Depression - the sequel

Paul Krugman's latest version of his book The Return of Depression Economics makes for terrific reading . That he won the nobel prize for economics last year shows out in the form of his clear thinking about the reasons why depressions happen and how they lead to prolonged recessions .
He has masterfully de-jargoned the crisis making it a good read .
Despite all his explanations , I think the basic reasons for a recession are much simpler .
All that marketing as a science is focussed on doing is converting wants into needs. And creating more and more wants and converting more and more of them into needs. Till one day your infinitely bloated 'wants' make you a slave of the ambitious and equally 'wanting' financial system.
Let me illustrate this with an example .
Let's say - a basic need is to have a house in Mumbai .
You have two options - buy or rent ( classic dilemna - no McKinsey needed )
If you rent , you pay a certain amount every month , live in Mumbai till you have made your moolah and catch the flight home in some years. All seems to be fine . Math says you will spend 50,ooo bucks a month over 20 years i.e. 1.2 cr . With some inflation , say 1.5 cr. Simple landlord-tenant relationship and life chugs along.
Now , every Tom, D & Harry around you will seem to be making a killing with a real estate investment , every bank conversation will funnel into a investment strategy discussion on why not a house , every neighbour will quit his lease and buy , every builder will entice with EMI , every broker will show you an offer you can't refuse and every year your landlord will breathe down an annual 15% increase . The collective pressure will convert your 'want' of a house into a 'need' for a house .
You fall for it .
Suddenly , the economy surges around you - as you have now activated the capitalist machinery - a broker earns commission , an advocate registration doc fees , a carpenter and interior designer attack the house with Jacquar , marble and teak, new furniture and furnishings clean out whats left in the bank , a bank executive creates a loan dossier and wins his incentive , an insurance agent creates a policy premium , a gardener ( in Mumbai ?, you kidding!) , the municipal commissioner turns up with his annual tax bill , the society needs maintanence payments , and you need to pay a chartered accountant to calculate your tax liability , pay a lawyer to read the fine print of tenacy documents and a broker to manage the property. Not to mention paying some of the builders employees wages, to the building construction industry and to the transport business .Wow and whew !
Let's get back to the math .
At a 12.5% annual interest ( most banks currently ) for a 1 cr house ( a measly 800 sqft 2 bed place ) will lighten your account by 1.25 lac a month or 3 cr over 20 years , not taking into account the cheerfully sucking economic predators , detailed above , surrounding you.
All this converting wants into needs business takes into account a perennial growth in ones income so the propensity to keep paying smaller and smaller EMI's is factored .
Many such wants spin the capitalist wheel till there's huge amount of job creation , money exchanging and overall gain . Trouble is when consumtion stops .
If you can't be convinced , this wheel stops. And when money supply stops - like when the music stops in a game of musical chairs - someone has to dance in the centre of the circle.
If you imagine a country as big as ours or as big as the US creating 24X7 wants , surely somethings gotta give somewhere . Either in depleted energy or in stressful health or in absurd levels of greed before prices will keep rising ( inflation ) till its impossible to convert a 'need' anymore. Leading to empty stores of 'wants' noone can afford or wants to buy .
And isn't that a recession ?

Slumdog wows

Saw slumdog millionaire last night and loved it .

Now I can't understand those who say this shows India's grotesque underbelly when we have lot of great things to show - including a state of the art suspension bridge over the bandra-worli sea space and probably the plans for the worlds tallest building . They couldn't be more wrong.

Only suffering , strife , struggle makes for a great plot . Every single piece of literary fiction whether it camouflaged as humor , paraded as parody or depicted as a tragedy has 'suffering' at its core . There can be no story worthwhile without suffering . Go back to Shakespeare , Milton , Updike , Heller , Dickens , Eliot , Kafka or even Wodehouse , who makes it light and bearable - 'suffering' is the essence of a story . For the magic of any story is the change in its key character between the beginning and end of the plot - an emotional growth , a fulfilment , a redemption . How can a story achieve that if the protagonist starts and ends without any change in his character and personality - status quo is no story! The characters that stay etched in your mind are the ones that had the greatest change in their state of being - Nazneen in Brick Lane , David Copperfield , Nicholas Nickleby , Howard Roack in Fountainhead ,Yossarian in Catch 22, D'Artegnan in Three musketeers , Ali in Kite runner , or Jemal in Slumdog .

Think of the another example closer to real life - Dhirubhai Ambanis' is a great story , Lakshmi mittal , Amitabh , Kishore Biyani , Sunil Mittal , Azim Premji ,Rahul Bajaj , Barack Obama , Nelson Mandela , Gandhi are all great stories - each one of them is of immense fortitude , searing ambition, enormous sacrifices and remakable achievement against all odds . Anil Ambani , Aditya Mittal , Abhishek , Sanjeev Bajaj or Rahul Gandhi can never be the stuff of legends since they start with billions and build empires further - its not a growth of character , just an delta extention of the inheritance thats been handed out to them .

Where is the 'pain' , its endurance and the emotional growth that makes it compelling for the world to participate ?

Irony - 2

Slumdog millionaire officially is now hugely successful - the rags to riches story of a slum boy who becomes a millionaire reflects in the rags to riches fate of the movie itself . Legend has it that the movie was to release in a DVD-only format , but as its tagline goes - born to lose , destined to win - it was finally released with over 600 prints and has grossed $42.5 mn ( Rs.205 cr ) as of 19th jan , a week before its Indian premiere , promising more moolah to the Fox studios.
Somewhere else , another generational rags to riches story plays out in a downright-deprived-to-absolutely-powerful sort of manner - Barack Obama becomes the first occupant of the white house ( Might as well change its name now to Presidents house or One,Washington).
A couple of years back , Shilpa Shetty got caught in a racist battle between her and Jade Goody on an episode of Big Brother . Jade called her 'brown' and it sparked a huge row in the UK for the then PM Tony Blair . Guess who succeeded Blair as the next PM - Gordon 'Brown' !
Irony again that the biggest fraud in Indian corporate history had to be called 'Satyam'.

Chutnefying english

Spent the last weekend attending an interesting seminar organized by MICA , on the birth of Hinglish and death of English - aptly called 'Chutnefying English' .

Purists and practitioners were at loggerheads trying to take sides while trying to sound very meaningful . Mahesh Bhatt very uncharacteristically read out two full pages of a thesis on how statistically now more people speak hinglish than english ( pulling a 350 mn number out of his hat ) and how earlier in films it was only villians and comedians who spoke hinglish but now it has degenerated hindi itself . Mehmoods' lines 'Bahaar ki chokri kitna advance hai' or the song 'mera joota hai japani , patloon inglistani' were the earliest hinglish renditions and most villians were 'Peter ' , 'Mona' or 'Michael' - taking off on colonial times . Its only when Bhatt took off in extempore citing his rich experiences as a filmmaker that the debate gained heat . He wondered why we learnt 'Jack and Jill ' or 'Little Miss Muffet' when there was a huge repository of urdu and hindi literature and why kids don't like parents who still don't know english . His point being 'mother tongue ' helped one connect to ones own self - something he repeated ad nauseam.

Rupert Snell , the Hindi and Braj teacher from the University of Texas , Austin was terrific . He hilariously introduced Bhatt , kept the sunday audience in splits with his chaste hindi and tackled with dry humor all the muck people slung at 'oh those brits'. Shannon Finch , the gritty anthropology student ( while protesting vehemently on why Gurcharan Das didn't give her the time he committed ) gave an interesting insight on why people repeat sentences in hindi and english for effect - a phenomenon she called Bilingual Repitition with some very good examples - recorded from students she gave recorders to capture their usage -

A teacher instructing a class followed the ask 'Kitab khol deejiye' with 'Please open your books' . In a random conversation , ' Aadha saal khatam ho gaya' was followed by 'Half the year is gone' by a student . And how what she called code switching - mixing multilingual words - added to empathic stress . To illustrate she played out a recording from her research : Suddenly , we were talking about India aur achanak usne subject change kar diya .( 'Suddenly' and 'achanak' being similar words with the hindi version adding to dramatic effect )

Also , as an example of code switching used to define which language the sentence came from she used an example ( sentences below ) - it seems that while the first sentence below has more english words than hindi , its still a hindi sentence while the second with fewer english words is an english sentence .

Daddy ki blue shirt table par hai

Film rajaas ki duniya is not worth ek single rupaiah

Someone also amplified boringly the science of mixing hindi verbs and english nouns and adjectives - gherao-ed , manao-ed , maska-fying etc. The other aspect of this debate was the commerce behind it all . The need to connect , felt Prasoon Joshi was far more important that the need to maintain purity . e.g Pepsi's Yeh Dil Maange More reflected youthfulness , aggression as in 'maange' , a movement away from the scarcity era with 'more' and Coke rebounded with 'Life Ho To Aisi ' another hinglish line . A movie like 'Jab we met ' also went on to rake in huge moolah due to its refreshing take on youthful romance . Another young bloke studied spanish usage in the US to conclude that there is nothing like Spanlish as purists rule that lingo - so much so that even TV broadcasters prefer pure spanish speakers without a word of english embedded in it .

Here's my take on the Hinglish affair - language is a means of communication . So it is sub-servient to a need - the need to communicate . It can't be a master - you need to learn it and speak in its pure form . Shakespeare added 30000 words to the english then , now new age technology has added many more words to it - did we have words like googled , flickrd , wifi , podcast , itune , wikipedia , second life , smsed ,email - so who is to say that Hindi can't add words of its own . If it helps millions reach out to others - a little twist , some nichod will maybe help english survive .

Code-mixing and bilingual repitition ki aisi ki taisi ,

Chill maro , mat karo bheja fry , piyo thoda cold lassi .

Kya english aur kya hindi , thoda punjabi mein jod do sindhi ,

Bani jo bhasha tod-marod , oose complete karo dictionary oxford !

Satyam Jayete?

Satyam has gone belly up .

Its according to which channel one is seeing or which business paper one reads - anywhere from a 5000cr to a 7000 cr scam . Ramalinga Raju has confessed to the massive accounting fraud , sinking his stock by 80% and the stock market by 750 points , putting pressure on the world markets on corp governance and probably liquifyeing PwC - all in one day.

Just in the morning multibillionaire Adolf Merckle , one of Germanys wealthiest men , owner of Heidelberg cement among other firms jumped in front of a running train not able to handle mounting debt.

Raju chose to confess instead . It was like riding a tiger , not knowing how to get off without being eaten - said RR in his letter .

Greed is good , said Gordon Gekko , Michael Douglas's character in Wall Street .

Not so sure.

Outliers !

Just finished reading 'the Outliers' , the latest from bad-haired behavioral scientist Malcolm Gladwell . His second book 'Blink' didn't quite impress me for its premise was ridiculous , while his debut book 'Tipping point' dissapointed in its examples . So what made me buy his third book ?

Having worked now for just under 20 years , am desperately seeking some mid-aged mantras / quick-fixes for the next 20 - what should be the ends and what should be the means ? How much wealth does one need ? How high should one aspire for ? As means , is it entrepreneurship , is it going to be higher up the company management ladders or is it going to be further studies followed by some more racing with the rats or just hang up boots , shave your head , buy a 350cc bike and travel the world - blow all you have to start again in some years ?
Perhaps the sub-title of the book - 'the story of success' - caught my imagination and hope of finding some answers prompting hard earned 400 bucks to be thrown at it , just as a new year broke.

Outliers are people who are those who 'unbelong' - are different from the rest for any variety of reasons. Gladwell divides the book into two parts - 'opportunity' and 'legacy' with the proposition that the opportunity and legacy are the reasons why some people enjoy tremendous success and most don't . In a wild premise, he states that the timing of birth makes all the difference between having opportunities or landing a legacy and therefore all talent is overrated , its all luck ,luck and more luck . For instance , those born around 1955 have benefitted from the mid-1970's software boom - steve jobs , bill gates , larry ollison , eric shmidt etc. , those born in 1830's benefitted from the 1860's boom in railroad , oil and gas boom ( jd rockfeller etc. ) . Stating legacy as an ingredient for success , he analyses the growth of the jews in the US . The Jewish immigrants came as garment workers ( sophisticated work integrated with mainline America) , Italians came as construction workers , Irish as domestic help and Mexicans as farm labourers , thereby creating an immigrant hierarcy in the US with the jews at the top . The second generation jews all got into law , medicine , engineering , wall street ( solomon , lehman m goldman sachs ) and ran all the newspapers . So a Jew with parents who worked as garment labor in 1930s would have studied law or engineering and would be automated to be successful today !
Similarly , he argues why koreans max in air crashes - they obey authority in their culture and therefore can't negotiate or converse effectively with culturally rough ( considered normal in cities like new york )air traffic controllers around the world.
Leaving legacy aside , I thought of applying the 'opportunity' corollary to the Indian context and in 10 year blocks to see if the theorem holds.

If one rewinds back to 1995 , here's all the jobs a guy out of college could do then - heavy engineering , FMCG , durables , government , armed services , PSU banks and newspapers - mostly low paying , low on skill and mass in nature .

Fast forward to 2005 , here's what he could consider - Insurance ,BPO ,Telecom , Infrastructure , IT , Banks , Mutual Funds , Stocks , Financial services ,Events ,Media - TV , Radio , Advertising ,Hospitality, Automobiles - each of these industries had just 1 player in 1995 and has close to 20-25 players in 2005! All highly productive , high paying and high on skill and money.

Let me now forecast what the opportunity landscape might look like in 2015 for a guy looking for a job - NGOs , Travel , Health , Education , Private equity , Management Consulting, Retail , Logistics , Transport , Security ( arms , ammunition , guards - keeping away the have nots will be an industry ) , Services- legal , Films and Leisure( yatchs , suites , choppers et al) . Extremely evolved and unsteadily high paying .

So here's Malcolm Gladwells big point ( adapted by me to the Indian context ) - those who are born around the mid-1970s in India will have the greatest chance of making it big as they will be around their 30s in 2005 , making the most use of the opportunites - and riding away into the sunset with a billion or two in the boot of their 4000 cc BMW parked in their 8 bedroom bungalow in South Mumbai !

So how about being born at the right time , next time ?
Eh !