In an interesting article in the FT, Nassim Nicholas Taleb points out that while the rewards system on Wall Street incentivizes bankers who take risk, it does not have adequate disincentives to discourage a trader whose annual bonuses depends just on the returns he brought in during that period. So while the punt might prove unsuccessful down the line, the banker has already collected his bonuses for the year, and, at worst, only loses his bonus for the year when his long-term punt failed. So, while an entrepreneur lives and dies by the risks he takes (which is the general idea of capitalism), the banker takes the “free option”, so the taxpayer (in some form) is forced to cover the losses.

 

Three days and 350+ casualties later, it is still hard to find an opinion piece in a major newspaper that is anything but praise for Israel’s pounding of Gaza.

But those selfsame media outlets employ selective (and grossly untrue) reporting when covering the India-Pakistan conflict; reports on India are about a bellicose nation that is mounting its troops along the border with Pakistan, while those about Pakistan are of a peace-loving nation desperately trying to balance its commitment to the United States in the war on terror while having to protect its sovereignty from a bullying neighbor.

While Israel’s right to protect its citizens cannot be denied, it is worth pondering how much more effective its methods are, given the cushion of a well-oiled propaganda machine that India lacks.

 

First a video clip from Times Now.

You know what irks me? It is not that she (whose only real calling card is that she is somewhat remotely related to Aishwarya Rai) is dating him or anything. But that this report calls her a “popular South Indian actress“.

Reminds me of Koundamani yet again: “மூணு வீலும் ஒரு தார்பாலினும் இருந்தா நீ ஓனரா? படுவா, அப்போ டாட்டா பிர்லா-வல்லாம் என்னடா சொல்லுவீங்க?”

 

Paul Krugman, who writes a bi-weekly column in The Hindu The New York Times, has won the Nobel Prize for Economics. Mr. Krugman is a Professor of Economics at Princeton University.

Mr. Krugman received the award for his work on international trade and economic geography. In particular, the prize committee lauded his work for “having shown the effects of economies of scale on trade patterns and on the location of economic activity.” (NYT)

 

Yesterday, President Bush issued a statement that Congress should lift the ban on offshore oil drilling off the US coastline. The best reason he could think of for this was the 4-dollar-a-gallon gas. Immediately, Senator McCain, who is increasingly looking like George Dubya Bush the Third, concurred with the President and thought offshore drilling is the way Americans can be saved from high oil prices. While public opinion might be slightly drifting towards this stupid idea, Senator Barack Obama stood his ground on the issue, discouraging the old style Washingtonian pandering of Bush-McCain.

The New York Times effectively settles the argument with a furiously hard-hitting editorial that criticizes Bush and McCain for selling out to big oil companies, that are already basking in record profits.

 

… is a company sans pareil. (Here’s one reason why.)

 

The shocking nature of US foreign policy under George W. Bush has reached a new low with the Government’s decision to cancel Fulbright scholarships awarded to Palestinian scholars.

According to the report, the State Department reasons that Israel would not permit the grant awardees – seven of them – to leave Gaza. Ironically, Israeli officials contacted by the IHT have assured the paper that they would do their utmost to facilitate the students to travel and study abroad.

This exposes the mindless, even vacuous depths that American foreign policy has reached. The result of this stupidity is not just that the US is overlooking some deserving candidates, but also that the US is failing in its role as a mediator in the Israel-Palestine peace process. Rather the Bush administration is placing more (unnecessary) roadblocks.

P.S.: This stupidity has to end. But John McCain is only intent on continuing the policies of George W. Bush. Vote for Senator Barack Obama!

Update – June 08, 2008

The State Department has restored the canceled scholarships.

 

Jug Suraiya writes in The Times of India that it was the criminalization of drugs that killed British teenager Scarlett Keeling in Goa, and then puts forth an almost passionate plea to legalize drugs. He bases his arguments on two contentions (or facts). First, that drugs are less of a health hazard than cigarettes or alcohol. Second, that the legal system is spending an inordinate amount of time trying to enforce the drug laws.

As someone who has (thankfully) kept away from all three vices, I cannot throw in a personal angle in analyzing which of the three – booze, smoke or coke – are more injurious. However the sense that I get from whatever I have seen, heard or read is that drugs are more injurious. Suraiya, in his article, writes that there are studies to prove that the other two are deadlier, but does not cite any; therefore, and for a gamut of other reasons, I consider this argument unsound. I think drugs attack the central nervous system, and this is dangerous. Is this not one of the reasons Don Vito Corleone refuses to get into the drug business with Virgil Sollozzo?

To me personally, the argument about which is more injurious is as naive (the i should have two dots) as trying to reason whether a knife driven through one’s heart will be more dangerous than a bullet through the temple.

The second argument is borrowed from libertarians. Because it takes a lot of effort to enforce drug laws, the legal system cannot focus on other issues. So let us legalize drugs. Yeah, right! So if you wanted to put the lawyers out of business, the way to do it is to legalize all crime – drugs, prostitution, murder, theft… Come, let’s go kill a few folks, and then argue that because the legal system is paralyzed by the number of murder trials, it is better to make homicides legal. (If that were to be done, I would take first aim at Jug Suraiya.)

Back in my Infosys days, I was told that whereas solving a problem was important, addressing the root cause of the issue was even more critical. And then there is this argument that says the legal system should cop out before it is choked.

To create some sort of a social assent for this kind of stupidity, Suraiya says:

Though in the Indic tradition, drugs like charas are routinely used by sadhus and tantriks, and bhang is a staple of Holi.

Not a baseless argument; but definitely base. To look at tradition selectively just to seek out the vices of earlier generations goes against common sense. There were so many good habits and actions that the sadhus preached and practised. And to ignore all of that and just to hold on their negatives is foolish.

Suraiya’s arguments from the economic standpoint might be well-founded. But legitimizing substance (ab)use would only lead to more abuse. It is unfortunate that our world is so irretrievable that the best preventive mechanism we have against drugs is not our own sense of right and wrong, but the legal system. And if that barrier is also removed, we might, in the future, look back upon it as the time we let drugs flood our homes. And so, instead of reading about girls like Scarlette in the news, we would have to contend with them at home.

Let my country awake!

Mar 032008
 

Just as my Equities portfolio was about to get out the red comes a single-day 900-point fall that pegs it back into dark red territory. God have mercy on Dalal Street.

 

The republication this week by some European newspapers of the controversial cartoons depicting Prophet Mohammed as a terrorist (that caused considerable trouble a couple of years ago) reeks of intolerance, disrespect and sheer contempt for the feelings of other people. And for these newspapers to hide behind the comfortable veil of “freedom of speech” is a unique mixture of timidity and audacity.

 

The Bush administration is intent on pushing the economic stimulus plan to provide Americans some relief from the credit crisis, and also wean the economy away from a probable recession. According to the plan, taxpayers will receive a check for $600, and those not paying taxes will receive a check for $300.

In the heat of the primaries season, and possibly also due to the uncertain nature of the global economic situation, this plan has not had its fair share of debate airtime. While there are many who are sceptical of a seemingly hurriedly thought out package, they remain muted because really no one knows what will resurrect the economy.

I have two questions myself concerning the plan. First, and to me, the most important question is will I, a taxpaying non-resident alien, who has been in the US only a few months, also receive a 600-dollar check? If yes, I would greatly welcome the plan.

The other question is, what is the guarantee that people would not tuck this money away into the safe confines of their bank accounts, rather than spend it immediately, thus boosting “consumer spending”, which is what the architects of the plan envisage?

If the prevailing logic, that consumer spending went down in the past month because people cut down on their expenses because they were uncertain about the future of the economy, is true, then one really needs to call into question the presumption that a one-time gift of 600 quids would spur people to lavish themselves with purchases.

P.S.: That said, I am unsure myself how else this could have been done better. To ensure that people do spend the money, the money could have doled out in the form of store credits. But that would only heighten criticism of the Bush administration that it is after all only pro-big business.

 

CNN IBN reports that the Supreme Court of India has allowed women to ply the bartending profession. Shocking!

The “discerning reader” would be quick to label this writer as a male-chauvinist and someone mired in old, stupid ideas that stereotype the role of men and women in society. Welcome to the club!

As someone who looks down on drinking, I do not know what the fine art of bartending is all about. Maybe women have a special skill that men lack when it comes to mixing whisky, soda and water. So I commend the Supreme Court’s decision as it is based on the relative abilities of the two genders.

But then, all of us know / have read that while women, wine and willingness make an excellent combination, when the latter turns negative, the results are unpalatable. If people driving under the influence of alcohol are a danger to society, then so are they when next to a woman.

The usual feminist argument is “So I should not pursue what I like the most because I cannot trust a swine?” or “Men will always be men.” Yes, I agree. And from the next time, do not lock your house.

Reminds me of an episode of Kadavul paadhi, Mirugam paadhi from Vijay TV, where they analyze the movie Manmadhan.

Mirugam: “Indha padathula Mandira Bedi, Yana Gupta ellaam super-a, thathroopam-a nadichirukkaanga!”

Kadavul: “Dey, Chendu. Avangala ellaam paththi appadi pesa koodaathu; avanga ellaam kalyaanam aanavanga…”

Mirugam: “Kalyaanam aanavanga naa, veetla purushanukku pongal kindi kudukka sollu… adha vittuttu ippdi ellaam nadichaa…”

 

The Hindu has published a long-pending editorial on the ongoing credit crunch in the US which is a result of housing lenders competing against each other in the recent past to provide home loans to unqualified people without properly assessing the long-term risk of their actions. Promptly, the editorial cites the chances of a similar crisis in India if the lending institutions are not careful enough.

A comparison with the developed world might not seem appropriate, given the vastly differing sizes of the financial systems. Yet, looking at the way things could go so horribly wrong in the U.S., it is time to wake up and strengthen credit evaluation systems and procedures (in India).

I remember a TV advertisement by ICICI Bank, in which a couple go to the bank in order to apply for a loan. Coffee is served, and by the time they have downed it, the loan manager is ready with their approval. Whereas one cannot read too much into this advertisement, it is not very far from the crisis-inducing behaviour that banks in the US are now paying for.

Nov 042007
 

Will President Bush, Supreme Protector of democracy worldwide, announce an armed invasion of Pakistan, in order to restore democracy in that country?

 

Yesterday, Drexel played host to the first Democratic debate in Philadelphia in over 30 years. Which is a feat because Drexel is not the biggest, not even the second biggest, of the major universities in the city. UPenn, Temple and Villanova would have felt outwitted, outsmarted. But let’s not focus on that too much.

The debate was an interesting case in point about how desperate the other challengers in a race can get when one of them is pulling ahead and away. Instead of focusing on what they had to offer, Senators John Edwards and Barack Obama used a good portion of their air time to slam Senator (and President-in-waiting?) Hillary Clinton on her position on Iran.

I’m no psephologist, but I have seen campaign races in India wherein if a person makes himself / herself the focus of the race, he / she often emerges victorious. Lalu Prasad Yadav, for example, became almost synonymous with Bihar. So much that even today one can’t think of Bihar without thinking about Laloo. So when the Opposition went out on election campaigns, they couldn’t talk of things without referring to him, thus indirectly campaigning for him.

Narendra Modi is another example of how a person converted a controversial issue into a persona issue to win elections in Gujarat. When most pundits had written his obituary for his mis-handling of Godhra, Modi swiftly made himself the focal point of the elections. His political positioning may not be morally right, but it has kept him in the Chief Minister’s chair for the past five years.

Closer home, Jayalalithaa used the same “everyone is against me” ploy to sway public sympathy in her favour in 2001, sweeping to power when no one expected her to win.

Of course, the focal point strategy is not a surefire method of achieving success. But the rule is “If a lot of people who are competing with you are saying something against you, then you are probably doing great.” Hillary’s position is enviable because it is not just her partymen who think she is surging ahead, but people from the other camp as well. She mentioned this herself in last night’s debate:

“If you watched their (Republican) debate last week, I seemed to be the topic of great conversation and consternation. And that’s for a reason, because I have stood against George Bush and his failed policies.”

Hillary Clinton’s 30-point lead over the rest of the field might be whittled down as America readies itself for the first round of primaries. Her poor performance last night in the face of a multi-pronged attack, where only Bill Richardson came to her defense (thereby increasing his chances of securing a ticket with her) can lead to a fall. But I don’t see it making a major impact if the main feature of Obama’s agenda (and those of others too) is just to concentrate on her. In politics, where negative publicity often works better, this strategy is only going to take her closer to 1600 Pennsylvania Avenue.

Update: After watching parts of the debate once again, it is hard not to concede that John Edwards should be adjudged the victor. Though he had lesser airtime than Obama and Clinton, he seemed the most confident, and if victory were to be measured in terms of how uncomfortable one made Clinton feel, Edwards trumps Obama hands down.

The focus now shifts to Vegas, where the next round of debate will see how Clinton answers some of the questions and doubts raised by her opponents. She has two weeks to prepare for the next round of onslaught. It will be interesting to see the next round of poll numbers. I expect Edwards to move closer to Obama, and Clinton to drop a few points.

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