Agni - The voice of revolution

Funny woman who missed her flight

2009-03-05T18:47:00.001-05:00

Field report - Future of India and commodities

2009-03-05T18:44:00.001-05:00

In January, I was visiting a few villages in India partly to understand how global markets are affecting them. After spending a week in Europe and a few weeks Indian cities, the villages marked a refreshing contrast. As I walked in the fields, I saw that the villagers were happy, gave me free juicy sugarcanes and they were more upbeat about economy than anybody else. As we will see, if India were to consume as much oil per-capita as a relatively poorer Eastern European nation like Slovenia, it alone needs 30 million barrels/day (mbpd) more (40% of world consumption) apart from another 35 mbpd from China. If they both want to consume as much as US, India needs about 60 million addition barrels apart from 70 mbpd for China (current world production of the order of 85 mbpd).

These villages might never get to the economic level of an average American or European countryside, their per-capita income might never get closer to that of an average American, but the changes going on in these nameless places will have a profound impact on world’s commodity, tech and consumer markets. And this could change the wage-commodity price relationship substantially.

Changes at the ground level

Kovil Esanai, a small village in southern part of India and about 200 miles from the tech center of Bangalore could have easily qualified for those UN ads on world’s poor with people earning less than $1/day. I spent my formative years and primary schooling in such villages where even the best village school is only slightly better than a glorified cowshed in terms of amenities & hygiene. Till about 2004, this village of Esanai didnt have a telephone, most of the homes were constructed with mud & dried coconut leaves, people couldn’t even afford bicycles, the village school was a little more than concrete benches under big trees, and most of energy usage was in the form of burning dried cow dung & wood.

However this village of 2009 is drastically different. Almost everybody has mobile phones, the village school has a brick building and every classroom has DVD players, projectors and PC, people drive new motorcycles built by Indian collaborations of Suzuki, Yamaha and Honda, more houses made of concrete with the “modern” amenities like refrigerator and gas stoves, and people have far more world awareness. The village is not some model village adopted by a world organization, nor is it near a outsourcing base or some major global factory. The nearest major town is 3 hours away and it takes more than half-day to reach a major city. The village is yet another part of developing world whose carbon footprint has dramatically grown and whose inhabitants have started to get a taste of the modern world. My back-of the envelope estimate shows that their average carbon consumption would have grown more than 5 times in as many years.

Image source: Market Research analyst

Implications for carbon consumption

Now, you are thinking so what? Almost everybody in Us has an automobile, concrete house, phones and good schools, why is this change relevant. Look at the graph below using the data from CIA factbook.

Data Source: CIA factbook

Compare India’s 2005 electricity usage with other countries – it is 30 times lower than US and 60 times lower than Iceland. If India and China were to reach the economic level of Eastern Europe and consume the level of Easter say Slovenia, there will be a run on world oil markets. We would need additional 60 million barrels/day (75% world consumption) for India and China alone, leave alone the growing demand for countries like Brazil and Saudi Arabia.

Wage differentials

While globalization has flattened a few wage rates for a few professions like Software development, Project management, portfolio management, etc, there is still a huge gap for non-globalized professions. For example, till 2004 a typical harvester or sowers in agricultral fields earned $0.5/day (for about 10 hours of work) and this is 150 times less than a comparable wage in the developed world. Even a slightly more sophisticated job in McDonalds has a wage differential of more than 20 as the study below shows.

However, globalization train has left the station and more professions are coming closer to flattening the wage differentials across geography. With more education and labor development, the villagers in the kovil esanai could be turned to produce goods that will substantially contract world prices and counteract the commodity inflation.

Data Source: Cross-country comparison of wage rates

New growth, New markets, New cash requirements

Unlike the west, India and China are still growing by over 5% of GDP and every year. You all must have heard the often hype-combine story of Indian and China, but the reality is their growth have real implications even if some of the hype is not true. The global recession is not going to change a lot of that. In the short term there might be slowdown in growth, but the previous growth has set off a real growth in India supported from domestic market. This would act as a cushion and be the base for the future growth. So, if you look past the next 2-4 years, Indian market looks very attractive and for the world markets as a whole the following markets look the most to be impacted.

Commodities: As villages like Esanai step into modern amenities, their energy consumption will go through the roof. We need a lot more oil and electricity to satisfy the demand. India’s per-capita food grain consumption is one-fifth of US, and if it starts eating better then 2008 food grain shortage might get back. USO and DBA could get big.
Capital: Right now countries like China and India are surplus in capital, because majority of their citizens don’t have access to formal credit markets. As villages grow and people want to expand their economic signature there might be a dramatic need for capital. Assuming that a per-capita capital requirement to expand, educate and establish is about $1000/year, India and China can suck up $3 trillion every year. It might not be far off from the point they could consume all their reserves (for China it is around $1500/per capita) and start requiring capital from world markets. That would be a good thing for millions of retirees looking for high yield savings.
Technology: Indians and Chinese might be skipping the computer revolution and directly going to the mobile revolution. India is estimated to go for 750 million mobile phones in next 2 years and already rank the highest in world mobile minutes usage. As they mature up into more powerful handsets it would be big for tech companies. Goog is already making use of the growth, by various initiatvies like mobile search, google bus, etc.

The Future

I see a future for world economy where the relationship between commodities to human labor, completely reversed. The last few decades we moved in a fashion that made labor wages grow faster than commodity prices. In the developed world, workers with minimum wage ($7.25/your) could buy 8700 gallons of gasoline with the yearly salary and drive 261000 miles in an average rated car. The price of food-grains to household income also reached among the lowest in human history, a couple of years ago. However, these will change and the events in 2008 summer was just a sampler. In the long term, the effect of entry of villages like esanai to the global scene will put downward pressure on services and upward pressure on commodities, and commodity prices to wage rates will grow significantly more than the levels in summer 2008. This will cause a significant realignment in the current global economy where developed world is moving mostly to services and developing world into manufacturing. The pains of adjustment will be hard, but in the long term will help improve the strength of the global fabric.

1. Newsweek - Why India’s economy will keep growing?

2. New york times – India retains optimism and growth

India’s thopukaranam is touted as Super brain yoga

2009-03-04T22:33:00.001-05:00

This is something a lot of south Indians do it as a part of prayer (and part of school punishment). Now, it is funny that this is getting into the fitness and medical community as a big thing.

'Slumdog Millionaire' opens a new passage to all things Indian

2009-03-04T21:02:00.001-05:00

Here is an interesting article in USA today. Is India getting closer to American mainstream like Latino and Chinese culture? Every Indian knows A.R. Rahman is one of the best world musicians, but sadly till now the world didnt know it. There are so many of these untapped talents that might start coming out. Who knows, maybe Amir Khan might be the next Tom Hanks (ok, Tom Hanks is uncomparable, but there is nobody else in Hollywood who can take up his mantle when he retires, so why not somebody from Bollywood?)

http://www.usatoday.com/life/lifestyle/2009-03-03-india-slumdog_N.htm

Hurray for ... Bollywood?

Not exactly, but there's no doubt the success of India-set Slumdog Millionaire — eight Academy Awards and more than $100 million at the box office — has magnified India's profile and accelerated the mingling of American and South Asian cultures.

Who knows? Just as salsa came to rival ketchup as America's top-selling relish with the diffusion of Latino culture, maybe Slumdog is a sign more Americans will be consuming even spicier fare.

So pass the chutney.

"Now you can find Indian food even in mainstream grocery stores," jokes Vin Bhat, the American-born co-founder of Saavn, a New York-based company that, as the largest digital distributor of Bollywood movies, music, videos and ringtones, is benefiting from the success of Slumdog.

Music to more and more ears

"We're seeing a tremendous impact," Bhat says. "We're already seeing record downloads on iTunes and other major carriers; we're seeing a lot of people purchasing tracks and albums by (Slumdog composer/musician) A.R. Rahman."

In fact, the soundtrack is top the album on iTunes and vaulted 26 spots to No. 22 on the Billboard chart in the days after the Oscars.

"People are buying Slumdog— it's an access point for people to explore other movie and musical content from India," which is easier to do nowadays, thanks to the Internet, Bhat says.

Indians in America, long concentrated in the tech industry, say it's about time. (Indians are the largest ethnic group among the South Asian population.)

"Perhaps it took something as spectacular as the Slumdog sweep to confirm our 'arrival' as a cultural, and not just professional, force," says Ragini Tharoor Srinivasan, editor of the American monthly India Currents.

The India-is-cool trend has waxed and waned for decades. "It goes back to The Beatles, Ravi Shankar, the Maharishi — look at how yoga is mainstream now," says frequent visitor Dan Storper, founder and CEO of Putamayo World Music, which expects its first, just-released all-Indian music CD, India, and coffee-table book, India: A Cultural Journey, to be best sellers in part thanks to Slumdog.

"There has been a curiosity about the region for a long time, but it always takes one big thing to take it to another level," Storper says. "The stage is now set."

Hollywood might be more willing to gamble on Indian-themed movies and other East-West collaborations now that Slumdog has established audience interest, says Chitra Banerjee Divakaruni, the Indian-born American novelist and author of The Mistress of Spices and just-published The Palace of Illusions.

"We're kind of on the cusp, and Slumdog might tip us over," she says. "Fiction touches the imagination, and the impact lives on long after the facts of non-fiction have faded."

More and more, Bollywood and Hollywood are hooking up. Aussie singer Kylie Minogue is making her Bollywood debut in Indian superstar Akshay Kumar's upcoming film, Blue, and has already recorded two songs for it, including the title track by Rahman.

Sylvester Stallone is appearing in an Indian film co-starring Kumar, Incredible Love, made in Hollywood and due out this year. Warner Bros. released the Hollywood-made Chandni Chowk to China, a Bollywood-style martial arts movie aimed at the world market, also starring Kumar, last month. Will Smith, Tom Hanks, Julia Roberts, George Clooney, Brad Pitt, Tom Cruise, Bruce Willis — all are said to be working out deals with Indian entertainment companies.

"There's all sorts of people going to work" in India, Slumdog director Danny Boyle told reporters backstage after winning his Oscar. "The world's shrinking a little bit."

But don't expect pure Bollywood down at the local multiplex. The genre is not really most Americans' cup of tea: no sex, not even kissing, and lots of over-the-top song-and-dance numbers. Five years ago, Bride and Prejudice, a Hollywood-Bollywood version of Jane Austen's Pride and Prejudice, flopped at the U.S. box office.

"The people who go to see Paul Blart: Mall Copa ren't going to start watching Bollywood films," says box-office analyst Gitesh Pandya, editor of BoxOfficeGuru.com. "But the exposure opens up more eyes."

Slumdog itself isn't very Bollywoodish: There's only one musical number. It's a British production with a British director, a British-Indian male lead and a Dickensian story of a Mumbai slum-dweller's rags-to-riches romance.

Nor is it the first India-themed movie to sweep the Oscars: Gandhi, a British production with a British cast and crew, took home eight top awards in 1982 but had almost no effect on U.S. culture.

Increased familiarity

By contrast, Slumdog lands in the American consciousness just as South Asian names, faces and accents are being heard more, thanks to immigration and population growth.

Nowadays, many Americans have Indian doctors — in fact, Indian-American Sanjay Gupta, a neurosurgeon and CNN correspondent, is being considered for U.S. surgeon general.

"For years, Indians complained about TV hospital shows that had no Indian doctors — it was completely unrealistic," Pandya says. "Then (British actress) Parminder Nagra was cast in ER, and everyone celebrated. This second generation born and raised in the U.S. wants to be represented" on TV.

And in politics. Louisiana Gov. Bobby Jindal, who delivered the GOP response to President Obama's address last week, is the first Indian-American ever elected to a statewide office — and the first Indian-American politician to address the nation on national television.

South Asian names and faces are becoming more familiar in screen credits (director M. Night Shayamalan, The Sixth Sense); on TV (Kal Penn in House, Naveen Andrews in Lost, Sanjaya Malakar and Anoop Desai on American Idol, Aasif Mandvi on The Daily Show, even Apu on The Simpsons); on the news (Martin Bashir on Nightline, and Ali Velshi and Fareed Zakaria on CNN); and advertising (Indian-American Ajay Mehta stars in Fiber One cereal ads).

In music, Western pop stars such as Snoop Dogg, Jay-Z and Britney Spears, hook up with Indian stars and make hits. Singer M.I.A. is a London-born Sri Lankan; No Doubt bassist Tony Kanal is a London-born Indian.

Golf fans follow Vijay Singh, a Fijian of Indian descent, lifestyle junkies follow Deepak Chopra, and readers snatch up books by the likes of Salman Rushdie, Arundhati Roy and Jhumpa Lahiri.

"We're trying to bridge the gap between East and West, and there's a natural musical and creative synergy between Western music and classic Indian music," especially the rhythmic Bhangra genre that blends well with hip-hop, says Ted Chung, chairman of the Cashmere Agency, a Los Angeles company that brought Snoop Dogg together with Akshay Kumar to make the title track of Singh Is Kinng, a hit in India last year.

"The passion that drives us is to show each other's culture and expose people to new things, so they're not so ignorant or afraid of something they don't know," Chung says.

Funny Math Video

2009-03-04T19:50:00.001-05:00

Who said recessions must be gloomy. Enjoy the fun with the recession math:

Funny video on Optimism

2009-03-02T19:09:00.001-05:00

This video is awesome. How many times we take modern things for granted? The credit crisis is partly led by customers who felt entitled to various things - new homes, biggest Plastma TVs, shiny cars... all on credit.

World's best companies - Fortune list

2009-03-02T19:05:00.001-05:00

This year's list of best companies is released by Fortune.

World's most admired companies:

Best companies to work for:

The curious case of Chander Mohan and the anachronism of the sharia law in India

2009-02-25T12:44:00.001-05:00

Today's Wall Street Journal reports about an Indian politician's escapade.Basically, this guy wanted to have an affair and marry his mistress and made full use of India's archaic legal system. While even many Islamic countries don't have sharia law allowing folks to marry multiple wives, India has them. One cannot believe a secular 21st century democracy, giving equal rights to both sexes still follows some archaic law that is hopelessly out of place with the march of the modern civilization.

When will India come to modern age and repeal such anachronistic laws?

....................

http://online.wsj.com/article/SB123552228845764863.html

"Chander Mohan, deputy chief minister of the northern state of Haryana, made a shocking announcement. Mr. Mohan, whose overwhelmingly Hindu state of 23 million people is among India's most prosperous, declared that he had converted to Islam. The 43-year-old father of two added that he had also just wed a second wife, another Muslim convert....

What's happened since has all the trappings of a Bollywood plot, replete with an alleged kidnapping and mysterious disappearances. The drama's serious subtext shows how crucial religious identity remains in a country that bills itself as the world's largest secular democracy....

...A divorcee, Ms. Bali says that her affair with the politician began after the two met by chance at a juice stall in 2004. She says she yielded to Mr. Mohan's insistent messages and love letters -- some of which, she claims, were written in blood.

...Indian law, however, prohibits bigamy and makes divorce a complicated procedure. It might have been especially complicated in Mr. Mohan's case because his house and numerous other assets are registered in the name of Ms. Bishnoi and their children.

Yet, there was a loophole: India's 150 million Muslims, unlike other Indian citizens, are exempted from the secular legislation in family matters. Instead, they are governed by Islamic personal law, or sharia, which permits Muslim men to have up to four wives. "

--------------------------

What do Indians search?

2009-02-24T18:38:00.001-05:00

I was going through google search trends - http://www.google.com/intl/en/press/zeitgeist2008/world.html#top and it is fascinating to see what Indians search the most J. I have not seen so many actors in the zeitgeist for any other country. And interestingly there is no male actor in the list. So, I think search in India is highly dominated by boys and I guess any search company trying for Indian market should note the demographic trend and configure the product accordingly. The overall theme fits with the fourth column.

Top searches on Mobile

1. orkut

2. yahoo

3. waptrick

4. gmail

5. games

6. katrina kaif

7. rediffmail

8. yahoomail

9. namitha

10. google

Fastest Rising

1. youtube

2. orkut

3. katrina kaif

4. cricket

5. irctc

6. facebook

7. genelia d'souza

8. beijing 2008 olympic games

9. sixth pay commission

10. ipl

Most Popular

1. orkut

2. gmail

3. yahoo

4. google

5. youtube

6. yahoomail

7. indian railways

8. rediff

9. cricket

10. katrina kaif

Top 'how to' searches

1. how to reduce weight

2. how to kiss

3. how to earn money

4. how to get pregnant

5. how to learn english

6. how to gain weight

7. how to play guitar

8. how to create a website

9. how to impress a girl

10. how to tie a tie

Contribution of Computers and Internet to Economic growth

2009-02-18T22:37:00.001-05:00

Also appears in: http://econjournal.com/2009/02/11/contribution-of-computers-and-internet-to-economic-growth/

How come we see the computer revolution everywhere except in the [aggregate] productivity statistics?

- Robert M. Solow, Winner, 1987 Nobel Prize for Economics (Sveriges Riksbank Prize)

Computers, Internet and mobile phones have fundamentally changed our life the last 2 decades. We could do more efficient shopping, connect to a lot more people and be more productive at work. As an engineer who have been a part in developing an Operating system, a search engine and a social networking tool - the three main products of this revolution, I feel they are great things to both build and to use. They make individuals much more productive looking at the micro level. However, looking from an economic point of view and see the Macro picture I’m bogged down with “Show me the money”. Economists of the 1980s and 90s have debated a lot about this and suggested that they may not have caused a lot of economic growth. As this review shows, the economists of late 80s successfully argued that this paradox is due to “mismeasurement, lags, redistribution and mismanagement”.

However, over a long period of time you should see the effect in economic growth, as the indirect effect of the productivity increases reflect in the macro economy. And things have changed since the original “productivity paradox” came, as PCs came into the living room and internet connected the ordinary people to do their mundane stuff in networks originally designed to survive nuclear attacks.So in this decade, have the powerful PCs, Smartphones, Search engines, Facebook led an explosive economic growth? In reopening the debate and looking at the recent data, there still seems to be dismal evidence for the productivity growth from the modern revolution. It is possible that the economy might have reached a saturation as a $10 trillion economy cannot continue to be sprinting like a $1 trillion economy, but still 1.7% annual growth in per-capita income since WWW came seems less. There might be other small causes too. The article concludes with what might be a possible cause for this.

GDP growth in the last decade

Here is the annual GDP growth since the War. We see some big spikes in the 1950s, 60s and the 70s, but the growth since the 1990s has been pretty muted, inspite of all the hype of the late 1990s.

Let me take two sample years 1995-2007 to compute the range. 1995 is year of the Windows 95 (that brought PCs to common people), Yahoo (the first search engine), Java (the language that will become the foundation of the web for the next few years) and of Netscape that brought the world of Internet to a lot of people. The next year Hotmail came in and brought email access to everybody. So, 1995 is the pretty much the start of the revolution. And, 1995 was in the start of a massive boom and 2007 was at the peak of another boom – so we should be seeing some real super growth in the period.

According to BEA statistics the GDP (chained 2000 dollars) has grown from $8.03b to about $11.6b a 45% growth in 12 years from 1995. Well that might sound great till we see the Census stats that says the population has grown from 261 million to about 303 million now. So, the GDP per-capita has effectively grown only 24% in this time - growth rate about 1.7%/year. Not bad, but definitely not close to an explosion.

Contribution to GDP:

Now, how much of the growth is really caused from the real productivity growth. There were four other parallel forces that contributed to the growth.

1. Globalization – with the rise of China, India and other countries, US had access to cheap capital, labor and goods. They consumed a lot of American goods and services and gave in return a lot of cheap goods that US retailers used to sell the customers and generate jobs. Thus, there was a lot of growth from personal consumption.

2. Financial “Innovation” – Wall street created a phantom growth over the last decade as it played with ever more greater financial tools. This produced rich profits for the financial companies, cheaper credit for corporations and individuals, and increased the leverage. All these directly fed into the GDP. Well, this doesn’t last long but still contributed to the growth over that period. OECD research shows that this growth contribution could be more than 1%/year.

3. Government expenditure – US government had embarked on a substantial spending program since the start of this decade (duh) with the war in Afghanistan and Pakistan, leading to a spurt in the government component of GDP growth. The spending on homeland security has given a lot of work to defense manufacturers, and the tax cuts introduced by Bush had contributed to economic growth. All these came at the back of heavy national debt notwithstanding, for the temporary period we saw some growth.

And last but not the least:

4. Housing markets – Well, Americans spent a lot on housing between 1995-2007 will be the world’s biggest understatement. Because that is a kind of spending that has put the world in this peril. They built ever greater McMansions [Massive homes that become kind of commodity at the hands of common people], decorated it with expensive toys and spent on all the related stuff, giving jobs to millions of people. People also used their homes like ATM machines and drew money to buy all sorts of stuff. BEA statistics show that over 1% of growth per year in this period could be attributed to increasing housing spending.

Now, out of a 1.7% annual growth in the economy, we have financial sector, globalization, increased government spending and housing growth all could have contributed to growth upwards of 1% each per year, that must be subtracted from the overall growth. So where do we see the explosive growth from Computer and the Internet? As the snippet below shows, the effect of computers and information systems might have even contributed a small negative growth to the economy since 1995.

That sounds incredible to me, but that is what I see from the facts, and fits in the picture given the growth contributors above. Thus, I have to conclude that the computers, internet and social revolution might cause a long term productivity growth, but we have not seen that yet.

Where did all the time go?

Well, computers really save us the time and that cannot be denied. So, if it doesn’t go to economic growth, where does it really go? One possible explanation is people are spending more leisure time. In fact, according to this research from the Federal Reserve of Boston Americans spend 6-8 hours more than they did in the 1960s and according to this research from TNS Market Research more than a third of it is spent online.

Charts courtesy of: Measuring Trends in Leisure, written by Mark Aguiar and Erik Hurst

Chart from the “The Productivity of Information Technology”

Related works:

Header image courtesy: http://www.flickr.com/photos/61444548@N00/110855053/

Where do US Universities spend their money?

2009-02-18T22:36:00.001-05:00

Also appears in EconJournal

Have you ever wondered where do the money from your tuition go? How do the universities spend their money? Why does the cost of tuition grow 2X more than the inflation rate? Why are the US universities extremely inefficient and uneconomical? I didn’t find any other study and workable stats on university spending in the net, so I just made a small exploratory study on how universities spend money.

Organization of this essay:

Part 1 concerns endowments, Part 2 contains analysis on a private University (Harvard) and Part 3 contains analysis on a public university (UW) and Part 4 is the initial conclusion. If there is enough audience interest, I will go deeper into this problem in further posts.

I started from this chart from my earlier post and started digging where the universities spend their money in.

1. Endowments in US Universities

A lot of universities have billions in endowments that they really don’t need to go for any tuition (I think Yale is doing this partly for its undergrads). 78 universities have $1 billion+ in their reserves and 1b is a lot of money [that is 10% more than the entire money spent by Indian government in higher education per year, for instance] and Harvard alone has more money than the GDP of 100 nations. The endowment pool of top 10 universities (after the current downturn) is more than $150b combined. And by law they have to spend 5% of it every year. But, it amazes me that they collect the tuition and other than the endowment interest part they are not able to run the universities in an economical way and have to constantly jack up the tuition. Look at Harvard’s endowment growth in second chart, for instance.

http://www.nacubo.org/documents/research/NES2008PublicTable-AllInstitutionsByFY08MarketValue.pdf

2. Spending at Harvard

Let’s look at Harvard. Audited statement: http://vpf-web.harvard.edu/annualfinancial/pdfs/2007fullreport.pdf

· It spent 3.2b per year, of which 1.2b is from its investments.

· Tacked in its footnote of its financial statement is a $680m expenditure [wow… most nations in the world cannot spend 680m on their entire nation’s education program and Harvard puts that amount in footnote].

· They incur a deficit of 2m even after the endowment money.

Where did your money go?

3. How University of Washington spends its money

http://www.washington.edu/admin/finmgmt/annrpt08/2008report/AR08_tagged.pdf

Tuition contributes less than a sixth of its sources and instruction forms a fourth of its expenditures.

In facts and figures.

The instruction part of the expenses has grown a whopping 14% in last 2 years, while general inflation was less than 4% in that period.

It has a pretty good endowment growth, with the current fund worth $2.2b.

4. Comments

I think US education system should go in for a major overhaul. It is extremely good at graduate level with unbeatable teaching and lab quality. It has huge requirements (Assistant professors, Doctors etc spend 10+ years in school) and strict quality control. But, I think such great quality has a huge cost penalty particularly when you go for lower levels. A lot of times you just need a nail and hammer, and having a $10000 driller doesn’t satisfy any more efficiently. They should shift most of their courses online, let students really think, reason and question, and use the university’s facilities when they need to. They should cut their substantial overhead (more than 2/3 of their expense) and achieve very high throughput. Universities (like automakers) spend a huge amount on benefits (500m for a mid-sized university like UW).

Header Image of Harvard – courtesy of http://www.flickr.com/photos/bunkosquad/29703357/

My 2020 Wishlist

2009-02-17T22:50:00.000-05:00

1. Economical solar power (less than $0.05/kWh)

2. Economical water desalination (less than $0.001/gallon)

3. 100% global literacy

4. Democracy and Law & Order returning to Sub-saharan Africa

5. Poorest countries of developing world getting within a factor of ½ or more of developed world’s per-capita income (around $40K/yr)

6. Significant protection of coral reserves & tropical forests and help rebuild the damage to nature

7. Reversal of global warming using the cheap energy from #1

8. Eradication of most preventable, communicable diseases (including Polio, Malaria, Cholera, Tuberculosis and Typhoid)

9. Programmable homes, enabled by Nanomechanics, to enable changing in color, structure and other physical properties on demand, and making homes extremely cheap, mass producible and still satisfy consumer choices

10. Foldable, collapsible cars that can completely compact on demand (you can park the car in the closet) and give options to hold from 1 to 10 passengers, with adjustable sizes, and passing all the crash tests.

Header Image from: http://www.flickr.com/photos/66164549@N00/2455160742/

H1b and Innovation

2009-02-10T18:50:00.001-05:00

Here is an interesting paper on H1b and the contribution to innovation.

http://www.hbs.edu/research/pdf/09-005.pdf

It’s a pretty long paper and some parts of it are too technical. So, I have reorganized into two main themes and summarized the contents below.

Size of H1b	Innovation from H1b
immigrants represented 24% and 47% of the US SE workforce with bachelors and doctorate educations in the 2000 Census, respectively. This contribution was significantly higher than the 12% share of immigrants in the US working population.	Indian and Chinese inventors account for about 15% of Canada's patents during the 1995-2006 period, only slightly more than in the US
Approximately 40% and 10% of H-1B recipients over 2000-2005 came from India and China, respectively.	Higher H-1B admissions are associated with stronger increases in Indian invention in highly dependent computer-oriented firms (e.g., Microsoft, Oracle)
2.5% SE unemployment rate in 2006, the lowest unemployment rate measured for SE [Software Engineer] since the early 1990s	Bill Gates reported that Microsoft hires on average four additional employees to support each H-1B worker hired
The net increase in immigrant SEs during these twelve years [1994-2006] was 319k workers — 67% of the total. Looking even further, the number of non-citizen SE immigrants increased by 144k, or 30% of the total SE increase	Indian and Chinese patenting are consistently shown to be dependent upon the H-1B program, English invention is typically weakly correlated, and the results for other ethnicities fall in between. The majority of our estimates suggest that native invention is either not affected by the H-1B program in the aggregate or that a weak crowding-in effect exists.
SE and computer-related occupations account for approximately 60% of H-1B admissions	downturn in the Indian share of computer-related invention after 2000, which includes software patents. This shift from the strong growth in the 1990s is striking and may reflect more restrictive US immigration policies. Many factors contribute, however, such as the high-tech recession and the increasing attractiveness of foreign opportunities like Bangalore.
The share of H-1B visas granted to healthcare and therapy occupations declined dramatically from 54% in 1995 to 14% in 1998. SE and computer specialist occupations grew from 25% to 57% during this same period, and the SE sector has been dominant since this inversion.	H-1B admissions substantially increased rates of Indian and Chinese invention in dependent cities relative to their peers. In the base specifications, a 10% growth in the H-1B population increased Indian and Chinese invention by 6%-12% in the most dependent quintile of cities relative to the bottom two quintiles

London Trip, 2008: Part III - local trips

2008-12-22T11:28:00.001-05:00

The first day I spent mostly in getting to know the underground network. By the time i reached the hostel from airport, it was already 2pm and have only 1 more hour of sunlight left. So, after relaxing for 5 min and taking a relaxed shower, I visited St. Pancras - a kind of Central station with a great architecture and then after hanging out a bit, I directly went on to Royal Opera near Covent Garden. I had already booked a premiere show for "Thief of Baghdad" - a dance theatre. I got a good seat in the front for just 16 pounds and that is lucky. This is the first dance theatre I'm visiting, and there were no songs and not much emphasis on music. It was focused more on choreography and aerobics. I will explain more on the art elements, in another dedicated post. The theatre ran between 7:30 to 9:30, and then hunted for restaurants. Couple of restaurants turned me away as it was a crowded time and finally found an Italian pizza place.

The second day, I started my day with London School of Economics near Holbourn station. I reached the school by around 10:30 and walked around the campus. The campus was not too impressive given the fact that it is the world's central place for humanities education, but it was right at the center of London. I went around the facilities a bit, talked for a few minutes with an admission consultant. At around 12:15 I left there and headed off to the railway station to go to Oxford. I went to the wrong station - St. Pancras, and then had to detour to Paddington that connects to other places in Southern England.The train to Oxford was late and after waiting for an hour (for 1 hour long trip), I finally boarded the express train at 2pm and reached Oxford at 3. I was immediately welcomed by a cold rain (around -5C) with strong gusts of wind and a setting sun, and it was pretty uncomfortable. And to add insult to injury, I couldn't find a way to reach the university. As usual I went under-prepared with no address and was walking randomly. Finally, one guy pointed me to the Said Business school and reached there at 3:30. The admissions officer took me around the school and I was very impressed with the facilities. Of all the MBA schools that I have visited - Yale, Columbia, LSE and Oxford, Oxford impressed me the most.

I boarded the train from Oxford at 4:30 and it was a slooooow train. I reached London at 6:30 and headed to British national opera, for the Ballet - "Sleeping beauty". This is the first ballet I visited and it was incredible. It was so brilliantly choreographed with a dozens of hot chicks in varied movement playing the traditional story of sleeping beauty. It was a very long show at 3 hours with 2 interval breaks, but they conveyed the entire fairly tale with no song or dialogue or voice of any kind. After the show, I quickly finished a Pizza and headed home.

The third day started with rain and cold winds and pretty much usual London weather. But, I still braved for a walking tour around London guided by New Europe tours. This is a free tour conducted in many parts of Europe and next time I visit a European city, I will make it a point to find them. We started near the Hyde Park Corner at 11am with the memorial for Lord Wellington, an Army general who faced Napolean and started walking to Buckingham palace, then stopped outside Prince Charles' house, proceeded to St. James' place - an old palace for royal family where visiting ambassadors take their briefs, and walked through Pall Mall - a famous residential area. We then saw Florence Nightingale's memorial, the famous Trafalar square (where Londoners gather for any celebration), Victoria memorial and then the Big ben, Parliament house and WestMinister Abbey (where the royals are crowned and buried for last 1000 years and also housing the graves of Darwin, Newton, etc). We went all the walking (in total more than 2.5 miles) and the guide was giving us history lessons about royals and wars and all the way.

The tour ended at 2 and I was frozen by then. I went to a souvenir shop to buy trinkets to folks back home, and then went to war interiors of National Art Gallery near trafalgar square. I went around the exhibits to see Van Gogh, Monet, Renoir and few other great Painter's famous works. After about 1.5 hours, I took the train to British Museum. I wanted to see Peacock throne, Kohinoor diamond and other precious Indian treasures stolen from India. Unfortunately their Indian gallery was closed the week I visited for renovation :(. So, I walked around Egyptian mummies, some European artifacts, and pieces of historical work from Nicobar, Central America and elsewhere. I had just 1.5 hours to visite the museum and was tired from whole day of walking. So, I didn't see enough stuff. From the museum, I directly proceeded on to Queen's theatre near Piccadilly circus station for the famous musical - "Les Miserables". On the way, I had my portrait drawn by a painter.

Les Miserables was the most incredible theatre performances I have ever seen. It was set with the background as French revolution with emphasis on class differences and sufferings suffered by common people, including young children. I will do a detailed post on this.

The last day of the tour, I spent on a walking tour in old London. I walked around River Thames, spending time near London Tower Bridge, London Bridge, Tate Modern art museum, St. Paul's cathedral. At the end, I visited Trafalgar square and Big ben to take pictures (the previous day I could not, because of the rain).. I planned to go for a Jack the Ripper tour to see the poor part of London, but didnt do as I wanted to conserve energy for the next day's journey to India.

London Trip, 2008: Part II - Astor Hyde Park Hostel

2008-12-22T11:23:00.003-05:00

I came to London on the 11th of December 2008 with the BA48 flight from Seattle. The flight landed at around noon, and within another 30 min I was out of the airport with the baggage and the immigration cleared. It was such a breeze. I was carrying a big backpack and small carry-on, all laden with souvenir, chocolates and perfumes, I was taking to my folks in India. I booked a bed at Astor Hyde Park hostel at the heart of the city. It was near Hyde Park with famous A-list addresses, and next to Natural History museum, a string of embassies and Imperial college of London, and just 400m from Gloucester road underground station that connects with Heathrow and other parts of the city.

Unlike a hotel, here you share the room with 5 other people - both boys and girls. The first three days I had roomies as a Singapore couple, an European girl and guys from US and Hong Kong. The last day, my roomies were guys from Italy, Mexico and Germany. If you think 6 is too much for a room with a bathroom, wait till I tell you about my Netherlands experience, rooming with 18 other people and a bathroom shared between 2 such rooms! The hostels are mainly made for backpackers under 35, but more preferably students in their undergrad, and typically bursts with life (and of course there are a lot of hot chicks out there).

Among the hostels I researched, this hostel received the highest ratings and deservingly so. The room and bathrooms were relatively clean, the food was good, it was well accessible to public transportation and the place secure, and that is what you pretty much need.

For those of you who have not stayed in such youth hostels, here is some info:

Similarities to a hotel:

You get Wi-Fi Internet access, a sumptuous breakfast (with a lot more variety), a reception like central place to control access inside (unlike a motel), a laundry service, a public refrigerator and access to iron box.

Differences:

+ Hostels come with a kitchen and you can cook food, and save money on eating out. Though this time I didnt make use of this, the previous time when I visited Netherlands in 2005, I cooked during most of my stay for 8 days. I carried rice, yogurt, pickles, rotis, etc and that was more than enough to cook decent food to supplement the morning breakfast there.

+ It is very cheap. A good hotel in central London costs minimum of 60-80 pounds and near the Hyde park it is typically more than 150/day. I paid 65 pounds for the entire trip (4 days)

+ It has incredible diversity. Almost everybody who comes to such hostlers are either moving on to other places or coming after touring other places, so you get to meet people who travel a lot. This allows you to see a wider portion of the world through them.

+ Youth hostels are readily accessible to public transportation, since it is for people who won't afford cars.

- You get to share the room, and in many cases members of opposite sex. It is not for all people. You won't have too much privacy, sleep might get disturbed as people keep coming in and out of the room and have to put up with a limited space and need to be careful of your belongings.

London trip 2008: Part I

2008-12-22T11:23:00.001-05:00

My first impression of London was of a confusing place, with a lack of basic facilities drinking water fountains and trash bins, aggressive/horrible drivers who knows not to yield to pedestrians and wet, cold, windy, cloudy weather. But, once I learnt to saw beyond these, a brilliant city emerges - one that is truly an international city with immense diversity, a people with more respect for each other, a city that is super-connected by a network of underground trains and most importantly a city with incredible historical heritage. You have such a continued history that you can keep walking around and say what happened to the place you are standing in, in say 1600 or for that matter 1200. And given the propensity of the Londoners to maintain their traditions, more likely the system is not too different from those of the yesteryears. Even when the great fire of 1600's burnt down the city and a brilliant architect gave a modern city plan with grids and nice layouts, King Charles II preferred to rebuild the city just as it was.

The London Bridge (not the more iconic London Tower Bridge) was burnt down 'n' number of times ("London bridge is falling down, falling down"), and various parts of the city destroyed by wars for the past 2000 years, from the Romans, from the people of Normandy (in Northern France), the Vikings, the French with whom Brits have fought wars for so long including the famous 7 year war and the Napoleonic wars, and of course the brutal world wars with Germany and rest of Europe. Fires have raged and burnt down the city multiple times, plague has ravaged the city and financial crisis like those that followed the World Wars, the 1929 Great Depression and the current depression have stung the heart of the city. But, after all this London is still thriving, still energetic and still hopeful. This incredible resolve of the Londoners is what keeping them alive and is what going to take them through the current depression.

I came to London to see if I could move to this city, in case I get admitted to a school here, and so far I'm extremely pleased. I always fall in love with history, and this is a place with such a quality and will also give me access to Continental Europe with equally long history. I will cover the details in the next part.

Brutal carnage in Mumbai: Whom to assign Blame?

2008-11-28T14:41:00.001-05:00

I was surprised not to see any blame going to state and local level politics in India, who control the law and order machinery. Federal government could do only so much, and it is the state governments with all the police power that must ensure blocking low level crimes that feed into the high level terrorists. Mumbai has long been under the control of Mafias, and with their low level networks and access to money, it would be hard to stop the terrorists unless we stop these mafias. But, many of them have connections with all level of local politicians. So, we need a powerful police force that can stand independent of the corrupted local politicians. As KPS Gill showed in Punjab, an effective police force can neutralize even the most brutal of terrorist forces.

Unlike in the case of September 11th New York and July 7th London, Mumbai or for that matter any major Indian city, is not new to massive attacks. New York and London and Madrid were genuinely surprised by the scale and nature of attacks and made a massive ramp up in Law & Order to thwart any further attacks. India doesn't seem to have done too much as continued instances show. Taj is the center place for all powerful people visiting India, including Presidents and CEOs and how come dozens of terrorists entered there with weapons and with intimate awareness of the hotel? What were the intelligence and security forces doing, leaving such a high profile place loosely guarded?

What is the nature of the past investigations with the prior Indian terror attacks? There are no verdicts on any of the cases in the recent terror attacks. What are the courts, CBI and rest of the machinery doing?

We have been witnessing disaster situations of every kind. From nature created Tsunamis, earthquakes, floods to man-made terrorism, stampedes, fires and carnage of all flavors. Why is there no national policy on an effective answer to disaster, like the one Israel has. We need a national level preparatory education that would teach the common public on ways to deal with a crisis situation - and we need to integrate NCC and other grassroot level forces to make a combined national preparation against emergencies. We might have to make a mandatory short military training programs at the college level, so that we can better supplement the government forces. With its relatively smaller army (compared to population) and an ineffective police force, India is right now uncontrollable and unprepared.

The terrorism answer must focus on starting from preventing the lowest level crimes and flouting of the rules. As the book "The Tipping Point" and the "Broken window theroy" show, once the bad sections of the society realizes that they can go scot-free on most of the smaller crimes, they will tend to increase in scale and things will start to snow ball.

What should the world do post-Mumbai?

2008-11-28T00:44:00.000-05:00

The carnage in Mumbai is still going, 48 hours after the crisis started on a Black Wednesday. Terrorists have been mostly neutralized except for the Taj Mahal hotel, where one suspected terrorist seems to be holing out still. In size and daringness this is comparable to only September 11 - when a group of hijackers synchronized their attack to destabilize the commercial capital of the US. 9 different locations where attacked killing Jews, Europeans and scores of Indians. Once, the crisis ends we have big questions ahead of us.

The world community needs to come together against terrorism, in full force. A lot of columnists have claimed it is a home-grown Indian issue, and Indian officials have predictably used their stock quote "It is from Pakistan". Foreign investments would hurriedly get out of India and there might be bleeding in the Mumbai stock exchange next week, when Indian traders return after the disaster and American traders return after Thanksgiving break. Such, knee-jerk reactions is what terrorists want. World must stay together and realize that no part of world is safe - in the past few years they have hit the heart of London, New york, Madrid, Karachi, Bali, Mumbai, Delhi.... and we must not give into the terrorist ransoms and make them force our investment decisions.

1. World should pay more than lip-service against terrorism. We must unequivocally condemn global terrorism in all forms and for all causes. Whether it is the Chechens fighting against Russian, Uigurs against Chinese, Tamils against SriLankans, muslims against Israel, Talibans fighting Americans or the host of terrorist groups striking India, world must unilaterally act against them and work shoulder to shoulder. No end would justify the means, and even if we sympathize with the cause of people causing the terror in some instances (like the Tibetans who went in rampage against Chinese this summer) we must unconditionally act against it. Just as Pakistan is finding out with its home grown terrorists, and America found with the Afghan terrorists they trained in1980s and Indians found with the Sri Lankan terrorists, terrorism is like a Frankenstein monster that will eventually prey on its creator.

2. India would need to stop pin-pointing Pakistan for all the troubles and also recognize troubles in its own locality. How did dozens of armed men, with the most powerful weapons synchronize attacks against so many locations in a city already under terror alert, and still security forces had no clue? What were the intelligence agencies doing when terrorists were getting into hotels that are frequented by foreign leaders and other critical visitors to India? India must answer a lot of tough questions and should tell the world what happened with all the investigations it launched in the previous terror attacks. Indian law and order machinery is in shambles and controlled by a fracticious political system at the state levels. While India's federal institutions and leader command relatively, high-respect, India has a horrible set of intuitions at the state level. 6 years ago, in the Indian state of Gujarat, the state law and order system actively assisted militants to commit a carnage with the common people sitting in rooftops to enjoy the spectacle. India needs to rescue its horrible state of law and order, and take the state governments to task. Without that it is so vulnerable to terrorist attack and no kind of protection could be kept, as terrorists could easily slip through the cracks.

Pakistan could indeed be the cause of the troubles, given its notorious legacy, but it might mostly be from the anarchy that is spreading out there. India must work with the Pakistani government to collaboratively put together the terrorists, and not invite a macho match in the borders, in a volatile region.

3. Investors must proactively help the countries that are a victim of the terrorist troubles. Terrorists want to take countries out of international markets, and we must thwart such attempts. World should give a collective answer, and give our unity and solidarity and that will be the worst answer a terrorist would be expecting. If his aim is to destabilize economies, split communities and cause panic, what will be his reaction when we stand together to unite communities and strengthen economies.

Let the world stand together fight this global menace.

Major terror attack in Mumbai

2008-11-26T14:44:00.000-05:00

Image source: Guardian

Terrorists have yet again struck Mumbai, the financial center of India. The attack around 10:30 pm Indian standard Time, was one of the most daring things in the recent times.

India has been plagued by insurgents for the last couple of decades and is related to the global terror attacks emanating from Islamic insurgency in Afghanistan and Pakistan. The attacks seems to have been highly coordinated and aims to scare away away the tourists and other foreign visitors from the Indian financial capital. The information available currently is pretty sketchy and a detailed report will be made in this blog soon. One only hopes that International community will collaborate stronger with India in rooting out this global terror mania.

Attack locations:

Map source: Wall Street Journal

http://www.guardian.co.uk/world/2008/nov/26/india-attacks-mumbai

State of US housing

2008-05-19T21:47:00.001-04:00

Home construction turned up unexpectedly in April. It seems multi family dwelling is growing up. Here is the data from census.gov: http://www.census.gov/briefrm/esbr/www/esbr020.html (I have circled the point the where it started climbing up). Even with the current, it is hardly a great news, given that the number of units started is at the lowest point in this decade. You can see pretty detailed data here: http://www.census.gov/const/newresconst.pdf

WSJ gives some commentary on it here: http://online.wsj.com/article/SB121094058802498537.html?mod=hps_us_whats_news though it exaggerates the stuff a bit.

Interestingly, the home ownership rate decreased in the last one year (maybe due to foreclosures?)

http://www.census.gov/hhes/www/housing/hvs/hvsgraph.html

Paul Erdman's - The Panic of 89

2008-05-19T21:45:00.001-04:00

Last week I was reading through Paul Erdman’s “The panic of 89” a novel about a fictional systemic financial crash in 1988. Though the book is more than 20 years old, it is amazingly close to the current situation. The setting is an America with a Republican president who in his 8 years rule has loaded the country with a lot of debt and the international community has lost faith and dollar is having massive depreciation, while the economy is flirting with recession. The economy is slowly clawing into a recession while a Democrat President is to take control in a few weeks. In the meanwhile the commodity markets are menacing, house prices are falling, people are walking away from mortgages, Mortgage Backed Securities markets and Swap markets are crashing (he talks about colossally the derivatives market has grown in 80s) and a rogue leader from Venezuala is trying to screw US by grouping Latin America. The Fed chairman is as confused as Mr. Bernake and is trying to lower interest rates. All this is causing Bank of America to go the brink of a solvency crisis, and the plot involves a former IMF chief and the Fed Chairman in bringing back America to Normalcy. And then there are terrorists, murders and other stuff. The characters are not like the normal ones you see in other popular novels, but if you like Erdman’s novels you would appreciate the depth of characters. It is not just an interesting action packed novel, but this author who is a former Swiss Bank chief packs with loads of finance stuff that look as good as new. The author has always been ahead of his time and generally respected in Wall Street for foreseeing things – his novel “A Billion Dollar sure thing” that came in early 70s was talking about Oil and Gold crisis and another one of his old novels was talking about the trouble with Hedge Funds and stuff.

If you like action packed novels and want a different perspective of the current financial crisis and understand the behind the scenes politics in Fed, then I would recommend this book. Here is an old review of it in NY times.

http://query.nytimes.com/gst/fullpage.html?res=9B0DE0DC1039F932A25752C0A961948260

Writing fiction frees an author to use imagination, though the higher standard for non-fiction doesn’t seem to be there anymore. This author who was a Chief of Swiss Bank in a previous life was jailed for fraud and spent some time in Basel jail. There he got an acquaintance of a professional bank robber from whom he learnt a lot of tricks. He wanted to originally write a non-fiction about global finance, but the Swiss jail didn’t have a good library and so he converted his ideas and personal experiences into a novel and that became a runaway hit. Unlike his other novels this particular novel is often criticized by his fans for not being too fiction-like and too much of real life finance. Many of the characters are real – Reagan, Kissinger, Carlos, Volker whose names are used directly instead of building characters based on them, as done by other novelists. And a lot of the ideas were outrageous at that time – he speaks a lot about Derivatives, Credit Default Swaps, Mortgage Backed Securities and stuff at a time when hardly more than a couple knew mortgages could be securitized. I was reading through the reviews in Washington Post of the 80s and they were wondering how these could collapse the world financial system. But, looking from 2008, we know how. Though, this novel fell out of favor from his other books with more fiction contents, I consider this to be among his best.

He died last year and you can find more about him here: http://www.timesonline.co.uk/tol/comment/obituaries/article1722875.ece

State of IT in the first quarter of 2008

2008-05-19T21:43:00.001-04:00

San Francisco Fed recently published some hi-tech related stats and I find some of the data interesting.

Full data is here: http://www.frbsf.org/publications/economics/et/index.pdf

I don’t know why many of the major news sources didn’t comment on the data.

Summary: Computer Hardware and Software shipments is slowing down, job market growth in IT sector in this Western region is slightly positive in Services and slightly negative in IT Manufacturing, and Industrial production of IT industries in the last quarter seems to have dropped sharply, though I suspect this drop is seasonal.

Nice tool to analyze Subprime data

2008-05-15T17:02:00.001-04:00

I just found out that the FED released a tool 2 months ago to analyze subprime and Alt-A mortgages at county, state and zipcode level. It looked cool. So, for those who plan to purchase a house or for those who are curious to know how different regions of the country are faring in Subprime, this would be interesting.

http://www.newyorkfed.org/mortgagemaps/

Why are CA and FL hit mainly by mortgage crisis? Striking difference between Jumbo and non-jumbo mortgages

2008-05-15T17:01:00.001-04:00

I was going through ofheo’s data (Office of Federal Housing Enterprise) and one thing that mainly struck me was the dramatic difference between the Jumbo and Non-jumbo mortgages. In the first chart, the left bar is the Jumbo and the right bar is the non-jumbo. See how traditional was the non-jumbo market with mostly FRMs (Fixed Rate Mortgages). But, we see all sort of exotic things in Jumbo mortgages. We know from anecdotal evidence that this must be true because jumbo loans are unaffordable for a lot of people and GSE’s cannot take and so people try all sort of funny stuff, but now with hard data it is so clear why the mortgage crisis happened. And the second chart on the right, show the all the usual suspects on the top – with CA alone accounting for one-half of all jumbo loans issued in the country.

The scale of exotic stuff in the first chart (about 75% of total jumbo) really surprised me. And in the third chart at the bottom we can see how conforming loan limits have dramatically increased even faster than home appreciation rates in the last 20 years, even without the current government proposal.

Source:

http://www.ofheo.gov/media/research/MMNOTE11108.pdf

Source: http://www.ofheo.gov/media/mmnotes/MMNOTE072.pdf

OPEC's gimmicks

2008-05-15T16:59:00.001-04:00

We all know oil prices have been going up to extraordinary levels. Let us see some patterns in it. Look at what OPEC did to oil. When prices was skyrocketing they cut production sharply and when it started falling, they increased it substantially. So, the thing for oil investors to watchout is not just China and India’s demand increase, but what goes in the minds of the OPEC.