Economic Divide

Business is obviously booming in India and China.  This is the common perception, India ranks 2nd in IPO, 4th in M&As.   Villages don’t seem to be left behind. Last week, I heard from one of my friends that a barber (usually considered a lower class of economic strata) has put his son on the “management seat” in an engineering college. 

Ysterday, On my way to office, I went past the American School , a FORD Endevor (costs around 15L ?) pulled up near the school gate. There was a lonely looking girl who got out and went inside the school. The driver parked the vehicle there and had to wait.

 When I rode few yards further, there was an MTC bus which had around 70 passengers broke down. All of them were stranded and shouting. I could only think of the time the passengers were wasting and they trouble and tension they had to undergo when they reach their work locations (or anyother destinations they were set to). Productivity !!!

Two Inferences :

1.  Economic Divide is massive.  A ford Endevor for a school girl vs a dilaphitated MTC bus for masses.

2. India and Productivity growth are Antonyms

 

Independance

I wanted to break the long hiatus from blogging. What better day than to do it than the Independence Day of my mother land. 

When I was about to return from UK, I called a friend from there and informed him of my impending departure from the “Empire”.  I sounded very excited to meet up with friends and family. He quipped back … “You sound so excited about your return to your mother country “.   Frankly, this “mother country” theme NEVER turned me on.  Its just my family and friends. 

I am still wondering why we celebrate this Independence Day. It sounds so hollow here.   If you had lived in a western country you would know the difference.  Mediocrity and resistance to change has become the norm of this country. It’s so silly to hold the parade on republic and independence days and shows of the military toys. We have been doing the same thing over for 60 years. The toys are not great anyway. The speech is listened by none. Whatever speech the leaders give is not going to be followed by them. This is what I call resistance to change and mediocrity.

 I would touch upon economics, a subject dear to my heart. Economically, India is in a better shape than before. No doubt. In terms of preparedness for the future, we are a long way off. One small shock, we are at great risk. You might have noticed the big clamour that ensued the dollars descent from 43 to 40. This is a harbinger of the times ahead.

Enough said. This could be the icing on the cake of Independence Day celebrations. 

You can turn to me and ask “This is a nice rant but how are you helping the cause ?”. I say “Forget the cause; I am trying to make you understand so that you save your ass”.

 

Alonso is super cool.

 

What is WEALTH

I asked an economist and a realist….

 His reply – “there is no best measure of wealth. It is entirely subjective. you can define wealth however you see fit, but that doesn’t mean your definition is the same as mine. “

 

Interesting argument.

David R. Henderson and Charley Hooper argue that most of us are rich.

Except for the few hundred thousand who are homeless, the Americans whom the U.S. government defines as poor live exceptionally rich lives. In most ways, their lives are better than those of kings and queens just 200 years ago. Consider the quality and quantity of our food, clothing, refrigerators, televisions, washing machines, stereo systems, and automobiles. King Louis XIV of France had a greenhouse so he could eat oranges. The poor in this country can eat an orange every day, regardless of season. King Edward III of England could summon the royal musicians to play music. The poor in this country have a wide variety of music at their command, 24 hours a day, played note-perfect every time. Edward III lived in a dark, smelly, cold castle. Even the worst houses in this country are more comfortable and have electric lights, too. Care to live without showers and flush toilets? The kings of England and France had to. Next time you see a Shakespeare play in which kings and princes cavort, remember that royalty in Shakespeare’s day had rotten teeth, terrible breath, and body odor that would make you keel over.

 

Nobel Prizes

WMTW

2 US Researchers Win Nobel for Work on Genes

US duo win physics Nobel for backing up Big Bang

Stanford professor wins Nobel chemistry prize

I dont think  Economics Nobel will go anywhere outside USA.  USA rocks with intellect and innovation.

Oh yeah, India is the “knowledge super power”

 

India Apalls Edition

Having returned to India, the most apalling thing I find in India presently is the healthcare condition.

 Chikun Guniya is sweeping accross the states. I thought TN was the worst hit, but high denisty state of kerala is reeling under the virus consuming 40 people already.

Other dangers lurking :

 Dengue claims AIIMS student, 2 are in ICU

12 fresh polio cases reported

 

US Macroeconomics

US economic situation was bad for over couple of years now.  I personally have been keeping my fingers crossed for a long time now. I realise its a slow process ..the coming of recession.

Here is a nice round up of the situation 

 Bonds are screaming recession right now, as stocks continue to spike higher on window dressing and short covering. Rates have been falling for several months now, but housing continues to implode at an alarming rate, now with falling prices across most of the country. The massive fiscal and trade deficits are putting the US dollar at major risk, as we depend on the investment of our foreign friends to finance our deficits, homeland security and the ever-growing wars on terror. No borrowing from the people, as our US personal savings rate is now negative, and growing deeper everyday. Think about it…if the tech (dotcom) bubble could induce a mild recession in 2001-2, what will the bursting of the greatest housing (lending) bubble of all-time produce? Sorry, but falling oil prices won’t save your day. Oil is still double what it was priced at in 2001-2. Still up over 100% from just four years ago! As for housing and lending, everybody is in…and many are and will continue to try to run for the exits… 
 
October 2006 has the potential for a historic sell-off that could put the US economy in a moderate to severe recession within days if not hours. The negative wealth effect of an imploding housing and lending bubble, coupled with selling in the public stock markets, will put the consumer (~70% of GDP) and our banks and lending institutions on ice for some time.  
 
Lastly, history tells us that soft landings rarely happen, inverted yield curves often lead to recession, the “end” of a rate hike cycle often precludes a significant decline in stock indices, and that sooner rather than later, the US equity and risk markets will begin the process of pricing in all of the above. 

 

WE ROCK !!!

Morgan Stanley takes IT honours at Financial News awards  

Luke Jeffs

21 Sep 2006

Morgan Stanley has taken the crown for best European IT department for the second year in a row at the fourth annual Financial News Awards for IT Excellence, with Credit Suisse, Reuters, Bloomberg and Markit Group last night’s other big winners.

Morgan Stanley won best European IT department over rivals Credit Suisse, Dresdner Kleinwort and Deutsche Bank, and claimed the best back office solution prize for its European equity asset servicing project.

The US investment bank shared the sell side awards with Credit Suisse which won the best algorithmic trading system prize for the second year, and claimed the award for best regulatory driven initiative for its work on commission sharing.

Its chief information officer Tom Sanzone saw off peers from Deutsche Bank, Dresdner and Morgan Stanley to take the coveted best personal contribution prize.

Reuters, Bloomberg and Markit Group dominated the data and trading categories.

Reuters took three awards. It won best foreign exchange trading venue and best FX data solution. Reuters also shared the award for best equities data solution with Thomson Financial.

Bloomberg took the awards for both data and trading excellence in fixed income.

Markit Group claimed the best derivatives data solution for the second year running and the best new vendor solution for its derivatives system.

Eurex, the German exchange, knocked Euronext.liffe off top spot to claim the prize for best derivatives trading venue and the London Stock Exchange beat rivals Euronext and Deutsche Börse to the best equities trading venue award.

Barclays Global Investors was the inaugural winner of this year’s third new category – best buy side IT department of the year.

In total nine organisations shared 15 awards.

Financial News compiled a short list based on firms nominating themselves and consultation with industry experts. The winners were chosen by a panel of ten judges who are independent analysts and consultants.

 

Fastest super computer

On reading the news headlines “FASTEST SUPER COMPUTER TO BE BUILT”. Before reading further if  you don’t guess  who is building it and where… you are probably living in Mars.

Yes, its by IBM at a US govt lab.

From DIGG

IBM is at it again, trying to build the world’s most powerful supercomputer at a US government laboratory that could potentially be up to 4 times as fast as IBM’s very own BlueGene/L. The new machine has been codenamed Roadrunner, and this computer will follow a hybrid design that uses both conventional supercomputer processors as well as the new Cell chip design. It is hoped that the Roadrunner will hit petaflop speeds, maxing out at 1.6 thousand trillion calculations per second. In comparison, the BlueGene/L is only capable of a trillion calculations per second. The Roadrunner has a projected completion date of 2008 and will take up approximately 12,000 square feet of floor space