Theta @ 4 Hz

How iPod makes people "touch"

noreply@blogger.com (sydneymurugan) — Tue, 01 Feb 2011 08:22:00 +0000

Now I know why Steve Jobs named the product iPod "Touch".

If you want to get past someone in a crowded train, there is a fair chance that your old "excuse me" won't work. This is because most people are hooked on to their iPods or iPhones and they wouldn't even hear if a decent firecracker goes off - let alone your "excuse me". This leaves you with no other option but to touch them and let them know that you want to go past them.

iPod makes people touch!

"Don't be Evil" - End of Open Internet.

noreply@blogger.com (sydneymurugan) — Sat, 14 Aug 2010 03:17:00 +0000

When you see someone tries to fix something that is not broken you can conclude that either he is crazy or there is more to it than meets the eye.

The ongoing debate about net neutrality gained fierce momentum with Google and Verizon reportedly (I first read it in NY Times) agreeing in principle about ending the internet as we know now. If true, that would be the end of "Open Internet" as we see it today.

Google and Verizon came up with a two-page policy document. The full text is available here. Whilst a cursory read would seem that their intention is harmless, read between the lines:

Here is "Five sentences from the Google/Verizon proposal that could change the net forever" - Matt Schafer's Blog:

1. “Prioritization of Internet traffic would be presumed inconsistent with the non-discrimination standard, but the presumption could be rebutted.”

Interpretation: Favoring some traffic over other traffic is not okay, but an ISP could do it anyway if they have a good argument for it.

2. “Broadband Internet access service providers are permitted to engage in reasonable network management… (and) to prioritize general classes or types of Internet traffic.”

Interpretation: ISPs can throttle/prioritize traffic in whatever way they feel is necessary for the sake of the network.

3. “Because of the unique technical and operational characteristics of wireless networks, and the competitive and still-developing nature of wireless broadband services, only the transparency principle would apply to wireless broadband at this time.”

Interpretation: Since wireless Internet is “different” from wired Internet, net neutrality is not applicable to wireless Internet.

4. “The FCC would enforce the consumer protection and nondiscrimination requirements through case-by-case adjudication, but would have no rulemaking authority with respect to those provisions.”

Interpretation: The FCC has no authority to make rules to keep the Internet a level playing field for everyone.

5. “The FCC would have exclusive authority to oversee broadband Internet access service, but would not have any authority over Internet software applications, content or services.”

Interpretation: The FCC has no power to regulate ISPs at any level, but it can “oversee” ISPs and punish them after the fact with $2 million dollar fine.

Because we are so used to open Internet all along, it is really hard to imagine it being closed. So What does it mean?

It means that till now, Internet was a freeway with no tolls. It will now have two lanes. One fast lane and one slow lane. The fast lane would only be affordable to those who are willing to pay and the majority of smaller players would have to content with the slower lane.

Whilst debate is going on amongst consumer class expressing concern over discrimination which was hitherto unimaginable, the real danger lies somewhere else: It hinders entrepreneurship on the Internet.

We, as users, may not be required to pay in the short run - but in the long run they can charge us. But it will definitely affect those internet businesses who are not willing to pay their ISP for "faster" delivery of content to consumer.

Imagine you happened to invent an amazing algorithm for search. Far superior to Goole's algorithm and your search results are stunningly more relevant and accurate than that of Google. And, you are operating out of your garage and dreams about taking on Google - just the same way Sergey and Larry took on Yahoo! when they started Google.

Here comes the punch! Google pays a billion dollars to ISPs to deliver their search results faster and your search results, though really good, comes excruciatingly slow because you cant afford to pay as much as Google.

The winner here is Google and the losers are many. main loser is the consumer. We are denied good technology because the inventor is discriminated by the ISP based on how much he can pay.

Well, I know this is a bad example because if you happen to stumble upon an algorithm like that, you will have the backing of at least one big VC - and money will not be a problem. But what if you don't want to dilute your equity and decide go go without a VC?

Extend the impact to other businesses: Bloggers, Online tutors, Tradesmen who advertise on the internet and a whole heap of people who make a living out of it and aspires to make it big one day. What happens to them? Those who can afford to pay will survive and those who can't will perish.

Imagine this happened in the '90s when Google was still in the garage. Yahoo! might have shut Google out and Google would never have born. You would not be using gmail, google earth or google maps. Or Amazon - Barnes & Nobles would have shut them out.

So, What is really happening?

What is happening right now is that the little guys are able to take on established, big, brick and mortar businesses with their intelligence and innovation alone. Internet is the only platform where the small guy can even dream of taking on the big guys. And big businesses don't like it. They want to block the way for ever and would like to be in a position of power.

Google is getting fat and doesn't like idea of sharing eyeball revenue with anyone. Well, it is happening. With more potential competition out there in garages, big companies don't like the idea of their share of the pie getting smaller and smaller. Facebook's ad revenue projections for next year is a billion dollars. Where does this come from? I bet half of it would have been Google's if Facebook didn't exist.

All the innovations so far on the internet was possible because the platform was same for you, me or Microsoft. For the first time in the history of the world, something was out there which was truly democratic. And like all good things, it wont last.

Luckily (or is it?), Google and Verizon reportedly agree (or so it would seem) that the wired internet would be spared from the discrimination. And that discrimination would only between different types of data - for example - video, audio and data. That means, wireless internet is open for discrimination. Why is that?

I can't pinpoint what exactly it is. It is a hunch: it has something to do with Android. Android is outpacing all other platforms - Apple's iOS or Nokia's Symbian.

I think wireless internet is the future. No, I am sure now. Why else would the big corporations are salivating on it - leaving room for interpretations? Why else would Google and Verizon fix something that is not broken?

"What is our Bauxite doing in their mountains? What is our furniture doing in their forests?"

noreply@blogger.com (sydneymurugan) — Sun, 18 Apr 2010 02:48:00 +0000

Not my lines, of course. Arundhati Roy's. She is talking about (See her Essays: "Mr Chidambaram’s War" and "Walking with the comrades") multi-trillion dollar loot. This time it is from the mineral belt - Jharkand, Chatisgarh, Orissa and parts of West Bengal, Maharashtra and Andhra Pradesh. On one side: the tribals living in these forests and mountains for centuries, who will never survive in what we call our civilized society. Other side: Government of India, Respective state governments and powerful companies like: Vedanta Resources Plc (P. Chidambaram was a director in this company), Hindalco, Tata Steel, Jindal Iron and Steel, Mittal Group, Essar Group etc, and... all the mainstream medias.

First reaction of the intellectually disabled: Oh! These anti-development talk.

We are talking about $4 trillion in the form of Bauxite (key raw material for production of Aluminum) in the state of Orissa alone - and that itself is 4 times India's GDP - to give you an idea about the size.

Thats good - India will get $4 trillion! - Just from Orissa! Vow!

Will we? For every $1, we get 7 cents. 93 cents would go to the corporations. Thats $3720 Billion for Big corporations (comprising of say, 1000 rich people) and $280 Billion for the development of 1100 Million People. How does that sound?

After Kickbacks and layers of corruption and inherent inefficiencies, we would be lucky to walk away with a net of $100 billion. The price: The elegant Mountains and virgin forests, the ecosystem, a whole civilization - and a permanent scar in our conscience.

By the time the welfare money (if, any) filters through a million levels of bureaucracy, the needy would be long gone - they would be left begging in our cities.

It is estimated every square inch of land in these areas are covered by MoUs with the corporations. And there are more than 100 MoUs signed so far.

As always, the labelling was done: The tribals are "Maoists" and are therefore the "gravest internal security threat" according to our Prime Minister.

Arundhati Roy calls the choice the "Bush Binary" (Are you with Saddam or US?) - you are either with us or with them. As if there is no choice in between. Most importantly, as if that is a choice.

So, on whose side are you? Are you pro development or anti-development? Does being on the side of tribals mean that you are against progress? Are things that simple? Watch...

Has she mocked Gandhi? I dont think so...

And who are these Maoists?

For the greener ones amongst us, production of 1 tonne of Aluminium will use 1400 Tonnes of water and would leave 15 tonnes of CO2 into the atmosphere. See "Keep the Bauxite in the Mountains" by Felix Padel & Samarendra Das.

How much can you pay as compensation for these people? And how do you fix the social responsibility for the big corporations? I always felt Corporate Taxes are not a good enough yardstick. There should be a system of extraction of money from these corporations based on some broader criteria like human costs, current and future impact on ecosystems etc. In other words, there should be a holistic view rather than the profit view.

If you have made up your mind to sell the family silver, why sell it cheap? Why not 80 cents for you and 20 Cents for the corporations? I am sure that 20 cents will cover the cost of production, marketing and associated dirt.

Remember, we help these companies steal them. We work for them, we make money for them. By not reacting, we are responsible.

What can we do? I have a solution. We can buy shares in these companies and make an immediate profit. Then dump it and donate half the money to fund resistance.

The ending trouble

noreply@blogger.com (sydneymurugan) — Sat, 17 Apr 2010 21:03:00 +0000

We all suffer from "Starting Trouble"...

Just to prove I was alive all the time... (click on the picture - It is my draft list- list of incomplete blogs)

Almost all of the blogs I published including this one might have had an editing time of say, 3 hours. The idea is, the weak eggs go to the draft. They are allowed to hatch on their own until they become the Godzillas I can't ignore.

Either the Godzillas don't scare me or I have ending trouble.

Why Gold?

noreply@blogger.com (sydneymurugan) — Fri, 10 Jul 2009 21:52:00 +0000

From about 1815 to 1915, all the major currencies like Pound, Franc, Dollar, Mark etc was gold backed. This meant their exchange rates were also linked to gold. One Dollar would be defined as say, 1/30th of an ounce of gold. Pound was say, 1/6th of an ounce of gold. Therefore the exchange rate between USD and Pound would be $1 = 0.2 Pounds.

This was simple mathematics and it made sense. If you had $30, you can take it to a Bank and demand 1 ounce of Gold. The banks were obliged to keep gold reserves. They were fully solvent.

First world war changed this. Urgency for financing the war gave way to partial gold back-up. Governments started printing currency notes without gold back up.

Thus, currencies became partially gold based. They became non-convertible (to gold) nationally. But internationally, gold back-up continued. All transactions between international banks, exports etc were backed by gold.

Even this partial gold base prevented countries from printing paper money. How?

Lets say one country prints paper money to boost their domestic money supply. What will happen?

As money supply increases, prices will rise. It would be much cheaper to buy imported goods than to produce. Import would mean outflow of gold. As gold reserves are limited, they will be forced to keep this in check and look for efficiency in production or reduction in money supply.

Simple, isn't it?

If the world had kept gold standard, the economic growth as we see today would not have happened. But the growth would have been more natural and organic.

Fractional reserve banking system was the steroid. It lead to credit creation. $1 million in printed currency based on $10000 gold reserve would become $10 million in credit. This credit would drive the economy. So, $10,000 became $10 Million.

Worldwide, especially in the western world, all the governments are used to this opium of fiat currency. They are addicted to it. The parasite took over the host and became the host itself. Gold gave way to paper.

What is finance? It is just a way to facilitate the meeting between capital and the generation of goods and services, which we call economy. But, now finance is the king. Real capital and real economy - for which we introduced finance - is forgotten. In the U.S, all the growth in the last 25 years has been in finance. Clever guys created instruments called derivatives which could be based on the price of anything from pepper to oil or the thickness of your backyard grass. The turnover of these derivatives were higher than the turnover of actual commodity or instrument they supposedly represent.

It is a bit like self-fulfilling betting results. I will explain.

Imagine you are a part of a vast digital network of gamblers, numbering in the millions. You are betting your substantial portfolio on the results of a general election happening in your country. There are two candidates - X & Y. You see that in the betting market, X has more odds, meaning the betting market expects Y to win. Even though ideologically you are with X, you want to win and hence you bet on Y. Now that you are committed, you will make sure that not only you, but all your friends and relatives vote for Y on the voting day. The betting market now influenced your real life.

We forget why the betting market was skewed to Y in the first place. It is because big money got there before you did and made it look like a win situation for their man Y. You were part of the crowd lead by these pied pipers.

This is what happened in the case of oil last year. Large business houses were betting on it, driving the real price up. It happens to commodities, your food, real estate, anything and everything. Warren Buffet calls these derivatives "financial weapons of mass destruction".

Niall Ferguson, the famous economic historian, wrote an article in Vanity Fair in 2008:

"We have witnessed the death of a planet. Call it Planet Finance. Two years ago, in 2006, the measured economic output of the entire world was worth around $48.6 trillion. The total market capitalization of the world’s stock markets was $50.6 trillion, 4 percent larger. The total value of domestic and international bonds was $67.9 trillion, 40 percent larger. Planet Finance was beginning to dwarf Planet Earth"

The facilitator became larger than the deal. Parasite became bigger than the host.

Let us come back to gold. Do you know that there is a big gap between the supply and demand of gold? The total world wide demand for gold is about 4000 tonnes per annum. The supply is only about 2500 tonnes. But then, why aren't we seeing the price rise in gold that it actually deserves? Who is filling this gap? Who is keeping it down artificially? What is their purpose? How do they do it?

I know the who part. It is western central banks and the U.S Federal Reserve.

Why? Beacuse this is very vital to their strong dollar policy. The low price of gold has a sort of a calming effect in the economy. To maintain the illusion that that the paper you are holding is valuable. Not to cause a flight towards the precious metal. Which would be disastrous and destructive now.

How? I actually do not know. May be they are selling it from their reserves. Deceit has its own ways. You will get more answers when Ron Paul's bill to audit the Fed passes in the Senate.

For 6000 years, mankind held gold as valuable. All these years what we have managed to dig out is about the size of a 20m cube - about 140,000 tonnes.

Here is how I see it. This may be crazy - may be there is no scientific basis. But this is how my mind works. I am just a common man. Prove me wrong if you can.

If this were the original and only money, this should represent that $48.6 trillion that Niall Ferguson was talking about. I mean what the world is truly worth. Any growth would be offset by additional mining of gold.

Now I do my math. You will not find this anywhere. It is my original thought.

I will round things up. $48.6 trillion to $50 Trillion.

$50 Trillion divided by 140,000 tonnes should give me intricate value of gold per tonne. $50*1000*1000*10,00000 divided by 140,000*1000*1000. Then you multiply the result by 31.1034768 to convert it to $ value per ounce.

This works out to be about $11,108 per ounce of gold. This is the real intrinsic value. The current value is about $900.

Add the frenzy on top and on a speculative day, it could go to $20,000 per ounce!! People are mad, they are crazy. You can't predict what will happen once hell breaks loose. There simply aren't any financial or economic models available.

As the D-day approaches, you will see a sudden plunge in the value of gold. I bet my dear life that this will happen. That is only a red herring. Big money is trying to make you sell so that they can buy it at low value. Don't be disheartened. Keep buying. It should pay off.

Therefore, I am with 6000 year history. Not with a piece of paper invented about a couple of hundred years back. I want to make sure I am holding the real asset at the time of reckoning. My minimum point of argument would be not to look like an idiot at the crucial time. I don't want to get caught swimming naked when the tide turns low.

What about you?

The end game is on

noreply@blogger.com (sydneymurugan) — Wed, 08 Jul 2009 20:45:00 +0000

Cybersecurity Act of 2009, if passed in the U.S Senate, will be the beginning of the end of free speech. This bill gives the President virtually complete authority to do anything with the internet.

The similarities are unmistakeable.

Amidst 9/11, they passed an Act which gave them power to arrest and jail a person indefinitely without trial.

The TARP program was announced with a veiled threat of an impending market collapse. Billions went into executive paychecks and bonuses. Trillions of dollars went to Wall Street extortionists.

Now the U.S government is creating a situation of terror to pass this bill. They are screaming of cyber attacks on all government agency websites which could affect national security. You will see some dramas if this bill doesn't pass. Some of the "crucial" websites would be under "attack" in 9/11 mode!

The real stories are always ignored in CNN, Foxtel,CNBC etc. Only a few of us ignore mainstream media and seek the truth from internet. Now they are taking it over.

Both work for the same masters. Bush and Obama. Latter is the made up face of imperialism.

What are you doing - you Americans? Watching TV 6 hours a day and eating burgers while your freedom is being snatched away from you?

Shame on you.

All about Dollar

noreply@blogger.com (sydneymurugan) — Sat, 20 Jun 2009 23:45:00 +0000

U.S Dollar is going through its most critical phase now. It is facing an unprecedented test of confidence. All these years, U.S was exporting paper ($) and importing real goods. This may come to an end soon.

Lets study the history of the mighty dollar first. Dollar was fully pegged against gold from 1800's onwards. An ounce of gold was worth around $20. This price never fluctuated much till 1970's - mostly it was in $20-$22 price band. Thus, for nearly two centuries, the value of the dollar remained stable against the gold.

Then, the most infamous president in U.S history, the most crooked of them all, Richard Nixon, removed the gold standard and made it a fiat currency - well not quite - he pegged it against the oil. In a masterstroke, he laid the foundation of dollar imperialism by forcing the biggest oil exporter in the world (Saudi Arabia) to trade its oil in dollar.

That single act changed everything. Dollar became the world's most preferred currency. If China wants to import oil, they have to pay in USD. Not in any other currency. They have to earn USD first by exporting goods to U.S.

This is the reason why no central bank in the world wants their currency to rise against the dollar. China is artificially controlling the value of yuan so that it will not rise against the dollar. If it does, well - it actually is - it will be expensive for the U.S to buy goods from China and China won't get dollar through export. And if it doesn't, China won't be able to buy oil.

Through that single act, U.S managed to get an unlimited credit card. A card for which there is no repayment - not even a minimum amount due.

U.S had gone a step further with oil exporting countries. Not only they have to accept USD as the trading currency, but they will have to invest the proceeds - USD - into U.S treasury bonds. U.S will use the interest on those bonds as a return for lending them their military and other technologies - for example construction.

This is called petro-dollar recycling. U.S will print this worthless papers called treasury bonds, sell them to these suckers and the suckers will feed U.S with their resources. By suckers I mean every other country on earth.

Then U.S went one step further. If anyone steps out of the line (like Saddam did - he tried to trade oil for Euro), they will use military force. And how does U.S feed this most destructive force on Earth? With your money!!

It is estimated that the recent bailout of U.S economy cost anything between 12-15 trillion dollars. How did they get the money? They just printed it. Conjured it out of thin air! None of those trillions went into real economy like commodities or other goods and services. All of it had gone to financial services - mostly false economies. It went to those who had made a casino out of U.S economy - who literally blackmailed U.S Government with the threat of bankruptcy.

This is not the end of the story. Worse is not over yet. U.S will need another infusion of trillions of dollars. We have only seen the beginning.

Citibank recently reported a profit after the bailout. I am not sure about the numbers. But it was pathetically clear that it was done to boost the share price. Months before that profit announcement, the regulators amended an accounting treatment to suit Citibank.

Suppose you have an investment for $250 Million dollars in some bonds or fancy financial instruments. The current market value of it is $1 Million. The old accounting practice was mark to market - meaning you are supposed to record the market value and write $249 million loss to your P&L. This is conservative, sensible accounting. If I am not mistaken, in India, the norms are tighter. If the market value has gone up to say $500 million, still you will record it at $250 Million. You are not allowed to show the notional profit in your P&l, unless you actually gain the profit by physically selling the investment.

Do you know what U.S Government did? They invented a new accounting method. Even if the value of your investments fell down by 99%, you can still value it at its original cost or even higher, depending upon what a computer model predicted as its potential value. Translated into layman's words - never trust the balance sheet of any U.S Bank from now on.

Why did the U.S government allowed this? Because they are the biggest shareholders of Citibank. They wanted Citibank's share price to go up at any cost. They wanted the Federal Reserve balance sheet to look healthy now that people like Ron Paul are demanding a Federal Reserve audit.

Do you know how the balance sheet of the Federal Reserve will look like?

On the liability side, $15 Trillion. On the assets side, companies like Citibank, Fannie mae, Freddie Mac etc.

How do you think a Country which borrows $4 billion a day will be able to pay back these trillions? If I were the creditor to U.S, what would I do? I would try to find out an ingenious way to come out of this s*it.

That is what countries like China, Saudi and Japan are doing. They are all thinking hard to come out of this unscathed. If dollar loses its reserve currency status, all these creditors would lose trillions because the treasury bonds would become worthless. Not that it already isn't.

There could be 3 situations. situation one - the bullet become larger. Somehow, all these will subside and we all wait for the next bubble to burst and then the bailout becomes much, much larger and eventually uncontrollable. Instead of biting the bullet now, you bite an cannon ball later and die.

Situation two - all these U.S debts would be consolidated in a bank like IMF as SDR's - special drawing rights. That would mean that instead of dollar, international transactions would be in some other form like the SDRs. I have an inkling this is the way things would eventually go.

Situation three - Instead of spending, U.S begins to save. Instead of importing stuff, they consume less and begin to export stuff. This would mean a 180 degree turnaround - a complete U turn. Unless the rest of the world sees a clear, tangible shift towards this, most likely it would be situation 1 first and then situation 2.

In situation 2, USD would be worthless and U.S would be indebted in some other sensible global currency forever. Hyperinflation would hit U.S economy. In comparison Zimbabwe (inflation - 1000000%) would look like a rich country.

The problem with one country controlling the reserve currency is that unless that country shows fiscal responsibility, the rest of the world suffers - of no reason their own. Like Iceland did. Like the rest of the world suffers now.

To my friends in U.S and elsewhere : switch your investments to Gold or real estate in an asian country like India. India's economy is really unique. Exports form only 20% or less of our GDP. Our domestic economy is one of the strongest in the world. Holding onto your USD or related instruments, you are taking the risk of your life.

You can make money out of this. Short USD and go long on gold.

Peter Schiff tells us a story about asians and an american in an island:

"Some people that got stranded on an island, and I think it was 6 or 7 were Asians and there was one American and as soon as they were on the island they had to divide up the jobs. And one Asian was given the job of fishing, the other one was hunting, one of them got the job of gathering fire wood. So they all had jobs, and the American was assigned the job of eating. And so at the end of the day, they would all gather around and prepare this feast and the American would sit there and eat it. But he would´nt eat it all, he´d just leave enough crumbs so he could give to the 6 Asians so they could go on and repeat it again tomorrow, spend all day preparing a meal for the American to eat. Now, the way modern economists would look at it, they would say “Well, this American is vital to the whole island economy. Without him nobody would have to fish, nobody would have to hunt, nobody would have to gather fire wood. He is creating all this employment on the island”. But the reality is, every Asian on that island, his lot in life would be dramatically improved if they kicked the American off the island because now they would have a lot more to eat or maybe they wouldn´t have to spend all day hunting and fishing and they can lay on the beach a little bit”

Thats the silver lining of the whole thing. If the dollar collapses, the rest of the world may face a temporary crisis. But the living standards for the rest of us would be much, much higher. Asian countries would be the biggest beneficiaries.

Lets kick this cancer out before it is too late.

Note: Please also see my earlier post on the subject: http://sydneymurugan.blogspot.com/2009/01/why-we-carry-you.html

"Thakarachenda" - a movie by Avira Rebecca.

noreply@blogger.com (sydneymurugan) — Thu, 18 Jun 2009 09:37:00 +0000

Ever tasted hunger? Ever faced homelessness? Ever felt what it is like to be at the receiving end every day of your life?

If you want to know how life is at the bottom of the pyramid, watch this movie.

Click on the title - it will take you to the story.

Good movies in Malayalam are so hard to come by these days. It was released (?) in 2007.

Watch it, my friends. Experience how it is like to be poor.

If possible, watch it with your kids. Tell them about poverty. Let them know that the comforts we take for granted carry a price tag.

This is an honest movie. And it shows.

Confessions of an Economic Hit Man

noreply@blogger.com (sydneymurugan) — Sun, 17 May 2009 07:57:00 +0000

This is a fascinating account of how corperatocracy achieves its pervasiveness. How imperialism, masqueraded as neoliberalism, is thrust upon resource-rich countries via unserviceable loans. Gone are the days when you grab the resources with military might. That was old method - expensive, messy and negative publicity. Changed times calls for changed techniques. New method is more subtle, less expensive, faster and long lasting. With the new method,you need lots of brains and a few people - well trained corporate commandos called EHMs - Economic Hit Men.

The way this is achieved is really simple. They (U.S Government - in the form of World Bank, IMF) identify one country with a particular resource - lets say oil. They send out their EHMs to do the legwork. They come in, do their research and collect data. In this process, they also identify and condition willing traitors, opinion drivers, power brokers and other key players within the bureaucracy or dictatorship - as the case may be. Those who do not fall for money is coerced through other means - say sex or even veiled or blatant threats.

The next stage is identifying a project which directly or indirectly or even unrelated to the resource they want to grab. The objective here is to force you to accept a huge loan which they know you can't service. But you can not force somebody to accept a loan, can you? Here comes their research reports, projections and other enticing numbers. This is to convince you that your economic growth and the resulting rise in GDP and per capita income would give you more than enough money in taxes and other revenues to service the debt easily. Often these projections are made for a period of 25 to 50 years. Long term benefits. Was it not John Maynard Keynes, the founder of keynesian theory who said "In the long term, we're all dead."?

How ironical, isn't it?

For some of you who are not familiar with economics, let me explain this irony.

Keynesian economics argues that private sector decisions sometimes lead to inefficient macroeconomic outcomes and therefore advocates active policy responses by the public sector, including monetary policy actions by the central bank and fiscal policy actions by the government to stabilize output over the business cycle. This is from wikipedia.

Got the irony part now?

Okay. Let's go to the next stage now.

You are convinced now. Like you were not in the first place. When I say convinced, I mean that you are now convinced that you have something with which you can convince the people. The locals. The less fortunate. The real owners of those resources.

Come on, do you think that this is a big job?

If you can't, help doesn't end there. You can use our vast network of trumpets. Boardroom Bulletins - as Arundhati Roy puts it.

Okay. You have now agreed in principle. Lets go to the next stage - the specifics. The part they like. This is where the meat is.

The project - be it a construction of a dam, railway, roads or anything - needs to be done by competent people - not your homegrown, third rate companies. Competent here would mean a handful of companies. Bechtel, Halliburton and the like.

Do a research on them please. On IMF, World Bank and the competent companies, I mean.

You will find these outfits are as international as your granddad's grocery shop.

U.S Hold veto power. They are also the biggest single shareholder. The poorest of the poor 150+ countries together hold less than 30%. Got the picture?

Calculations by U.S treasury shows that for every U.S.$1 the United States contributes to international development banks, U.S. exporters win more than U.S.$2 in bank-financed procurement contracts. International, my foot!

Dominated by neoclassical economists, these outfits are systematically looting poor countries out of their valuable resources in two ways - One - repayment of loans (I mean interests, not the principal) - Two - by bringing valuable resources like oil, minerals, metals or even water (remember Bolivia) into the whole equation.

I am being carried away. Lets finish what we started.

These projects are often highly capital intensive and require technical know-how which is in the possession of only a few. A common feature of all these projects is that it often involves technical updations and require long term maintenance contracts, stretching to the project's economic life. That would mean highly lucrative maintenance contracts.

Do you know that IMF or World Bank have never disapproved a loan? All these projects have never been aimed at alleviating poverty, eradicating hunger. It had always been a recycling mechanism - a way to indebt poor countries and re-cycle the money back to big corporations. The pound of flesh had always been the same - right to exploit natural resources, formulation of pro-imperialistic policies and the like .

In an Indian context, whenever a voice is heard against this form of imperialism, you are labelled anti-development.

This was not meant to be a book review. But you must read this book. And its sequel too - "The Secret history of American Empire" - by the same author.

Mate in two

noreply@blogger.com (sydneymurugan) — Fri, 06 Mar 2009 11:49:00 +0000

Have a look at the board below:

This is a beautiful Chess problem. White has to move and checkmate Black king in 2 moves.

Let us analyze the problem now. What do you see on the board?

You see the Black king almost smothered. He has only one legal move, which is to capture the white rook in d5. Lets think about it's consequences later. Let's continue with analysis of the position.

Besides the king, Black has 4 pieces: 2 pawns and 2 rooks. The pawns are blocked. The rooks can move. In fact, the rooks are attacking white's pieces.

What about white?

White has an overwhelming superiority over Black. If this were a real game, only an enthusiastic newbie will continue playing as Black. Black's fate is sealed unless white is brain-dead in the next minute or two.

But thats not our problem. Our problem is to checkmate Black in 2 moves.

Lets try the most obvious-looking possibilities first. Lets capture the Black rook sitting in d7 with rook in f7. Will this achieve our purpose? No. The remaining Black rook could capture the knight. And, forget about checkmate in next move.

You can try various moves, till you get fed up or accidentally arrive at the correct move.

Try moving the Bishop, pinning the rook. Or a check with Knight at g5. Move the Queen, or the King, even. Try the pawn push, making it a queen , or any piece you like. The more you try, the more you appreciate the depth of the problem.

Now, those who have seen or solved problems like these know that first move is never an obvious move. It is never a Check or a capture. It is silent, with minimum of ripples and yet, when unveiled, it is a certain death sentence for the opponent.

The answer is Nc6!

Now, if Black replies R(f)xf7, Re5 mate.
If Black plays R(d)xf7, Re6 mate.
If R(f)xd5, Rf6 mate.
If R(d)xd5, Re7 mate.
If Kxd5, Qa2 mate.
If Kxf7, pawn at g8 becomes queen and mate!

Hmmm... really good!

The above problem was coined by Comins Mansfield, one of the best chess problem composers of all time.

Did I solve it? Heck no. Wasted 15 minutes and 50 grams of keratin -hairs and nails put together. And when finally I couldnt hold it any longer, like everyone else, peeped at the answer and wondered how I could have missed it.

"Awakenings" and a freaky coincidence

noreply@blogger.com (sydneymurugan) — Sat, 28 Feb 2009 20:39:00 +0000

On a weekday last week, I borrowed some movies from the local library. Usually, I go by imdb ratings. The norm is, unless it is in the top 250 (all time), or rated above 8, I assign a low priority on watching it. It is most likely that I finish it in two sessions if it is a weekday. If it is crap, I never go past the first 15 minutes.

The chances of you picking up a gem outside of those 250 is rare.

Among the ones I picked up, I chose "Awakenings" - a Robyn Williams and De Niro starrer. Even though I had planned to watch it over two sessions, myself and my wife sat through the whole movie, spellbound. It was the story of a doctor (Robyn Williams) trying to help patients who are paralyzed and unresponsive due to a disease called Encephalitis. He finds out that a drug used for treatment of Parkinson's disease can bring these patients back to normal life. De Niro is a patient on whom the first trials are made. He awakens, 30 years after going into a coma as a 10 year old boy. Convinced that he got his life back, he falls in love with a girl whom he meets at the hospital. To his (and the Doctor's) horror, he finds out that the drug loses its effect over a period of time. When it dawns on him that he will have to go back to his old paralytic existence, he has to say the final goodbye to her. This scene is one of the most emotional scenes I have seen in a long, long time. I would say, this is De Niro's best performance ever.

You just cant go to bed and start snoring away after watching a movie like this. Therefore I decided to play online chess even though it was late into night. I logged in for a quick match. I found that the playing room was almost full, with 80 people online. I hooked up with a player, exchanged pleasantries and started the game. From his first name, I was sure he was either from India or Indonesia. Slowly, I began to realize that he is a very good player and was not a brush-off as I initially thought. By middle game, I started to admire his strength and was getting curious about him. I began to check his game statistics (ratings, etc) and found that this person is connected to this gaming room from one of the social networking sites in which I am active. For the sake of privacy, people usually change their names when they play online games. But I had a hunch that this person may not have done so. Therefore I checked his profile online.

I was stunned!

Now tell me this.

What are the odds that I was playing with a person who was the victim of the same disease that I saw in a movie minutes earlier?

J M Coetzee: Disgrace

noreply@blogger.com (sydneymurugan) — Mon, 16 Feb 2009 01:26:00 +0000

I began reading this book taken in by persuasive and passionate comments from a friend. Now I am grateful to him - even though I would rate the experience as highly disturbing.

Those who have not read the book, please beware that there are spoilers ahead.

The story is set in post-apartheid South Africa. David Lurie is white, fading and aging professor - twice divorced and drying up fast emotionally. He , in an act of "Disgrace", becomes sexually involved (there is only one-sided involvement - his) with a black student. As a consequence, he is expelled from the university. He decides to leave Cape Town and sets off to rural East Cape to his only daughter (still single) who leads a quiet country life. Even though he finds country life not particularly attractive, slowly he gets adapted to it. But he quickly finds that the country landscape is also changing - fast. The balance of power has shifted to the blacks and he finds he has no hope left and the story ends at that point.

His escape (he is in self-denial mode about "escape" ) to the country justifies the phrase "Out of frying pan, into fire". He gets to have a preview of what lies ahead in his life for him to live through. He says to himself this is "no country for old men" and he has really solid reasons for that.

It is almost like he spells a cast of ill-fortune for his daughter Lucy who was in her elements when he first meets her at the farm. She gets raped by 3 black thieves (Two men and a boy) afterwards. He is attacked, gets locked up, soaked in Methanol and set to fire. Helpless, he is at wrath with himself. The thieves flee with their loot and his car. To make matters worse for him, his daughter doesn't want to complain to the police - about the rape. They file a complaint for theft, though.

His daughter's life is changed - inside out. Now, he is the one who maintains the farm - with the help of Petrus - Lucy's black neighbor.

Petrus is introduced to the story before the rape - Lucy mentions him as her "assistant". Petrus is a married man, middle aged and is a scheming man who would like to buy out Lucy's farm. He is no "assistant" by any standards. In fact, David thinks (rightly too) Petrus has arranged the rape. Petrus is mysteriously absent when the rape takes place.

David describes (to himself) the rape as"anthropological"!

Later, he finds the boy who raped Lucy in a party arranged by Petrus. Even though Lucy tries to stop him, he makes a scene and storms out of the party. To make matters worse, he finds that the boy is staying with Petrus now. Lucy is being outplayed by Petrus in every way. Lucy is willing to pay any price - she is even willing to be labelled as Petrus's concubine - she just wants to hold on to her land.

The story ends at a point where Lucy is pregnant (from the rape) and decides to keep the baby. In this twilight of his life, David has nothing to look forward to. Only Despair.

We, as readers will not be able to fully comprehend the motives/emotional drivers of two characters - one is Lucy and the other is Melanie - the black student with whom David is involved sexually. The reason is very simple. The story is told through the eyes of David - and he is unable to understand them too. This is where Coetzee is perfect in his narration technique.

This book got the booker prize in 1999 and was later made into a movie.

Thanks, my friend - for recommending this book.

Q&A: a.k.a Slumdog Millionaire

noreply@blogger.com (sydneymurugan) — Sun, 25 Jan 2009 21:24:00 +0000

There were two choices before me: Either I could watch it in the cinemas or read the book. I chose the second one because of two things. One, it would give me the private freedom to make as many movies as I want, and Two, usually books are better. I feel like I have lost this time - even before seeing the movie - not because the book is a disappointment, but because this is one of those books which really is a movie masquerading as a novel. This is really a movie script minus all the technicals. If Danny Boyle had not picked it up, surely someone in Bollywood would have. The only little surprise the author or the publisher might have had was that it was someone from hollywood.

I had no qualms about the genre of the book when I bought it. Less expectations gives you lesser disappointments. I am angry only when I am sold a second rate stuff marketed as first rate. "White tiger" was such an experience, this was not. I knew that I was reading a masala - and I knew that this wasnt a Da Vinci Code either. So I am alright.

What is my final word? Yes. This is time pass. But see the movie first. Why? Beacuse I am sure you will get the same experience for a fraction of the effort.

Why we carry you.

noreply@blogger.com (sydneymurugan) — Sat, 17 Jan 2009 21:36:00 +0000

You are the only prominent personality in town. You can walk into any store, buy as much as you want and issue your personal cheque. They will accept it with a smile. In fact, they are grateful to have your cheques.

There's a catch. Because of your reckless shopping, your bank balance is running very low. Almost zero.

But you are completely at ease because you know that those cheques will never be cashed – instead, those cheques will be preserved. Idiots!

Shopkeepers and traders are also relaxed because they think you are the richest person in town and your cheques are safer than the national currency.

Imagine that this goes on for a while. For years. Meanwhile you are growing, very fast. With your consumption, the traders are also growing. Every person, shop and even bank is counting their worth in your cheques. No one has thought (dared) about cashing the cheque. Well, till now.

A reckless trader in town hates you. He announces that he will not accept your cheques anymore. He needs the actual currency. Worse still, he requests some other traders to do the same. They are on the verge of announcing it.

What would you do?

Your whole existence is at stake. You would do whatever you can to preserve your prominence and the luxury that it brings. You do not want to lose all this just because of one trader.

You and your think-tank plant a few skeletons in his cupboard and opens it in public. You publicise this in your own newspaper, your own TV Channel and you have taken everyone (almost!) to confidence. Now it is accepted that he is an evil man and he should be destroyed. All the other big traders announce support for you and sends you their hit men.

And why do you think everyone supported you? Are they idiots?

Of course not. They did it for it their existence. Why?

You have grown too big and you are their biggest customer. Without you, they have to shut down their shops, factories and banks. They face disaster.

These guys are neck deep in your scam. Almost half of their assets are measured in your cheques. They know that your cheques are worthless but as long as they keep their mouths shut, things will go on as usual.

Now you know the real meaning of "having them by the balls".

They need to preserve you. They have to carry you on their shoulders.You are a national treasure. Whatever you do, they have to follow suit. There is no way out.

Now substitute U.S for yourself. Saddam for the trader. Dollar for your cheques - well, not the dollar - U.S treasury bonds.

How would you like your tiger?

noreply@blogger.com (sydneymurugan) — Fri, 16 Jan 2009 21:50:00 +0000

"White Tiger", is supposed to be a rare species. But I cant say the same about the book. Adiga has written this book for a foreign audience who wants to know more about the India buzz. And he hasn't disappointed them. It tells them exactly what they want to hear. They are happy.

The book does a superficial analysis of the life of people in the "Darkness" - namely, of lower caste, working class. Adiga has chosen Balram Halwai, who migrated to the big city from a small village in Northern India in search of a better life. He becomes a driver to Mr Ashok, an upper class confused desi, recently returned from U.S, son of a wealthy and powerful coal miner. The story unfolds in the form of letters written by Balram to the Chinese prime minister who is scheduled to visit India somewhere soon in the story line.

The book is a fast read. It is cleverly written too. It has flashes of brilliance. But when you deal with a subject like this, you expect some depth, some content. You expect a point of view that you did not expect. Clever one-liners or good analogies are not enough. Ultimately, you feel betrayed. Maybe it is the booker label. Well, thats a very personal opinion.

Afterthought:

The name "White Tiger" actually suits the novel. How is it different from a normal tiger? It is the same species, only thing is it doesn't have the pigment. And that is exactly how white and brown skins are different.

Satyameva Jayate

noreply@blogger.com (sydneymurugan) — Fri, 09 Jan 2009 02:05:00 +0000

As somebody had rightly put it, Ramalinga Raju had, in one single stroke achieved what LeT (Lashkar-e-Toiba) could not in many years. He has marred the reputation of India’s showcase industry and had shaken foreign investors confidence in India Inc.

How could one fool so many people? Satyam’s board had as many independent directors as it could manage – among them India’s former cabinet secretary and a Harward professor. Satyam also had the best (?) auditors money could buy. It had won awards for corporate governance. Its internal audit team was hailed as one of the best in the world (by Institute of Internal Auditors, USA).

I simply cant believe this.

I would not be surprised if, prior to letting the cat out, Raju (etc) had shorted Satyam shares or ADR and made a tidy amount of money. I would not be surprised if ICAI slaps its maximum fine (Rs 5 Lakh!?) and let PWC walk. The hands that should go up in a voting process could be tied up in partnership deeds involving PWC or its affiliates.

What tests my logic is how on earth an audit firm miss Rs 5000 Crore Cash/Bank balance? Did Satyam forge the bank statements? Even though they forged it and produced it for audit, what happens to 3^rd party confirmation letters sent by auditors to banks? The banks are supposed to send the confirmations directly to the auditors.

How can you not verify an asset which makes up 80% of the balance sheet?

Every deed should have a justification or rationalisation. In order to understand it better, let’s put ourselves in Raju’s shoes.

One strong motive would be to avoid Satyam being a takeover target. Satyam’s reported OPM (OPM is one of the key yardsticks with which analysts rank similar companies. Higher OPM within the same industry is always the first thing that analysts look for. It indicates that the company can command premium pricing for its services.) was 24% while in reality it was 3% - as per Raju’s letter to the board. With a less than industry average OPM, institutional investors (makes up 88% of the total share holding) could dump the shares which would resulted in an increase in the float as well as a decrease in price. Perfect for a predator. Raju might lose his job. He could have been mortified by that thought initially. To protect that, he might have fudged the books, and as he himself has put it, “it was like riding a tiger”. Not an enviable position, of course.

Another motive is the greed for cash (which he denies in his letter). Maybe Satyam had 24% OPM and Raju had siphoned the money off and thought that by acquiring Maytas he could plug the hole at least for some more years. In that case, the letter to the board could be a red herring.

Another scenario could be this – Due to the real estate slump, Maytas was struggling and he had to do something which could save both. With that land bank on the assets side of the balance sheet and by revaluing it, he could plug the hole. He would, of course, not pay Maytas anything in cash because he had none.

Whatever the case maybe, the fact remains that the balance sheet has a big hole. Did the low margins cause the hole or was it plain robbery? By acquiring Maytas, who was he trying to save - himself or Satyam or Maytas?

“Creative accounting” is nothing new. Companies do it all the time. Take Jet Airways for example, in a lean quarter, it had switched its depreciation policy to come up with $180 Million extra profit. Similarly HCL tech recognised $80 Million revenue when rupee appreciated against the dollar but ignored the losses when the reverse happened. This was due to its large hedging positions. Ranbaxy refused to provide for $180 million losses on derivative contracts. Reliance communications did not recognise $80 Million loss on future FCCB conversions.

These practices are called “Creative accounting”. These companies are walking on a very thin line between the best practices and allowed practices.

But Satyam was not being creative. This is creation itself and Raju is the creator.

What a paradox! I mean name of the company.