Long overdue :)

Madame BBB (pronouned Bey Bey Bey, as the French might) has tagged me. I believe in doing everything in the fullness of time, and thus have taken my time to respond.

So here are the rules:

First, the rules:Post 5 links to 5 of your previously written posts. The posts have to relate to the 5 key words given (family, friend, yourself, your love, anything you like).Tag 5 other friends to do this meme. Try to tag at least 2 new acquaintances (if not, your current blog buddies will do) so that you get to know them each a little bit better.

Family: No idea why I don't really write about my family! But I did once or twice. Here it is.

Friends: This isn't exactly about a friend, but more about high school and things past.

Me: This isn't going to be that hard. Most of the blog is about me and my rantings and whinings. For example.

Love: Some of my famed analytical skill has extended to this subject as well.

Anything I Like: This is pretty much my blog, and I write as I please about myself and my life. You really need to visit the Artic! Aren't you totally taken by this? Remember OTG?

PS: I think this tag come out over 2 months ago. I doub't if anyone even remembers.

Who do I tag? Everyone who comments on this post. Ha ha just kidding. That would drive away even my 2 commenters. No one I say. No one.

Chennai, London and other things

A week back, I did write this witty, sarcastic and amazingly funny blog post that just vapourized when I tried to post it because I had got disconnected in the meantime. Yes people, I was in India, like I currently am. Though some things like terrible internet connections never really seem to change, a lot else has.

• Privatized airlines. Jet Airways from London to Mumbai was great to say the least. On time. Good Indian food. Desi in-flight entertainment . A lot better than the American carriers (Delta, United, AA) that actually expect you to pay cash for your food on a 14 hour flight. Heard a lot about Kingfisher as well, from friends. Looks like Mr Mallya personally selected all the air hostesses.
• Cell phones. Everyone has a cell phone, some have two, and ads are everywhere. Whoever would have imagined?
• Construction. Everywhere. Flyovers, commercial complexes, residential flats … Lots of lending. Banks are competing hard to sell home loans. Many people are going to be very broke if demand slows.
• Prices. I think the official government inflation number of 6% is inaccurate to put it very mildly. If I were to not put it mildly, I will call it a blatant lie propagated by the political parties to keep the populace quiet. I would put the number close to 35% a year for someone living in a metropolitan city. A roadside meal that used to cost about 30Rs now costs 100Rs. An average restaurant dinner ends up running to around 400Rs PP. Auto fares have double over the last 2-3 years. Let us not even speak about real estate prices. It isn’t surprising that the IT companies have had to ramp up salaries by 20% a year to keep turnover in check. What used to be a 1.5 lakh a year job in 2003 now pays about 4.0 lakh. I shudder to think how the median Indian (rhymes doesn’t it) is coping.
• The traffic. I don’t know if it is just me, but the whole city appears to crawl during the morning and evening rush hours. A good alternative to driving down from Kalakshetra to Nungambakkam is to shut yourself in your garage with your car, turn on the engine, honk repeatedly to yourself, and wait for the end.

I have another week to go before I am back to my good old SSDD lifestyle. (Same Shit Different Day)

I shall now backtrack, and fill you in on the numerous splendors that have bedecked my life since I landed in the land of our colonial masters on the 19th of November, in the 2007th year of the lord, but before I descended upon the land of the sacred cow.

I think the biggest problem with London is the Colonial Hangover Premium (CHP) that debilitates it. Now, not many of you read random finance papers that proselytize on risk premia and investor utility, so I need to explain.

See growing up, in whichever city you might have, you had a Hyde Park or Connaught Place or Victoria Terminus or (insert name of dead British guy) Road. Or, if you are that type, you had visited a bar/pub that pilfered alcohol in the name of some person/place/thing from that exalted pile of mud (it keeps raining) in the Atlantic. When you finally grow up, you finally want to go and see what the fuss is all about, and pay the price. Ouch!

• 5 pounds for a tube ride in a system that is perennially delayed, overcrowded and closes at 12:30 am. Now that is better than spending 30 pounds on a cab ride.
• Tourists everywhere. I made the mistake of going near Harrods around Christmas. It took me 25 minutes to walk the 100 yards from the west exit to the tube stop.
• 400 pounds a week in rent for a studio convertible.
• 10 pounds for dinner on the wayside (60 pounds to make a meal of show and pretension)
• 40% taxes. What?! Where is my wage?! Government! Give me back my money!

Setting all the cribbin aside, London is a fun city. Firstly, unlike Chicago, it is a focal point for DLA’s (Desis Living Abroad), which means that there is a large contingent from university infesting the city. The museums look delectable, though I still haven’t done full justice to them. However, in all modesty, I am forced to admit that nothing can beat having, on a cool summer eve, for your perusal, a couple of wings of Picasso at the Art Institute. Desi food is plentiful and cheap, which keeps me happy and sated. However, the most important point that should guide any decision making process is that none of the bartenders have heard of (or would like to hear of) Miller, Budweiser or Coors.

Now, astute readers would note that this sporadic periodical was started on a blustery January evening, in the dank depths of a computer lab in Lyon, way back in 2004. It is now 2008, and I am back to Europa, though I always thought I had got dumped for good the first time around.

Labor day holiday

I had a nice 5 day break for Labor Day. Breaks are good. Most breaks are to a good extent characterized by fun and frolic. Mine was mostly confusion and mayhem. However, it was interesting. In the end interesting is what matters.

On Friday evening flew into Rochester, NY to visit my friend Arrvindh. We planned to drive down (or rather up) to the Adirondacks for a spot of trekking. At the outset, our plan was quite ambitious. We would set out from Rochester on Sunday morning, reaching Lake George in the Adirondacks by lunch. We were to join KP and Rajesh, who were driving up from NYC, and who would be there at about the same time.

After a shockingly early (atleast by my standards) Saturday night we set out to Lake George at the unearthly hour of 7 in the morning. I get a call from the dynamic duo at 8:15 informing us that they have just woken up. They were supposed to have left a 8:00am, to compensate for the 60 less miles they were driving. So, we kill time at a gas station, getting breakfast and set out again. Then at 9:30am we get another call. The front wheels of their car had just decided to part ways with the main body. The car had ripped through some spikes on the road. They were stuck at the New Jersey turnpike, waiting for the tow van. At this point, we decided to stop waiting, and drive on straight to Black Mountain, the hill we planned to hike up. We reach there at 2pm. We wait till 3pm, and head out. We shorten our trek and come back by 6pm. We find out from the departure register that the other two had arrived at 3:10pm. Bad luck. Why couldn't they have arrived 10 minutes earlier? This little mishap unleashed a chain of events of such fury and complexity that in ancient times the skies would have parted and demon lords would have wreaked havoc across the lands.

Since they left 10 minutes after us, they should arrive 10 minutes after us, we think. We decided to wait. Most deceptively simple arithmetic in real life usually tends to be flagrantly wrong. There was no sign of them at 7pm..7:30pm..8pm. I tried to call. I heard a phone ringing behind me. KP had bravely decided to leave his phone and wallet behind in the car. Brilliant!

Finally at 8:30pm we get a call. For some completely incomprehensible reason, Rajesh's cell phones had found reception. It turned out that the two had made a wrong turn, and were stuck 6 miles away, in the woods, right by the Lake. Notice that these are two nice Brahmin boys (very marriagable, to any girls who are reading this) who do their Sandhis every morning and take their coffee hot every afternoon at 4 sharp. Snakes and bears? Ayyo ayyo. It began to get chilly. I wanted to suggest that the boistrous boys should kill a bear, eat its meat and wear its skin as a coat.

I was ahead of myself. It turned out that there were some boats by the Lake. Though the occupants were quite intoxicated, they were not sufficiently enough that they couldn't call the Rangers. Rangers ride (glide) to the rescue. The poonaled payyas were loaded onto the boat and duly tranported to the nearest spot of land not inhabited by bears and snakes. Unfortunately, this spot of land was 50 miles away, it was 11 in the night, and we were driving a 2 seater. We did what we had to do (not really, but since we did it, one might as well take the credit). The two were parcelled into the back seat. I suggested that the one who had forgotten his wallet and phone should be put into the trunk, but my friend Arrvindh had been weaned on the milk of kindness.

Now the keen observer would note that if the wallet and phone were in a parking lot 50 miles away, so would be the backpack and clothes. Thus not only was my evening ruined, but my clothes were too (due to forced donations). So concluded my Sunday.

Monday was spent driving to New York City with Rajesh and KP. Arrvindh had decided to return back to Rochester. Such is the busy schedule of a Ph.D. student.

As is life, troubles tend to multiply. In NYC, not one, not two, but three friends bailed out on me. Is there something about me that is intrinsically undesirable? One was busy with work, another had a gf's birthday and the third had to visit parents in New Jersey. My moping was partially saved by Rajesh, who offered to continue to tolerate my existence in his apartment. His roommate Arun I found interesting, mostly due to our shared interest in coffee and tennis.

I found NYC to be too crowded, expensive and noisy. However, I did fulfill my newly found interest in Finance by visiting (externally) the headquarters of every major financial institution - Lehman Brothers, Morgan Stanley, Bear Stears, BlackRock, Citigroup, Bank of America etc. . The list is very long. Outside the Bear Stearns headquarters I tried to imagine which were traders who had lost a lot of money. Since I hadn't checked on the market that day, I let my mind run wild with all the things that might have happened. Maybe the market had crashed, and all these people were leaving, never to return. They looked that way anyway. I was to be disappointed, the market was up 20 points for the day. That was my Tuesday.

On Wednesday morning, after a late coffee (with Arun) and an even later lunch, I go down to Greenwich Village and Soho. Most overrated. I certainly wouldn't pay a million dollars for a 1 bedroom apartment there. I think NYC would be a good city to live in if you make a couple of bucks a year, and can afford a good standard of life. Otherwise it is all about small apartments, crowded trains, and long commutes.

What I do love about New York though is Central Park. It is the little patch of green and peace that counterbalances all the madness. All of New York comes there, be from Harlem or the Upper East Side. I saw Steven Tyler listen to a some roadside bums explain their decoration on a mosaic that said "Imagine", obviously a tribute to John Lennon. The running paths: I could run forever, what with the skyline in the background and endless stream of interesting people to look at. I wanted to run a quick 5 miles, but I hadn't brought along my athletic shoes.

I also love the Metropolitan Museum (Met). It is one of the most carefully designed museums I have been to, and trust me I have been to many. The arrangement of the Egyptian temple in real scale, as it would have been 4000 years ago, is something I have seen nowhere else. It also has a great collection of Roman and Greek artifacts. I was so enchanted that in my 5 hours there on Wednesday I barely managed to finish the Greek and Egyption sections. Very disappointing. It is something I have to get back at a later date.

Late on Wednesday, I take the bus out to La Guardia to catch the flight to Chicago. As luck would have it I forget the name of my flight, though I did remember the departure time. I have a harrowing and highly embarrassing time trying to figure out the name of the airline. Thus is too much choice. India is good that way - Air India and Indian Airlines. It was that way at least. Capitalism, competiation and choice have descended there as well.

I return home late Wednesday night, and head out to work on Thursday, my traditional hatred of Monday mornings temporarily shifted to Thursdays. All in all a good holiday, a lot to write home about.

Summer Update

Dont you find it funny that only after much of the summer has slipped away do you start thinking about things - the things you did, the things you could do but did not do, and the things you wanted to do but could not do. In any case, I had a good time, and look forward to the fall and winter. Winter however cold, wind swept and bleak you might be - I am not scared.

Interestingly, I did vigorously cram as much as I could into the summer because the winter is boring. If summer extended all year long (as it does in Madras), I am sure I would have planned out far less.

In other developments, the past few weeks have been quite the learning experience. As many of you may know, and may not know, there has been much tension in the markets. Spurious NINJA (No INcome Job or Assets) housing loans over the last few years are coming back to haunt many a lender. There has been many a default, leading to many a loss of money to those wise people who lent the money. Summing up, hedge funds who bought these loans have been blowing up left right and center. It doesn't help if you borrow 10 bucks for every buck that you have and buy stuff that then goes on to lose 50% of its value over 4 weeks. When a fund loses big money, it gets margin calls, and to meet these margin calls it has to generate cash, and to generate cash it has to sell other parts of its holdings that are doing just fine. So, the whole market crashes down because there is a mad rush to sell and get out of positions before they fall in value. It is like a game of musical chairs; when the music stops the last one standing is out. At times like these one is thankful that one is an Analyst, the lowest kind of life in the Financial pecking order. As an Analyst, you aren't really responsible for anything, and consequently get paid nothing. However, you do get a birdseye view of the proceedings, and observe all hell breaking loose without actually being tarred and feathered.

India Etc.

In the London subway, there are more escalators going up than down. Why?

Its because people trickle into a train station in one's and two's but exit all at once. The distributions are different. Cool no (yeah right!).

India has changed a lot over the last few years - it is finally competing in the global marketplace, international firms are taking opportunities within India seriously, creating jobs and pushing money into the country, and the standard of living has improved substantially for the middle class. (It can be argued that all this development has done little for the poor, the people who most urgently need upliftment. I agree to a good extent.)

India is the fastest growing market for mobile phones in the world. It is expected to have atleast a couple of hundred million handset in a few years. I do not doubt it. A mobile phone costs about 2500Rs over its 3 year lifetime. Thats less than 100Rs a month, or 3 Rs a day. Very affordable.

Median salaries have shot up over the last few years, atleast from what I have got to observe. When I joined college in 2000, just after the technology bubble burst, the best job on campus was with ITC. I think it paid about 6 lakhs. Then came McKinsey the super high-profile consultant job paying about 7. That was around 2004. At that time I thought the scene was good. I had no idea! This year I found out that Deutsch Bank recruited for their NY Office, paying 100k+USD. Lehman Brothers, Bloomberg, Goldman Sachs came as well. I know for a fact that this is beyond the range of most of those recruited even from the fancy pancy Ivy League schools in the US. (This heartens me much. Wait till some of the Princeton and Harvard schmuks I work with hear this. Ha ha. To get you to understand my antagonism, 2 of them actually asked me if I had failed my training exams.) Even if it is argued that these are just some numbers out in the tail, the median has gone up to about 5 lakhs as well.

I drove down Old Mahabalipuram Road the other day. The amount of development is simply awesome, inspite of the road being a total wreck.

Though I feel there has been a lot of real growth, there seem to be some signs of a speculative bubble. I am quite the novice, and might be wrong, but do allow me my opinion.

The first thing that comes to my mind is the self-congratulatory rubbish that is filling the media. They make it sound like the only direction prices can go is up. I saw this flash across on NDTV Profit :

40% of Analysts Bullish on the Market.

A little common sense will tell you that if 40% are thinking that the market is going to go up, 60% think that the market is going to stay put or go down. The latter would be the more relevant albeit unpopular piece of information.

Real estate prices have doubled over the last couple of years. A 2 bedroom flat in Kalakshetra costs about 1.5 crores. Thats about 400,000 USD. It used to cost about 70lakhs a year back. In a reaction to this, the Association of Industry(..blah) said something to the effect that this was just the beggining and there is much more to come. I am sure the Seths behind the chamber have quite a few flats to sell.

The whole thing smells suspiciously like the hoopla that surrounded the technology bubble. Though the dot com revolution indeed revolutionaized our lives, it was nowhere near what it was made out to be. It ended up making a handful few absurdly rich (through selling their stock at absurd prices), and very many poorer and much disillusioned. A similar phenomena is going on in India, I feel.

Much of the price increases seem to me to be fueled by speculative buyers - people who buy hoping to sell it for a good profit a few months later. It works like this. Looking at the price go up, many people feel bad on having missed out on the bonanza, and enter the market. This pushes up prices further. This increase attracts more people who want to make a quick buck, and so on, and so forth. Eventually, the prices become so absurd that even the moneylust deranged back off. The bubble bursts. The guy who bought last is the biggest (and poorest) fool. The investment banker from Goldman Sachs and Mr. Behari Singhania, the first to buy, and the last to sell, are left much enriched. (Its called the bigger fool theory. There is some good material on the subject by Robert Shiller, and Charles Kindleberger.)

I heard that Japan had this huge spurt in the stock and real estate in the early 1990's. All kinds of folks started speculating, and when the bubble burst, things got messed up. Japan has still not recovered in 2007. The Nikkei is less than half of what it was in the 1990's. The housing market in the US is also going through a similar blow up right now, after going up absurdly over the last few years. It looked quite invincible before shit hit the fan (atleast by how things were made to sound in the popular press.)

My point is that India is being made to look invincible, and like nothing can ever go wrong. Economic trouble in the US can shake up the IT and BPO industries, and make the money dry up pretty quickly. It is sometimes a little surprising to me how short the collective memory is. It reminds me of the Indian cricket team. All previous performances are promptly forgotten, and we root for victory in the upcoming match with breathless enthusiasm.