Thursday, May 22, 2008

Random Musings

This is just the result of a really boring day and a lot of channel surfing and a mind desperate for some exercise.

a)The Lord of the rings

Real life analogy:

The life of a Smart Bachelor:

Assuming the person is a smart bachelor,there will be numerous people waiting to obtain the ring he possesses but is unwilling to give.He,in turn,takes advantage of this fact and convinces these people to do his bidding.Obviously,he is not to be blamed for it because it is just the ring's effect on him that is making him take this advantage and he is not responsible for what he is doing.

Finally,somewhere along the line,he makes a mistake and loses the ring to another.After which,of course he pays for his mistake as the new ring bearer is more bothered about the ring and other things than the old ring bearer himself.

Solution:It has been observed that these qualtities of neglecting the old ring bearer shown by the new ring bearer reduces greatly if she does not wear the ring for long.Hence,the old ring bearer must provide more new rings to the new ring bearer(which must be necessarily more powerful than the old ring).As long as this is the case,the old ring bearer has nothing to fear.A costly solution though....

How to notice that it is time for a change:When she takes your face in her hands and say "My Precious",carefully notice whether she is looking at you or her hand.You will know what is to be done.

b)The God of Small things

(Going by the title)Lets just say its a really nice attempt by Ms.Roy to sympathis with some people,making them feel that there is a God especially for them.Very honourable...

c)"Not a penny more,not a penny less" by Jeffer Archer

The only thing I can decipher from this title is that the book obviously wasnt written in the recent times keeping in mind the inflation rate.

d)Pirates of the Carribean-Dead Man's Chest

This is news.I didnt know that in the Carribean too,people areinterested in dead men's chests.

Maybe they took a leaf out of Indian Doctors,who are interested in Live as well as dead people,their chests,the vital organs that lie in and around it,and their price in the illegal markets.

Tuesday, May 20, 2008

The Story of a Boy

All characters in this story are fictional and any relation to any individuals living or dead is purely coincidental.(Yeah,rite!)

There was once a boy named Yadait.He had just passed 10th std with flying colours and his parents and relatives where all planning what stream he was going to choose and what he was gonna do in life(By now,u must have figured which country he was from).
But his thoughts,on the other hand were dwelling on different things.11th standard.Hmm....what was the first thing that came to his mind when he thought of it?And Yadait remembered the sensational story covered by AAJ TAK which he saw last week about some people of this age showing the world the innovative uses of the MMS service and their applications .

Yadait's parents asked him"Son,where do you want to do your schooling now??Do you want to stay here ,or go and join the prestigious PPS in Delhi,or the prestigious DSBB in Chennai,though you will have to stay in a hostel in Delhi or as a paying guest in Chennai.."

For some reason,Yadait was very interested in joining the school at Delhi,but he decided to think again.This was a golden opportunity for some "exposure" to the outside world,and he better make a well thought descision.

He had already stayed in Delhi for 4 years before and had seen EVERYTHING there was to see there....
While in Chennai he could see something new,after all life was all about experience and trying out new things,right?And also chance to live as a paying guest was not lost on him.Paying guest...hey,he had heard that term also very recentlky before.where was that??Ah,wasnt there something recently in the news about.....never mind.After a lot of deep thinking,he decided that DSBB chennai was the place to be.
So after a 2 year stint in Mlore he bid adieu to it,leaving with a lot of fond memories....for a new adventure.To Chennai.
Somewhere on the way,his dad told him something about a small test he had to give to get into the school.Ahh,well,he knew it was just a formality.WIth the marks he had scored,they would be just waiting to take him in.
He reached his new home finally, expectations rising by the minute.(Except for the hour after his first in chennai,coz he fell unconscious thanks to a heat stroke).But no matter.This teeny-weeny incident wasnt gonna dampen his spirits.
He directly went to his school to be.As he stepped into the campus the first thing he saw was..........A temple.Hmm...not exactly what he had in mind.He walked ahead and went into the principal's waiting room and was promptly kicked out.He had to give the entrance exam first,they said."Fine,bring it on",Yadait was begining to get a little irritated.Lets get this over with.
So they took him to the library.And gave him the paper,and told him to start.
"How long is the test?",He asked.
"2 hours",the librarian replied,glaring at him as though he was pulling her leg by asking the question.
And so he started answering the questions.Or,well,he did try.After 2 long hours,the paper was snatched away from him.As he got up and was leaving,the librarian asked him"Where are you going?".
He innocently replied"I dunno,is there a canteen here?Im a little hungry".Now she really got pissed.
She replied,"Boy,if you want to study here,youbetter stop making these jokes.This is a prestigious institution and if you hope to get into this school you better mind your manners".
The boy was dumbfounded.He didnt know what to say,so he just went back and sat in the seat next to the one in which he had given the test.It was really hot.
The teacher came to him.For some reason,he put his head down like he had done some grave mistake.She said,"Its ok,dont do it again."
He looked up,trying to not look confused,and that was when she put the second paper on the table."Two hours"she announced,and went back to her place.
After 2 more tests,and three more seats,he finally left the library,already looking for his father and wondering how he could convince him into changing the Chennai plan after all.He saw him outside the principal's office,talking to some old woman.Hid dad saw him and called him over."Madam,this is my son,Yadait"he said proudly.
"Hmm,so you hope to study in our esteemed institution??"she asked,2 huge magnified eyes staring at hime through soda glass spectacles .
He just bowed his head just as he had done in the library,giving the same guilty look.Apparantly,that was what she was looking for.
"He will do well,this boy will,IF HE CLEARS THE TEST.The result will be out tomorrow.Pray,boy,pray"she said,again glaring at him.

Well,now he knew why the temple was where it was.
This was going to be one long day.
(will be continued in the next post...)

Wednesday, May 14, 2008

An Inconvinient Truth

I wrote this one after watching “An inconvenient Truth” … Al Gore’s Documentary
"Its difficult to get a man to understand something
when his slalry depends on his NOT UNDERSTANDING it..."-Al Gore

Its funny how the world works
How in each action ,a consequence lurks
Yet,here we are,at this moment, on oneside,with one cause
And then with the opposite,without so much as a beat or pause

What is ethical,what is not
I do not judge, Im not that lot
What on my mind is just one thing
How the hell does one choose his wing

Is there an idea behind each side
Or do all of them change as regularly as the tide
Should principles resonate in my voice
Or should that too change as time flies

Someone Said…
“The only thing that’s constant is change”
Well,its not that way from what I gauge
Coz from what I gather,some things are same
The politics,the confusion,the shifting of blame
What seems to change is just the odd name
While the rich get richer and maybe some more fame

Its like climbing a mountain cliff
Everyone trying hard to reach that elusive tip {Here,everyone refers to countries}
The ones below trying hard to trail
The “great” ones above,their fading trail
Never once does one stop n stare
No No No…to us the beauty is all too stale.

And yet some hope that things will change
For principals and ideals it’s a war they wage
Takin on one person at a time
Showing us the truth,what we’ve done,our crimes

Will we change,or will we lose
Will we still follow the old ways or finally start to choose
Its not a question of WILL but WHEN,really
Coz we either change or will pay dearly

The Sub Prime Crisis

In the recent past there has been a huge cry about the sub-prime crisis and its effect, how a number of companies have made huge losses, companies firing employees and the threat of global economic recession looming. What exactly is it? This article is an attempt at giving a basic overview of the Sub-Prime crises.

When a customer avails a loan from a bank, the bank may or may not give the customer the loan on the basis of whether they think he/she can repay the loan or not. This is done by evaluating the credit-rating of the customer, which depends on his/her salary, other loans, credit history etc. A higher credit rating signifies a better probability the payment of the loan and hence people are classified into prime (higher credit rating) and sub-prime (relatively lower credit rating) customers respectively.

As the credit rating of the person decreases, the rate of interest at which he/she has to repay the loan increases as the risk borne by the bank is more. However, if the credit rating is lesser than a particular range, banks do not sanction the loan as the risk is too great to take by the banks.Credit Rating Agencies carry out the task of rating customers. For example, in India it is done by the Credit Rating Agency of India (CRAI).

In the scenario in which the Sub-Prime Crisis took place, real estate in America was booming. The fed rate (the rate at which the federal bank gives money to banks) was low. This was primarily due to the laissez-faire approach followed by the government. As a result, the rate at which the banks were offering loans to the customers was also low.
The American culture involves a number of immigrants coming to America in order to realize the “American Dream”. No matter what place in the world, living in one’s own house is a symbol of wealth and economic improvement. These conditions provided the lower middle class a perfect and safe opportunity to acquire loans to buy homes. The general psychology prevailing in the masses was that even if they couldn’t pay the loan they had taken they could come up with alternative solutions like -:
1) Sell the house at a greater price because by then the price of the house would have gone up),repay the loan and walk away with a clean profit.

2) Use the new present increased value of the house as leverage for an extension on the loan.
3) Use the new present increased value of the house for a loan fro another bank to pay back the original loan.

Hence, a lot of Americans started availing loans, which included a lot of sub-prime customers. The banks acted on the notion that with the soaring real estate prices, even if anything goes wrong, they could keep the house as collateral and hence make a tidy profit as the value of the house would increase with time. So, they started sanctioning loans to a number of sub-prime customers. The credit rating agencies also have been accused of not rating customers correctly.

Meanwhile, as the customers were too many, the banks did not have enough funds to provide for these loans. Hence the idea of Mortgage Based securities was floated.Loosely put, financial institutions started offering securities to people in the market on the basis of getting returns on the customers paying back the loans. The people investing in these markets include people of all sections of society. Hence, the country as a whole got exposed to financing the sub prime loans.

With the financing of these loans, as demand for real estate started exponentially increasing, so did the real estate value. This had a number of indirect consequences.
As people bought houses, they started buying commodities for their homes. A new home also meant a rise in social status. Hence, by psychology, they started spending more too(especially as they thought their net worth was anyway increasing with the soaring real estate prices).This spiked up the inflation rate in the country.

As the inflation rate shot up, the government increased the fed rate in order to reduce the banks from giving loans and in turn reduce spending. But this resulted in the people seeking extension for on their loans started being offered an interest rate much higher than before. The burden of this rate being too much to bear, the customers started defaulting on the loans. As the new interest rates were more, the number of new loans financed also reduced, which meant less demand for real estate. In any case, the real estate market was booming for many years and the prices where much higher than the actual value reflected by the growth rate of the country. Hence, the prices of real estate started spiralling. This started widespread panic.

The number of people defaulting on loans mushroomed. The real estate prices fell. When banks took custody of the houses that were bought, the value of the real estate was low. In fact, in many cases it was much lower than the value at which the loan was financed, which meant huge losses for the banks. As the banks started losing money, the value of the Mortgage Based Securities catapulted. Hence the investors also started losing money. As banks lost huge amounts of money, to make up for it and straighten their balance sheets, they had to cut back on costs which resulted in a lot of employees getting fired. This topped with the growing depression in the people due to loss of their home’s started having an impact on growth.

With the losses in jobs and people losing their homes, spending reduced. This caused the growth to reduce and this is the stage at which the economy is today.

Current events regarding the crises:

  • Lehman Brothers, one of the largest global banks went bankrupt.
  • Two huge financing institutions Fannie Mae and Freddie Mac went bankrupt.
  • Citibank, one the premier global banks posted huge losses which led to the resignation of their chairman. Currently, Vikram Pandit, an Indian is leading the bank.
  • The US government announced a 700 billion dollar bailout plan to deal with the crises.