Shameless Politics

The ongoing Tom-and-Jerry skirmishes between the BJP and Shiv Sena , is both amusing and thought-provoking at the same time. It is perfectly understandable that for the Shiv Sena, the BJP has become an existential threat, eat into their Marathi manus Hindu vote bank, big time. So, the SS never misses a single opportunity to heap invectives on the BJP. The BJP's reaction to all this? They just laugh it off. To add insult to injury, the more the SS tries to shout from the rooftop, the more they get ingored. The same goes to the likes of "leaders' who are past their "use-by" dates - the likes of Shotgun Sinha, Yashwant Sinha, Shourie et al. Makes me wonder whether it is a tactical masterstroke by the BJP, or whether they are plain incapable of ever responding in any manner other than to look askance. The heart wails " உங்களுக்கு வெட்கமே இல்லயாடா?" ( Don't you guys have any shame at all?) .

But, hold on! If you ever thought that the congress is any better, look no further than Karnataka. Every second day, CM HK Kumarasamy never fails to do a Kapil Dev éncore - the boohoohoo  cry in front of TV cameras with boring regularity. He keeps accusing the Congress of using him like a puppet, and not allowing him to function like a CM. But, he dare not cross the Lakshman Rekha - neither will he resign and call for fresh elections on his own. After all, self-respect sells at massive premiums, doesn't it?  Nor will the Congress blink first. The same "laugh-it-away" strategy is on display in the Garden City by Pappu's clan. The heart wails , yet again - " உங்களுக்கு வெட்கமே இல்லயாடா?" ( Don't you guys have any shame at all?)

But, hold on! Does this appear to you, to be a tacit tactic?  " நீ அடிக்கிற மாதிரி ஆதி, நான் அழற மாதிரி அழறேன்" ( you act as if you are thulping me, and I act as if I am writhing in pain). In both cases above? To me, it certainly does. And reminds me of Cho's famous not-so-last words " யாருக்கும் வெட்கமில்லை"  ( No one has shame left).

முழுவொளி தோற்றம்

ஓடிப் படித்தேன் உலகியல் உணர
நீடித்திருக்கும் எனவே நினைத்தேன்
தேடிச் சுகமென கிட்டிய தெல்லாம்
வாடிப் போனது வழக்கில், கேளாய்.


பாடிய நான்மறை பலன்தர வில்லை
ஓடிய மனமோ ஓரிடத்தில் இல்லை 
நாடினேன் மௌனம் நாதா உன்னிட்டு
மூடிய விழிக்குள் முழுவொளி தோற்றம்!!     

हम उछल जाते हैं

तेरे ही याद में मेरे दिन खुल जाते हैं
सारे ग़म-ए-ज़िन्दग़ी यूँ ही फिसल जाते हैं||

दुआं हैं की तुम ज़्यादा ज़ख़्मी न हो जाओ
मेरे तीर-ए-यादें बेक़ाबू निकल जाते हैं||

साक़ी का जाम अब बेसूद हो गया है
तेरा स्वाद-ए-मेहँदी से हम उछल जाते हैं||

मेरी ख़्वाबों में अक़सर फिरता रहो सनम
मेरी तनहा रातें दिन में बदल जाते हैं||   

Dilip

Think-small mentality is pulling India down

https://www.youtube.com/watch?v=12eD3K5Peu8&feature=youtu.be

I came across this youtube presentation, in a forum.

I largely disagree with his views. The guy, in my opinion, actually has the audacity to ask the audience to go back in time and think small, and they too sit there, clapping!! I wonder why!! Here are some of my observations on the facts of his arguments first:

1. Unorganized part of the economy contributes 50% of GDP, but employs 90% of labour...     HIGHLY INEFFICIENT. Tells you why the INR value is so low... how will it go up, without any meaningful productivity?

2. The second point of his - that a significant margin exists at the roadside idli shop, whereas in a five star hotel, the management keeps most of the margins..   is not true at all...    the so called gross margin ( revenue minus cost of goods sold) gets eaten up in large establishments by the overheads...  and the profit margins are still miniscule. If that is not true, then the EPS of listed hotel chains like Leela or Indian Hotels should be through the roof. Leela is currently about to hit NCLT !! The hotel business operates in a separate structure across the world, whereas in India, it is viewed as a luxury sector, attracting the maximum taxes. Add to it, the relatively high cost of realty, the sector simply is unviable in India. The same applies to airlien sector too.

3. Transformation happens in small orgs 12 times a year, whereas large ones take 5 years. Again, NOT TRUE. Let me explain below, later.

4. Disabled people are employed by unorganized sector, simply because hire and fire is easier, and they are the cheapest...  not out of any other reason.

5. He argues that India is not progressing because the large companies do not let these roadside guys prosper. Really??   He is contradicting his own position, because, at the start of his discussion, he says that it is the unorganized sector that his shouldering the GDP, and in the second half says that the large companies are not letting it grow. How is the big pie being stymied by the smaller pie??

6. He says "patronize the unorganized sector". Why? Only because of the human element, not because they produce CONSISTENTLY superior goods and services. Let me explain with an example. When bus bodies are built by humans, where they bend the sheet metals, weld manually, fit manually, etc...    the quality of the buses is - THE STATE TRANSPORT BUSES. Just look at how shabby the finish is. Contrast that with a Volvo bus! See the difference? So, do you want a lousy looking bus or a world class bus, even if it means getting it automated in terms of manufacture? Another example is the same ICF - as long as they encouraged only human work, the quality of Indian carriages had been consistently shabby. The same ICF has adopted modernization with a vengeance, and the result is the 180 kmph train.

Take a step back and think. These very same mom-and-pop shops that thrived on individual entrepreneurship, has existed in Europe and USA in the 17th, 18th and 19th Century, from where, they has mechanized, with a vengeance, and the results are there for everyone to see. The average OECD citizen has roti, Kapda aur Makaan, taken care of. The USA was quick to realize that they did not need 80% of the population working as farmers. They up-skilled their workforce progressively, and over time, the labour shortage was acute enough for them to justify bringing in labour from other countries ( It also suited them to upskill, because the menial jobs could be done by others, and these guys stayed on with white collar jobs). They created huge economies of scale, from farming to dairy sectors, to retailing and distribution sectors. The result - the OECS country people are largely out of poverty ( a few exceptions still exist) . Per capita GDP is the highest, and they have more millionaires than the jugaad guys that we are.

What this gentleman, in this video, says effectively is - do not work towards economies of scale; stay small, think small because, in a socialistic setup, that is the most efficient.

India is unable to think and act big simply because of the curse called Socialism that has been foisted on us by the Nehru clan. The laws are distinctly anti-big-establishment. They never allow you to think big. You cannot own more a a certain amount of land, in most states. If you are a non-agriculturist by hereditary occupation, you cannot buy agri land in most states. Most labour unions at the farm level ensure that you cannot employ machines. Which will force you to cough up exorbitant costs for employing inefficient, and often undependable, labour. As a simple case in point , Kerala has the same natural resources as Malaysia. But Malaysia allows large scale mechanization of their palm plantations and rubber plantations. Try doing that in Kerala!!  You undo socialistic nonsense, and encourage the common man towards entrepreneurship in larger scales, and you will see that these very same street-smart street guys will no longer remain street guys, but could give the Ambanis a run for their money. Sorry, but the presenter's thoughts are totally lopsided.

Another point to ponder - China did NOT become a global economic power, lifting most of it's people out of poverty in 30 years flat, by thinking small. They copied, vigoursouly, and then are now beating the whites at their own game, by setting up HUGE economies of scale, and bringing down the cost per unit. In 1979, both China and India had the same % of people below poverty line. And now, look at China, with only 4.5% of its people now BPL, compared to India's 23% !!

In short, the presenter's logic on both micro economic and macro economic fronts, appear to be flawed.

While the roadside guys' street-smartness is to be thorougly appreciated - for their ability to do jugaad under trying circumstances, in order to survive and make a living - do not attempt to eulogize and make that a virtuous working model for a 21st economy !!! You need them not just to eke out a living, but in this day nd age, when technology is helping mankind like never before, to move away from man's basic needs for survival and realize their self-worth, thinking small will only take them back on the path of struggle to even survive.

Think small, and you will remain small. Think big, and you can become the world's economic power house. Our people are extremely smart. But do not ask them to run a marathon with their feet tied!!

can-GE-survive-its-cooked-books?

https://www.forbes.com/sites/petercohan/2018/12/15/can-ge-survive-its-cooked-books/#3b4ac8292841

Firstly - motherhood statement - Accounting irregularities are nothing new to the Corporate World. Technically, many of these "cooking" happens within the SEC guidelines in the USA ( or Companies Act or other applicable governing Acts for Indian companies). History is replete with such instances of Accounting gone awry ( to put in benignly).

Secondly - the USA - that apostle of GAAP Accounting, who preaches transparency to the world, are the major culprits. Remember that giant $54Billion "Accounting error" in MCI Worldcom that took the company under? Andersen Consulting was pulled up by the SEC, for MCI as well as the other major disaster - Enron.  But then , like Amoeba, the firm was absorbed/ bought over, but strangely enough none of the partners went to jail, presumably because it was all within the existing laws. Which is why they tried to tighten it was Sarbennes-Oxley Act and a help of others. So, while systemically, the SEC has been trying to fix this, gaping holes continue, and are exploited by the Managements of many companies in collusion with the external auditors, under the shield of " being within the law".

Secondly, while in paper, the rules are clear, the authorities look the other way, when it comes to risk managment. How else does one explain the Collateralized Debt Securities, which enabled the Financial companies like Lehmann, Bear Stearns etc to leverage the same collateral more than a 100 times over? Unless, of course, the SEC admits that comonsense was not applied to question why a single collateral is leveraged multiple times over, and where is the SLR/ CRR requuirement, if margin calls are made.   I am convinced that the authorities had colluded with Wall Street.  Sending one Raj Rajarathnnam or Bernie Madoff to prison is not the answer. Systemic risks needs to be looked at holistically.

Thirdly, the role of credit agencies is question, to say the least. What were Moody's, S&P etc doing when Enron and MCI happened? What did they do to US sovereign rating when 2008 happened? How come the USA enjoyed AAA+ rating even in the worst time of it's financial history? If they cannot warn prospective lenders about the risks, through fair rating, then aren't they actually misrepresenting facts, and misleading the gullible investors and public at large?? If GE stock is down to less than $10 today, just back in history to see when their corporate bonds were derated last. You will find it shocking.

The same applies to India too. What were CARE, CRISIL, Moody's etc doing when IL&FS happened? Again, if the IBA really had it's way, more than half of Public Sector Banks would be NCLT cases, technically, since their nett worth is completely eroded due to bad debts. The same may apply to entities like Indian Railways, Air India etc ( nearly so) , but since these are government entities, they are not really covered under Companies Act, and are answerable only to the Parliament, and so, that is OK.

Year 2018 saw three small-cap companies in India severely affected by cooked-up books. Manpasand Beverages, PC Jewellers and Vakrangee Software.   If you get time, do a google search and read through the issues there. You will be shocked that the auditors had colluded with the management, to cook up books. PC Jewellers and Vakrangee, in fact , have a maze of cross holding, that is nothing but amazing!!

And if you thought only the USA and India have this, then think again!

In Korea, 2 of the 4 Chaebols have already gone belly-up due to Financial irregularities. If China were to really open up their books of Accounting, the sheer amount of bad debts in their Bank's Balance sheets, whill surely take the country down under. But then, they do not claim to be transparent, in any way, so there is no pretension. In Malaysia, the same is the case with many state run enterprises, including Malaysian Airlines. In fact, government owned airlines in most countries are already belly-up. Alitalia, SwissAir, Air France, KLM Thai Airways, Korean Air... that list is endless.. 

Many contingent liabilities are supposed to be captured there, but they are discretionary in nature, based on what the auditor is given as info. If, for whatever reason, the management fails to document any mattter of material impact, the auditors are not obligated to  factor that in.

Also, If my company has an accounting policy " no liability shall be created without a valid Purchase order", then my Accounting team will technically not be able to provide for the liability. But it comes to revenue/ cost matching, the profits will look bloated to that extent, since no provision has been made. So, Sarbennes Oxley cannot really cover this. This aspect continues to be a gap in GAAP. I am seeing this practically. In response, many companies get the project owner to certify about the impending liability, and make a cost provision, even if no PO exists yet. But many others, in their quest for higher Earnings per Share ( Wall street reporting, on which CEO and Board bonuses hinge), overlook it.

Many such issues continue to exist. If you look at PNB's case in Nirav Modi Saga, you will be left wondering about the role of the internal auditors.

As I said before, the issues are complex. There appears to be no singular solution. On the one hand, companies spend a fortune, these days, on compliance-related documentation. On the other hand, such cooking of books continue, rather unabashedly, and mostly within the purview of the laws.

The catch is the in the auditor's footnote to the B/S.

Many contingent liabilities are supposed to be captured there, but they are discretionary in nature, based on what the auditor is given as info. If, for whatever reason, the management fails to document any mattter of material impact, the auditors are not obligated to  factor that in.

Also, If my company has an accounting policy " no liability shall be created without a valid Purchase order", then my Accounting team will technically not be able to provide for the liability. But it comes to revenue/ cost matching, the profits will look bloated to that extent, since no provision has been made. So, Sarbennes Oxley cannot really cover this. This aspect continues to be a gap in GAAP. I am seeing this practically. In response, many companies get the project owner to certify about the impending liability, and make a cost provision, even if no PO exists yet. But many others, in their quest for higher Earnings per Share ( Wall street reporting, on which CEO and Board bonuses hinge), overlook it.

Many such issues continue to exist. If you look at PNB's case in Nirav Modi Saga, you will be left wondering about the role of the internal auditors.

As I said before, the issues are complex. There appears to be no singular solution. On the one hand, companies spend a fortune, these days, on compliance-related documentation. On the other hand, such cooking of books continue, rather unabashedly, and mostly within the purview of the laws.

Bottomline - I am convinced that balance sheets are cooked up everywhere - mostly within the laws. The regulators look away, and so do external auditors, very often. Thanks to equity culture, which requires the CEO and boards to survive one quarter at a time, these are inevitable.

तुम हो

इस गेहरा समँदर-ए-दिल का किनारा तुम हो 

इन ख्वाब-भरी आँखों का नज़ारा तुम हो

कितना भी कोशिश करूँ तुम्हे भूलने की 

सुबह जब पलक खुलती तो दुबारा तुम हो

गर्दिश-ए-दिल में सितारें कम नहीं - पर 

  मेरी सूनी अफ़क़ में टूटा तारा तुम हो 

तन्हाई में तड़पने की गुंजाइश अब हमें नहीं  

हर सांस में मह्सूस है, अब हमारा तुम हो 

Ramana Balachander

Ramana Balachander (RB)  appears to be a prodigious talent. At 17, he certainly shows great promise of evolving an ace Vainika, over time. I thoroughly enjoyed this concert of his.

https://www.youtube.com/watch?v=rVL6hum7WQ8&feature=youtu.be

A few observations:

1. The Suddha Todi Varnam opener stole my heart away. This is one of the masterpiece creations of the late Dr. Balamuralikrishna. RB has done full justice to the rendition. Brought in images of MB himself singing this.

2. The Janaranjani was top-class. One of the nuances of this ragam is that for the "Ni", as a way of gamakam, the Ni should sound somewhere in between Ni and Sa ( and not in either of them). That brings out the beauty of the ragam. RB has handled it exceedingly well.

3. Enta Muddho - Bindumalini - I do not know of any other composition by anyone else, in this ragam. But this one is a masterpiece of St. Thyagaraja, with very deep philosophical meaning.

3. The Bhairavi Thaanam and Kalpanaswarams were special. They show his mastery over both the instrument as well as over the music.

4. Miyan Ki Malhar - an out and out Hindustani Music Raag, has been well adopted by Tanjavur Kalyanaraman, the composer, and handled beautifully by RB. Note that this Raag has many "misra swaras" which are usually not the norm in Carantic music, but are the ones that bring out the beauty in Hindustani style. This Raag was supposedly commissioned by Miyan Tansen, the great musician in Emperor Akbar's court. Hence the name " Miyan Ki Malhar" It's "cousin", Megh Malhar is the equivalent of Carnatic Music's Amritavarshini, in it's supposed powers to bring in the rains.