"The King of Pop" is dead

Michael Jackson-"The King of Pop"- is no more. Newspaper reports suggests that he died of cardiac arrest on Thursday the 25th at L.A. Whether persistent use of painkillers and drugs had any effect on his death is a matter of speculation and it will be sometime before the facts come out.

His was a story of rags to riches and possibly culminating in financial troubles towards the end. As a child,by his own admission, he was at the receiving end of "child abuse" by his father. Strangely enough, in his later years he was to be embroiled in "child sexual abuse" case from which he was acquitted.

He started his performance when in the early teens with his siblings in "Jackson 5". Later he broke away and opted for solo performances as people spotted his enormous talent. Albums came in plenty with "Thriller"(best selling album of all time), "Billie Jean", "Beat It" etc..An entertainer par excellence, his "moonwalk" on stage would send millions of fans into delirium and frenzy. But fame and money came at a price. Stardom could never give him happiness. He was in his own world with a strange and unexplainable fear. Health and stress was taking a toll and he took to drugs and painkillers.

His image took a beating on alleged "child sexual abuse" and towards the end had to sell his house to partially overcome financial problems. He was planning for one last tour of London during early July09 where he was to have given fifty concerts. But death knocked early to spoil the party.

Michael set a trend like no one else . An icon by any standards, he redefined music to the world like never before.

Beware Australia, thou shall be the loser

Australia has been a country where racism has been always simmering within for many years now. Asians and Indians have been at the receiving end but what has happened recently to the Indian students is deplorable. The month of May 09 has seen several incidents of brutal assaults on Indians. If a foreign tourist is raped or robbed in India, the Indian media highlights the issue to such an extent that proper attention is given to rectify the deeds. However, one finds the Australian police, media and even the Government is underplaying the dastardly events that have happened to the Indian students. It is abundantly clear that these are racial attacks by a bunch of hooligans and thugs and the Indians are singled out. It is shameful that incidents of violence happens in public places like trains or railway stations and the public are mere passive onlookers. The gang is rejoicing and celebrating this as " Indian hunting month". Under these circumstances, it is shocking that the Australian authorities are treating these as "one of those incidents" and putting the blame on Indians being "soft targets".
The Australian government is more interested in preserving their "tourism image" and the fund flow to their educational institutions. There are approximately 100,000 Indian students in Australia to further their studies and they cough up Rs. 20,000 crores( Rs.200 billion) as their tuition fees and living expense. It is high time the Australian government takes sterner measures against the perpetrators of violence and ensure such incidents do not recur. Else, there won't be any takers for the courses that their Universities offer. They shall be the loser. A strong campaign is now going on in India not to go to Australia for higher studies thanks to the racism being perpetrated by some gangs there.
The Indian goverment is bringing a lot of pressure on their Australian counterpart. The sooner they bring about a permenant solution, the better it is for Australia. People talk about human rights violations. The western world act like big brothers to point out flaws in human rights violations in India, China and the developing world. But not a whisper is raised when such things are happening in developed countries like Australia. Different rules for different people. If this is not a sham, what is it?

LTTE Supremo Prabhakaran dead

It's official now. The Sri Lankan Government has confirmed that the LTTE Supremo Velupillai Prabhakaran has been shot dead. With his death the final frontier has come down and the LTTE has been flushed out. The Sri Lankan army was bent upon wiping off the LTTE from the face of their country.In the process lots of innocent Tamil civilians lost their lives due to indiscriminate bombings. Lots more have been rescued but what is more important now is to see their rehabilitation.

LTTE was a terrorist organization. Even though they started as a product of the Tamil problem in Sri Lanka, they lost their way down the line in their demand for Tamil Ealam. The leaders of the LTTE promised their cadres the moon and in the process the pressure mounted on them.It became apparent that there could not be a negotiated settlement.

The war is over but for peace to return, the SL government will have to find a political settlement for the Tamils.Without this, the government will give governance a go by.The sooner this aspect is sorted out the better it will be for all parties concerned.

Indian voters give thumbs up to Congress

The biggest democracy in the world-India- went to the polls and gave a clear verdict for a stable government. 350 million people cast their votes and much against the predictions of the psephologists, the voters gave thumbs up to the United Progressive Alliance( UPA). The voting was conducted over five phases through electronic voting machines and the results were out in a flash on the 16th May.

In the last UPA government, the left parties( communists) were the stumbling block for any reforms. The voters this time around probably realized this and gave the present UPA( with congress being the main party & without the left parties) a clear mandate.The congress can celebrate the verdict but along with the victory comes a lot of responsibilities. The Indian public would now expect the government to go ahead with its reforms and take the country forward.

The immediate areas to be looked into would be Infrastructure development,handling of the huge fiscal deficit, Rural development, poverty alleviation through job creation and skill development. The government will have it's hands full but also has a great opportunity to prove it's worth.

IPL gets underway in South Africa

IPL T20 cricket-Edition II- kicked off in the Rainbow country South Africa on the 16th of April.Funny that the Indian Premier League had to be played outside of India. Can anyone imagine Wimbledon being played in, say, India? But, considering the fact that the dates for the "slam bang" version of the game clashed with the Indian polls,the security arrangements for the elections obviously took precedence over IPL.

Full marks to the IPL commissioner Lalit Modi for making all necessary arrangements in three weeks time to shift the tourney to South Africa. The host country also deserves full praise.The response to the tournament in South Africa was fantastic.The atmosphere was carnival and the players were taken out in motorcade in Capetown. These were superbly organized and so was the opening ceremony with the African drum beats and the fireworks.

The initial matches have not evoked that much interest in India. Maybe because the "emotional connect" was missing but more so due to the poor weather conditions curtailing even the already curtailed version of the game. Also,some funny innovations have been introduced to the game which breaks the momentum, eg, the seven and half minutes " strategy break" after 10 overs is a big sham. Most players have objected to it and rightly so. This break is mainly created for the benefit of sponsors who can use it for TV ads for product promotion.

I hope that the matches get tight and have close finishes. That would enhance viewer interest and the TRP ratings. There is still a lot of matches to go but from what i have seen from the early games, my pick for the semi-finals would be Chennai, Mumbai, Delhi and Deccan. My winners pick would be Mumbai. I believe they have the most balanced side.
Lets wait and watch. we will know in a months time.

Polling gets underway in the most populous democracy in the world-India

The first phase of the polling to nominate a party at the centre has come to an end today. By the time the other phases of the polling get over,it would be another month. There is a definite sense of uneasiness among the leading parties. Broadly there are three fronts in the fray-The United Progressive Alliance(UPA)with Congress as the main party,The National Democratic Alliance(NDA)with the BJP as the leading party and the third front comprising the Communist parties and Regional parties.

Regional parties are becoming stronger by the day and are likely to be the King makers in forming the Government at the centre.The first phase of polling has seen very poor voter turnout. Whether it is because of peak summer or a general apathy of the public remains to be seen. But the voters are getting fed up and frustrated with the parties for how little they have done or achieved.

I am pretty sure that none of the three fronts are going to get an absolute majority and it will be a hung parliament. But come mid May when the results are announced, one can see frenzied activities among parties having parleys to tie up an alliance. Individual parties would jump from one front to another to piggyback with the possible ruler of the country. Shame, principles and policies have no place in politics and shuttling to and fro to gain and lend favours are the norm.

With so much of "horse trading" likely to go on after the results, one hopes to have a "stable" government.

41 years victory drought in New Zealand ends

Dhoni's men did what no other Indian cricket team did for the last 41 years in New Zealand( NZ).Yes! Dhoni's team went, saw and conquered the lion in it's own den. Team India won the one day series 3-1 and also won the three test match series 1-0. It could well have been 2-0 had not the rain Gods taken pity on NZ.

NZ was always a nemesis for the Indian team. The cold and blustery wind and the seaming pitches were always a matter of extreme discomfort for the Indians in earlier years. But the present team didn't carry any baggage of the yesteryears and went with an attitude to win. True, the pitches in NZ this time were more like sub-continent stuff except in Wellington where it was cold and gusty winds and the NZ team looked like a 'work in progress' side.But our batsmen and bowlers did their part to perfection in grinding the opposition to the dust.

Team India is well on it's way to staking a claim for the No.1 spot in world cricket. All they have to gaurd against is a feeling of complascency. Under " captain cool' Dhoni, one believes that the No.1 spot is not very far off.

Best Wishes

G-20 agrees to regulatory crackdown

The much awaited G-20 came and went by. There were lots of apprehensions that the divide between U.S.A and the EU on the methodology of economic stimulus may derail the Summit. However, saner sense prevailed and with a lot of behind the scene activity and persuasion, an effective agreement was dished out.

The world leaders agreed on stricter limits on Hedge funds, Executive pay, credit-rating companies and risk taking banks. They also bolstered IMF and offered cash to revitalize trade to help governments tide over the economic turmoil. More than $ 1 trillion was pledged in emergency aid to cushion the global economic debacle. This is apart from the $5 trillion already planned by nations as stimulus package till 2010.

The rules of capitalism are being rewritten where governance and regulation are the watch words rather than blind speculation and non-transparency. Tax haven nations might be a thing of the past or they have to be transparent in providing information. The G-20 have vowed to” name and shame” nations resorting to protectionism.

One hopes that with these measures and much more to follow in the months to come, the economy will slowly but steadily limp back to normal at least in 2010. Free market per se is welcome. However, greed coupled with pure speculation and irrational exuberance is a sure recipe for disaster. People seem to have realized this now and it is fondly hoped that the mistakes committed by the developed world is not repeated again.

Terror hits Cricket

The dastardly act of attacking the SriLankan cricketers poses a serious question whether International cricket will take place in Pakistan at all hereafter. Cricketers world over are shaken by this act of terrorism in Lahore, Pakistan. It was sheer providence that the SL cricketers escaped with minor injuries but the whole lot looked shaken and terrified by what hit them.

India was supposed to have gone to Pakistan to play cricket during January but the Indian Government rightly decided to call off the trip after the Mumbai 26/11 incident. It was clear that security measures leaves a lot to be desired in Pakistan especially when the State doesn’t seem to have control. The Taliban and allied forces pose a grave threat and the present Government in Pakistan doesn’t seem to have a clue in tackling such a situation.
The Government in Pakistan will have to wake up to realities and act tough lest they lose face with the International community. Terrorist camps and organization in Pakistan will have to be erased and terrorism should be nipped in the bud. The proximity of Pakistan poses a serious threat to India especially with the freewheeling terrorist and organization. One hopes that the Pakistan Government realizes the seriousness of the situation and act accordingly and swiftly to wipe out terrorism in the area

Who says Satyam means "Truth" in Satyam Computers?

Satyam is a sanskrit word meaning "Truth". When the erstwhile chairman of Satyam Computers, Ramalinga Raju, made a shocking revelation that for years the company's accounts have been fudged to the extent of Rs.7000 crores(Rs.70 billion), Brand Satyam came crashing down in the corporate world and "Truth" got brushed away and buried deep in the annals of Satyam.

Raju in his letter states that except he and his brother who was the M.D, no one else was involved in the scam. This is too simply stated. A scam of this magnitude looks impossible without a coterie of people involved. The CFO has to be a party and it is naive to believe that the Auditors-Pricewaterhouse- could be kept in the dark for so many years.
The Govt. will have to put an Administrator and a team to fully go into the Books of accounts. The interim team's(recommendd by Raju) financial powers should be forthwith removed and they should only take care of the client process.

Whether money has been siphoned out of the system will have to be looked into. There will be a lot of legal liabilities and a severe erosion in the credibility. Hence, it becomes necessary to expedite the process of unearthing the facts and to roll out action plans for normal functioning. The employees of Satyam would be going thro' hell. It is imperative that the new team takes care of their interests.

One hopes that this is a one off incident in the corporate world. But, it may be foolish to think so. Lot more regulations will be in the offing to prevent such scams and ensure shareholders interests are protected. One thought would be to have a peer audit. However, one should not forget that too many regulations would also create Red tape which is in no one's interests.

The guilty should be punished and sent to serve in jail. It is such punitive measures that can act as a deterrent.

The year 2008- A reflection

Another year has gone by and the way the year has panned, most people would be happy its over and done with.More often than not, US takes center stage for new products and innovations. So it happened this time too. Only thing they will be remembered for all the wrong reasons- the sub prime crisis, the fancy derivatives churned out by the so called "whiz kids" of management- spelt doom for the economy not confined to the States but to the whole world.Big names like Lehman brothers, Washington Mutual, Meryl Lynch folded up and others like AIG, Citi bank and the Auto giants virtually touched bankruptcy and had to be bailed out with Government doles. Their shares have plummeted so low that they have become worthless papers.

In most world markets, the secondary capital markets hit a peak by Jan 2008 and also lost between 60-70% market capitalization in 7-8 months.The US had its worst holiday sales in five years, consumer confidence at a 41 year low and unemployment at a 15 year high. Clearly in recession for the last one year but it took the government till september2008 to say the dreaded 'R' word. The whole world is reeling under this turmoil.

This is not going to be a short phase of recession but a very painful one. It might take the whole of 2009 and extend to 2010 before confidence can be restored. China and India would lead the recovery during this troubled period but ultimately US will have to kick off to bring the world trade in order.

The year also witnessed one of the worst terror strike in Mumbai on 26/11. Makes one wonder where is the value system heading to? The year 2008 is better forgotten. The year probably showed us how we should not manage things.

The only redeeming feature of the year would come from the sports and games arena. The Beijing Olympics was a runaway success and showcased to the world the Chinese supremacy. A Phelps or a Bolt created history by achieving what many thought as impossible.

India winning the inaugural world 20-20 cricket and gaining ascendancy in test cricket by beating the Aussies by year end. The IPL 20-20 cricket becoming a huge success which could turn cricket on its head like the "Packer" series.

Viswanathan Anand winning the world chess championship and sharp shooter Abhinav Bindra winning the only gold ever for India in an individual event.It was also Spain's sporting year. Nadal dethroning King Federer from the No.1 spot in tennis and also winning the Olympic gold in the singles. Spain also conquered the Euro 2008 cup and won the Davis cup finals. Yes, sports and games were the only silver lining in an otherwise disastrous year.

Hopefully, the world would have learnt from all the mistakes in 2008 and not allow it to be repeated. That if it happens, would be the only positive fall out from the year gone by.

Diwali 2008 @ VT - Archana's dance

Part of the Diwali function at Virginia Tech during November 2008. My daughter Archana was the Cultural secretary of the Indian Association and was the key figure in conduting the Diwali celebrations.
This dance is a typical Kerala dance normally performed during the "Onam" celebrations. Archana choreographed the dance.
Very difficult to spot persons by dress as all have similar sarees. However, you can see Archana( with the red blouse) occupying the front row and in the centre most of the time( near the girl with the blue blouse in the initial part of the dance)

"Mumbai terror" aftermath- What do we do next

The dust is settling down. But the heart still bleeds. There is a mixed feeling of anger, frustration, helplessness, and insecurity. There is a direct hate towards politicians for their ineptitude, insensitiveness and their “promise now- forget later” attitude. But these feelings, however natural they may be, will not prevent recurrence of such attacks. Whoever forms the Government, these things will not change. We have to demand change and change our attitude and outlook as well.

We need a paradigm shift in the way we as citizens think and act. For far too long India and her people has been very tolerant. We are a nation who always reflect and take pride in our culture, tradition, our soft attitude. We accept corrupt people and we offer bribes, we tolerate court cases which go on for years, we accept people breaking queues. These are what I believe is internal terrorism which erodes our value systems. We have always believed these as part of our normal daily process. Well, they are not. We have allowed them to be and we are responsible for it. Let’s own it up. Let us show our collective anger against these also so that corruption, indiscipline, laxity in judicial process etc. are rooted out of our country. Ironically, this grave tragedy has provided us with a window of an opportunity to unite and eradicate all the above social maladies. Let us also correct ourselves when we point fingers at politicians.

Let us all take a common resolution and oath that 1) we will not bribe and we shall not tolerate corruption at any level. 2) We shall respect rules and not break lines. 3) We shall demand fair judgment to be delivered in reasonable time.

This is the time when we should move and make these changes happen. Else, we will again get into the usual rut and allow things to drift. This alone can change the fabric of our society. Only then can we become a strong and a united nation which can face both internal and external challenges.

The anger in the aftermath of the “Mumbai terror” has had an unprecedented effect on our politicians. The collective energy created by this anger has for once made our politicians scared of our citizens. They are now aware that nothing short of action is going to satisfy the people. However, knee-jerk reactions are not the answer to the problem we face.

What we need is a clear and concrete action plan from the Government with timelines and milestones. These action plans should be categorized as a) immediate, b) short-term, and c) long-term.

Action Plans:

a) immediate(0 to 30 days):

1) Remove people from posts who are directly accountable and those who made insensitive statements. (This is partly done as I write but more will have to follow. This action is symbolic and essential but not enough by itself).

2) Collect info and evidence on perpetrators. (As per the Government and the media reports, the detailed evidence collected points to elements in Pakistan).

3) Provide the evidence to the concerned country asking them to take action in closing down terror training camps and handover listed persons who are fugitives from Indian justice.

4) Simultaneously, get global support by providing evidence. Global support should also include targeting terror camps incase the concerned country doesn’t cooperate. There is precedence here as U.S.A has already targeted terror camps. However, a lot of tact, diplomacy and applying global pressure are important as the neighbouring country is a nuclear weapon country and the worst situation would be when the terrorists get hold of the nuclear arsenal.

5) Make a clear statement of intent (details will form as part of “short-term” plans) to improve equipment and facilities to coast guard, National Security Guard (NSG) and other relevant departments.

b) Short-term (0 to one year):

1) Follow up on the "immediate" plans.

2) Depoliticize departments like police and intelligence wings like Research and analysis wing (RAW). Make this a purely professional outfit.

3) Create a structure where different departments don’t act as “silos” (e.g.: Navy and coast guard). Information flow should be smooth and clearly define responsibilities, accountabilities and chain of command.

4) Study the requirements of up gradation in equipment, infrastructure, technology and facilities for coast guard, NSG and other relevant departments and provide resources at once.

5) Create a Federal intelligence agency for acting against terror. Simultaneously, train and improve skills in police force to handle terror. A group of the trained people at some stage can be brought under the Federal agency.

c) Long term (one to two years):

1) Should move into a presidential form of government (in the lines of U.S.A).

2) Cabinet and Ministers need not be politicians and preferably should be experts in the respective fields.

These are my suggestions for my countrymen and for the government. It is my strong belief that if we do this we could move forward with our head held high.

These suggested plans are by no means exhaustive but are the salient points. I am open for suggestions from anyone who would like to take India forward. People who think there is substance in this blog, I would request you to share this link with all your friends so that we can formulate some meaningful action plans.

Remember, let’s not lose time. Let’s move and make a paradigm change to propel our country where the citizens are secure, “ actually free “ and where others will look up to us.

Jai Hind

War against terror in Mumbai

Terror struck Mumbai again on the night of 26th November 2008 and lasted for 60 hours before the last of the terrorists were killed in fierce gun battle. 200 people killed and more than 300 injured. These counts are certainly bound to go up once the places are sanitised and the final figure comes out.

It is not as if Mumbai has not witnessed terrorist attacks before. The 1993 attack and the serial blasts in trains in 2006 are still fresh in the minds of people. The earlier attacks were all blasts set of by remote control. However, this time the terrorists had come by sea in boats and then spreading to different places like the Taj Hotel, Hotel Oberoi and Nariman House in the thickly populated Colaba area. Mumbai was in siege and was a battle ground.

The Taj is 105 years old and is a heritage hotel. Those who have been to Mumbai would know the majestic presence of the Taj Hotel alongside the Arabian sea and right in front of the “Gateway of India” arch. On the 26th November 2008, this symbolic arch became the “Gateway of terror”.

The terrorists had opened fire indiscriminately inside the hotel killing innumerable guests and also had taken people as hostages. The collateral damage that could be caused to the hostages was the main reason why the operation took so long. The Army, National security guards, police and firemen had done a superlative job and in some cases sacrificing their lives in the process to save others. The Nation salutes them and their heroics. The heart bleeds for all the families who have lost their near and dear ones..

India has faced the brunt of so many terrorist attacks. After every attack, the politicians talk big using rhetoric and clichés saying that they will crush terrorism and punish the guilty and then it’s all forgotten. “Enough is enough”. Stop talking and start acting. It is high time the Government and politicians become accountable and answer the citizens. Providing security to the people is the paramount responsibility of the Government. Let’s act and evolve concrete steps to put an end to this terror.

There goes "free market trade"

The last blog I wrote was on the last day of 2007.So many things and events have happened since then that has turned the world on its head. The most noticeable is the Global financial crisis and for the first time the election of an African- American to the White House.

The financial crisis seen now has never been felt before in this enormity the world over. The great Depression of the 1930’s was severe only in America. The world was not that integrated then nor was it seamless and hence the storm was net felt throughout the world. Now with no trade barriers, the shock wave spread right through the world. Like the Iraqi war fiasco, the credit for this global turmoil should be taken by the U.S.A.

The last eight years has seen such a shoddy administration in Washington that a lot of people would be happy to see the back of Bush. Greed coupled with no financial regulation is a sure recipe for doom. This is exactly what happened when the interest rates were brought down and held to such a low level by Greenspan and property prices shot up.

The so called whiz kids in financial management assumed that individual’s income would keep going up and hence repayment of loans would become easier, the Real estate bubble will never burst and the economy will never collapse. Fancy financial instruments like collateralized debt obligation (CDO) were evolved and traded putting more pressure on banks and Mortgage houses to extend loans without verifying the financial standing of the borrower. The so called Ninja loans (no income-no job and asset) became a routine thing. When the borrowers failed to repay the loans, the chain snapped and the bubble burst turning all the CDO’s to worthless papers. From a state of “irrational exuberance” in October 2007, the world has now come to a state of “chaotic pessimism”.

U.S.A, the great free market champion, was in panic mode. A $700 billion bailout plan which included buying Bank’s equity was put in place. This virtually amounts to part Nationalization of Banks and insurance companies like A.I.G. When South east Asia went through a financial crisis in 1997, the International Monetary Fund (IMF) which is the financial mouthpiece of U.S.A, laid conditions to South Korea and Indonesia that loans would be given only if the Government doesn’t bail out banks which are inefficient and should allow them to die. When it happens to the “so called free market country”, the rules are different.

Free market trade or free market capitalism is good provided it is done with proper regulation and supervision.It is high time countries understand that a “watch dog” regulator is essential. Financial checks and balances should be put in place so that speculation of this magnitude doesn’t recur. Judicious regulation in place is a must for trouble-free financial transactions.

Let this be an eye opener to all and especially to the powers that be in the Washington corridor

Wither 2007, Welcome 2008

April 2007 saw the massacre in Virginia tech campus by a gunman on the rampage killing 32 people before shooting himself to death. The year ended with the assassination of former Prime minister of Pakistan, Benazir Bhutto. However, in between these two tragic events, the world saw China continuing to grow at 11% with India following with 9% GDP. Most world index ended in a positive note except Japan's Nikkei. Apple brought out its IPhone amidst much fanfare & Nintendo launching its virtual reality game of Wii which was a run-away success.The year also saw a global credit squeeze triggered by the U.S sub prime lending problem. Most Financial institutions in the western world were seriously hit as their mortgage securities became worthless papers triggering billions of dollars in write downs. The panic caused the dollar to plummet & lost its bearings against most world currencies. Crude oil jumped 58% during the year from $61 to $96. It's effect on world inflation would be felt in 2008.

In a nutshell, 2007 has been just another year for the developed countries but a strong performance by the emerging economies.

What do i see of 2008? U.S will be struggling most of the year to keep it's head above water.The Fed will be busy tinkering with the interest rates to stave off a recession. But the dollar would start strengthening from the second half when the economy slowly starts to unfold.My bet would be to buy the Financial stocks in Feb/March when they are likely to be at their lowest . Given a 2 year span, these should give good returns. On the political front, Democrats would win the Presidential race & one might well see a woman president for the first time.

China would showcase its economic power during the Beijing Olympics but may see a slowdown in the second half after the event. India would continue its upward march & sectors like, Power, Metals, Infrastructure,Banks & Capital goods would be the stocks to watch for.

Happy New year to all.

American football- A lesson for Management

My son is crazy about Football( American football). I keep saying it's a misnomer as they hardly ever use their feet in this game except for punting & kickoffs.He would sit in front of the TV all weekends glued to the game. I had no interest in the game & always felt it was too physical & so much of a "body contact" game. To me everything in the game appeared to be a foul as people ram against each other with their body mass of plus 250 pounds. But as i kept learning the rules of the game from him, slowly it occurred to me that there is a method after all. As days went by, i realized i was also getting hooked on to it.

As i kept watching, it dawned on me that there is a lot of Management learning from this game. As a matter of fact, most team games like soccer,cricket etc.. have something to offer to the Management Gurus.

1) There is a clear shared vision among the players in the team- to Win-. That brings with it the passion & commitment which is there for all to see in their body language.

2) To achieve the goal, there are strategies put in place. The quarter back along with the coach plans out each play & all the players are made aware.

3) Each member of the team knows what is expected of him & hence Role clarity is fully understood by all.

4) Flexibility & interchangeability of positions happens seamlessly without any effort & rancour. This is very important to achieve a common goal & shows teamwork.

5) Rewards & recognition are instantaneous: when a quarter back makes a great pass, or a wide receiver takes a catch or when a touch down is effected, the appreciation & applause from the crowd is spontaneous. So is the joy from all the team members. This is a strong motivation for people when recognition is immediate & it drives them to perform better.

Diwali 2007 @ VT

Archana's dance performance during Diwali celebrations in Virginia Tech in Nov 07. She did the choreography. She is wearing the blue dress.

Fed rate- who calls the shots?

The U.S Federal fund rate is the rate that banks charge each other for overnight loans of Federal funds which are the reserves held by banks at the Fed. This rate is about 3% lower than the prime lending rate. Any change in the Fed rate will have direct implication on the lending rate to consumers & corporate & a bearing on the economic activity & inflation.

The FOMC(Federal open market committee) headed by the Fed reserve chairman is empowered to do the Fed rate change. But recent happenings in the U.S stock markets makes one to believe that the capital market has a profound influence in the decision making process of the FOMC. The markets factor the rate cut ahead of time & keeps climbing up leaving virtually a "Hobson's choice" for the FOMC.

Take the example of the October 31st, 2007 FOMC meet. The data showed inflation was at comfort level with less than 2%, economy grew by 3% for the quarter( the highest for the year), labour figures were healthy. Of course the sub prime mess & credit problems were a concern. But having made a 50 basis point cut in their September meet & given the economic data, one would have thought that the rate would be left unchanged. But in reality, the FOMC made a 25 basis point cut. The Fed in their beige book comments recorded that the decision to cut rates was a "close call". One can only surmise & read between the lines that the Fed played the balancing act. After all this, the market which had gone up prior to the Fed meet, tanked in November with news of more write offs from Citi group & other credit problems.

That brings us to the main topic- Who calls the shots?- the Fed or the stock market influencing the decision. Had the Fed left the rate unchanged in October, they could have probably left their reputation intact. The Fed's main aim is to promote economic growth & control inflation thro' monetary policies. Stock markets are a measure of economy & not the economy itself.

In defence of the Fed, one can say that they are in an unenviable situation. Should their decision precipitate a fall in the market, it is not confined to just the U.S market but has a cascading effect on the global markets. The fallout is huge & that always weighs in the decision making process. The pressures are enormous but as they say " when the going gets tough, the tough gets going". That's what separates the great from the good.

World economy & Emerging markets

The world is seeing a sea change in the balance of economic power. There is a clear shift taking place towards the emerging economies. Why do we say that? Let's look at the facts.



The world GDP is about $ 49 trillion (at market exchange rates) & growing at 4% in 2007. U.S is still the biggest contributor with 25% of the global economy at $ 13.5 trillion followed by Japan & Germany. However, the emerging economies contribute to 30% of the world economy at market exchange rate. If we consider the purchasing-power parity(PPP), then the emerging economies constitute more than 50% of the world GDP. On a PPP basis China & India would occupy the second & fourth positions in world economy. As against a growth rate of 3% of U.S, China & India are having a tearaway growth of 11% & 9% respectively. The emerging economies contribute to 50% of the world GDP growth, 80% of the growth in oil demand is accounted for by them & hold 75% of the world foreign reserves.


The emerging economies have grown 35% in the last four years from 2003 & in the same period the emerging capital markets have grown four-fold compared to only 70% growth of S&P index in U.S. Brazil market has gone up by a whopping 900% during this period & China & India have gone up by more than 500%(source: JP Morgan). Some emerging markets are showing signs of "altitude sickness". As i write this, Shanghai markets have dropped 20% from this month high. However, there are still no indications for a bubble burst. Brazil is trading at a forward P/E(price/earning) of 12.5, China & India at about 22 as compared to the U.S at 15.



The low risk markets in emerging economies are Taiwan, South Korea, Malaysia, Thailand with their P/E ranging between 11.5-14. Also they have current account surplus. India on the other hand has shown a lot of exuberance in stock market due to high liquidity. But 85% of foreign investment in India have gone to debt or portfolio management this year. Most of this is in speculative stock markets. With a current account deficit of 2% to GDP, India is in a precarious position if there is a flight of foreign capital. Having said that, the Central bank is doing an excellent job by being proactive in steering the economy with high growth & moderate inflation. China appears less risky with a huge current account reserve & a break even budget balance/GDP.

That brings us to the often asked question of "decoupling". U.S is still a huge economy. But the pace at which China & India are growing & there is no reason why they won't in the future, it's a matter of time down the future when the markets will decouple from U.S. If after 20 years someone asks you " when will U.S decouple from China & India", don't be surprised.