Tuesday, September 30, 2008

Economedy of Errors: Cartoonists View

Source: About.Com

"Mr.Bush, we finally found the WMDs. In New York City!!"

An article from 2003, to which we should probably have paid attention, here

Thanks to Shashank for sharing this with me. I decided to put it on my blog since it is so relevant even half a decade later, maybe more so. What amazes me is that something so obviously catastrophic was beyond the comprehension of so many highly educated and highly paid "experts" for 5 years. Begs the question, what is it that they actually do besides smoking pot at B-schools?

An excerpt for those too lazy to click through to the BBC site :-)


Buffett warns on investment 'time bomb'
Tuesday, 4 March, 2003

The derivatives market has exploded in recent years, with investment banks selling billions of dollars worth of these investments to clients as a way to off-load or manage market risk. But Mr Buffett argues that such highly complex financial instruments are time bombs and "financial weapons of mass destruction" that could harm not only their buyers and sellers, but the whole economic system.

Derivatives are financial instruments that allow investors to speculate on the future price of, for example, commodities or shares - without buying the underlying investment. Some derivatives contracts, Mr Buffett says, appear to have been devised by "madmen". He warns that derivatives can push companies onto a "spiral that can lead to a corporate meltdown", like the demise of the notorious hedge fund Long-Term Capital Management in 1998.

Derivatives also pose a dangerous incentive for false accounting, Mr Buffett says. The profits and losses from derivates deals are booked straight away, even though no actual money changes hand. In many cases the real costs hit companies only many years later.

This can result in nasty accounting errors. Some of them spring from "honest" optimism. But others are the result of "huge-scale fraud", and Mr Buffett points to the US energy market, which relied for most of its deals on derivatives trading and resulted in the collapse of Enron.

read more

I am sure Buffet was not alone to anticipate the "many years later" cost impact, way back in 2003. If they continued to lure and loot the trusting public despite such warnings, they must be judged similar to war criminals now. While many of us may lose money, jobs, homes and even Internet access (ouch!), the mad-men (in Buffet's words) responsible for the man-made destruction continue to sip their Pina Coladas hiding in their yachts near Cayman Islands...

On a related note, please avoid spreading and acting on rumours regarding insolvency at ICICI Bank. I am not a fan of the bank and, in fact, stay far away from dealing with it. But I do know that such rumours are malicious and could trigger an unnecessary spiral of doom for a teetering economy. Stay sane and prudent. Work hard and spend more.

We'll be out of this mess, soon.

Friday, September 26, 2008

(On)Line Maaro

One of the better things that have happened to our lives recently is the online ticket booking systems. I remember the days when booking a ticket meant waking up at 5 to stand in a line at the railway station, only to return empty-handed at 11 because the quota was filled. Of course, you could still buy as many "black" tickets as you wanted at the pan shop near the counters. From those dark days to the efficiency of anywhere, anytime booking, including specifying seat preference. We have come a long way indeed, at least in this department. The great thing is it applies not just to air and rail bookings but even buses now.

I recently booked with KSRTC and was surprised at how well the website was designed and functioning. The icing on the cake was a airline style seat map! This was such a contrast to the last time we booked, going to a KSRTC travel agent who spent 30 minutes on a dial-up connection just waiting for the page to render. And another 30 while he made mistakes and repeated the search.

Even the bus itself was quite comfortable, even if it did stop at vague food joints and showed the most boring films. Once you have the ticket print out, you just head to Majestic where the platforms are well-numbered and a well-mannered conductor assists you in boarding. The same applies to Airport shuttle, where one can book tickets on RedBus or ViaWorld (although for now the buses are so empty, don't bother with reservation!) and rest assured in the hands of timely service and well-mannered, good-humored, hindi-english-kannada speaking conductors.

The newly designed IRCTC offers a load of features for rail booking. It has minimized problem of searching for oddly named stations, though no software can help you detect that Chhatrapati Shahuji Maharaj Junction is what you want, when looking for Kolhapur. I just wish they had a simpler interface for searching different classes and dates on the same page, instead of trying different combination as new search each time. What impressed me most was how effortlessly and quickly (2-3 days) they refunded the money for canceled tickets and failed transactions. They even allow you to ensure, say, a lower berth or not book a ticket at all. Adding a seat map would be the next big idea.

For airlines, I have already professed my love for IXIGO by adding their widget below my blog. This clutter-free site shows the final price, all inclusive, whereas many other travel sites confuse us by comparing basic fare only. Then they have a fast, easy interface to refine or modify the search. The best part is, clicking on the fare takes you to the airline website for payment. Ixigo is not an agent and does not collect any fee. You deal direct with the Airline for everything, which makes it hassle-free and cheaper in case of cancelations. I only wish they had a similar service for international flights soon, since comparing best itinerary (stating both total travel time AND total cost clearly) is still quite difficult. If anyone knows of an international flight price-finder from India, do comment and let me know.

On a different note, we recently used the Pune Corporation website for paying property tax. The transaction deducted money from my card but showed up as failed on the website. Sending a mail to the help-desk elicited a prompt response. Within 2 days, they confirmed that tax due was clear. Again, I was happy with not just the facility but even the prompt service.

These small steps go a long way in improving quality of life of the average Indian. More such initiatives will help so much in reducing faltu stress and eliminating corrupt middle-men.

Thursday, September 25, 2008

KISSmet Kommention

Maybe it's envy. After all, the highest number of comments on any post of mine is 7.

But I can never understand exactly how important people think their blogs are, when they enable three layer security mechanisms to control comments. Why would all the spammers in the world divert their resources from lucrative phishing schemes, to unleash commenting bots on you? The letter verification is to elude bots, not a free eye-sight test. I really don't see why Blogger even bothers to retain this feature. In fact, the more I see Wordpress blogs, the more disillusioned I am with the Blogger design. You just comment-- no authentication, no gyaan. And what pretty comment boxes, what useful comment alerts.
Google is going lazy the Microsoft way, of late. Don't you think?

Of course, some of the best writers out there still use Blogger. So I brave the security cordon and continue squeezing in my puny comments on my favorite blogs. But please, people, just keep it simple!!

Wednesday, September 24, 2008

Dunce of the Millennium

A friend's blog states in the header: Dunce of the Millennium, awarded to the fool who destroys the planet he lives on.

That's a cool statement. Saving the world. Forests, weather and energy for our children. Keeping Wall-E at bay. We know it, yet we don't do anything about it. After all, we are but one person. What can we do? How can it matter what we do? What's the government doing?

One of my all time favorite movies is "Brazil". It's Terry Gilliam's vision of an Orwellian world, where free speech is punished and bug-ridden machines rule (he knew about Microsoft Vista?). The unique factor of the movie is how this society is enforced not by an all-powerful dictator or a ruthless "big brother". It is every day people like you and me, doing just their daily jobs, their "duty". In itself, each man's work is harmless; each man believes in freedom and love. But together, as cogs in the "system", they work to destroy the very ideals they hold dear. They unknowingly (really?) create a totalitarian state themselves, instead of a power-hungry "villain" commonly seen in this genre.

This post is not about a totalitarian state, although recent events with churches and taxi-drivers would not place that too far in the future either. This is about my favorite topic: Bangalore infrastructure.

The topic has been done to death by everyone already. IT honchos, industrialists, expatriates, journalists, students and even politicians have commented and accepted that the infrastructure is crumbling and something needs to be done soon. One day, they even decided to raze some randomly selected illegal buildings (randomly sparing all civil-servant bungalows) in Koramangala, that left some innocent people homeless (the officials who authorised the illegal construction sold and vanished years ago). The locality remains as congested. Then they came up with magic boxes to create signal-free routes and ease the traffic flow. With no drainage and narrow service roads, most magic boxes flood within 1 hour of rain. The signal-free routes, meanwhile, have no pedestrian bridges. Unnecessary lives are lost each time people attempt crossing in front of cars doing 100kmph. You might think these were common-sense factors that any city plan would provide for. But this post is not about all that either.

No, this post is about something much more "you and me". Something so visible and yet so invisible.

My landlord is making a commercial complex near Lalbagh. That's a crowded stretch of road, yet one of the "freshest" areas in Bangalore thanks to the botanical garden and dense trees of Basavangudi nearby. This 4 storey complex will house a supermarket, restaurant and offices. In other words, it will host an estimated 45-60 people at a time, daily. For all the additional business that it will generate, there's basement parking provided for about 12 cars. When I asked him how will that work, he reassured me: "Oh there's lots of lanes around the place, customers can park easily!".

Well, that is true. After all, he is not in the business of making MLCP (multi level car parking). How can he justify cost of an extra basement to park more cars? Anyway, parking another 6 cars will not solve Banaglore's traffic woes. The government must do something about that!

After this incident, I began to notice other new construction. There's a new Big Bazaar opposite Ragigudda temple in Jayanagar. This is a busy intersection, often gridlocked. On Wednesdays, people throng BB for the weekly discount. About 15-20 cars can be parked inside, twice that number line the narrow roads leading in and around the complex on busy days. Another hypermall by Mantri is coming up soon, banking on the same lanes for parking.

The fancy Innovative Film City on the outskirts of the city has over 15 attractions and costs Rs.700 for a full-day tour. They plan to open a 21 screen multiplex, a shopping arcade and a hotel. The cars and tour buses must park outside the main entrance, going all the way up the sylvan hillside. While this works fine today, I shudder to imagine what happens when another theme park opens next door. The optimist in me believes the car park may be under construction. The cynic looks at their earlier disaster, the multiplex at Marathahalli, and is afraid the parking may again be sufficient for a tenth of the capacity. If it exists, at all.

The same story is repeated in numerous new malls (viz Garuda Mall, where parking is a joke!) and apartments coming up around the city. I can understand planners did not anticipate 4-wheeler growth 10 years ago and older buildings must struggle with insufficient parking space. What gets my goat is when the administration approves new projects with obviously insufficient parking. More so when these new ventures are otherwise aping the American model of mega stores like the Walmart that have parking lots larger than the store size itself! Two years later, the BBMP is conveniently going to blame builders for not providing enough parking, and absolve themselves of any blame for increased floods, jams and fires in the newly "developed" areas.

I am sure fire safety laws are being flouted in a similar vein, with cramped escape routes and
no access for fire engines. They will jail another Ansal Builder for 2 years, while another 80 innocents perish in a fire. Would you believe these malls and multiplexes came up after we allegedly became conscious of the need to "do something about it".

The point of all this ranting is how we "save money" in our little projects, comfortable in the thought that one more car parked on the road won't hurt anyone. And, smart IT executives and investment bankers like you and I, we continue to agitate for better infrastructure and world-class facilities from the government.

I wish we'd just save the neighborhood before we save the planet.