The streets of London

The past few days, in my life has really been joyful, it was filled with meeting close friends, family and old family friends of ours. Many I met in the buzzing streets of London and a few in the country side. Few of my friends I met often, decided to meet and chat in restraunts over a sumptuous meal. The cuisines were Chinese, thai and Indian, which we preferred at all times! Halfway through our meal, we compared and contrasted the taste and blend, to other restraunts. A few family friends invited us to the country side: Surrey and Northolt. It was completely different, because we saw lush green on both the sides of the over rail, normally my eyes are used to the darkness of the London underground. It was great to eat vegetables grown in one’s own garden, baked potatoes tasted much better and the salads looked genuinely tempting to me, a person who hates raw green leaves, in any part of the world.

London has a unique mixture of world cultures and traditions. It is truly cosmopolitan in nature. You can just find any kind of food that you want without any difficulty, at all. Shopping seems to get interesting year after year. Oxford street gets busier day by day. Knightsbridge is filled with shoppers, carrying bags and bags of shopping… Some might wish they were blessed with more than two hands, to carry it all back home.. Tottenham Court road is filled with young shoppers, the more of the gadget freaks.

High street retailers are all offering sweet discounts. There are big slashes in prices. The SALE board seems to hang on all the shops. Choices seem to be plenty and the fashion seems to be changing quickly, people want to be trendy. There are huge varieties of summer clothes, trousers, cosmetics and accessories. Time seems to fly, once you start shopping, when you come out of one, the Polo t-shirts and and Levi Jean on display at the other store, seem to catch the eye. The range stalked is certainly not the same as every store, some better than the other.

The customer is spoilt by choice and the spread. It is best to be brand conscious so that you just stick to a couple of brands and choose wisely from the selected few. Armani Exchange for example has introduced a selection of body sprays and a range of cool sunglasses, so a loyal Armani customer would be willing to try on some of these and if he is happy with the product, he might never visit a sunglass hut or buy a bottle of DKNY spray, again. For him Armani serves all his needs. This is the marketing mantra followed by most fashion brand owners.

The saying that if a man gets bored in London, he is forever bored in life is so true. The accessibility to places is extremely straight forward; the underground system is one of the best in the world. It is a city that never sleeps…. In a true sense !

Humpty Dumpty have a great Fall.

United Kingdom was proud enough for many decades, in the growth and promise it produced from two key industries. One being the financial services while the other being manufacturing of automobiles. Both industries generated huge revenues and inturn contributed positively to the GDP of the nation. Unemployment was reduced and being a financial capital, it provided jobs for many from foreign lands.

But statistics has drastically changed today affecting major businesses in UK. Increasing availability of loans to the car industry had led to a consistent growth in demand, while improving technology and growing mass production resulted in a massive expansion in supply. This continued to the point of overproduction so that, when consumer confidence disappeared thousands of cars are sitting unsold.

Britain no longer exports raw materials like wool and coal, which it did during post-war. The nation is purely dependent on third world countries for its primary and secondary manufacturing needs not being able to compete with them. It is a relatively poor nation in natural resources like land and metals compared to USA. Thus is depends on regions where these resources are found cheaply.

The Government is taking measures to save the sinking manufacturing and financial sector by different bail out stimulus. But how could an industry boast of supply when there is no demand? One hopes that after the economy improves, there would be better sales margin but the Government needs to also address the issue of raising unemployment.

All the King’s (MR. Gordon Brown) horses and all the kings Men are trying to put Humpty and Dumpty together again!

(Picture Courtesy: http://www.telegraph.co.uk/telegraph/multimedia/archive/01211/new-cars_1211454c.jpg)

An unique Cause.

Known as the ‘saint of kanchi’, Chandrasekara saraswathi swamigal was a widely respected pontiff and religious head. His life came to an end, a little after his 100th birthday which was celebrated by his followers and his institution. He was seen as God himself in human form, by various devotees across the globe. A grand ceremony was organized commencing his date of birth where he was worshipped with a 101 gold coins. To him gold nor gravel made no difference! He was a great scholar in Hindu philosophy and had mastered many languages. He practiced what he preached and had a very conservative outlook on many worldly issues, unlike his successors. He was an epitome of self-less service.

The saint devised a simple scheme to fight hunger. Under the ‘Pidi Arusi Thittam’ (a handful of rice) he asked the womenfolk, to put a handful of rice and a 1 rupee coin each day, in a separate pot before they started cooking their noon meal. Once a fortnight a volunteer would collect the savings from several households and bring it to the local Siva temple, where the rice was cooked with condiments and spices, offered to the Lord and distributed to the poor people in the village. This scheme was even followed by women living in cities and the contribution seemed viable to an average Indian household.

This gave them a sense of duty and feeling that they involved themselves in a ‘dharmic’ cause each day. It did not require much effort or capital. Many were fed daily. He believed temples should serve for the common good. This scheme seems to be extinct now.

The ‘annadhanam’ (poor feeding) programs launched by state governments in India seem to focus on just the temples in metro cities, they have huge collection boxes where people donate in thousands but it hardly serves the needy. On the contrary historic temples in the villages have no such services. Why doesn’t the Government implement or organize similar schemes where they are the need of the hour? The whole meaning of such schemes are distorted if they do not serve the purpose of targeting the down trodden.

Will someone revive the Paramacharya’s idea and continue to live his dream?
Because a few drops make a mighty ocean.

Fancy less 'Ponzi'.

Banks are falling prey to the ‘domino effect’; they collapse one after the other in a consecutive manner. Hedge funds owned by private individuals managing various client funds are also getting bad publicity. Hedge funds were mechanisms which promised handsome returns on genuine investments, in a very short span of time. The fall out of one such fund swindling about $50 billion was allegedly engineered by Bernard Madoff. International banks and small time investors from Japan to Switzerland have emerged as potential victims to history’s largest Ponzi scheme.

Well known as the Ponzi in US, many European countries know it as the pyramid scheme. The Ponzi scheme is a fraudulent investment operation that pays returns to investors from their own money or money paid by subsequent investors rather than from profit. In order to keep the scheme going, it requires an ever increasing flow of money. Eventually the scheme will collapse because the earnings if any, is less than the payments. It raises a lot of suspicion amongst legal authorities, as the promoter is selling unregistered securities.

Jewish charities and foundations had negative exposure of funds pooled into Madoff’s scheme. It is worth knowing about the “5% payout rule” which is a federal law, requiring foundations to pay out 5% of their funds each year or in reality over a span of time. So Madoff knew this rule well, and for a billion dollars in the foundation's investment, Madoff was on the look out for $50 million dollars, of withdrawals each year.

A madoff fund investor was found dead in his New York office, the CEO of Access International Advisors had invested $ 1.4 billion with Madoff. This was a case of suicide, where heavy losses cannot be compensated by any means.

Stringent rules are broken; scrutiny fails; the risk factor is overseen; mistakes repeated; perceptions altered; laws breached and unwise decisions made in the pursuit of ‘quick money’ and ‘becoming rich overnight’. The ruling American government must ensure such fraudulent activities do not repeat its course while many such Madoff’s don’t shoot up and investors judge their actions thinking in a long term perspective.

A stitch in time surely, saves nine.

(Picture source: http://farm1.static.flickr.com/136/325705655_89d22b63a3.jpg?v=0)

The Money Mystery

I had attended a talk organized by the Economics Society, here at the University of Warwick,recently. The speaker was the founder of an asset management firm ‘Hutchinson Lilley Investments Ltd’ London. This company just has 5 employees on its payrolls, including the speaker, and manages a portfolio of 700 million pounds. As an experienced individual, in private equities and wealth management Mr. Robert Hutchinson managing director, predicted the economic crisis much before his counterparts in other such boutiques.

Her Majesty the Queen of England, had visited the London School of Economics, recently to declare open a building which was funded by one of her endowments. She asked a senior professor, why couldn’t anybody predict such a severe downturn in advance? She received an unconvincing answer, that at every stage someone constantly relied on someone else. This resembles a fall of a pack of cards. This was then published in the daily telegraph, on reading this news, Mr.Robert, sent a letter to her Majesty explaining briefly but precisely, what he thought was the main cause for this depression. His opinions were based on the need for stable performance, low volatility and Humility of fund managers. He gave a promising picture for the UK down the lane, and signed his letter off as a humble servant of her Majesty!

Banks were safe places where people deposited gold, in those days and received a ‘bearer certificate’ without their name on it. A pound coin was actually made of silver and much bigger than what is currently in circulation now. That is why even today cash rich investors are investing a fortune in gold and silver. Inflation was one of the causes that even led to the collapse of the Roman empire, Mr.Robert believes, who has keen interest and deep knowledge about the history of financial systems.

When Governments promise citizens reforms and tax cuts, they have to borrow money or they inflate prices. Government policies pass through central banks and monetary funds to reach the economy. High taxation in countries like Britain, seem to follow a principle, where they plug the goose (people), till the point it starts to hiss.

"In prosperity our friends know us; in adversity we know our friends." This quotation by John Churton Collins, is very apt to every fund manager in today’s scenario, he says.

The insight given by the speaker about the concepts of hedge fund mechanisms and the recent Madoff Ponzi scandal, will be cited in the next article, as a continuation.

(Picture source: http://stillfinancial.com/uploads/Investments.jpg)

Not By Bread Alone does Man Live.

Human beings are as busy as a bee, today life seems very mechanical and sometimes even chaotic. Sources of entertainment and activities of leisure, always seem to involve spending money for a few hours of enjoyment. The more one spends, the more the materialistic world has to offer. Some find it hard to even have a work-life balance. The equation of life seems to be disturbed, simply because there is no time to stand and stare. The beauty of nature, vast and vibrant do not seem to satisfy mankind. On the contrary they lose all the charm, for they are being exploited for the wrong means.

It has become rare to even see God's excellent creations, in big cities and towns. No wonder, the verses of the bible were written years ago, to remind people that they need to find solace and happiness from nature, which gives them a break from this mundane world.

"Man does not live by bread alone
But by truth and beauty
By grace and harmony
By work and leisure
By aspiration and achievement
Man does not live by bread alone
But by the splendour of the firmament at night
By the glory of the heavens at dawn
By the blending of colours at sunset
Man does not live by bread alone
But by the shining silver of a mountain torrent
By the rhythmic music of a flowing rivulet
By the mellow radiance of a soft-lit temple
Man does not live by bread alone
But by the fragrance of magnolia tree
By the majesty of mountain
By the crystal excellence of breakers
By the tenderness of a mother’s lap
By the warmth of a friendly clasp
By the lyrics of poets
By the wisdom of sages
By the biographies of great souls
Man does not live by bread alone
But by high companionship and
By seeking and finding by caring and sharing
By loving and being loved".

A DAY FOR TWO NATIONS.

Today is a significant day for two developing economies in the world. There is much focus on the potential of the BRIC (Brazil, Russia, India, and China) countries.

India celebrates its 60th Republic day today, which coincides with the Chinese New Year. It is an important day for both Indians and the Chinese living world over. China looks forward to a promising new OX year, while India remembers this day as the adoption of its Constitution from the formerly ruling British Raj. Several issues of concern confront both India and China, which cannot be underestimated at any cost.

Political reforms within the Communist Party in China are intensifying. China’s ethnic minority regions will be particularly restless. Security issues in Tibet and ethnic Tibetan areas also pose a threat. The achievements won at the recent Olympics are also being reflected in “greener” objectives like reducing water consumption, recycling waste and controlling carbon emissions. It is later this year that China will send its first probe to Mars, with Russia’s help.

India is recently shaken, following the terrorist attacks in Mumbai. Black listing of major IT firms by the World Bank was a blow for the outsourcing business. The election season is expected to bring about positive changes and liberal reforms. Policy makers need to maintain broader commitment towards combating Terrorism, Illiteracy, Poverty and Corruption. I strongly believe that only by overcoming such social ills, can the nation be a safe and secure one. This in turn will positively impact on the 7% growth rate aimed at.

The journey of a 1000 miles starts today, with a single step, reminds a Chinese maxim.

(Picture Coutesy: http://www.pjlighthouse.com/wp-content/uploads/2007/04/karl_bang_oriental_art_02.jpg)