Chi-Merican seesaw

This is a tussle for power worth mentioning. It is a seesaw which requires players on either side, America and China, such that neither player can evolve into a world power single handed. China had recently disclosed its decision to acquire nearly a 3 trillion dollar worth of natural resources majorly in crude oil, gold, natural gas, copper, iron ore, etc. On the face of it, there seems to be working on in securing the nation’s supply of raw materials for the nation’s growth.Due to China’s huge demand the copper prices are pushed up. Also the natural resources too are not left alone in the Bull Run. But when the purchase is viewed from the point of view that these are the resources most fought for and with limited supply, the issue becomes severe. It becomes more severe when the acquirer is the biggest holder of dollars outside USA.

It is the making of the perfect battle of supremacy. The Chinese are looking forward to two things by this purchase. Firstly they wish to reduce their US dollar dependency as a reserve currency. Keeping these reserves with very high dependency will be detrimental to their growth of international power because of the volatile world political environment. It is a double edged sword with China. While it gives China a good leverage and a say on the American policy decisions, but a prejudicial step taken by any nation to reduce the utility power of USD will reduce the value of Chinese foreign reserves. America on the other hand needs the utility value of USD to decrease to pay off its mounting debts and also help its exports to be more competitive. And here is the making of the first centre for power struggle between the two nations.

But China wishes to use the devaluation for its own benefit. If the USD is devalued it will also force the Chinese to shell out bigger sums to acquire the natural resources reducing the USD reserves. To counter this they are buying in resources which contain real value with them like gold, silver, metals, etc. Another aspect to the devaluation row is that US wishes to reduce its dependency on imports from China. This requires the Chinese goods to cost more in that case Chinese yuan should be valued more. With Chinese not willing to do so, US got an (probably) unintentional opportunity because of the financial system failure. It has taken lot many steps to devalue its dollars including the quantitative easing.

Secondly China wishes to promote its currency to be used in the international settlements. To be able to do this they will require the gold backing for its money and also decontrol its currency. Taking a step forward into this move China is said to have planned purchase of gold worth 1 trillion dollars. And as can be seen in the current market scenario where the price of gold is touching new highs every month, the purchase of gold is helping China to get rid of the dollar and showcase that its currency has more real worth backing. But the irony is gold is still valued in dollars.

New York Stock Exchange & Deutsche Boerse Merger

The following article was written by me for my magazine "FOCUS" by club ECOBIZZ of IBS, Hyderabad (ICFAI Business School, Hyderabad)

New York Stock Exchange Euronext (NYSE-E) and Deutsch Börse (DB) are amongst the biggest stock exchange companies in the world. They have recently gone into the decision to merge creating the world’s biggest stock exchange firm having presence in more than 7 countries. Indeed a super power like situation.

What are these companies? And what is it about companies running the stock exchanges? Well NYSE is the most renowned stock market in the world, tracked by millions of traders for speculating the world sentiments. Many exchanges feel the effects of the movements on this exchange. It’s the biggest market for equity trading. Listing on this bourse signifies an Indian company as a blue chip for the Indian investors. This is the might of the greatest stock exchange in the world. It has its presence in pan Europe too along with dominance in American markets. DB on the other hand is the biggest player in the derivatives market having its presence in many countries in Europe. NYSE had in 2006 beaten DB in a bid to purchase Euronext the pan European stock exchange (covering many European countries) creating a behemoth of stock exchange company. Now with the news of NYSE-E & DB merger creating the world’s biggest, largest stock exchange entity.

The $10 Billion merger controlling a $20 Trillion has all the eyes of the world markets. This merger for exchanges means a convergence of technologies and processes, improving the performance of the exchanges and reduction in costs to investors. It shall also increase the investment choices for an individual investor after the consolidation of the investment avenues. The acquisition will broaden the trading avenues by increasing access to companies listed on foreign exchanges, access to foreign markets to tap money.

Exchanges, the world over, earn money by charging a small margin on trade volume and earn profits by

The Japanese Recovery – Strategic view

The March 11 Japan earthquake, the 5th largest in world, has affected the world economy in more ways than just economics. So while looking at this major natural disaster the two criteria discussed in the article are Economics & Politics.

The Economics: A classic case of “supply side disruption” fueled by the unpredictable and dangerous cocktail of natural disasters - the Japan earthquake tsunami and nuclear disaster. Japan is amongst the major producers of capital goods and creates 10% of the world economic output. The good exported by Japan, consisting mostly of machinery and transport equipment was in 2010 worth about $470bn. This natural disaster wrecked havoc on the factories producing the goods heavily demanded by the whole world. This was visible in major reduction in production & sales figures of auto majors sourcing from Japan. Their May 2011 sales figures declined nearly 23%. Japan provides nearly 60% of the world’s computer chips and the calamity resulted in closure of 2 companies for repairs reducing the output by 25%. The nations round the world hence need an early recovery for the smoothening of the supply chain and depreciation of Yen.

The fund flowed into the nation for the reconstruction and there was a high appreciation of Yen. The bond market in Japan was also gathering pace. This proved one major point – Investor confidence in Japan’s recovery and repayment capability. The Japanese showed this capability and capacity. They have restored the infrastructure destroyed with great speed. An example of this would be the case of the Tohoku Shinkansen, a high-speed rail line connecting Tokyo and northeastern Japan. It recommenced operations 49 days after the earthquake.

Sports and Nation's Crisis

This article was published in my magazine - The Focus - September 2010 Edition - For IBS, Hyderabad

Do the sporting events create a crisis situation for the host countries? Are the sporting events actually deliver the "social benefits"?

South Africans are already feeling the heat of hosting the World Cup tournament. When the initial estimate of World Cup stadium costs was made by South Africa, it was set at some 2-3 billion Rand. Based on current visitor estimates, there seems no way for the SA Government to recoup that investment; to top it up, over the last few months officials have been predicting the final bill will come in around 13 billion Rand. It is a staggering increase, but also a typical example of the insane enthusiasm that every country gets when asked to stage anything to do with big-money sport. These mega events are organized with the hope of generating vast revenues and gain more businesses and tourists. Organizing countries highlight the advertising revenues and international exposure (social benefit) as the benefits that follow.

The 1990 World Cup cost Italy £550 million. The economic benefit has been variously described since then as neutral to negative. In 2002 the host country Japan made a whopping loss: ticket sales were £1.4 billion, and FIFA gave the country £100 million - but the all up cost was £4.7 billion. Even the Germans made only a measly £56.4 million on their staging of the World Cup in 2006: and if Germany can't make money out of something, then it just isn't possible. (Versus the cost of staging the thing, this represented a net profit margin of 0.4%). When the UK won the 'right' to stage the Olympics in 2005, the nation went crazy. The total expenditure which started at £4.8 billion has crept up to £8 billion by 2010.

The EU has estimates that when soccer World Cup tournament is played on another continent, the loss to economic output is £.8.1 billion -either through people watching at a late/early hour and then calling in sick, or just calling sick for the whole two weeks to see the finals in person. Last week, Britain's new coalition government announced $38 million in Olympic budget cuts as part of efforts to slash the nation's budget deficit.

Even the current Greece crisis has got its heritage linked back to the Olympic Games. While many factors are behind the crippling debt crisis, the 2004 Summer Olympics in Athens has drawn particular attention. If not the sole reason for the nation's financial mess, it scores some point to the games as an illustration of what's gone wrong in Greece. Greece had been overspending. Governments in the Greek were not able to balance a budget in nearly 40 years, and the country narrowly averted bankruptcy in May before panicky European partners grudgingly put up massive rescue loans. As a result recently the Greece's Finance Minister George Papakonstantinou had to outline harsh spending cuts and tax increases to free up billions of Euros in a joint International Monetary Fund and Eurozone rescue. Greece will receive about $135 billion in bailout loans through 2012 from IMF and EU governments worried about the Greek crisis. This crisis could also damage the Euro.

There are more than a dozen Olympic venues - the start of Greece's irresponsible spending binge - now vacant, fenced off and patrolled by private security guards. Money loaned on short term, was spent on long term assets. The 2004 Athens Olympics cost nearly $11 billion by current exchange rates, double the initial budget, which does not include major infrastructure projects rushed to completion at inflated costs. In the months before the games, construction crews worked around the clock, using floodlights to keep the work going at night. In addition, the tab for security alone was more than $1.2 billion. Six years later, more than half of Athens' Olympic sites are barely used or empty.

So finally the question that prevails for us Indians is; are we heading for the same fate with the CWG? With the current media publicity of the in-appropriations in CWG purchases and more than `30,000 crore expenditure, do we still expect the tourists to come and watch the events at incomplete stadia? Would we even break-even?

Competition Head On

Check this new TVC from Tata Manza.



taking the fight for the segment to the new level. No points to people who can judge where this goes, but for those who did not understand the target its Maruti Suzuki. Both these companies are pitching in with their models to capture the fast growing market and get a good foothold into the same. now the only thing which remains to be seen is the answer from Maruti.

Kudos to the team which has come up with this TVC. Indeed a splendid attack.

Induced Spending

The buzz word doing the rounds from the advent of "recession" is how to induce the consumer spending when they are quite skeptical about the future security. America is the leading example in this. America has brought in various fiscal and monetary policies which induce the people to spend more and save less. Policies are reducing the borrowing rate, reducing the value of the currency so that more money is spent constructively. But how much of it is actually done? American investors are sending their money to overseas markets where there are more returns on investments. How much is actually been spent to improve the economy?

As a parallel to this, India in the ancient times was very rich. Most of the population was wealthy and had some occupation to perform. There was no urgency in spending the money to buy items of desire. They had enough liquidity with them to spend as and when required. Also the people believed in savings and longevity of material goods.

This situation can be seen as an issue to the country's financial circulation. If people do not spend much and there is no consistent demand, then how can enterprises define their raw material pipeline? And as raw material for enterprise A is the output product of enterprise B, with this vicious circle there can be a devastating crumble of the system. With this crumble citizens tend to save more and spend less as there is no future security.

With this situation in mind and the recent festivities doing the round, I was amazed at the rituals which were formulated for all the festivals of our nation. There are numerous festivals, effectively making someone celebrate a festival or occasion everyday. All these occasions require people to invite guests and also give some money as "shagun". Now with this kind of raw money changing hands, the system is finally able to run the mill. People are spending during the festive seasons and saving during the odd seasons. These festivals are an imbibed feature of us Indians. We cannot live without it. Its our culture.

So without blaming any culture, I will say that if the festivities are made about such that people are compelled to spend, then you have your financial machinery running smoothly. There won't be any need of fiscal or monetary policies to Induce Spending.

JK Cement

This is a classic advertisement, which puts the basic principles of advertisements to use. The principle - "You can sell any product by displaying a semi-clad lady in advertisement". This is the principle which even if you want to avoid, you cant. People who like it will like it, people who hate it will discuss about it. The ultimate goal of brand remembrance is achieved.

Indeed this principle has been used a lot of times for many great advertisements, but what the heck? There should be some linkage to the product being advertised and the content of it.

Well whatever be the case of the content of this advertisement, it has achieved its purpose. The advertisement has created buzz on the television media and online media by "hate blogs". Any kind of publicity is a publicity.

Am sorry about the quality of the video, but that's the best available online. If i get hold of good quality, will post it. But who cares about viewing a better version of this crap TVC. Do you? then let me know, i will get it for you.




amateur video advertisement for JK Cement.
And this video too has benefited as an outcome of the above advertisement. People have started hitting this video on youtube.

Why we need Bt Brinjal (Baingan Tadka)

“One step for man; one giant leap for mankind”.

Great quote which creatively resonates with the expansion of human adventures. We are great explorers thanks to our never ending quest for exploration – craving for unknown.

Starting from being the chimps who wanted to explore their surroundings, we have come to the extent of being present on every inch of this lovely planet. We have explored the outer universe and still trying to figure out what lies beneath us. We just know the depth we need to explore, but not its extent. We are even exploring the avenues and the methods to bring into us the qualities of living beings surrounding us. First we experimented with “Life After Death” for our beloved sheep – Dolly was the new name. Next we thought to get into experimenting bringing cross cultivation, by mixing genes of two different species. The only hindrance to this was the objection by governments against human trials. But now we have taken the detour to do this with plants. We are slowly progressing in imbibing qualities of other living organisms into us. We are bringing ONENESS to its truth.

All the living beings require staying together for mutual benefit. Now we have started exploring this option. We wanted to bring in the “Bacillus thuringiensis”, so we developed the Bt Brinjal. Actually the word Bt stands for “Bacillus thuringiensis”, which is a soil bacteria, and hence the BT Brinjal is actually the normal Brinjal, with an additional gene from the Bt bacteria, which produces Bt protein. This new Brinjal was researched on by Mahyco (Maharashtra Hybrid Seeds Company) and is promoted by University of Agriculture Sciences, Dharwad, and Tamil Nadu Agriculture University, Coimbatore. Now the genes of this little bacterium can freely integrate with our body. Totally unrestricted and unaffected by our immune system. This is true bio-diversity integration.

We can definitely neglect the reports of soil infertility due to using Bt Cotton, animals dying by eating the Bt crops, fauna extinction. We the Indians are the super powers of the next generation. We need to prove to the whole world that we can be the best “guinea pigs” available on earth. Why go anywhere else, Indian soil and its inhabitants are the best test objects. We have the out of the world immunity power which can thwart off any bacterial or viral attack from inside our body.

Why stop at “Bacillus thuringiensis”, check the mutation with the hepatitis virus, or AIDS virus, with these viruses as part of our body, we will enhance our capabilities against these diseases. Then India will be the only AIDS free nation in the world. Even tough the western companies initially will conduct extensive trials with their proven medications and procedures; they won’t succeed in selling those drugs in Indian markets as we will be the AIDS resistant human species. All their money will be lost at treating the guinea pigs of India.

On the future developments front, we have very bright prospects for the Indian companies. We should stop at nothing and start integrating the genes which will build up our antennae like cockroaches, create highly sensitive nose like dog, eating machine like pigs which can survive on any shit.

HAIL, INDIA!!!

HAIL, OUR POLITICIANS!!!

You can read the following articles to get the latest update

http://ibnlive.in.com/news/not-so-scientific-bt-brinjal-report-full-of-errors/109519-11.html

One more news, we can have genetically modified forests too. And this time USA doesn’t want to stay behind, so they will experiment with forests.

http://www.scientificamerican.com/article.cfm?id=eucalyptus-genetically-modified-pine-tree-southwest-forest