The War in Mumbai

If my blood boiled to see the terror attacks in Mumbai this last week, I was also appalled by the role played by the TV news media. In the first place, someone needs to define for these newbies what news is. Between doling out on-the-spot awards to our bravehearts, pushing to-do lists, and adopting causes, each of them had only one preoccupation – to prove the exclusivity of their coverage. There was little insight, no investigation, basically now news reporting. Old reporting hands in the print media have been shocked by the gullibility of the TV journos who seem to lap up anything that came from anyone in uniform as if it were the gospel truth. The result was that every few hours we were dutifully informed how the Taj had been ‘sanitised’ and promptly the firing would start again.

This of course highlighted the failure of the authorities charged with taking on the terrorists. But frankly the initial weak-kneed response by the local authorities as well as the police wasn't anything new. It has been visible all along, through all the bombings and the attacks in the past. There is clearly no central command ever in these situations partly because law & order is a state subject and the states are least qualified to handle terror which is seen as a central issue.

But the political paralysis this time was new and very alarming. In the past various leaders have been the first to come out and issue empty statements about things being in control (even if they were not). This time around for 12 hours after the first bit of firing there was absolutely no response. In fact, the next morning Mumbai police put out an alert saying don't go out of your homes unless you have to. Now we know that apart from the 9 terrorists killed another 10-12 got away and are probably in hiding somewhere in the city. At that point only the cops knew it and they must have informed the political leaders, which is why they stayed away not wanting to expose themselves.

The crucial issue for me is what was the military/intelligence leadership up to? The NSG commandos appeared so ill-trained and lacking in basic discipline. It seemed like a throwback to Operation Bluestar. Shooting away recklessly for 36 hours at a static target hardly seems a modern operation. There wasn't even a semblance of an intermediary who would talk to the kidnappers while the commandos took charge. I can understand now why we have made such a mess of Kashmir.

I think in blaming Pakistan, we are just looking for a scapegoat for our own ineptness and the lack of calibre in our leadership. Sure Pakistan is culpable but its political leadership has no control over its terrorist agencies and we should have been working with them long before this incident happened to blow up the terrorist cells in covert operations. If we claim to know exactly where Dawood lives in Karachi why have not been able to take him out in all these years. It’s not like our intelligence agencies don't operate in Pakistan. I think there's just too much bluster and lack of elementary education.

Meanwhile, the US continues with its cynical intervention in world affairs. Its efforts are directed at preventing a war between India and Pakistan only because it fears Pakistan will move a 100000 men from the Afghan border and hurt its own operations in Kabul. Now if China uses this opportunity to mount a limited attack to reclaim its territory in Arunachal, will the US back India? I doubt it.

Some form of a war is inevitable now, largely for political reasons but its impact will be to turn the current recession into a 30s style economic depression.  

Girls for Food in Bihar

As if the misery of the poor affected by the floods in Bihar isn't bad enough, comes horrifying news of how the human trafficking vultures have descended on the blighted state. There have been a few stories on the subject largely in the international press (http://www.radioaustralia.net.au/news/stories/200809/s2355277.htm?tab=latest) but the Indian media is yet to take too much notice. Guess it's old news for them and there are more graphic horrors to report. 12-year old girls being pushed into prostitution by their mothers to buy food for the rest of the family, is too old a story in India to get any reader or viewer overtly worried. And if the audience isn't interested, the media couldn't be bothered. 

It's also a convenient alibi for when you want to shut your eyes to the sad state of real India, far removed from the hype of the rising middle class and its obscenely unctuous avarice. But it's one thing to accept that there are two Indias, quite another to actually superimpose 10% of the population onto the remaining 90% and pretend we are all fine here. Check the scandalous fashion spread in the latest issue of Vogue India, in which poor, nameless people sport $10,000 handbags and $100 bibs. Talk of exploitation and apathy.

Google's Bundles of Joy

In one of his films Rajesh Khanna has this wonderful line “It is so simple to be happy but so difficult to be simple”. And it must be doubly difficult to be simple and yet make others happy. No one in this generation has done it better than Google, the company that’s given us the ubiquitous search option, which like a good massage is the answer to every problem. But besides its thoroughly utilitarian role Google also dishes out ever so often, some of the most memorable pictures interspersed into the letters of the word Google. I have seen so many of them to mark various events but even then I have been taken by surprise at the wonderful pictures that the Olympics have occasioned. In itself they couldn’t be doing anything for the company, not at least by way of increasing its revenues but for the sheer joy it brings to users like me, it’s an unprecedented piece of corporate social responsibility. For that matter, they could well put them on some tees and sell them as Google merchandise! Some people just don’t know how to make money.
You can see some of these visuals. For more just keep googling.

The Sin of Passivity

What do you say to a man who stands by and watches when another is being killed nearby ? Or more precisely what does that man say for himself. That there was little he could do against armed murderers; that he didn't know the murdered man or maybe and most likely, that he saw nothing. Any one of these answers comes from those of us who were in Delhi in 1984 or in Mumbai in 1992 or in Gujarat in 2004. They are good enough to save face or even to avoid accepting any blame. But what of a lifetime of guilt. Can we avoid that? Avoid thinking of the little boy whose life may have been saved if we had as much as taken him home.

It seems people can and did. Time magazine's cover story on Hitler "The Betrayer" in its issue dated May 7, 1945, has this damning indictment of a people who had been thoroughly defeated and discredited by then.

"In all the various emotions which the Germans are feeling now—fear, anger, hopelessness, bitterness, shame, servility and helplessness—there is one which you will rarely find and that is a sense of guilt, the sense of being responsible personally and as a nation for what has happened.
Most Germans realize now or profess to realize that this war was unnecessary and wrong. But they still don't go beyond that to the salient realization that Naziism and everything that went with it was wrong. The main reason the war seems wrong to them is because they lost it. They place the blame on Hitler because he got them into it; if he had won the war few people in Germany today would be concerned with the question of whether the war was right or wrong."
http://www.time.com/time/magazine/article/0,9171,797474-1,00.html

Funny thing is, it's probably that absence of debilitating guilt which allowed the post war generation to rebuild a ruined nation into the European powerhouse we have today.

Housing Scams

It happened in the last years of the NBFC boom and bust and it is happening now amidst the real estate meltdown. In the late 80s the newly minted non-banking financial companies that were running on hype rather than returns, managed to con a number of gullible investors into placing their funds with them against the promise of whopping returns. Later when investors turned up to collect they mostly met closed doors. The building boom in India, particularly for home buyers, is now in serious danger of going down the same path.

Some years ago a prominent Delhi based builder announced project in West Delhi with the usual fanfare and media hype. I don't know how many people fell for it it and put down advances to book this piece of paradise on earth. But those that did must be ruing their luck. Today the project is in that never-never land where all thoughts of "the ultimate in luxury living " lie banished. What you have instead is a a dirt site with unruly grass growing all over and not a speck of construction material anywhere in sight. Local brokers say the project ran afoul of authorities. But sandwiched between lethal tarnsmission wires and a metro substation, there's no future for this "picture perfect place to park your dreams!"

But if you went to the site of the builder (http://www.parsvnath.com/Paramount/Aboutproject.asp), you wouldn't guess there's any problem with the project. The only giveaway is the pictures under the head "Site Photographs". When 2 years after a project was launched you only see pictures of the marketing office, you know this is one housing dream that's going nowhere.

India's Sub Prime

Joe Leahy in the Financial Times has written about India’s own version of the subprime crisis in the form of rising delinquencies of personal loans and credit card payments.
http://www.ft.com/cms/s/0/c03d934c-f06c-11dc-ba7c-0000779fd2ac.html
Not for the first time, if this snowballs into the kind of crisis that we are seeing in the US, its roots will lie in the excesses of the past 2-3 years. There is a direct link between those pesky calls from barely literate people selling "no income proof-needed" credit cards and "no questions asked" loans and what some banks have now started to mention at least in private. Simply put, some of those loans aren't coming back. Give a 24-year old five credit cards, a credit limit which far exceeds her annual income, and the outcome is a spiral of defaults. The same is the case with loans which were given more against hope than any real repayment capacity. In their eagerness to rope in more customers, banks have been throwing all caution to the wind. It has to catch up some day.

I wrote about it in the Financial Express, 15 months ago:

Boom or bubble
Housing loans are cause for worry
In Greek tragedy, the legend “Nothing to excess” resonates through the tragic life and end of King Oedipus. When a house in a distant suburb of Delhi is priced at Rs 1.5 crore (that’s almost $350,000) and bought by a 30-something couple, thanks to the magic of leverage, it’s time to read the oracle’s words again. Leverage is a double-edged sword. Sure it allows people to buy a multi-crore condominium by putting down just the Rs 10 lakh they have. But when things turn sour the losses are equally amplified. Just a 10% decline in the price of the property would mean that the borrower has lost 100% of his money. A rule of thumb that property America has used is that fair house prices are 125 times the monthly rent. Across Delhi, Mumbai and even the suburbs it’s now closer to 250 times. An unholy concatenation of low interest rates and high growth in income with a consequent impact on the asset value has fuelled this mad rush to acquire property. Interest rates on housing loans for a 20-year tenure have dropped from a high of 13-14% in 2000 to about 7-8% in 2006. The consequence has been a mortgage-driven housing boom. The only agency with little to gain from this bubble, the RBI, in its recent occasional paper stated, “It is alarming to find that real income growth played only a minor role in determining housing prices in India”. Its norms for lending to the real estate sector have been getting stricter. After blocking funding for purchase of land, the central bank has further tightened measures for checking flow of funds from banks to the real estate sector. It has asked banks to ensure that credit disbursed is used only for “productive construction activity.” There’s another worry – the traditional source of home finance – housing finance corporations which are specialized to assess housing-related risk and are more rigorous in their evaluation criteria – have lost market share to Indian and foreign banks. Their share of the market has dropped from 60% of outstanding loans in 1999 to about 35% last year.

If and when this bubble bursts, there won’t be a “soft landing”. And to those confident that this is one bubble that’s going to keep growing, it would be good to remember that unusual events happen more often than one would expect. Any burst of severe volatility could lead to grief for the economy as whole. IMF research reported in the World Economic Outlook indicated that output losses after house-price crashes in developed countries have, on average, been twice as large as those after stock market crashes, usually resulting in lasting recessions. For an economy that has just started on steroids that’s a sobering thought.

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Testing Leaders

Serial job-seeking may not be a way to greatness but much is to be learnt from the mating dance between company and candidate. Interviews and increasingly these days, ‘concalls’ are a great way of picking up the latest buzz words from around the world as well as the latest techniques to test your nerves. At one interview, for instance, I could have sworn that I was asked to pour out the coffee purely to see if my hand was steady (any tremor would have hinted at sustained use of opium at some point in my life). A friend told me that at a meeting for a C-suite position he was constantly heckled and pushed by the HR manager till he finally asked the young whipper snapper if being thrown off the 22nd floor was one of the hazards of his job. Upon which, the sly fellow told him that he was just testing to see his reaction in the face of recalcitrant employees.

But I liked how one company went about hiring a new CEO. Besides the usual dinner and drink routine, they got a couple of the younger managers to meet the incumbent and ask him how he would handle real-life issues they were grappling with. It was an unusual but very effective way of gauging whether he had the leadership skills to handle the job and equally there was a automatic buy–in from the managers since they were part of the process of selecting their new boss.

He Who Laughs Last

Hard hit by the poor performance of its two largest divisions, private equity and corporate real estate, celebrity PE firm Blackstone has posted a 89% fall in its earnings in the final three months of 2007. Last year at the height of the buyout mania, the firm which essentially advises companies to go private, went public. The Chinese government was one of the investors who subscribed to that issue, a move hailed as a master stroke by many. India, they pointed out, had missed a trick by not using its ample foreign exchange reserves, to make similar investment. The Blackstone stock is now down 50% from its listing price. Mandarins of India’s central bank must be having a quiet laugh.

Our Feudal Lords

12% of scientists and 38% doctors in the US may be Indians, but at home our idiom remains stuck in the feudal era. Our political leaders don’t meet people; they “grant an audience” (See extract from DNA newspaper, below). Our business leaders don’t join school kids at a sports meet; they “kindly agree to give away the prizes”, with a boring, long-winded speech to boot. The favors and fawning raj is as ubiquitous as the more reviled license permit raj.
At one large Indian firm, lunch is served by seniority. When our politicians move on the streets, the world has to come to a halt. It doesn’t matter how great your need – you could be student rushing to an exam hall or a pregnant woman racing to a hospital. All wait while our feudal lords stride forth to solve such national crises as attending a venial warlord’s son’s wedding. Indian bosses expect their underlings to squeeze themselves into invisibility when they pass by. And if you think security has anything to do with this, how come it disappears when they need to woo their voters or beg their shareholders to approve their latest corporate fraud.

From DNA Newspaper (Sunday, March 02, 2008)
"Much to the chagrin of UPA ally and DMK boss M Karunanidhi, (Mrs) Gandhi granted an audience to his nephew-turned-foe, Dayanidhi Maran."

Courting Obesity

According to a recent United Nations publication it takes roughly 5 hectares [12.35 acres] of productive ecosystem to support the average U.S. citizen's consumption of goods and services versus less than 0.5 hectares [1.23 acres] to support consumption levels of the average citizen in the developing world. Those gluttonous yanks. But hang on. We are getting there as well and fast. Soon Indian citizens in the top quarter of the pyramid will need the same five hectares to support their consumption needs. For evidence look no further than the average family table at meal times. We eat lots more and many more things. And then struggle to work it off at gyms and spas. But that’s another story. On special occasions, the spreads are mind numbing. Pasta and cheese share table space with sarson ka saag and chettinad chicken. Obesity and attendant miseries lurk at every corner. But we are helpless. Greed and gluttony have a life of their own. Instead of grudging our food-growers the $15 billion loan waiver, we should give them a $15 billion bonus for keeping our waistlines growing.

Why oh Why

After years of writing for a living, it's difficult to keep your mouth shut. Even if someone's paying you for it. In despair I turned to the last refuge of those who may write without any hope of being read. Somewhat like Father McKenzie, who I am beginning to resemble in other ways as well. Once the decision was taken, the exhilaration followed. No holds barred, no one to please, no party line to follow and no deadline either. This is writing bliss.
But some self-imposed rules. No baby talk. No food tales. No poems. No travel tales.And no paens to the past. Such horrors have long assailed my senses as friends and strangers force their outpourings down unwilling throats. The 1-month old creature gurgling in delight as it wets its mama's pants, may be the apple of the lady's eye, but to all others it is an eyesore.
So then what will it be? Everything actually, that I see, observe and feel strongly about. The IPL tamasha as much as the Thackerays' shennanigans. And in between I will squeeze in my take on how the credit excesses of the Americans are being aped with much vigor by our demographic dividends.
But no more promises. Let the Outporiad begin!