Comment on Wall Street Bonuses are Not the Real Issue by RadhaJ http://6ampacific.com/2009/10/29/wall-street-bonuses-are-not-the-real-issue/comment-page-1/#comment-16474 RadhaJ Thu, 05 Nov 2009 19:45:20 +0000 http://6ampacific.com/?p=530#comment-16474 Basab. I agree with the point that the tremendous growth in capital markets has facilitated the rise in salaries. This is a wonderfully elegant explanation that has the value of being applicable to other contexts. However, I dont view this growth of capital markets as unhealthy. Permit me to restate the unoriginal (but unpopular) view that capital markets connect people with money (and perhaps no ideas) to people with ideas (and perhaps no money). So, they are key to democracy, like the circulatory system is to the human body --- "doesnt make anything" by itself, but facilitate others to do what they want to do. The use of (Wall and Dalal) street funding to expand microfinance in India, eg. <a href="http://online.wsj.com/article/SB125650454944206667.html," target="_blank">http://online.wsj.com/article/SB12565045494420666...</a> is an uncontroversial feel-good example of the utility of growth in capital markets. Less uncontroversial, but perhaps more impactful, is the role that capital markets played in the boom of the 2000s. Arguably, the world (and certainly the emerging third world) is better off with the boom. Money was certainly wasted (in 2000, 2008 etc) , and more transparency is certainly needed. But, is there a better alternative? Basab. I agree with the point that the tremendous growth in capital markets has facilitated the rise in salaries. This is a wonderfully elegant explanation that has the value of being applicable to other contexts.
However, I dont view this growth of capital markets as unhealthy. Permit me to restate the unoriginal (but unpopular) view that capital markets connect people with money (and perhaps no ideas) to people with ideas (and perhaps no money). So, they are key to democracy, like the circulatory system is to the human body — "doesnt make anything" by itself, but facilitate others to do what they want to do.
The use of (Wall and Dalal) street funding to expand microfinance in India, eg. http://online.wsj.com/article/SB12565045494420666... is an uncontroversial feel-good example of the utility of growth in capital markets. Less uncontroversial, but perhaps more impactful, is the role that capital markets played in the boom of the 2000s. Arguably, the world (and certainly the emerging third world) is better off with the boom.
Money was certainly wasted (in 2000, 2008 etc) , and more transparency is certainly needed. But, is there a better alternative?

]]> Comment on Leaving the Kindle On During Takeoff by Anant Misra http://6ampacific.com/2009/10/03/leaving-the-kindle-on-during-takeoff/comment-page-1/#comment-16470 Anant Misra Mon, 02 Nov 2009 06:42:19 +0000 http://6ampacific.com/?p=514#comment-16470 Passengers, they say, shouldnt be distracted, especially during the critical take-off and landing phases. I completely agree with this reasoning and thus clearly in favour of switching off all electronic devices at those times. However, it is unfair to not allow them to use their phones, while in a plane on the tarmac for an extended duration. This inconvenience was heightened in election season, thanks to VIP flights and passengers were inconvenienced in spite of there being no threat to safety. Id much rather be asked to kindly switch off my phone for my own good, than be patronised with technical mumbo jumbo! <a href="http://mobileet.timesofindia.com/mobile.aspx?article=yes&pageid=16&sectid=edid=&edlabel=ETM&mydateHid=25-05-2009&pubname=Economic+Times+-+Mumbai&edname=&articleid=Ar01601&publabel=ET" target="_blank">http://mobileet.timesofindia.com/mobile.aspx?arti...</a> Passengers, they say, shouldnt be distracted, especially during the critical take-off and landing phases. I completely agree with this reasoning and thus clearly in favour of switching off all electronic devices at those times. However, it is unfair to not allow them to use their phones, while in a plane on the tarmac for an extended duration.
This inconvenience was heightened in election season, thanks to VIP flights and passengers were inconvenienced in spite of there being no threat to safety. Id much rather be asked to kindly switch off my phone for my own good, than be patronised with technical mumbo jumbo!

http://mobileet.timesofindia.com/mobile.aspx?arti...

]]> Comment on Leaving the Kindle On During Takeoff by Anant Misra http://6ampacific.com/2009/10/03/leaving-the-kindle-on-during-takeoff/comment-page-1/#comment-16468 Anant Misra Mon, 02 Nov 2009 06:41:59 +0000 http://6ampacific.com/?p=514#comment-16468 Indian authorities have implemented these rules in accordance with international norms , which themselves took the lead from the US. The history of the rule in the US is that it was in fact the FCC, their communications regulator, who requested their airline regulator, the FAA, to ask customers to turn off their mobile phones. This was because in the early days of cellular technology, the entire network could crash, if a number of phones went up in the air and switched too quickly from one cell site or tower to another. There was always the theoretical possibility that there could be on-board interference, even though all airline navigation equipment works in a completely different frequency range. With smarter networks and better electromagnetic shielding in cockpits, both reasons are now redundant. In any case, no flight attendant has ever asked me to remove a data card, while working on my laptop, proving that airline staff themselves dont really understand the rule. Pilots and aviation specialists, Ive spoken to, coyly admit that the real reason they want phones switched off, is to avoid a cacophony on board. Indian authorities have implemented these rules in accordance with international norms , which themselves took the lead from the US. The history of the rule in the US is that it was in fact the FCC, their communications regulator, who requested their airline regulator, the FAA, to ask customers to turn off their mobile phones. This was because in the early days of cellular technology, the entire network could crash, if a number of phones went up in the air and switched too quickly from one cell site or tower to another. There was always the theoretical possibility that there could be on-board interference, even though all airline navigation equipment works in a completely different frequency range. With smarter networks and better electromagnetic shielding in cockpits, both reasons are now redundant.
In any case, no flight attendant has ever asked me to remove a data card, while working on my laptop, proving that airline staff themselves dont really understand the rule. Pilots and aviation specialists, Ive spoken to, coyly admit that the real reason they want phones switched off, is to avoid a cacophony on board.

]]> Comment on Leaving the Kindle On During Takeoff by Anant Misra http://6ampacific.com/2009/10/03/leaving-the-kindle-on-during-takeoff/comment-page-1/#comment-16469 Anant Misra Mon, 02 Nov 2009 06:41:37 +0000 http://6ampacific.com/?p=514#comment-16469 Lets not get into the details of technical studies done by aircraft manufacturers you can find those online. Lets not even argue the fact that all reported incidents from actual flights only revealed mild correlation and no evidence of causation . Lets just use plane (pun intended) logic. If there was even the slightest chance even 1% that a phone could actually disrupt on-board equipment, do you actually think youd be let on board with one Half the passengers just put their phones on silent and turn their screens off. If the airlines were really serious, they would confiscate your phone at security check and return it on landing, or they would install jammers on all flights. Lets not get into the details of technical studies done by aircraft manufacturers you can find those online. Lets not even argue the fact that all reported incidents from actual flights only revealed mild correlation and no evidence of causation . Lets just use plane (pun intended) logic. If there was even the slightest chance even 1% that a phone could actually disrupt on-board equipment, do you actually think youd be let on board with one Half the passengers just put their phones on silent and turn their screens off. If the airlines were really serious, they would confiscate your phone at security check and return it on landing, or they would install jammers on all flights.

]]> Comment on Leaving the Kindle On During Takeoff by Anant Misra http://6ampacific.com/2009/10/03/leaving-the-kindle-on-during-takeoff/comment-page-1/#comment-16467 Anant Misra Mon, 02 Nov 2009 06:40:25 +0000 http://6ampacific.com/?p=514#comment-16467 Another perspective, if it really interferes with flight communication we would not be allowed to carry it onboard. AFEW days ago, Airtel announced a tie-up with Aeromobile of the UK to offer inflight connectivity on sectors outside India. Permission is apparently being sought from the Directorate General of Civil Aviation (DGCA) to allow similar services in Indian airspace. My request to the ministry of civil aviation would be to consider and correct the current rule regarding phones on flights, before giving this the go-ahead . The issue at hand is that telling passengers to kindly switch off your mobile phones since they interfere with the navigation equipment on board is a blatant lie and, as a matter of principle, citizens should not be lied to. Another perspective, if it really interferes with flight communication we would not be allowed to carry it onboard.

AFEW days ago, Airtel announced a tie-up with Aeromobile of the UK to offer inflight connectivity on sectors outside India. Permission is apparently being sought from the Directorate General of Civil Aviation (DGCA) to allow similar services in Indian airspace. My request to the ministry of civil aviation would be to consider and correct the current rule regarding phones on flights, before giving this the go-ahead . The issue at hand is that telling passengers to kindly switch off your mobile phones since they interfere with the navigation equipment on board is a blatant lie and, as a matter of principle, citizens should not be lied to.

]]> Comment on Wall Street Bonuses are Not the Real Issue by Krishna http://6ampacific.com/2009/10/29/wall-street-bonuses-are-not-the-real-issue/comment-page-1/#comment-16466 Krishna Sat, 31 Oct 2009 17:44:07 +0000 http://6ampacific.com/?p=530#comment-16466 How high? As high as someone is willing to pay. That's something for the hirer to judge. The rule of "caveat emptor" prevails. Benchmarking compensation practices in financial industry with other industries is like comparing apples to oranges. Financial industry is a high stress industry and you will see it if you take a look at their balance sheets. Other industries have land and building, plant and machinery, patents, stock of raw / finished goods inventory, work-in-progress, cost of production, distribution and logistics etc., to account for as assets (with additions every year) and to provide for their depreciation etc. that blocks a huge proportion of their pre-tax profits from suffering tax knocks. Financial industry has no such tax shelters besides interest on loans that get charged off to their revenue. So there will be a huge surplus left (during the upcycle years) that will face a full tax slap and it is prudent to use it to reward high performing employees generously that can ensure deal pipelines to remain full. The industry runs on the individual, his contacts and his foresightedness much more than the organizational clout and outreach that other industries enjoy. How high? As high as someone is willing to pay. That's something for the hirer to judge. The rule of "caveat emptor" prevails.

Benchmarking compensation practices in financial industry with other industries is like comparing apples to oranges. Financial industry is a high stress industry and you will see it if you take a look at their balance sheets. Other industries have land and building, plant and machinery, patents, stock of raw / finished goods inventory, work-in-progress, cost of production, distribution and logistics etc., to account for as assets (with additions every year) and to provide for their depreciation etc. that blocks a huge proportion of their pre-tax profits from suffering tax knocks. Financial industry has no such tax shelters besides interest on loans that get charged off to their revenue. So there will be a huge surplus left (during the upcycle years) that will face a full tax slap and it is prudent to use it to reward high performing employees generously that can ensure deal pipelines to remain full. The industry runs on the individual, his contacts and his foresightedness much more than the organizational clout and outreach that other industries enjoy.

]]> Comment on Insider Trading by Basab Pradhan http://6ampacific.com/2009/10/20/insider-trading/comment-page-1/#comment-16465 Basab Pradhan Fri, 30 Oct 2009 21:33:42 +0000 http://6ampacific.com/?p=528#comment-16465 I found it later. Look at my comment just above yours :-) I found it later. Look at my comment just above yours :-)

]]> Comment on Wall Street Bonuses are Not the Real Issue by Basab Pradhan http://6ampacific.com/2009/10/29/wall-street-bonuses-are-not-the-real-issue/comment-page-1/#comment-16464 Basab Pradhan Fri, 30 Oct 2009 21:32:53 +0000 http://6ampacific.com/?p=530#comment-16464 I don't contest the point that compensation in capital markets is higher than other industries because the companies gain from having the smartest people working for them. But that still leaves open questions like - - How high is high? Once they have crossed the other industries how high does it have to be for it to be serving the purpose of pulling talented people in. - Why has it grown faster? Comp in capital markets have always been higher. But if in the last two decades it has grown much faster than the average comp (or even avg comp in college educated pop) is that because it absolutely must have the cream of the working population (which I can tell you is not the case at all)? Or is it that the total pie - profits + bonus pool - has been growing like a rocket leaving enough room to satisfy investors and hand out oversize bonuses. I don't contest the point that compensation in capital markets is higher than other industries because the companies gain from having the smartest people working for them. But that still leaves open questions like –

- How high is high? Once they have crossed the other industries how high does it have to be for it to be serving the purpose of pulling talented people in.
- Why has it grown faster? Comp in capital markets have always been higher. But if in the last two decades it has grown much faster than the average comp (or even avg comp in college educated pop) is that because it absolutely must have the cream of the working population (which I can tell you is not the case at all)? Or is it that the total pie – profits + bonus pool – has been growing like a rocket leaving enough room to satisfy investors and hand out oversize bonuses.

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