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Mongolian, Kannada, and Malyali Rock, and some absolutely fantastic violin solos

This is why people love Youtube! Check out these pieces. A brilliant combination of sounds from rare musical instruments blended perfectly with what we have heard often to create some fantastic pieces of music. Using words to praise these will be paying the artists a great dis-respect.. Hear hear!!

Mongolian Folk Rock:


Yanni : Rainmaker : A fine combination of the Didgeridoo with beautiful violin solos performed by Samvel Yervinyan. Yanni's passion for his music makes listening to this piece all the more interesting


Samvel Yervian and Syaki Katsuki in Yanni - The Storm. *bows in respect*. (Pay close attention to the harp)


Dr. L Subramaniam with Ambi Subramaniam playing at the gateway of India


Dr. L Subramaniam playing "The Spanish Wave"


Raghu Dixit : Kannada Folk Rock : Gudgudiya Sedi Nodo


Avial : Malyali Rock : Nada Nada


Enjoy!
H

Financing your great American dream... with Credit

I just finished watching an educational documentary: Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders.

The documentary weaves together stories of Americans who have practically spent their entire lives paying off hefty debts. Debts they took to finance their own  great American Dream : buying a house, a brand new car,  and stacks of beer cans, stashed away in the basement. Cans waiting to be pulled out for the next Superbowl game. You get the drift.

Maxed Out shares the stories of families who have lost their mothers, sons, and daughters. Stories of husbands who contemplate committing suicide to escape the embarrassment of filing for bankruptcy.

The observed pattern in most credit default stories is this :

1. Sign Up for free Credit Cards which offer extremely low interest rates on taking credit (Hey you get free T Shirts and Backpacks for every Credit Card you sign up for. Fine Print : You also agree to sign your life away to the bank in the fine print if you default on credit payments, which most Americans, reportedly, have and will manage to!)
2. Finance your Great American Dream by swiping your flashy VISA Platinum Card. Does it have your name engraved in it with golden letters?
3. Realize that you've been living beyond your means when you purchased the new washing machine, LCD TV, and the newest GM car with 12 different Credit Cards. You call up your bank and explain your situation to the personal banker.
4. Your personal banker is sympathetic and he claims to understand your problems. The banker is only happy to help you by extending your payment duration window. He increases the interest rate to 21% and then to 30%, and works out a deceptively small E.M.I of $130. You will end up this amount till you dont die, when finally the bank will agree to write off the "remaining" debt as toxic/bad assets. The bank may even go to the extent of downgrading your credit rating and engrave it on your tombstone (okay I am sorry for being so cynical of banks).
5. Still haven't cleared your debts? Embarrassed by the Debt Recovery agents calling you with threats of taking away your home, your car? Take a cash advance from another bank to pay off your debt. Did I just take a loan to pay off am existing loan? Yes :-).
6. Don't feel that you are in a state to pay off your loans anymore? File for bankruptcy, and hope it is a Chapter 7 Bankruptcy. You get cleared off all your debts and the creditors wont trouble you anymore. But sadly you can file for Chapter 7 Bankruptcy only every 8 years, use it wisely.
7. Banks realize that more consumers are getting away with not paying their dues by using the Bankruptcy route. MBNA, a top financer of the Bush Election campaign and now a Bank of America subsidiary, along with other banks push for stricter Bankruptcy Legislation Laws [BAPCPA]to prevent misuse of Bankruptcy Laws by American citizens.
8. The banks target sub prime customers hoping that they will default sooner than later on their home loan payments. The bankers will have their men ready to claw the houses from the sub prime customers. After all, real estate prices will only rise and the bank will be able to give out bonuses, from the profits made, to its executives who sold the Credit Default Swaps and bought Mortgage Backed Securities. The banks will then post about the brilliant profits they made in the last quarter - hey the American Economy is booming. Lets buy American treasury bills. 
9. Boom! Freddie Mac and Fannie Mae just dissappeared. Lehman just fell. The FED just bought 79% stake in AIG. What's this new Company that the Fed just opened : Maiden Lane II LLC. (Maiden Lane is the proxy firm through which the fed buys all the toxic assets of troubled banks.)

Is this the law of averages at work? The banks took away billions (trillions?) of dollars from Americans in form of their houses, cars which are valued at nothing today. Are banks being punished, I cant find a better word, for the sins that they committed?

The lesson to be learnt: Learn to use your Credit Card wisely. Use the rules of the game to your own advantage. Avoid buying goods on credit if you can. If you do take credit make sure you pay off your debt in the stipulated time. You, as an Indian, don't have the protection of Bankruptcy Laws.  Your personal banker will be just as sympathetic as the American Banker is. Heck, my banker calls me a preferred and valued customer of his bank. Don't get drawn away by the flowery language of zero charge cards, cheap interest rates and the likes. Banks anywhere in the world function on the Financial Innovations of the west. And these are innovations only for a few, those who work for the bank - they are not innovations for you and me.

And finally, an important lesson that I learnt from this documentary was that it was important to not want everything NOW. There is a reason why our parents don't have massive debts to pay off. They only bought what their salaries would allow them to buy. 

I'll work hard and buy the House, TV, and Double Door refrigerator when I can afford one.

The US Recession crashed my Stock Market Model

Hmmph!

Have you ever wondered why we wear formal clothes?

Hi

So this time I asked myself what is the reason behind dress codes and importance of dressing in formal clothing at times. Here are a few reasons that I was able to find out

Attention to Detail

It is not right to judge a book by its cover or to judge a consultant by his/her looks. Dressing up properly is about making the first impression. An impression of being organized and having some basic ettiquettes of living in a society. The point that I am trying to make is that some amount of stereotyping has come to be accepted in society. For example: a person must be clean-shaven or atleast must make sure that he appears presentable and not scruffy. It indicates that the person gives attention to a certain amount of detail when he makes sure that he has trimmed his beard properly or when he has ironed out the last crease in his trousers. This behaviour of the person can be extrapolated to mean that a person would pay a similar amount of attention to his other engagements.

Indication of following consistent practises/belongingness to a team

This point may mean that I am encouraging standardization which can lead to loss of creative and lateral thinking, however my intent is to talk about the more positive aspects. Lets say you are part of a client servicing team and you choose to dress up differently from the other team members. It might indicate to the client that there is a lack of team understanding and this particular person feels/thinks in a radically different way from the other team members [which might just be a very good thing!]. However many situations require strong collaboration and team work. In such situations having a formal/common dressing sense can be used as a leverage to pitch to the client

Connecting with your client 

Maybe you feel it is right to wear casual clothes to a meeting, and maybe you wont judge a person by the clothes he/she is wearing. But maybe the client who you are dealing with/want to deal with may think otherwise. In such a situation you want to send a message to the client that you understand his view point (even thought you may hate the client for his thought process), respect it, and are willing to accept it if only to win a deal. You are free to follow your own belief system when you are alone or when you are giving business to other people [maybe you are cynical about people who dress up in suits and would not give them business :) ?].

I am sure you are raring to roar out so many counter points to this, and I personally would love to break each of those points above. I believe it is about drawing lines, and some amount of acceptance and moderation and that is why the rationalizing of the need for formal attire.

Capping executive pay in the US

I have recently, quite late in my opinion, taken an interest in the US Recession and the policies, and solutions that the Obama Administration has been trying to devise to clear up *the mess*. It is interesting, although wrong on a conscientious level when many are losing jobs in the US [please don't get started that I dint care about people not having jobs in India etc..], to read about how things are shaping up in the US and to think how those movements will impact India.

This post revolves around some thoughts on the recent cap on executive pay to $500,000. Recently, Obama lashed out against the executives when approximately $18bn was given out as bonus to executives in Wall Street. Consequently, a rule has been passed which require those banks that opt to accept financial assitance from the government to cap the salaries of executives at $500,000. This move by Obama has been stated by Opinion Columns of leading newspapers as a strongly populist move. A move to tell those in the US who don't have a job that executives cannot be allowed such luxuries in times of a crisis and that they need to conduct themselves more responsibily in such sensitive times. True, and I entirely agree that everyone, and not only executives, should indulge less in wasteful expenditures.

I read two articles with opposing views. One by Evan Newmark [WSJ : Mean Street: Why Capping Wall Street Bonuses Won’t Work], and the other by Paul Krugman [NY Times : Bailouts for Bunglers]. To summarize, crudely, Newmark feels that capping exec pay wont work simply because Executives will find more lucrative opportunities in other banks, those that are not constrained by the recent cap, and that banks may become hesistant to accept Financial Assistance due to such caps, which will lead to the failure of the entire stimulus plan as outlined by Obama. Krugman, on the other hand, believes that tax payer's money should not be used to pay for the luxuries of executives who have led to the breakdown of the financial system in the first place. Both are correct and I respect their opinions. There is a gap however that needs to be looked at.

If you have time, take a look at this three part documentary about how the recession occured and its results.

The recession was largely caused due to the following actors:

1. Politicians who wanted to fulfill the dreams of Americans to own houses.
2. Credit Rating Agencies which assigned good credit ratings to citizens inspite of some individuals not being credit worthy.
3. Banks to loan out money and reducing the associated risk by securitizing the mortgage.

What is being missed in the picture, and what I appreciate about India, is that the citizens did not possibly consider the implications of taking such large loans. They just like the banks should have thought twice before applying for loans. In India, generally, the middle class individual would think a lot and analyze the practicalities of taking a big loan. We are not a society that lives on credit, but we live on the money that we earn. It is quite rare to see people shopping beyond what their monthly salary would afford them. Each individual who applied for the loan withouth thinking whether he could pay it back was equally responsible in creating this recession. At a microscopic level, there would be many tax payers who probably never took such hefty loans and have suffered, while those who took loans and have been let off, thanks to the stimulus package. It is not practical to listen to each story at this time, and quick decisions need to be taken to fix the rot. The fix is to heal the banks so that they can inject capital into the system and allow the industry to get back up to normal production levels. The financial system is such that banks *have* to be fixed.  It is the people who created the bank in the first place and now it is not right to view the banks as a separate entity which is entirely being blamed for causing the recession.

The Obama administration possibly used the bank executives as scapegoats to set an example. Simply injecting money into the system by helping banks is only a short term solution. However, in the long run what really needs to be analyzed is how this strong dependency on banks be reduced. As Krugman points out, the banks cannot be allowed to go scot free when they make a mistake. The system should be such that even if banks do screw up they incur personal losses and it does not deeply affect the entire economy. That is a very idealistic situation that I talked about, but that perhaps can be one of the things experts can research about and find a solution to. All said and done I still appreciate the move by President Obama, to send a strong message to Wall Street Execs to stop wasting money. But many questions still linger in my mind...

 Is cutting back on the executive salary really a solution for fixing the recession? Or is it just a means to send a message to the American Junta that the president of United States sympathizes with it? When the citizens of America had a part to play in the recession then why should tax payer's money not be used to fix the problem? Why should it not go to those executives who are also helping to clean the muck in such troubled time?

I write this post as a complete non-expert with possibly many gaps in my own understanding of the situation. I'll appreciate your views about my analyses.

Hemant

*Later Edit : A friend ranted with some counter arguments and fixed some knowledge gaps in the post above. You can see those comments here : The Blog Where you have no choice but to bookmark*

On the US recession, its impact on India, random pictures, and music that you might appreciate

These days I am at Deloitte, Hyderabad for a two month internship. I am part of the Consulting/Technology Integration at Deloitte, Hyderabad and I will soon become a Business Technology Analyst (fancy title right?). We lovingly(and formally) call this off-shore center Region 10 (god help you if you imagine a basement full of consultants in black suits roaming about - we have a nice office with lotsa sunshine pouring in through the windows) and we are a part of Deloitte - US firm. R10 is fantastic, with the exception of the food which is  invariably cooked with a healthy dose of curry leaves, and dried lal mirchi most of the times. Good positive, self-motivated, and highly energetic people form the workforce here. My tales in Hyderabad are too boring and I find no reason to discuss them, although some may believe that discussing about discovering a nice juice shop at 12 in the night, while you are stranded and have almost nowhere to go can be interesting.

This part of the post is intended, mostly, for those who are not aware of the on-shore/off-shore model and contains my thoughts on one way in which the US recession will hit India.

The economics behind India's IT Success [The Blended Rate and the On-Shore/Off-Shore Model]: 

So as I mentioned before India is a BIG offshoring location. The hourly rates of Indian and American (not to generalize) vary drastically and it is much cheaper to get some portions of the work done in India. So work that need not be done at a Client Location is mostly/and is preferabbly off-shored to, as you rightly guessed, off-shore locations. Besides India,  some popular off-shore locations are : Brazil, Mexico, Argentina, Germany, Spain, Italy, China. 

This takes us to the concept of blended rates. Suppose a US consultant charges $300/hour and the corresponding rates for India are $30 then it makes sense to have a mix of Indian and American consultants coordinating on a project. The average hourly rate, most CAT aspirants would use Alligation to calculate this rate, is called the Blended Rate and is lower than the rate when only US consultants work on an engagement. 

The availability of cheap labour, combined with people having the right skill set, and availability of supporting infrastructure have been some of the reasons why India has been a successful off-shoring hub. Most big IT firms such as Accenture, IBM Global Services etc have set up Global Delivery Centers in multiple Indian locations. 

[Off-topic]

An advanced, and distributed form of the on-shore/off-shore model is called the Global Delivery Model. If you have taken a course on Distributed Computing then you will understand the concept of a Distributed On-Shore/Off-shore model. In essence, the organization has off-shore offices situated in multiple countries. The capabilities and expertise of different offices are leveraged all at once to deliver a solution to the client. Sounds easy right? Theoretically yes, but strategically it involves analyzing the problem from a lot of angles. I will probably end up writing throughout the night if I get into the nitty-gritties of the Global Delivery Model.

[/Off-topic]

So now that you have some background on the blended rate, I can perhaps come to the main point of the post. How does the current recession in US impact India and what are the lessons that we can learn? I do not want to sound like an expert, and what I am going to write is well understood in the industry. I only to hope to provide a simplified version of the complex talk that goes on...

So what will result in the success of an off-shore office? Availability of work. Till the US Office has work to off-shore the off-shore office will keep itself busy and its employees will be an asset to the parent organization. The moment employees dont have work, and just visit YouTube, they become a liability for the organization.

So essentially India has not really felt the full brunt of the recession for 2 reasons that I outline below (there are obviously more reasons that I am not even aware of):

1. A lot of Indian IT firms are big players in infrastructure maintenance and have long term Application Maintenance Contracts with foreign players - This means that whenever the user has an enhancement request/bug report it is the the indian office that gets on the problem to fix it. Such bug/enhancement support is required round the clock and it is just not feasible for clients to break the contract mid-way.
2. Project are already being executed - Many projects would have been started even before the recession struck the US, so those solutions have to be delivered to the client and the work keeps the off-shore locations busy. 
   

Now the problem : The project pipeline, that is new engagements, is not being filled at the old rate. That means potential clients are backing off from making large deals simply because they are too scared to invest money at present (The root cause that is exacerbating the recessionary situation). So in some time there will be no work that can be off-shored to India. Employees become a liability... I dont want to paint a negative picture and this is just a hypothesis, and I strongly hope it remains so.  That is the reason, I am guessing, why some experts said that India will face the full brunt of the Recession in the second half of FY 09.

Are there any solutions?

Yes, the strategy is called diversfying the locations that Indian vendors serve. By that I mean that Indian vendors should have a healty mix of clients from all over the world and not only US or UK. In economic terms it means that India, and the Asian market at a larger level, needs to decouple itself from the rest of the world. In other words, even in the age of globalization it needs to be self sufficient and not overtly depend upon foriegn clients for business. By diversifying the locations that Indian IT vendors serve they will be able to minimize their risk in the market.

To sign-off this post on a lighter note, I am attaching a few pictures that are close to me.

So here goes:

I will try again, when it is time.

Lucky to have seen the power center before its collapse? The image above was taken on August 24, 2008

A nice friend, and colleague, from Deloitte picked Crocy from the market. Crocy likes to eat anything he can get his mouth to.

Music that you might appreciate:

1. The Story - Brandi Carlile
2. How we Operate - Gomez
3. Cosy in the Rocket - Psapp
4. Carnival of Rust - Poets of a Fall
5. Late Goodbyes - Poets of a Fall

TV shows that you might like:

1. Grey's Anatomy
2. Scrubs

Both are medical dramas.. oh well!

Enjoy,

Hemant