Wall Street Bonuses, AIG under fire

So apparently all of America and it’s “Tax-paying Citizens” are hopping mad about top performers (and others, who were given retention plans etc.) being given bonuses with their pay. Isn’t it being blown a wee bit out of proportion though? For the below reasons possibly:

a) The bailout need would not change whether they got the bonuses or not. I understand the morality and the issues involved, but then, when the plans/contracts were signed, this was not the environment. Moreover, if you want to come out of a bad position, you need the best people working for you and making money for you. If you’re not planning to reward people who do well in their parts of the business, then how will AIG ever start making money. Last I checked, motivation was needed, wasn’t it?

b) One of these senators on bloomberg was questioning why some of the thousands of people laid off by citibank cannot be hired by AIG. Well, because a) There are contracts and contractual issues, b) You would be filling a seat with a fired lower preference guy from citibank by firing one of your top performers cause you had to pay them a bonus!

c) It’s really simple. I, as an employee, have the ability to make some money (or do anything else positive) for the firm that I work for. I want to be compensated for it. Especially in such a bad environment, if you do not hold on to the good people in your organisation who are actually making some money for you, then my guess is that the company (say AIG) would be in a worse off position and the losses would only be wider and the tax-payer would only be madder. Let them do their jobs now. Yes, most of them screwed up, but we all know that and they know that. Now let them work and let them be compensated if they can work well. The time to stop the flow of money was probably “then” and not “now”

d) It’s really EVERYONE who screwed up. Stop beating the banks up about it. Every person invested wrongly. Oh, and because they are poor citizens and dumb cows, its not their fault but because the bankers BANK, and they make a lot of money, they were supposed to be magicians or know-it-alls!!

Seriously, now these executives might be working for the tax-payer by proxy, as the government owns most of these firms, but that is not going to change that these are high stakes games and the best people in the business need to be paid the best amount of money. Stop being government-al in your thinking, or what you will get will be services and businesses that are as efficient as the government.

West Bengal, Mamati-di and NO-NO

So this whole Nano nautanki has been going on for a few days now and Tata’s have even asked the workers to stop reporting for work. Of course, these are high stakes games and one cannot predict how it will end and who will blink BUT …

However much you try reading in the mainstream media, there really isn’t any fair comment or on-the-ground news about what is right and wrong with both the sides. I’m a firm believer in “there’s another side to it” and I would like to know both. Also, knowing that Mamata is a politician and Tatas are Tatas, I tend to give the T’s the benefit of doubt.

At the end of the day, this fight against industry is NOT going to be very good for all these states. I understand that there might be genuine problems and there may be foul play by these very industries and the vested interest parties but why don’t we ever come up with an optimal solution?

Does anyone know of any articles or pieces available online which gives a fair picture of the situation on the ground in Singur?

Blame it on the … Chindians!!

Highly opinionated! That’s what I am.

One of those opinions being – The west is too obsessed with itself, and knows too little about the rest of the world. What they think they know, is surprisingly inaccurate and misinformed.

Only to prove this point, the western media and the officials of Public or Private Service keep going on and on and on about how China and India are responsible for all the ills that the world is facing today.

On the Commodity pricing front – They keep going on about how the fast increasing demands of foodgrains and energy fuels is igniting the price of commodities all over. Of course, some bit of it is our contribution, but… but… but…

a) I am sure speculators and all these traders on energy and commodity exchannges have a HUGE part to play

b) Actually, per capita consumption of foodgrains is HARDLY going up in India, even in comparison to the US. Especially if they consider how much they are now converting into biofuel etc. Some big names, who keep passing the buck to Chindia like the man known as Bush, just love leading the public down false paths. Obviously he has all the information and all the data… but of course the American people like to hear that someone else is responsible for all the so-called misery.

On the energy and fuels front, of course there is growth in India, but does anyone BOTHER to check what is the per-capita consumption in the west and what it is in India. If not that, have they checked what is the TOTAL consumption of western economies or America as compared to India???

On the global warming and emissions front – has anyone checked what is the total emissions of the US against the total emissions of India? Forget per capita, that thing is not even worth mentioning. Every leader is convinced that the environment cannot be helped unless the “fastest growing” economies come on-board, but has anyone thought how much emissions can be controlled if the US emissions went down by 5% or 10%?

The west has been polluting and developing at this pace for the last 50 years. They are enjoying the living standards and the economic conditions for which the price has already been paid. Now they should be the ones making up for it. Give these new economies a chance to flower.

I would sincerely advise these leaders to stop misleading their vote-banks and take some hard decisions. Of course no one likes to say/hear the truth, but blaming it all on Chindia will not help. Even the most logical person will neither expect the Chindians to keep living like the scum of the planet and nor will the Chindians pay the price for all the havoc the west has wreaked on the planet. We will drive gas-guzzling SUVs too and we will eat junk food and becomes obscenely fat like American kids too. If you’re hurt that the government subsidizes gas prices, then you should read the fine print and know that they tax us back and make gas still MORE EXPENSIVE than it is in the US.

Stop crying babies! The real growth and transfer of power is yet to come.

Live streaming TV online

Details on installing Sopcast or TVU will also be added sooner or later to the site…. till then…

I am now making my link entries on a new tab on this website called  Live TV links.

This is a new page which will hold updated links (when possible for live transmissions on the web of the sports I like to watch.

Recipes that work

Sookhe Aloo -> http://madteaparty.wordpress.com/2006/08/05/the-time-has-come/

Please leave feedback, though would be a little cumbersome. I had changed the recipe slightly only cos I had a couple of components missing, my aloo was already boiled and some component was not in a as-required form…

Dubai Open Tennis Championships 2008

Before I say anything else, I would like to thank the lord, my wife, parents and Barclays for making sure I and the best players in the Sony Ericsson WTA tour could exist within 15 metres of each other while they grunt away to glory. The atmosphere is chilled out fun… there is pizza, burger, nachos and beer available at the pubs next door to the stadium and you can watch while you eat and drink. What more can a mere mortal from over-crowded/rowdy/barely-legal-to-drink-in-pubs/badly-behaved-shoving-pushing-crowds Delhi want in life… My friends tell me that these privileges would be worth a fortune in many countries and to think that tickets are prices from AED 30 to AED 150-200 for the whole tournament here. I’m happy about being in Dubai!!

Yesterday I saw the matches between Dementieva and Schnyder and Mirza/Schiavone and Kuznetsova/Mauresmo…

The best part is that while watching tennis you feel so close to the players… the court is small and the seating area is even smaller if your last experience has been watching cricket at Eden Gardens. Hopefully I’ll be going again today to watch singles matches involving Sania and well as Sharapova. It’s time to make amends for the mistakes I committed yesterday – had forgotten to take my camera along.  Should put up a couple of the best pictures here soon…. Maybe I’ll get Sania to pose for me

Crying, whining investors in India

Mathematically if,

DD – domestic demand; FD – foreign demand; SP – stock price

then SP is in equilibrium with DD + FD.

SP = FD + DD (simplistically put)

When FD goes down, SP also has to go down unless DD makes up for it. But of course, we Indians are masters of “follow the leader” and when FD goes down, DD goes down by 1.5 times of FD. So what do we expect? Chidambaram should take care of the SP!!!! Crazy fools I say.

There are tons and tons of articles in the print media and on the TV about how families in Gujarat have been wiped out and how angry protestors outside the BSE were shouting slogans against the finance minister of India. I have a few points to raise to this:

a) When the Indian markets have been going through the roof for the past n number of months, how many of these protestors sent flowers or roses to the finance minister. Of course, none of these jokers was making money in the markets during all these days!! Most of the people I know closely are all still holding positive positions in their portfolios. So I would really like to meet the people who had a bad enough investment strategy to “wipe out their family” due to a correction which takes you back to levels seen just a few months ago.

b) Most sane investors would still have positive positions in the market if they have been investing regularly and not only in the last 6 months. The only real losers in the market today would be people who thought there was a quick and easy way to make money in the equity markets. These people were either leveraged (using money that was not theirs to risk) or foolhardy (jumping in just to make a killing). If these people do not understand that the markets follow a simple risk-reward philosophy then there is no one to be blamed.

c) Most of the stock prices will come back close to their earlier levels sooner or later. Investors who even invested at the lows of 22nd of January have also MADE a lot of money within this correction. The only stocks that will not come back to erstwhile levels are the ones where the most foolish people were treading. You cannot fault the SEBI or the finance ministry for that.

d) There is a lot of comment about how the FIIs come in to India, make money and leave! How crazy is that. If we used our own brains, and instead of selling stocks at moments like these, bought them and then sold them when the FIIs are back, then who would be the one making profit. We don’t lose money cos of the government or the FIIs, we lose it because we are following the FIIs in buying and selling instead of leading them.

I could go on and on, but the moot point is that the India story really is intact. Indian companies really are growing and no consumers income has gone down due to a stock market correction. Since all this demand is continuing to grow, Indian markets will keep growing. I would request our whining friends to stop making a political issue out of a worldwide correction and instead focus their attention on which are the right investment strategies for the future.

Edit:

US and Europe fell again after trading hours in India – Does this mean we’re in for another fall investing opportunity tomorrow?

Decoupling and all that!

Over the past few months, there has been a lot of talk about decoupling in the worlds economic markets and how Europe or China or India are not going to be affected as much when the US goes down.  And now, as the whole world catches a cold, there are more comments of how that is not true. To me, both of these versions are flawed. It is obvious that it is neither black nor white. Anyone in the world can not claim to be not affected when the US economy goes down, but, what we can definitely say is that businesses are on the whole far more “insured” today as compared to 10 years ago. On the one hand, every market in the world will swing wildly when the biggest FIIs start pulling money out of investments, but on the other hand companies (especially in India) will still march onwards to stellar growth and results. It is the panic of the domestic investor that is causing them to lose money. I’ll write more on that in another post, but basically my point is:

a) Decoupling is true, and more so for India than most others, in the sense that we are not so export-dependent as China. The biggest companies in the sensex will go on doing amazing business and keep growing in spite of what happens in the US. Of course there are some export oriented segments or US oriented companies which might suffer in the process. The fact that stock prices have gone down does not mean that the companies have just become unprofitable, or not-so-profitable or anything else. Its just a case of demand and supply of the shares – it’ll change again soon enough.

b) Decoupling is NOT true in the financial or equity markets. Today money flows almost freely from one country to another. But of course we are going to see a fall in Indian equities if the institutional investors are all pulling out money. Moreover, this decoupling will never happen and more in my next post.

Price of property is too high…. NOO..OOT

The price of property is just never high enough. In my short adult life, I have always thought that the price of property is just too high whenever you find something that you actually want. The first (out of 1.5) apartment I have ever bought was bought at a price of INR 1750 psft. This was to change to 1900 psft the next day itself. Whew, so thankfully I went ahead and booked it and closed that transaction. WOW, I look back at that transaction and wonder why I did not buy 5 of them then. It is another matter that I could not sleep that night and wondered if I had made the right decision. Today, from that price of 1750 in April 2004, the price is roughly 5000 psft. Thats a return of 185% profit in 4 years. And trust me, its not too good if compared to the peak performers.

Looking for property in Dubai, it is impossible to believe that there is nothing to buy that you think is wirth living in for less than INR 20000000, or about AED 2M. And that would be a 1 bedroom. Not so long ago, this was maybe 1M and people thought it was a bubble then!!!

Old age wisdom says – Property seldom lets you down. Of course there can be bubbles, and of course there can be wars or bomb blasts… but in the long run, or on an average – if you can qualify for a loan – then buy a property.

At the same time, unwise and purely speculative positions are something that I would now stay away from. As noted in my post earlier, TDI Kingsbury at Kundli seems right now to be quite an unwise move, especially considering they DID charge quite an amount for the vision they showed. Now god only knows where they will take us, or more importantly – WHEN!!

Indiatimes.com

As the weeks go by, I notice that Indiatimes.com is going down a slippery slope pretty fast. Its sad as it is when TV channels make a mockery of a news channel by having breaking news every hour that involves flying cows and trapped children but Indiatimes really does take the cake. The photo galleries have now pretty much gone degenerated into the “topless and hiding assets” mode and are definitely soft porn for the Indian masses. Not that I am into forcing morality (haha! yeah I know) but an organisation so big! I mean rediff could have gone into the porn business decades ago if thats the way forward for a responsible news corporation. What is wrong with Indiatimes. Just doesn’t smell good and I had to say so! Do go and check them out. I don’t know if Indiatimes is going to sue me as it is or not for my opinion (though they will definitely get a stick from a number of fronts if they try to rake this up), so do not want to post some pics from there as well.

Oh, I do so wish I could put some of them up here, but anyway – being in Dubai, my blog will probably get banned if I did that.