The Bipolar World ?

When I was still in junior school and was being mildly dieted on the dosage of world changing events of the last century, I always thought that our forefathers had seen a lot of action and whether we will ever be lucky enough to witness something of that scale. The two World Wars, the Great Depression, independence of the colonies, the Cold War, fall of the Berlin Wall and the disintegration of the Soviet block were definitely the events that redefined the world. Of course, I had the advantage of being a (naive) kid then (while in school) and considered these events as interesting adventures in the real world. Today with some worldly sanity at my disposal, I understand the ramifications of these events on the humanity as a whole, but at the same time I also recognize the fact that in terms of action we will probably be luckier than our forefathers.

The new millennium started with a bang with the Y2K scare becoming the talk of the day and crashing IT-tech stocks the nightmare. Although, both the events were more prominent in the US but the intertwined world felt the tremors all the same. The interest rates across the globe spiraled downwards encouraging borrowing to revive the economies. Who knew then, that this mini crises was just for the starters and the main course waited to be served yet. With globalization having firmly established its foot hold across the planet and the surge of flight to quality after the demise of the Asian TIGERS, coupled with the inauspicious Tech-bubble burst, there started the rat race to hoard the US debt instruments.  Fueled by the need to pump quick money into the economy  the Fed relaxed the terms of lending to trigger domestic spending and investment. Although in hind-sight, it seems that Mr. Greenspan hit the gas paddle too hard - the economic automobile which went into acceleration initially, went out of control finally and tore apart not just the US but the whole world. The banks were incentivized for lending to ridiculous high levels; so much so, that there was emergence of the Jumbo, the NINJA (No income - No Job - No Asset) and the teaser-rate loans literally. To exacerbate the issues - the money making acumen of the investment bankers led to the financial jugglery of colletralized  products such as those of the CDO's, the CMO's which wiped clean the books of the commercial banks to favorably alter the debt-equity ratios and enable them for further lending (all within the norms!). Due to the consequence of which there was an iterative increase in the haziness of the grey area of where the responsibility sat. In the process, the circular relationships between the lender (through the CDO's and CMO's) and the borrower (through home loans) got so entangled and complex that the subsequent failure of the borrowers to  meet the debt servicing demands in the realm of increasing interest rates made the whole financial system collapse. The first to die was Bear Sterns, but it was the demise of Lehman that broke the camel's back. The repercussions were such that the economies across the length and breadth of the globe tottered and the negative indicators rose to unprecedented levels. An estimated of 500,000 people directly related to the financial industry lost jobs, trillions of dollars were wiped off in market meltdowns and the butterfly effect of the same are still unfathomable. A full two years after the bankruptcy of Lehman, the effects have still not vanished. The recent demise of the Greece - a country which is credited with the birth of City-States in Europe and its global dominance, the country which gave birth to language of the financial derivatives - is a live example of the same. 

The question is - "Is this the end of the story? or is there a lot more to come ?". The way I see it is, is that, we should not jump the band-wagon of the claims of sustainable recovery and should carefully look at the changes that the recent crises has brought in the world order. China has been seen flexing muscles in the international forums for the first time in the world history. It is sitting on the stock-pile of forex reserves to the tune of 3 trillion US dollars including the bond investments etc. The massive reserve gives it the flexibility and power to keep its export driven giant economy floating and thriving by deflating the currency artificially. The US on the other hand is squatting on the time bomb of debt which it has amassed. The talks of regulation of fiscal deficit and cutting the spending are not hoax cries but of significant impact (read destructive) if the word goes foul. What hit Greece and Dubai are not too different or rather, the same debt servicing concerns, that the US will face if not for the investor's confidence. To me what keeps the investor's confidence going is just the historical graph of the US success since Chirstopher Columbus landed there in 1492. I do admit it lends (not in the sense I have used the word earlier!) a credibility, but history, as they say, is not always a mirror of the future events. With China growing at a nimble two figure growth rate against the phenomenal (pun intended) 1.6% that US witnessed this quarter, and with the dying European economy, chances are, that the balance might shift in favor of the south-east Asian economies. The US is already trying to woo China into deregulating its currency, so that it can boost an internal demand. Though the deregulation might fuel the US domestic demand in short term but if the dollars that Asian dragon has got hold of come into the free market I see an inevitable erosion of the value of dollar which might consequently lead to other impacts such as that of a shifting of Oil trading to Euro or some other asian currency (currently majority of oil is traded in dollars), withdrawal of international money invested into the US treasury or it might even lead to the burst of Chinese property bubble which is being discussed a lot in financial circles these days. But as we know, the dragon is too smart to let that happen and had been stealthily letting the Yuan / Renminbi appreciate slowly along with managing to keep the production costs low with its unique (human rights don't matter much to those people) model of mass production. 

The questions are numerous but no one has seen what lies in the future. I surmise a shift towards the balance of world power … I mean something which last century has seen in the form of Russo-US cold war may now translate into Sino-US economic balance in this century. All in all, I believe there is a lot of action to be seen and there is not going to be any dearth of adventures in the coming times.

Live and 'Let' live

It has been around a month and half since I have shifted to Delhi to be a part of one of the national hobbies - prepare for a competitive exam. I am currently settled in the older part of Delhi famously denoted by the postal code of Delhi : 6 "-1" (ah! just a shade lighter). This is an interesting part of the town where you can find the textual rich-poor economic divide, cluttered narrow streets, Delhi's world famous Gaffar market and of course the tourists who for some peculiar reason love to be here. While I am still learning to meander through the narrow streets and bustling markets of old Delhi, I am also discovering an altogether new sense of liveliness in wayward crowds and the honking-abusing delhites. However, the life as such is not that 'happening' in the literal sense of the term, but nevertheless the experience of going back to studies is great and at times tiring :). 

While staying here I couldn't help but notice that a very simple economy is thriving in this place, totally dependent on me and my fellow compatriots who have come here to fulfill the dream. The economy has been created, run and boosted by the institutions operating in the place providing guidance for the game (the game of life for some, an exam for others! ). Those who come to study here, have 'to let' a place and there comes alive the age old saying - "Live and 'Let' live" only with a slightly different connotation attached to it. Literally, the place is a hub of houses where the owners have constructed floors over floors (although illegally but how has that ever mattered) with rooms to be rented to the budding bureaucrats of the nation (if you ever had a house in this place you could have earned some serious money by just letting-out). The bulk of student presence has led to the mushrooming up of eateries, stationary shops and a whole lot of other businesses. A look around the place would reveal the need-based jugaad that the area has witnessed, as you would be hard-pressed to find a patterned (leave aside planned) infrastructural development. The area is a support system for several but this haphazard evolution (can't call it development) of the place has led to other problems which these days are fancily termed as the problems of urban sanitation. This is the place in Delhi which after first rains gives media the masterpiece shots to be relayed over the televised news 24X7, this is the place that gets the debut shot of dengue every year and what not. If ever a disaster strikes here, I am sure of the consequences but why would even nature harm the harmless (only till the time they get selected) future bureaucrats.

What a place for a bureaucrat to start his career with - to know from close quarters how things can go wrong and yet be so right for so many.

The Step Son : Kashmir

From the times since Pashtun armed gangs attacked the valley triggering an Indian armed response and the historic (disputed?) caving in of Kashmir to India, things have moved little forward for the erstwhile heaven on earth. Neither the political situation has ever stabilized, nor there has been any 'development' for the natives. To add on to the overwhelming troubles, there has been a significant presence of separatist groups both within and outside the region flaming anti-India feelings every now and then. 

To look at the situation in a historical perspective, the fate of Kashmir was sealed to be different from the rest of India when the stalwarts of Indian independence ceded under pressure to recognize a different constitution for the state. Although, the constitution recognized some autonomous provisions for the region, the autonomy has never been realized truly. Rather, it has sowed the seeds of hatred and suspicion as the centre has, more often than not, utilized the constitutional quasi-unitary features to destroy the same. More so, by the very nature of the difference in treatment Kashmir has now become the unruly step son; which with every passing moment is getting difficult to tame and calm. The denial of small freedoms such as the access to new mobile connections, restrictions on movements-associations etc. topped with the incessant rant of the politically motivated religious factions have bred so much discontent over the past couple of years that the manifestation of which is today visible in the form of a early Palestinian style of revolt (its tragic that they considered stone-pelting as the peaceful way to protest).  Starting off with a small demonstrative exhibitions of public resentment over the state policies, stone pelting has now taken a fatal turn as the recent spate of killings show. The law and order machinery has lost its cool and state repressive machine has swung into action. Since last June, more than fifty people have died in state retaliatory action and most of them include the teens. At this moment its not the life, but death of stone-pelter which has become important. Those in the political lobby who had earlier supported the anti-state agenda for political advantages have lost the driver's seat and the situation has completely become chaotic. However, it is shameful to see that they are still trying to cash in political gains out of the death of civilians. The public anger is the classic case of rabble hypothesis in action and  now it seems to be bit late for an easy solution. The options remaining are far and few; but as Shawshank said "Hope is a good thing, probably the best of the things and no good thing ever dies" , I sincerely hope for a peaceful solution. 

Writing this article on the Independence day is definitely not the best thing I would have liked, but the situation is such that the taste of freedom is not too sweet when I see the current turmoil of our Himalayan cousin.

Charity in Vogue

Association with the 'Social Cause'  is something that is gaining ground these days. The members of the elite class of the society are increasingly showing an interestedness and an inclination to get involved in the charitable activities. Especially, the social work by Ladies (yes, in the archaic british sense of the term) has become an Indian phenomenon. More so, if the lady has the pleasure of being a wife of some billionaire; 9 out 10 cases she would be doing charity or rather 'giving back to the society'. Just stress your knee a bit and you would come up with a list of names of active females from rich background (yeah! with so much of women empowerment, men now unmistakably form the background).  Though the concept is novel and might even help a few, I am personally bogged down by the choice of this form of activity by an ever increasing number of females from the tycoon families. Is it really a case of existence of too much goodness on earth which has escaped me in my short life-span till a short while ago ? Or is it something else ? Although, how much I may want the first question to be answered in affirmative my argumentative Indian mind veers towards exploring the possibility of an answer in the second question - Is it something that gives them a position of popularity in kitty party these days (Mind you - kitty parties had always been very important forums of discussion) ? Or does this have to do with the tax evasion in an oblique sense ? 

If it is really inspired by the sense of social cause, and I hope it is, than it is just a matter of time before Indian industrialists and their female counterparts (of course!) join club with Mr. Buffet who has already usurped wealth to the tune of $130 billion from the like minded fellow donors in the US or may be start something on the same lines in Indian context to do some real charity (parting with 50% of your life's accumulation is something that can't be unreal). Advertising the greatness by contributing fractions of a percentage point are no longer going to be the rules of the game. Mr. Buffet and fellows have set the bar much higher. Now the ball is in our court, lets wait and watch what  the Indian tycoons can do to match the challenge.