Thursday, October 30, 2008

Crackers of Joy

She was in the gymn, working out rigorously. Her thighs hurt when she did her 20th squat. She shut her eyes, and in that moment she saw Egypt... the hotel in which she had stayed, the oppressive heat during the day and the cooling colors of the sheeshas at night... many people... tooo many people bustling around the busy streets of Cairo.. and the spectacular feeling of walking along the life-giving Nile.

She sometimes can't believe that had left it all... dropped everything and taken a break from life... to enjoy life. She can't believe that she had once slept in those scary dorms, walked alone on those bright streets of Amsterdam, befriended absolute strangers in the dorm and traveled with them.

Sometimes she sees her travels as that point from which life began... like the day Christ was born. It is the reference. Everything before that is BC, and everything after that is AD.
Everything before her travels was when she was a different person... not just a different person, but a person she sometimes can't even identify with now. Nothing after her travels would have happened had she not traveled.

She hasn't experienced fear since then... or genuine unhappiness. She has become carefee. She has gained the perspective to identify and courage to ignore the irrelevant. She has also learnt the art of looking at herself from a vantage point, without getting involved/biased. She can cry/laugh/teach/learn etc and transit out of herself and question why she is crying/laughing/teaching/learning.

She is in love with herself... bloody narcissist!

Tuesday, October 28, 2008

Making my own sense of it all...

This is what I understand of the current mayhem in the economy:-

US bank gives 2 types of loans: corporate and personal. Say there is a corporate that is into real estate... company HomeMakers (HM), and there are many clients A, B, C etc.

HM requires a loan for its business of producing houses whereas A needs loan to pay for the house.

Now bank tells HM: "Hey, you want money for your business. I see that you might do well. I am willing to stake my money in your business, as long as you show your own commitment. So, I will put in 50% and you put in 50% into the total capital. If you can invest your 100Cr, I will match it to invest another 100Cr."
HM is happy. He makes houses and sells to all those who can pay for them.

Now HM tells bank: "I can probably build more houses if there was a market for it. Currently there are some people who would like to buy a house, but don't have the capacity for it. Why don't you loan them money to buy the house? If you do so, they can pay me the money for the house piecemeal and I can build houses for them as well. In short, why don't you create a market for me? ".

Bank looks at capacity of A. Bank sees that it can afford to lend money to A coz A seems to have repayment capacity in a certain time period, say 20 years. So Bank tells A: "I am willing ot invest my 80% and your 20%. You repay me back the 80% in 20 years. Until then, you use my money to pay for the house and enjoy the benefits of getting a house NOW as opposed to many years later."

So, HM builds more houses, the As Bs and Cs get houses and the Bank makes its own profit from the interests generated. This is all good.

Now, for some reason (this is dont get), the Bank has a lot of money. So, it tries to find more such customers. Many banks have a lot of money and all of them want to lend it to such customers. So, customer tells Bank_1: "Why should I borrow money from your Bank when I can do so from Bank_2 as well?". So, because of competition, Bank_1 says: "Alright, I'll lower the amount YOU have to invest in the flat... how about a 90-10 ratio? I put in 90%, you put in 10%."...
Because of intense competitions, banks start giving loans at 100% their own risk. They can do this because of an important underlying reason. The real-estate prices.
Today, if client A takes a loan for a home, pays some amount of the loan, and then decides that he can't pay anymore.. or for any reason, he defaults at the payment, the bank can simply hijack the house, and sell it in the market.
Since real-estate prices are rising, the bank will get a higher price in the market, than what it paid for (in terms of the loan to the client).
The bank also got a small portion of the loan repayment.

This way, the bank does not lose anything... and this in fact, seems to be a lucrative business... perhaps so much so that the bigger players get interested.
Now say the bank does a 200million dollars such business.. and is happy with it. A bigger player comes and says: " You continue doing this business. However, I have a lot of money with me which I would like to invest in this business. So, you find clients for me, do background checks on them, lend them MY money and collect interest from them... and give the interest to me. I can't do this myself coz you are better at this whole thing than I am. I just have the money. So, if you are collecting 12% interest from your clients, you charge 12% on these new clients... and give me 11% out of that. The 1% differential you can claim as yours".

Now, the bank gets a chance to earn more. It continues with its own thing of lending people its own money to buy the flat.
But additionally, bank tries to find more customers to give loans to. This time, however, there is a difference in the banks mentality. This money that is to be lent is not the bank's... it is the Bigger Player (BP)'s money. And more the bank can lend from the BP's money to the clients, the greater is the 1% chunk of it that the bank is going to earn. However, NOW if some client defaults on payments, it is the BP's responsibility to bear the losses.
So, the risk which initially the bank bore if the client defaulted, is moved to the BP

Now there is a Bigger-Than-Bigger Player (BTB) who can loan more money to the BP. And the risk of the client defaulting is moved higher in the hierarchy... until there are still bigger players, and now the game goes international. It becomes news that the US banks have a great business, and dllar is strong and all that... so European banks, Indian banks etc invest in this scheme.

In general, initially the risk moved higher in the hierarchy from bank to the bigger player (sometimes called wealth managers) to still bigger players. When international entities got involved, the risk got diversified across the world.

In principle, many people across the globe contributed to give the client A, B and C the power to buy his house.

It was all good until a dreaded thing happened. Real-estate pries went down. For instance, a house that cost 100million today, costed say 90million tomo. Now A thinks... "I have paid 5million of my loan back. But what if I chose not to pay anymore? I can give the house key back to the bank... and get a new home in the market for just 90million. So, I spend a total of 95M vs 100M." The Banks got keys to many houses. In short, many people defaulted on the payments.
So, all the banks started selling those houses. Because of greater supply than the demand, the prices spiralled.

This caused a negative cycle. The bank that thought that it could recover its loan in case of a client default, by selling the house, could NOT recover, because the value of the house went down.
So the bank lost its money... and so did the Bigger Players (because the risk was pushed up the hierarchy).

The big names that we hear today (Lehman Bros, AIG etc) are the bigger players somewhere in the hierarchy.

Since they began losing money in this business, they had to get back all their money invested in other businesses all over the world, to contain these losses.
So, India felt the heat because of 2 primary reasons:-
1. The international investment that it received (Foreign Investment: FIIs) is being pulled back.
2. The Indian entities that invested in this business lost their money.. and they were the Indian big players like ICICI.

From a rough statistical data, only 5 billion dollars of the total 55 billion dollars of foreign investment has been pulled back. And India is in panic mode. 30% of the money around is from foreign investors, and 70% is domestic. In worst case scenario, if ALL 30% were to be pulled back by the foreigners, the 100% has to be satisfied by the 70% that we domestically contribute.

This probably causes an extremely negative market sentiment and indices of growth/success/stability/hope (like the Sensex, Real Estate morale) spiral down cascadingly.

It is believed (by dad :) ) that the worst has not yet arrived.

There are too many Qs.
1. Primarily, what went wrong?
What I don't understand is how does the tide turn? What causes it?

2. This business of loaning money to clients and having a hierarchical system for that, has been in effect since 10-15 years. Why did it collapse NOW?

3. Also, why are some economies resilient to these damages, and others more vulnerable?

Perhaps, to understand these things, one needs a deeper AND wider know-how of things. Or one needs a dad like mine... who can tone (dumb?) down the talk to my level. (Claimer: any mistakes are a part of MY misunderstanding).

But if nothing else, the current scenarios do make for fascinating coffee-table discussion and ruminations and speculations... As interestingly observed by dad's friend that "Worth has become vyarth, and notional losses have become national losses"

Saturday, October 18, 2008

The real damage

Wi-fi is disabled in our college. Strangely enough, the same people have taken contradictory stand on it... so much so that they have shifted their sides more than 3 times. This is almost unpardonable...

When the college became wi-fi enabled, people gloated with pride... They started quoting bandwidth, signal strength and all that... in many a places, it was quoted as the strength of the college. And then, this city was attacked using an insecure wifi... and there was a cascade of disconnections. Suddenly, people were now proud to have made our college more secure by disabling wifi. The wifi range was 'so good' that someone sitting in the car outside college could use it.

But then, the big fish arrived to judge the small fish.... guys from the central board came to accredit the college based on facilities and infrastrucutre and other parameters they deem fit. Now, college had boasted of wifi. So, they turned it on for a couple of days... to boast of how we embrace technology and all.

This is not just two-facedness, but changing the face too many times. It is a pity that the minds that run a prestigious college should so openly participate in a farce.

But worse, in my opinion, is that the anti-social elements succeeded in scaring educationist and professors of computer engineering courses enough to switch off wifi (a lifeline of this age). Instead of being proud that by disabling wifi we have made the college a safer place, we should be ashamed that we had to recede, to ashamedly take a step back. Instead of using preventive methods, we simply used escapism.

Thursday, October 09, 2008

A strong opinion on not having one...

The world's biggest smoking ban has been imposed in this country. That too, on a markedly auspicious and sentimental (for some) day, making it all the more difficult for the opponents to overcome the resulting moral support this law gets.

Having a categorical view on such a subject does not seem justified, and that is because having such a view requires the viewers to have experienced/experimented with both sides. Smoking may be physically injurious to health, but it probably gives a much-needed temporary relief to the smoker. Same with many 'vices' of society, especially Indian society. For instance, smoking weed (marijuana, or ganja) is not proved to cause or instigate lung cancer. And the psychosomatic relief and joy obtained from it is unparalleled (perhaps preceded by higher drugs).

This is not to say that consuming drugs, smoking tobacco, premarital relationships/sex, live-ins, and all other taboos are necessarily right. It is just that it is not clear whether indulging in them is good or bad.

I recently got into a mild argument with an acquaintance who happened to be a doctor. When I expressed my disapproval at the law nonchalantly, she was most offended. "You should see the patients of extensive smoking... their un-seeable swollen lips... their pain and suffering", she said with a tone which was irritatingly righteous.

I think the problem is that that which we see appears more gory than that which may be gorier but cannot be seen. Just because one can see the pain and suffering and the sights which caused one to convulse with nausea, does not mean that there aren't worse cases of suffering. Perhaps smoking caused the patient to eventually suffer after some 40 years of regular smoking. But can't you see the interim relief he got, the smile on his face while sharing a smoke with colleagues or friends, enjoying the temporary state of bliss? Perhaps he should have controlled it to not let it worsen. But the real debate is - are years of engagement in a potentially 'harmful' activity which gives one considerable joy/relief/happiness really that bad that a government has to step in and debatably compromise on individuals' right of choice?

The only redemption for the law is that the government is trying to protect those who do not smoke from the ill-effects pf passive smoking. In that case, doing that in Mumbai is almost laughable where some reliable statistic says that staying in Mumbai is equivalent to smoking a half a pack of cigarettes everyday. However, overlooking that, it is understandable if such a law is to be enforced in really confined places where passive smoking is inevitable. But banning it in the open-space of Mocha, near the paanwala, in any remotely public place even if it is open-air, is pushing it.

I think we have forgotten that health is not confined to only physical health, but mental/emotional health is just as important, if not more. In that case, (case 1) A's smoke causing B to smoke passively is probably not as bad as (case 2) A's insulting and demeaning behavior causing mental turmoil/stress/depression in B. The govt is doing a lot for the victims of passive smoking coz it is detriment to B's physical health. But is the govt or any agency of power doing anything to stop/contain adverse effects to B's mental health?

There are many ways to look at it. And getting back to the original point, no individual or entity, be it government or society or parents, can have a categorical view on such activities without having tasted both sides.

Monday, October 06, 2008


It was a Sunday, and she was on Carter Road. Sitting. Staring... into the space and years.

She could see a lot of couples. And more bystanders trying to watch the couples. Yet, the couples were in oblivion, and knew how to have fun clandestinely.
She smiled at their victory vicariously.

The place seemed so familiar it almost made her uncomfortable. She realized that she had not forgotten much. It was just that she never experienced the right triggers that activated these memory cells. Now that she saw the same setting, she could identify even with the crevices on the rocks... They were their sinhaasans, once upon a time, those rocks... thrones on which the two of them sat and watched the world pass by, drew generously large conclusions, made small talk and big talk alike, tried to impress, tried to understand, kissed, groped, made unfinished love, solved mid-day crossword and basked in the glory of getting the 9-letter word.

And for an instant she felt filmy. She thought that she would give up all that that made her 'grow up', her foreign education, her degree, her mature mindset... hell, even her travels... only if she could get back that untainted joy of companionship.

She knows it is not him that she yearns. It is the companionship... that feeling of speaking one's mind, of getting honest opinion/advice/feedback, of knowing a new perspective, of laughing together.

She fiercely guards her independence... but at the same time, hopes for someone to rightfully snatch it away.

Saturday, October 04, 2008

Plain Updates

Time for a new blog post... I am happy, relaxed and 'de-stressed' as a friend pointed out.

It's 2.40am on Saturday night, and I just got back from a totally kick-ass session with friends... Absolutely unwound! It started with going for Garba (being deprived of Mumbai garba for 2 years) with Falguni in her elements.... followed by cheese pav bhaaji and sandwich and good ol' ThumbsUp at Shivsaagar, and then the soothing Double Apple sheesha at Mocha.... and then the interesting drive back home... all this tinted with the 'haraaaami jokes' and bakwaas PJs and reminsicizing days of yore...

Ah! There is little that can beat the raw freedom of dancing Garba to Falguni's tunes... Andar kaa jaanwar utth jaata hai. There comes a point where nothing matters, and you are one with the music... the crescendo and the eventual climax take you to a new plane where it's only you, your rhythm and the music.. and if you break out of that mode, you see all others still in trance...
It's almost soulful.
Also, there is an inexplicable joy in understanding others' in the group and getting the same step in 4 beats. Just recently I tried choreographing a dance, and I realized how tough it is to get people to synchronize their dance steps... but somehow, that is not the case with those who understand garba... I don't know if it is in 'our blood' (if there is such a thing), but the synch definitely happes much easily and quickly..

Sameer, Hetal, PG, Mani... I love you all... I laughed until my eyes cried and stomach ached. It felt so good to do absolute bakwaas.... Being a teacher, I end up re-thinking and filtering my talks much more than I ever did... but today, it was pretty crazy...

Apart from all this dancing and garba, the students of TSE are crazy. They sang the Happy Bday song for me twice in 1 month.. coupled with loud hooting and banging of benches. But I love this job... I am learning a lot about interaction with another breed of people. And they are very cooooool... in fact, I am afraid I might fancy them.

Many more updates.. but now it is time for my dandiya-energized-but-simultaneously-exhausted body to relax.