Articles on advertising,marketing, movies, music martial arts and issues that inspire me. You can contact me on natesanvinod@rediffmail.com
Monday, December 22, 2008
Consumer Protection Act 1994- Advertising to children
A little girl lisps "I love you" and names a brand of synthetic soft drink concentrate. Sales shoot up. There is no real fruit juice in it, no nourishment for growing bodies, yet no children's party is complete without this drink. The girl in the ad goes on to make the kind of money that even tenured professors do not earn, and lured by this money other parents try to push their pre-school progeny into advertising offices.
A beverage promoted as a "complete food and nourishing drink" puts out an advertisement with the photographs of six toppers of the higher secondary examination, implying that drinking the product ensures a high rank. Following a complaint by the Consumer Education and Research Centre (CERC) of Ahmedabad, pointing out that the ad plays on the anxiety of children as well as parents and that it is hard work rather than merely consuming some brand of drink that determines rank, the Monopolies and Restrictive Trade Practices Commission (MRTP) ordered the withdrawal of the advertisement. The Advertising Standards Council of India (ASCI) also agreed that the use of the photographs of rank holders was misleading and an unfair practice.
These are but two examples of how children are targeted and manipulated for the sake of profits. Children under the age of 15 make up nearly 40 per cent of our population. That means close to 400 million, a constituency of consumers larger than the population of the U.S., Canada and Australia combined. Apart from being a large potential market (for everything from bottled drinks to instant noodles and soaps) children also constitute tomorrow's generation - and advertisers know that consumption habits and preferences developed in childhood get carried into adulthood.
We arm children with road sense so that they will not be run over by speeding traffic outside, but we do not think of arming them in the same way against bulldozing ads or unscrupulous commercial practices that seek to manipulate their priorities and desires. And with television now in every home, the inveiglement is taken right into millions of living rooms where children become a captive (and impressionable) audience. Even toddlers who cannot yet read, have been known to recognise catchy jingles and visuals.
Which may not be a bad thing, provided ads gave out unbiased information. But do they? Cola drinks contain synthetic chemical sweeteners (far cheaper than conventional sweeteners) which are merely empty calories and provide no nutrients. Their long-term effects on human metabolism are also not fully known. With the equivalent of eight teaspoons of sugar a bottle, these bottled drinks also pose a threat to teeth. The caffeine content in them likewise is unhealthy for children. Yet children go for cola drinks because of massive advertising, sponsorship of sports events like cricket matches, the use of sportsmen as models in ads, and contests with attractive prizes.
In one such contest which promised mini-bats signed by Gavaskar in exchange for bottle caps, schoolboys in the posh Cuffe Parade area in Mumbai began to drink fizzy cola by the crateful (thereby spoiling appetite and health) while their peers, from middle-class families, began to rummage through garbage dumps looking for bottle tops, till a group of horrified mothers complained to a consumer organisation about the warped sense of values that such contests were promoting.
So who safeguards children's interests as consumers, in terms of health, quality of life and value systems, in a scenario where the annual outlays on advertising run to several hundred crores? In a country where children's per capita consumption of milk is 10 per cent less than the nutritional requirement, how ethical is it to target and lure them with fizzy drinks?
Our Constitution enshrines the state's obligations towards children and we have ratified international conventions and covenants that seek to uphold children's rights to safe growth into adulthood. Yet, their interests get eroded when lack of awareness on the one hand and lax enforcement of protective laws on the other result in the sale of sweets and ice lollies containing prohibited colours (sunset yellow, for example, which is a carcinogen) outside school gates. Often "medical" formulations banned abroad are permitted to be prescribed here. (Periactin, promoted as a "growth stimulant", is banned by the U.S. Food and Drug Administration, yet it was prescribed for my son by a doctor in Mumbai.)
Lead in the paint on toys can cause brain damage. A TV ad on Doordarshan used to show a little girl pretending to have a cough because she wanted to suck lozenges with a pepperminty taste - but cough drops which contain subclinical doses of epherdrine or menthol which can harm. Monosodium glutamate, which enhanced flavour, added to instant soup packets can harm infants. It was only after consumer activitists' pressures that the packets now contain labelling warning that it is "unsuitable for infants under 12 months and pregnant women."
G.S.Baine/Fotomedia
Growth hormones in chicken feed led to 3,000 children in Puerto Rico developing abnormal sexual changes, after eating chicken. Recently Germany banned the use of soft plastic teethers containing the chemical pthalates. Clear plastic feeding bottles are also banned due to the possibility of the plastic leaching while heating the formula but, the Consumer Guidance Society of India points out that most people in India do not even know of these hazards.
The Thalidomide tragedy is perhaps the most horrific example of how children can be harmed by new chemical formulations of which we do not know the long term effects. Thousands of deformed children were born to women who were prescribed the drug as a cure for morning sickness during pregnancy.
Children become victims in another sense too - one boy jumped out of a window last year in U.P. and died while imitating a TV stunt in an advertisement. Another was grievously injured trying to "fly" out like Shaktimaan in the popular TV serial. Children "consume" not only food and formulations but also attitudes and ideas, in the name of fantasy, without knowing where to draw the line.
Advertisements for a variety of "institutes" that promise to offer courses of study that "guarantee a job" proliferate, but not all such institutions are genuine. Gullible students and their parents, under tension, enroll and pay up fat fees, often to discover that the deal is bogus. Claiming a refund is often a futile exercise. This is a particularly reprehensible rip-off. CERC took one such institute, which was trying to cash in on the IIT aura (by naming itself the Indian Institute of Computer Management) to court and obtained a ruling asking the institute to change its name to avoid misleading students. Many "diplomas" and "certificates" from dubious institutions are worthless, but lack of awareness leads to much avoidable distress and loss of money.
Sweden has banned all TV advertisements aimed at children. Germany had an entire batch of bicycle helmets for children recalled after Test magazine found them substandard. We too have broadcasting codes and laws for protecting consumers, but we have not thought of initiating imaginative measures using modern communication techniques, to develop consumer consciousness in children. In England, for instance, a school teacher asked a boy who lost a tooth during class, to put the tooth in a cup of cola drink and leave it over the weekend. On Monday morning the class could see that the tooth was not only discolored but also corroded. The message, about the effects of cola drinks on teeth, went home clearly, without a didactic lecture from the teacher.
Children in a Bangalore school did a "project" where they counted the number of pages in notebooks and found that there were only 186 instead of the 200 printed on the cover. At a national seminar on "Children as Consumers" held at Ahmedabad by the CERC, students came up with perceptive comments and suggestions - one 9-year-old asked why Sachin drank cola if it was bad for the teeth; another wondered why his syllabus taught him about our Constitution in civics but not about consumer awareness "which would be more useful." Another wanted to know if she could "go to the police" to complain about cheating, when the grocery store sells flour that has worms.
Children learn young. And if the sellers seek to catch them young, why can't we catch them young too, arm them against practices and pressures that are not in their best interests?
Credit : The Hindu.
Source:Advertising Professionals of India - Sugandha Dubey
Friday, December 19, 2008
DUBAI - THE IMPACT OF THE GLOBAL MELTDOWN
Dubai faces meltdown, expat job losses feared
Dubai, Nov 12 : For the first time, fears have been openly voiced over a business meltdown in Dubai due to the global finanacial crisis, after a steep fall in realty stocks, the stalling of real estate sales, sacking of 200 employees by a leading developer and tightening of credits by banks.
In a front page report, the Gulf News reported that the Dubai stock market plummeted more than seven per cent yesterday as investors, gripped by worries of a real estate crash and a grim regional and global economic outlook, continued to be on a selling spree.
Many Indian developers like Shobha, stars like Shah Rukh Khan and expatriate businessmen have announced investments in the UAE and any likely meltdown will hit their business as well as job prospects of thousands of Indians and other expatriates.
It has been carnage in Dubai stock exchanges in the last few days as the worth of top government-owned real estate companies like Emaar, which had planned huge developments in India with a Calcutta-based real estate firm, continued rapid downward slide, declining 9.88 per cent to close at 3.74 Dirhams.
"Dubai is bearing the brunt of the regional and global market weakness... The market perception is that Dubai is seen as the "weakest link" within the GCC in this environment," said Khalid Masri, executive partner, Rasmala Investments. The combined loss of market capitalisation since last Sunday is about 65 billion Dirhams.
Vyas Jayabhanu, head of Abu Dhabi-based Al Dhafra Brokerage said a series of news yesterday created havoc. "Investors didn't take kindly to the news that real estate major Damac has laid off 200 employees. And then there was another big one that Emirates airlines profits dived by 88 per cent...Hence, investors, who came in today, did not believe Emaar chairman Mohammad Al Abbar's statement that UAE's GDP will contract from 14 per cent to nine per cent. They certainly feel it is going to be worse," he added.
In the last two months, expatriates, including a majority of Indians had sent home four billion Dirhams taking advantage of low rupee exchange value. Most of the funds were raised through easy personal loans from banks and any large scale layoffs will mean losses to banks.
Elsewhere in the region, a similar gloom pervades investors. Saudi Arabia's Tadawul Index closed 5.2 per cent down and Kuwait's stock exchange, the second largest in the Arab world, dropped 2.6 per cent. Qatar and Bahrain stock exchanges declined 6.25 per cent and 2.74 per cent, respectively.
Yesterday, leading UAE bank Mashreq announced that it was open to merger. Meanwhile, a top banker from cash rich Abu Dhabi, the CEO of Abu Dhabi Commercial Bank Ervin Enox said his bank will not allow defaults from Dubai-owned government companies on credit payments
Global financial crisis hits Dubai
Wednesday, November 12 2008
Dubai, Nov 12: Dubai city for the first time witnessed fear of financial meltdown on Tuesday, Nov 11 after the steep fall in realty stocks, the stalling of real estate sales, sacking of 200 employees by a leading developer and tightening of credits by banks. Also the fear was openly voiced over a business meltdown due to the global economic crisis.
On Tuesday, the Gulf News reported that the Dubai stock market plummeted more than seven per cent on Tuesday, Nov 11 as investors, gripped by worries of a real estate crash and a grim regional and global economic outlook, continued to be on a selling spree. Many Indian developers like Shobha, stars like Shah Rukh Khan and expatriate businessmen have announced investments in the UAE and any likely meltdown will hit their business as well as job prospects of thousands of Indians and other expatriates.
It has been carnage in Dubai stock exchanges in the last few days as the worth of top government-owned real estate companies like Emaar, which had planned huge developments in India with a Calcutta-based real estate firm, continued rapid downward slide, declining 9.88 per cent to close at 3.74 Dirhams.
"Dubai is bearing the brunt of the regional and global market weakness... The market perception is that Dubai is seen as the 'weakest link' within the GCC in this environment," said Khalid Masri, executive partner, Rasmala Investments. The combined loss of market capitalisation since last Sunday is about 65 billion Dirhams.
Vyas Jayabhanu, head of Abu Dhabi-based Al Dhafra Brokerage said a series of news yesterday created havoc. "Investors didn't take kindly to the news that real estate major Damac has laid off 200 employees. And then there was another big one that Emirates airlines profits dived by 88 per cent...Hence, investors, who came in today, did not believe Emaar chairman Mohammad Al Abbar's statement that UAE's GDP will contract from 14 per cent to nine per cent. They certainly feel it is going to be worse," he added.
In the last two months, expatriates, including a majority of Indians had sent home four billion Dirhams taking advantage of low rupee exchange value. Most of the funds were raised through easy personal loans from banks and any large scale layoffs will mean losses to banks.
Elsewhere in the region, a similar gloom pervades investors. Saudi Arabia's Tadawul Index closed 5.2 per cent down and Kuwait's stock exchange, the second largest in the Arab world, dropped 2.6 per cent. Qatar and Bahrain stock exchanges declined 6.25 per cent and 2.74 per cent, respectively.
On Tuesday, Nov 11 leading UAE bank Mashreq announced that it was open to merger. Meanwhile, a top banker from cash rich Abu Dhabi, the CEO of Abu Dhabi Commercial Bank Ervin Enox said his bank will not allow defaults from Dubai-owned government companies on credit payments.
Dubai realty meltdown stumps expat Indians
12 Dec 2008, 0530 hrs IST, Malena K Amusa, ET Bureau
NEW DELHI: When xxxx and xxxxxx moved from New York city to Dubai two years ago, they were greeted by the uncomfortable heat of
the desert emirate’s red hot property market. It took the couple, who are in their 30s and working for top corporations in Dubai, six months to secure an apartment mortgage as wealthy investors
from oil-rich Gulf neighbours and Russia were driving up property prices to dizzying heights. So, when they finally moved into their home earlier this year, they were elated.
But two weeks ago, they were facing a chilling new reality after the property market had cooled off substantially: they got a letter from their bank informing them that their monthly mortgage bill just went up from 18,000 dirham (dh) a month (Rs 2.47 lakh) to Dh 25,000 (Rs 3.43 lakh).
Citing global financial downturn, the bank, which takes its interest-rate cues from the cost of borrowing globally, had spiked the couple’s interest payment.
“Now, if one of us is laid off, we may have to give our keys to the bank,” rues xxxx Dubai — Asian realty’s ‘Promised Land’ — is showing symptoms of acute financial strain, causing big property developers like Nakheel to lay off hundreds, tycoons like Donald Trump to delay multi-million dollar projects, and average property buyers to balk at regulations that fail to shield investors from global fluctuations.
The oil-rich Gulf region, many had expected, would be spared the financial turmoil enveloping the rest of the world.
But crude oil prices fell from a peak of nearly $150 per barrel to less than $50, weakening Dubai’s financial backers and leaving the emirate, with little mineral wealth, in the doldrums.
“Unlike any part of the world, guys like me can’t walk out of a mortgage here,” says Abhy, a part-time property investor from Kochi, who wanted to protect his full identity. In July, Abhy, who works as a business consultant, invested 15% in cash in a 1,200 sq ft flat that cost Dh 1,700 per sq ft, in addition to getting a mortgage. His plan was to sell the flat in 2010 at a much higher rate. Today, he’s not sure he’ll get Dh 1,400 per sq ft even if he is lucky enough to find a buyer.
Abhy also had to give his bank an undated cheque for Dh 3.5 million, which the bank would cash in case he defaulted on his mortgage payments. That cheque would bounce, Abhy says. And most unsettling, his bank considers a change of job a default. A slowdown in Dubai’s economy could mean a fall from grace.
A recent report by UAE property assessment agency RichVille blames Dubai for doing little to protect investors such as Abhy.
“The central bank did not reduce its interest rates when all western countries reduced theirs,” the report said. Banks were discouraging construction and end-buyer finance “by significantly increasing interest rates, increasing required loan down payments to more than 35%, and finally making the terms for accepting loan applications very difficult.”
But hope seems to be on the horizon. Latest news reports indicate that banks are trying to make it easier to get a mortgage to spur buying.
And then there is the spectre of layoffs. Nakheel, one of the top three players in Dubai realty, laid off 500 employees — 15% of its workforce — in November. Morgan Stanley shed nearly 15% of its staff in Dubai and Lehman Brothers closed its office in Dubai’s financial district after it filed for bankruptcy protection in the US.
There are some lucky ones, too. Samir Sen, a civil engineer living in Dubai for 23 years, made a Dh 200,000 profit after buying a studio flat in 2006 and selling it last year. He’s now holding a second studio flat to develop and sell in two years. He is of the view that while credit is tightening, and people — who can’t afford to hold a home — struggle to sell, the housing market “is not going up or down; it’s stable.”
Venu Rajamony, India’s Consul General in Dubai, says the economy is strong, but adds that many Indians, mainly construction workers, are heading back home. There are 600,000 Indians living in Dubai, he said. Many are construction workers.
Abbas Ali Mirza, president of the Dubai-based Indian Business and Professional Council, an association of at least 700 business leaders, says: “Everything appears fine and normal.” Representatives of property development agencies Damac and Emaar declined to comment.
Meanwhile, XXXX and XXXXX consider their options. And one of them is to open a bedroom to a temporary tenant.
Dubai property giant sacks 500 as finance crisis bites
2008-11-30
DUBAI (AFP) - The Dubai property giant behind such grandiose projects as a one-kilometre tower and artifical palm-shaped islands said on Sunday it has fired 500 staff as the global economic crisis begins to bite in the oil-rich Gulf.
Government-controlled developer Nakheel, one of the biggest employers in the booming desert city-state, also said it would be scaling back work on some of its projects.
"Approximately 15 percent of the total workforce, which amounts to 500 employees, was made redundant," it said in a statement, describing the move as "a responsible action in light of the current global market conditions."
It is the largest job cut in the wake of the global financial meltdown to be announced in United Arab Emirates and in Dubai, a city of skyscrapers, opulent hotels and malls which hosts hundreds of thousands of foreign residents including Westerners and Asian workers.
"We have the responsibility to adjust our short term business plans to accommodate the current global environment," said an unnamed spokesperson quoted in the statement.
"The redundancies are indeed regrettable, but a necessity dictated by operational requirements which are in turn dependent on demand," the spokesperson added.
Earlier this month, Damac Group, owner of the region's largest private developer Damac Properties, said it cut 200 jobs or 2.5 percent of its workforce.
Nakheel is developing several iconic projects in Dubai, including three palm-shaped man-made islands, only one of which is completed, and a cluster of islands in the shape of a map of the world.
It also announced last month a jaw-dropping plan to build a one-kilometre-high (3,280 feet) tower which would overshadow the still unfinished Burj Dubai, already the tallest on earth.
Nakheel also develops residential and commercial property, whose sales thrived after the sector was opened to foreign investors a few years ago.
Last week, Nakheel jointly hosted a star-studded 20-million-dollar bash to celebrate the opening of the Atlantis Hotel on its Jumeirah Palm island, with a huge firework display.
Top officials in Dubai insist the emirate's real estate sector -- a major engine of economic growth in recent years -- will weather the global crisis, but investors appear to have lost confidence in the market which was until recently a great magnet for investments.
Mohammad Alabbar, head of Dubai's Advisory Council, which was formed to deal with the impact of the financial meltdown, hinted last week that Dubai's major developers will use their control over supply to curb an increasingly clear drop in property prices.
"Our priority is to manage supply in the real estate market to ensure equilibrium," he said.
Fears however loom over the future of Dubai's economy after a double-digit growth registered in the past few years, with concern rising over the emirate's accummulated foreign debt amid the global credit crunch.
The emirate's bourse has been taking severe beating since the beginning of the financial meltdown, mainly due to a nosedive in real estate shares.
Despite occasional surges, the Dubai Financial Market is now about 67 percent lower than its level at the the start of the year, while the market leader, Emaar property giant, has seen its shares drop to record lows.
Foreigners number over 4.7 million, or over 84 percent of the UAE population, while Indians alone account for 42.5 percent of all expatriates, according to an unofficial study released this year.
Expatriates from the Indian subcontinent and southeast Asia also make up around 75 percent of the workforce, the study said.
There are also about 120,000 Britons representing the largest Western community in the UAE, with 100,000 living in Dubai alone.
After months of press releases and government promises that there will be no such thing as a bubble in Dubai, the big boys of Dubai are finally saying, “Beam me up Scotty, I think I’m in trouble.”
“Trouble,” would be the understatement of the year, and the developers are making it clear they are not one whit interested in the fortunes of the smaller investor. Despite the recent introduction of laws written to protect smaller investors, Dubai’s property developers are thinking up new ways of avoiding any responsibility and screwing every last penny possible from the situation as fast as the new laws are passed.
MiNC, developer of Prodigy 1 in Jumeirah Village South has put a new proposal to their current investors:
Pay more than the agreed price, or we will cancel the project and keep your deposit.
The wording was slightly different, but that is what it amounts to. According to MiNC, two banks have withdrawn funding and “the project is no longer financially viable. Costs have increased to the extent that MiNC would make a significant and material loss if it were to build this project.”
Gulf News
It is actions such as this that will finally deflate what is left of the Dubai bubble. A lot of confusion is surrounding Article 11 under Law 13, which guarantees investors - “In the case of canceling the contract, the developer may retain 30 per cent of the ‘contract’s value’, and the rule of (30-70 per cent of the money paid) shall be applied on amounts exceeding 30 per cent.”
Key words here are “contracts value,” not “monies paid,” as the Article originally stated. Arguments abound and opinions are divided amongst those who feel that Dubai no longer needs outside investors and the emphasis of government intervention should be in favor of protecting the developers, and others feeling (as we do) that the smaller investor is vital if Dubai wishes to be anything more than a “Disneyland in the desert.”
As things stand at the moment, if a small investor defaults (as is starting to happen on a large scale), the developer keeps 100% of the money in some cases, and developers are simply refusing to answer questions or deal with inquiries. A number of smaller investors are attempting to band together in an effort to at least recover the “70% of monies paid.” One such group can be contacted here:
investorslaw13@hotmail.com
Elsewhere, prices are falling dramatically, with distressed properties being offered at 40% discounts on Palm Jumeirah, which is still massively over-priced. If falls in the US and Spain are any indicator, some analysts are expecting Dubai’s prices to fall anything as much as 60% in the next few months.
Other property websites are now starting to report on Dubai’s bursting bubble, and here is a selection:
Reuters - Dubai real estate suffers as distressed sales rise
AOL Dubai Property boom halts as prices fall and jobs go
According to Mohannad Sweid, CEO of Depa, some of Dubai companies are in “denial” about the viability of projects in light of the global financial crisis.
We are at the denial stage where lots of developers know for a fact that their projects should be cancelled and they’re either not announcing it or they’re saying it’s going to be delayed. We cannot deny the effect [the crisis] has been having, we are a part of this world and I believe it’s just not right to say we haven’t seen any impact. What we have had in the GCC in the last three years is the difference between reality and non-reality. Our market research showed there will be 280 new hotels built over four years within the GCC. That was advertised all the time… If we look at the reality - how many hotels have been delivered - it’s hardly more than five or six hotels a year.
In terms of risk to his own firm, Sweid was confident that infrastructure projects would still go ahead.
In this region, a lot of infrastructure is not developed yet and these elements of infrastructure have to be developed - it’s not a choice,” he said, citing Dubai’s new metro system as an example. He added that Depa was still on track for growth for next year, but the “fears” were for 2010 and 2011.
The real question is not whether the Dubai bubble has finally burst, but more how far it will deflate. With property prices quoted as having risen somewhere in the region of 76% over the last year, a major correction is likely. Already prices have fallen 40% in most developments, and we feel it is going to deflate a lot faster than it blew up.
Filed under Dubai by Mark Knowles
Tuesday, December 16, 2008
A Citizen's Charter
A few points after the Mumbai terror attacks, just so that the flame is kept alive.
1)The death of Mr Karkare and the19 policemen have indicated the crying need to provide better arms, equipment and training for our police force. Outdated guns, sub-standard bullet proof jackets, poor infra-structure were exposed in the attack and what saved the day to an extent was personal commitment shown by some of these officers and foot soldiers.
2) The law enforcement personnel need to be paid better and the pending demands for salary revisions and more humane working conditions need to be addressed promptly. Fratricide among the CISF and CRP is occurring too frequently for comfort. If casualties in the line of duty were not enough, suicides due to work related stress seems to be the next cause for loss of life among security forces.This needs to be addressed with more headcount and more human working conditions rather than YOGA sessions. The people to police ratio is the worst in this country. Recruitment would help assuage the unemployment issue apart from winning votes.( just in case this has escaped the notice of the establishment).
There are quite a few Commissions that have urged reforms in the working of the law enforcement machinery. Dusting these files of cobweb and getting the likes of Kiran Bedi, Robeiro et al and starting an Action Committee to implement these across the country, would be the right step (or left step- depending on the political leaning)
3). A three tier structure, with a federal police force, a state level force and a district level force, could be looked at. The National “Investigative” Agency is fine, but there is already a CBI. To prevent two “investigating” each others pants off, the NIA should focus on terrorism and law and order problems that are federal in nature. Terrorism, separatism, violent and criminal acts by one linguistic group against another, should fall in its purview, so that it can act where the local force is unable to, though it wants to , or does not want to, though it is able to. The CBI should continue to focus on criminal investigations which are referred to it and which have multi-state ramifications. Recently the rapist son of a high ranking police chief in an Orrissa gave the police in Rajasthan the slip. Till date, the chase is on and even “Times Now” , with its always indignant, holier than thou, Arnab Goswami, in spite of his inquisitionary zeal has lost stamina and interest and has moved onto other juicier stories for the “nation is watching” hour at 9pm! An intra- state police force would have saved the day, or would have found it difficult to come up with excuses for the lapse!!
The recent investigations into various frauds have thrown up the need for specialized know how and skills. Cyber crime is another area where know- how needs to be augmented and specialized teams set up. Use of CCTV’s etc would anyway call for IT skills to be enhanced across the forces. White collar crime is on the increase and investigations and recovery of assets is a tricky business. Unless the skills on the law enforcement is as good as that on the other side, it will be a game of catch me if you can with the law enforcement beginning to resemble the famous Inspector Clouseau of the Pink Panther fame.
4) Life would become simpler too, if criminal investigation and implementation of the criminal procedure code is separated from crowd control and public safety. The Police Act is an anachronism and a British legacy. It needs to be made contemporary. The criminal procedure code needs review. Incorporating technological progress into the Evidence Act needs to be implemented. The number of courts and platforms for the judiciary to deliver justice needs to be enhanced significantly. "Justice delayed is justice denied". It is delayed decisions and the dilatory tactics (tareek pe tareek), that encourage crime. There is a feeling that one can get away with anything if one has the right connections. The law is not only blind, it is beginning to look as if it is deaf, dumb and handicapped!!!
5) People and politicians have mentioned the undue importance to “lal bathis”. There is need to augment the investments in safety/ security of public transport systems too. This is felt even more with the railways and road transport operations. While there is some improvement, a lot still needs to be done.
Separation of VIP security from the routine law enforcement functions needs to
be looked at. The option of a "protection tax" should be levied on politicians
and elected representatives who avail of it beyond a certain level. While “positional security” is a must for people who hold public office, we need to be rational in its implementation. Where the travel is not for fulfilling the requirements of the public office and is personal in nature (party work), the expenditure must be debited to the user of the security. There should also be reasonable restrictions on movement of such V.V.I.P’s so that the externality to the common citizen is reduced.
6) Licensing and monitoring of security agencies should be made stricter and they should be provided greater powers like permission to use sophisticated firearms to ensure protection of private property. Private parties then can afford to arrange for their own safety. With kidnapping becoming an industry in itself and a popular means of earning a livelihood among the vast unemployed in the Northern States, private security may become a necessity for most people in the upper income groups. Not everyone is an Adobe CEO , to cough up lakhs at short notice and throw it from running trains! If the law enforcement cannot deliver, the ‘potential ransom’ is better utilized as security costs. At least children are prevented from going through the trauma of a kidnap!!
7) Implementation of "bio metric smart cards' and integrating the electoral
rolls, ration cards, passport documents should be undertaken and monitored.
Public sector outlays in this area should increase the money flow and provide
sucour to the economy that is slowing down. Apart from ensuring that welfare projects and funds reach the right beneficiary, it also helps in monitoring and managing law and order problems. Linkage with other documents also ensures speedier investigations/ verifications of identity and less likelihood of infiltrations/illegal migrants and impostors.
8) The armed forces need substantial outlays to obtain better equipment and know how. This needs to be addressed. The condition of the air force is well known and has been the theme of a popular movie also (Rang De Basanti). The navy's inability to protect our rather long coastline has been exposed with the Mumbai blasts.
9) I think there is a need to ensure corrective action. As the saying goes "if
you wrong me once, shame on you, if you wrong me twice, shame on me"
The US never allowed a repeat of 9/11. UK ensured that the blasts there were
history, we seem to be impotent when it comes to the safety and dignity of our
people. The 1993 bomb blast accused and those who abetted them find supporters and sympathisers and seem to be walking around free. This includes an underworld don who was extradited from Portugal! The law should be the same for pick pockets and mass murderers, as well as those who aid them in any which way, never mind that they are popular film stars who enact national heroes in movies. People who lost their near and dear one's are also human beings and have rights.
10) Perversely and I hate myself for saying this, the only positive aspect in this
blast is that it is the powerful and the rich that was under attack and
therefore there is likely to be corrective action. If it had been another
suburban train where this had happened, things would have gone back to usual
with the usual platitudes about the "Resilience" of "Mumbai", the "Spirit of
Mumbai" and the followers of La Dolce Vita would have been partying this weekend with abandon. They would probably then make noises for stray dogs to be protected better, never mind if another construction labourer's child is
mistaken for garbage by these canines and pose for PETA with no clothes on. To add insult to injury, they would probably do a "fashion show" for the “poor accused” under POTA, who were accused “without proof “and whose "human rights" were violated!
Well now it is different, "enough is enough" is the headline among the voting public and Thank God for that!!
Amen
Post Script: 16th December 2008
At the time of sending this there is legislation being filed to handle the possibility of future terror attacks. One hopes that it does not take another 26/11 to get the political establishment to ensure that the right to life and liberty,to own property, to move freely in the country are fundamental to the citizens and it is their responsibility to see that it is not violated. The laws and the ways to implement them, should be updated and made relevant to the times that we live in. We seem to be living in an era where the “underworld” is the dispenser of “instant justice” and an extra constitutional authority instead of the democratic institutions!
This is the only explanation for the huge resources, network and consequently, clout, that these “anti-socials” seem to command.
We need to move to a status quo where we need not worry about our children being kidnapped, our women being teased or molested, our land and assets being seized from us without due compensation or consent, or life being taken simply because we were born into a place or to people whose religious faith we could not have decided.
As Tagore said,
Where the mind is without fear and the head is held high
Where knowledge is free
Where the world has not been broken up into fragments
By narrow domestic walls
Where words come out from the depth of truth
Where tireless striving stretches its arms towards perfection
Where the clear stream of reason has not lost its way
Into the dreary desert sand of dead habit
Where the mind is led forward by thee
Into ever-widening thought and action
Into that heaven of freedom, my Father, let my country awake
Amen
Tuesday, December 9, 2008
GREAT ADVERTISING- DON'T USE CELLPHONES WHILE DRIVING
Tuesday, December 2, 2008
Zoomtra - Digital marketing ; A case study for the travel industry
Client : Zoomtra.com
Name of Agency : In-house
Year : 2008
Category : Online Marketing
Zoomtra.com, the makers of India Dekha! had an objective of providing a platform for travel enthusiasts and planners to connect and share their travel interests with one another. Zoomtra.com saw a clear opportunity on Facebook and launched India Dekha - a traveller networking application using the Facebook tool that allows third-party applications to integrate on its platform. Two months later in February 2008, India Dekha! was one of the first 20 global applications that went live with Orkut’s third party application tool as well.
Project summary
The online travel space in India has already started to look cluttered with over 20 significant online travel sellers with exorbitant marketing budgets. In such a scenario, how does a newly launched travel search engine reach to the masses and differentiate itself?
Zoomtra.com’s goal as a travel search engine is to provide the most comprehensive, fastest and easiest to use results for any travel search requirement of an Indian user. A significant USP of Zoomtra.com is that the search results consist of real life user generated inputs by experienced travelers. This enables a more powerful and unbiased approach to travel search as a concept. To make this concept clearer, think about the following point - Would you rather believe a travel seller about the quality of the destination and hotel you are planning to go to, or your friend who went to the same location and hotel a couple of weeks back?
The strategy team at Zoomtra.com had to come up with a long tail strategy that could reach the masses and could produce immediate results. The team saw a clear opportunity in Facebook’s and Orkut’s newly launched tool that allowed third-party applications to be plugged into its platform. The tool enables the third party applications to interact with their user base and networking features.
The strategy team proposed a traveler networking application called India Dekha! that would evolve as an India-centered travel community. The application would enable all Facebook and Orkut’s users to display their own travel history in a fun manner and connect with fellow travel enthusiasts to share their feedback on various destinations in India, along with ratings to the cities’ shopping, eating places, night life etc.
Challenges, objectives and strategy
The main objectives were:
* Creating India’s largest traveler community
* Reaching the masses
* Being cost efficient
* Collecting user generated inputs about Indian Destinations to power our travel search results
* Ensuring consumer involvement and engagement
* Automated spread of word had to be viral.
The biggest challenge was to involve an Indian internet user since Indians are relatively new to concepts like online communities and they refrain from writing a lot unless given easy to use options. The team came up with a fun concept wherein a user would select a location on the map of India and place a pin and tell what type of a place is it, whether home town, place visited, place on a wish list etc.
We categorized the reviews and ratings into various things about a city like, night life, shopping, eating places, what you like and dislike about that city. This ensured an easy-to-use tool to give feedback in an interactive manner.
Another tool that we added was the travel planning tool. Whenever someone marks a place where he wants to go, the application prompts the names of friends with whom he might want to travel to that place. On mentioning the names of friends and auto-invite reached the friends.
Using Orkut and Facebook, this personalized map automatically got shared with the friends’ network of a user. The friends in turn comment and share their experiences of those locations as well.
The key aspect to note is that this strategy had all the right marketing elements in it. It was fun to use, launched at the right place and to the correct audience, viral in nature and inexpensive to create.
We launched our application where people were already present and networking with each other i.e. Orkut & Facebook. This application allowed these same users to express their travel interests, thoughts and aspirations. The cost that went in was that of the man hours spent in designing and developing the application. Creating a new community from scratch and launching an independent website would have been cost prohibitive. Various other big players in this space had their communities present for over 4-5 years in existence with moderate success. Facebook and Orkut also proved to be a place where competition was nil.
The application carried a powered by Zoomtra tag, that would help in brand recall. User interaction was taken care of by asking them to mark places they’ve visited and to rate their home towns and placed they’ve traveled in India. Above that, one could also share his/her India Dekha! Map with friends, invite new friends and one’s activity on India Dekha! was published in friends’ mini feeds. This ensured the viral spread of the word.
Result
The launch was an instant success on both Facebook and Orkut.
Current Day Stats across both platforms:
* 1.5 lakh Registered Users.
* 4 lakh Reviews & Ratings.
The content on the travel community about various destinations and traveler tips is used to power our search results on Zoomtra.com for people planning to travel.
Source: Zoomtra
Reproduced with permission from Advertising professionals of India - facebook group
Thursday, November 27, 2008
A Common Man's Wednesday
Wednesday of the “aam aadmi, bina gutli wala”
“Wednesday” was a movie devoid of “stars” and made on a modest scale by UTV Movies. It did phenomenal business. A “common man” fed up of the constant bomb blasts in the name of religion, decided to strike back. He chose “Wednesday” since most of the attacks on innocent common men were on Fridays, Tuesdays etal! He chose to retaliate, because, he probably felt that the ‘greatest triumph for evil is for good men to do nothing by it ‘! The establishment was doing nothing and instead, seemed to unwittingly abet terrorism, if not aid it, by its impotence and/or incompetence.
Sometimes, real life imitates the reel life, instead of vice-versa. The attack this Wednesday, in Mumbai, is not exactly a replica of the movie. It is different in many ways. For starters, the bad guys are not the ones who get killed. Many law enforcement officers with impeccable and untarnished records, have lost their lives. Salaskar who could put the fear of God into known “Don’s”, and/or “Daddy’s” was shot dead. Hemant Karkare another highly respected officer and head of the ATS, was shot in the chest (in spite of a bullet proof vest?) and lost his life. There are plenty of civilians, whose only fault, is that they choose to travel by rail on Wednesday night from VST, or chose to walk by Leopold, or even Flora Fountain. Never mind, which religion they followed, what their linguistic orientation, they were all “common men and women’, who were in Mumbai that night.
The Government for the “aam admi” or the “common man” seems to resemble an government of the “aam admi” alright, but of the “bina gutliwala” variety, the one that paradoxically, a soft drink company was promoting as being the juiciest! The common man is certainly a juicy proposition for the dispensation. He is open to exploitation without resistance and he is without a voice, or even a soul. ”Bina gutliwala” to be exact!
Tata Tea in its commercial, requests us to wake up and have a cup of tea. Jago re! says an obnoxious little youngster with a “Mr. Know All” air about him, as he goes around smugly exhorting anyone he sees, to cast their vote. In an earlier commercial, they suggested interviewing the local candidate(MLA/MP) and checking his credentials! Knowing the history of political suffrage in this country, one would be tempted to ask the team on Tata Tea, to wake up and smell the coffee!. But one should not throw the baby out with the bathwater. At least there is a recognition that something is wrong, and that it needs to be corrected. After all, ‘the mile long journey has to begin with the first step’! ‘Jago re’ sounds very much like the clarion call of Vivekananda, “awake arise and stop not till the goal is reached”. However ,the solution is NOT simply in VOTING , but finding the right people to STAND FOR ELECTIONS and ensuring that the ones WHO STAND FOR ELECTIONS DO WHAT IS RIGHT. It’s not so much about checking credentials, but using the system to one’s advantage and organizing groups which can be effective in the system. It is about uniting for a common cause and standing by people who need help and raising your voice and might for what is right. Corporate denizens do this in dead earnest, when it comes to petty office politics and gossip, but somehow loose the plot, when it comes to the large canvas!!
There are however, some exceptions. Silver linings, even as the clouds of despair and darkness, seem to be overhead. The agitation against the destruction of the “silent valley” in the 90’s in Kerala, the legislation to introduce “RTI” in recent times, have all been gains for the common man, as also the legal vigilante protests in Jessica Lal and other cases. Terrorism can be rooted out if there is political will and if we ensure that whoever is guilty of it, irrespective of whether he is a film star, or a ganglord, or a celebrity, gets the maximum punishment possible. Importantly, the punishment should be sufficient deterrent for prospective terrorists. I believe this is where we loose out. Public memory is short and we have “human rights activists”, who seem to be unable to define what a “human being” is and how to provide justice to the aggrieved “human beings” , who have lost their innocent kith and kin, who were also “human beings”, till their lives were snatched away!
Our legal system is too slow and very often, even the convicted get reprieves due to red tape. I see no reason for government money being spent, to keep these “creatures” alive. We have seen innocent hostages being taken by terrorists, to secure the release of their convicted colleagues, as in the Air India Kandahar case, when the BJP was in power.
An eye for an eye, does not make the world blind, it ensures that you have at least one eye left! I think Mahatma Gandhi got his arithmetic wrong! If my will goes, it should be both eyes for an eye for strategic reasons and a kneecap for the road!
Amen
Wednesday, November 26, 2008
The Indian Coffee Houses
“THE INDIAN COFFEE HOUSES”
Long time since, I added to the trivia... so here goes! ...Long beforeSemco became a corporate benchmark for "Managing Without Managers - aparticipatory industrial democracy... and Ricardo Semler's bookMaverick became a runaway bestseller.. . ....And long before the
Argentinian Workers' Cooperatives started taking over the abandoned workplaces - (this phenomenon requires a separate post.. will do that in time to come...) - something similar happened in
century, Baba Budan smuggled the seven coffee bean seeds ("strapped to his chest" the legend tells us) from
elites ( Mughals and later, British) as well as of the ordinary families in southern
to run without any management. The first Indian Coffee Workers Co-Operative Society was founded in
aura...Some tributes to this vanishing institution: A Mutiner reflects on the old nostalgia:"It would be a lie to say that I don’t miss that coffee house. An old dingy place with ceiling like a dome. The cheap wooden tables that were colored to give an impression of mahogany.
Those two big glass jars at the managers desk. The waiters with the long pagdis. The manager who would return even fifty paise of your change but would never smile. The orders that would take exactly three hundred seconds to appear on your tables. The always present group of
oldies, all of whom looked like communist poets or war veterans or editors of some old and forgotten local newspapers and their tables filled with three tea-cups (rather glasses) per person with the occasional one or two plates of egg pakodas. The fact that they were always there made me think that they owned the place, but now I realizethat they were there because that was the only place that had not grown younger as they grew older. The Indian coffee house had grown older with them, with time it had become a little outdated, lost a little of its old shine and was stripped of most or all of its utility, just like them. Its all changed now with the Coffee Day standing in its place. Not that this change isn’t good or anything, its just that I want to
know what happened to that group of oldies, those waiters, that manager and those tables."In another article - Flavour of Another Era - in The Hindu, Kasturi Basu ruminated about the changing hues of the place, where one would discuss and converse: "....for hours over a cup of
coffee, smoke from the endless number of cigarettes spiraling up to the ceiling high enough to contain at least three stories of present multi-storied buildings and a floor area to match its majestic columns, waiters in traditional uniform of spotless white and red and high,
stiff hats, mixed aroma of coffee, fish fry and mutton Afghani and animated conversation between people whose ages are removed from each other by a decade... Except if you went close, the snatches of conversation revealed that over the years, politics, literature and music had acquired a subtle flavour of the next management entrance examination and IT units in the city. Old sweepers, who once preserved bills scattered on the floors because they contained complex
mathematical calculations or poems on the reverse, hardly find anything of note. Waiters say they do not have to stop working now to listen to an interesting discussion." Travel writer, Colin Todhunter wrote this touching tribute to the vanishing magic of Indian Coffee House in
2005:"After having sampled the delights of coffee around the globe, I have come to conclude that there is only one place to drink it:
visited branches in Shimla,
Nehru, Gandhi, and Indira Gandhi usually adorn the walls of each ICH and the waiters are dressed in shabby, white (well, whitish) uniforms. They are pretty basic places where the decor generally takes a back seat to the low prices and delicious dosas and masala dishes on offer.
Things are cheap and simple in the ICH. Unlike the new, trendy coffee bars now in
has good food served in a strange leaning-tower- of-Pisa-like spiral building. Others however can be a bit dingy and don’t have most of the items on the menu. The elaborate head-dress on the waiters is a usually a metaphor for the type of service on offer: clean, starched and upright or limp and ill-fitting. But one thing is always guaranteed: the fare will be excellent. ... Unlike the trendy Starbucks, Café Nero or Costa coffee bars in the West, traditional coffee houses possess a
certain authenticity. That's what I like about the ICH. It operates as a worker’s co-operative and is unmolested by the cynicism of the corporate world. And for better or worse, it shows. Maybe it’s a place trapped in time. But it’s a place in time that I prefer." Amen!
I cannot help feeling nostalgic when I read about India Coffee House. My first
memory of Coffee House is the one on
Tuesday, November 25, 2008
HOW CREDIBLE ARE EFFIE AWARDS?
HOW CREDIBLE ARE AD CLUB EFFIE AWARDS?
11th November Effies 2008
Afaqs! met with a few jury members during the judging round to find out what they thought of the entries that they'd already been through.
Dhunji Wadia, branch head, Mumbai, JWT, expressed his disappointment: "There has been repetition in some cases. Since the brands were present last year as well, some of them don't really hit you as a great idea."
Exchange 4 media on 25th Nov08. Effie 2008 awards to be announced.
On his expectations, Dhunji Wadia, Managing Partner, JWT
However, when asked about his personal favourite campaign from the finalist, all Wadia said was, “All the eight finalists from JWT are my favourites. Some have already shown results in other global and local competitions, and as for the others, their time will come.”
These are two quotations in the space of 14 days, from a judge of the Effies 2008, who is also a senior manager in one of the agencies which is participating in the competition. While peer group approval is a great motivator and can be a good indicator of talent and skill, IT WOULD SEEM THAT there is also the risk of subjectivity and personal agendas clouding the judgment and selection of the most deserving work.
An Ad Club Member
POEM IN PENURY?
You'd better watch out
You'd better not cry
You'd better keep cash
I'm telling you why:
Recession is coming to town.
It's hitting you once,It's hitting you twice
It doesn't care if you've been careful and wise
Recession is coming to town....
It's worthless if you've got shares
It's worthless if you've got bonds
It's safe when you've got cash in hand
So keep cash for goodness sake,
HEY You'd better watch out
You'd better not cry
You'd better keep cash. I'm telling you why:
Recession is coming to town!
Finance products are confusing. Finance products are so vague
The banks make you bear the cost of risk.
So keep out for goodness sake, OH You'd better watch out
You'd better not cry.
You'd better keep cash I'm telling you why:
Recession is coming to town.
UNKNOWN AUTHOR - POSTED IN A LIST SERVE OF EX-NDDBIANS
Sunday, November 23, 2008
Abraham Lincoln to his son's school teacher
Abraham Lincoln, the 16th President of the
He will have to learn. I know that all men are not just, all men are not true. But teach him also, that for every scoundrel, there is a hero, that for every selfish politician, there is a dedicated leader.
Teach him that for every enemy, there is a friend. It will take time, I know, but teach him, if you can, that a dollar earned, is of far more value than five found. Teach him to learn to loose and also to enjoy winning. Steer him away from envy, if you can. Teach him the secret of quiet laughter. Let him learn early, that the bullies are the easiest to lick. Teach him if you can, the wonder of books, but also give him quiet time, to ponder over the eternal mystery of birds in the sky, bees in the sun and flowers on a green hill side.
In school, teach him that it is far more honorable to fail, than to cheat. Teach him to have faith in his own ideas, even if everyone tells him that they are wrong. Teach him to be gentle with gentle people and tough with the tough. Try to give my son the strength to not follow the crowd, when everyone is getting on the bandwagon. Teach him to listen to all men, but teach him also to filter all that he hears on a screen of truth and take only the truth that comes through.
Teach him if you can, how to find laughter when he is sad. Teach him also, that there is no shame in tears. Teach him to scoff at cynics and to beware of too much sweetness. Teach him to sell his brawn and brain to the highest bidder, but never to put a price tag on his heart and soul. Teach him to close his ears to a howling mob…and to stand and fight if he thinks he is right.
Teach him gently; but do not cuddle him because only the test of fire makes fine steel. Let him have the courage to be impatient, let him have the patience to be brave. Teach him always to have sublime faith in himself because then he will always have sublime faith in mankind.
This is a big order ; but see what you can do… he is such a fine fellow , my son.
TEACH FOR INDIA
‘Veritas Vos Liberagit’ goes the saying and it incidentally is the credo of my alma mater, the
When more than 75% of the country are “bachas” as the young leader of one of the “oldest’ political parties claims, then the importance of knowledge cannot be understated. “Teach
No, TOI has not asked me to write this and has no business relationship with me other than that of a reader to a publicationJ
A decade back I was encouraged by Mr M.G.Parameswaran, who now heads FCB Ulka, to teach at the Somaiyah Institute of Management Studies and Research, since he felt that I was full of academic concepts and “teaching everyone around, their job” J. Professor Arya at the SIMSR found that I had a knack for it, given the full house I got every weekend, from the youngsters and the working managers. When finally, his Institute started showing up in the final rounds of strategy competitions, the word spread and I ended up teaching at SIES-Nerul, Vivekananda and later on, at N.L.Dalmia.
I must say that the stint helped me immensely in clearing up concepts I had learned and forgotten, at
I am enclosing a link which has a letter sent by the BMM batch of Vivekananda in 2000, when I was in the
http://vnreferences.blogspot.com/2008/04/class-of20012nd-year-bmm-students-at.html
Saturday, November 22, 2008
DELLOITE ON THE GLOBAL ECONOMIC OUTLOOK
Deloitte economists offer more optimistic persective in Global Economic Outlook Q4 report
Written by five Deloitte global economists, it predicts that, although developed country economies will continue their serious downturns, the massive infusion of government money should restore activity to the credit markets and set the stage for recovery. Emerging countries will feel the negative effects of this downturn.
The report looks at the historical precedent of financial crises in
'Unlike some past financial crises, this one resulted in a rapid and massive governmental response on both sides of the
Omar Fahoum, Chairman and Chief Executive of Deloitte & Touche
• In
•
Monday, November 17, 2008
Sunday, November 16, 2008
Diamond Industry -Trends
Diamond Industry seems to be facing the heat . The slowdown in the US has affected the Surat polishing industry.
http://www.rediff.com/money/2008/nov/06bcrisis2.htm
http://www.rediff.com/money/2008/feb/12diamond.html
www.hindu.com/2008/11/09/stories/2008110960081500.html
http://www.livemint.com/2008/11/05163851/Surat-diamond-industry-under-t.html
Friday, November 14, 2008
Tuesday, November 11, 2008
Sub-prime Crisis, Global Meltdown, Real Estate and Investments -A reality check
How
I am not sure if you have seen this earlier. But wonderful analogy. Makes the point very clear.. Just ignore the lack of Wren and Martin in the English. ( after all it's
Once there was a little island country. The land of this country was the tiny island itself. The total money in circulation was 2 dollar as there were only two pieces of 1 dollar coins circulating around.
1) There were 3 citizens living on this island country. A owned the land. B and C each owned 1 dollar..
2) B decided to purchase the land from A for 1 dollar. So, A and C now each own 1 dollar while B owned a piece of land that is worth 1 dollar.
The net asset of the country = 3 dollar.
3) C thought that since there is only one piece of land in the country and land is is a fixed asset , its value must definitely go up. So, he borrowed 1 dollar from A and together with his own 1 dollar, he bought the land from B for 2 dollar.
A has a loan to C of 1 dollar, so his net asset is 1 dollar.
B sold his land and got 2 dollar, so his net asset is 2 dollar.
C owned the piece of land worth 2 dollar but with his 1 dollar debt to A, his net asset is 1 dollar.
The net asset of the country = 4 dollar.
4) A saw that the land he once owned has risen in value. He regretted selling it. Luckily, he has a 1 dollar loan to C. He then borrowed 2 dollar from B and acquired the land back from C for 3 dollar. The payment is by
2 dollar cash (which he borrowed) and cancellation of the 1 dollar loan to C.
As a result, A now owned a piece of land that is worth 3 dollar. But since he owed B 2 dollar, his net asset is 1 dollar.
B loaned 2 dollar to A. So his net asset is 2 dollar.
C now has the 2 coins. His net asset is also 2 dollar.
The net asset of the country = 5 dollar. A bubble is building up.
(5) B saw that the value of land kept rising. He also wanted to own the land. So he bought the land from A for 4 do llar. The payment is by borrowing
2 dollar from C and cancellation of his 2 dollar loan to A.
As a result, A has got his debt cleared and he got the 2 coins. His net asset is 2 dollar.
B owned a piece of land that is worth 4 dollar but since he has a debt of 2 dollar with C, his net Asset is 2 dollar.
C loaned 2 dollar to B, so his net asset is 2 dollar.
The net asset of the country = 6 dollar. Even though, the country has only one piece of land and 2 Dollar in circulation.
(6) Everybody has made money and everybody felt happy and prosperous.
(7) One day an evil wind blowed. An evil thought came to C's mind. 'Hey, what if the land price stop going up, how could B repay my loan. There is only 2 dollar in circulation, I think after all the land that B owns is worth at most 1 dollar only.'
A also thought the same.
(8) Nobody wanted to buy land anymore. In the end, A owns the 2 dollar coins, his net asset is 2 dollar. B owed C 2 dollar and the land he owned which he thought worth 4 dollar is now 1 dollar. His net asset becomes -1 dollar. C has a loan of 2 dollar to B. But it is a bad debt. Although his net asset is still 2 dollar, his Heart is palpitating.
The net asset of the country = 3 dollar again.
Who has stolen the 3 dollar from the country?
Of course, before the bubble burst B thought his land worth 4 dollar.
Actually, right before the collapse, the net asset of the country was 6 dollar in paper. his net asset is still 2 dollar, his heart is palpitating.
The net asset of the country = 3 dollar again.
(9) B had no choice but to declare bankruptcy. C as to relinquish his 2 dollar bad debt to B but in return he acquired the land which is worth 1 dollar now.
A owns the 2 coins, his net asset is 2 dollar. B is bankrupt, his net asset is 0 dollar. ( B lost everything ) C got no choice but end up with a land worth only 1 dollar (C lost one dollar) The net asset of the country = 3 dollar.
************ ****End of the story******* ********* ********* **
There is however a redistribution of wealth.
A is the winner, B is the loser, C is lucky that he is spared.
A few points worth noting -
(1) When a bubble is building up, the debt of individual in a country to one another is also building up.
(2) This story of the island is a close system whereby there is no other country and hence no foreign debt. The worth of the asset can only be calculated using the island's own currency. Hence, there is no net loss.
(3) An over-dumped system is assumed when the bubble burst, meaning the land's value did not go down to below 1 dollar.
(4) When the bubble burst, the fellow with cash is the winner. The fellows having the land or extending loan to others are the loser. The asset could shrink or in worst case, they go bankrupt.
(5) If there is another citizen D either holding a dollar or another piece of land but refrain to take part in the game. At the end of the day, he will neither win nor lose. But he will see the value of his money or land go up and down like a see saw.
(6) When the bubble was in the growing phase, everybody made money.
(7) If you are smart and know that you are living in a growing bubble, it is worthwhile to borrow money (like A ) and take part in the game. But you must know when you should change everything back to cash.
(8) Instead of land, the above applies to stocks as well.
(9) The actual worth of land or stocks depend largely on psychology.
Do forward it to your friends wherever you can to spread the knowledge. You will surely be remembered for Good.
Sunday, November 9, 2008
BARACK OBAMA
Full video and text: Barack Obama's victory speech
http://www.timesonline.co.uk/tol/news/world/us_and_americas/us_elections/article5086178.ece
Article on the digital marketing mix used by Barack Obama.
http://digital.afaqs.com/perl/digital/news/index.html?sid=22572Al Ries on Obama's Campaign Strategy in Advertising Age
http://adage.com/columns/article?article_id=132237
Friday, November 7, 2008
Obama's Digital Marketing Strategy
A very useful article on Obama's digital marketing strategy. Click on the link or visit afaqs.com and look for the Guest Article by VijaySankaran of Urja Communications dated 7th November 2008
Thursday, November 6, 2008
LIGHT AT THE END OF THE TUNNEL
Light at the end of the tunnel
* PWC’s Sivarama Krishnan’s take on the economy is that ,there is enough liquidity with individuals and banks and that given the cautious sentiment , there is none being put to use, either as loans or as investments.
*The argument is that this “meltdown” and “crunch” for
*Given that the fundamentals of the economy are robust (agriculture, industry), the industry belief is that the GDP growth rates would be at least 6% by the next fiscal. In the medium term therefore, there would be revival of demand for project finance. (50% of companies are looking at cheaper sources of funds for the medium term).
*Innovative methods like public deposits as also forming JV’s(40%) are being considered. Acquiring of competitors is likely to happen as the “consolidation’ phase happens and the “shakeouts” throw up the weak players.
*This seems to be true. While Foreign Institutional Investors have pulled out $12 billion from the Indian bourses this year, Foreign Direct Investment to
* The Oman State General Reserve Government Fund has picked up 24.5% in the 2500 acre
The land acquisition price was reported to be Rs 40 lakh an acre.
*Struggling
*
*However Tata Motors shut down its plants for 3 days to reduce build up of inventories and while blue collar workers ended up with a reduced pay for the period, white collar was not paid at all.
* Production has been reduced in all auto plants and this includes Ashok Leyland (26% reduction), Eicher (38%, in response to a slide in sales of 55%), Mahindra‘s figures are not available.
Consumer Durables have had a good season it seems. The season (sept –oct)
Accounts for 25% of annual sales. Apparently the growth was 50% over the same period last year. This could partly be because last year, Diwali was in November and this year it has come to be counted with the October sales.
The disbursements to Government employees was made prior to Diwali and with the revisions and arrears, there was sufficient liquidity to drive off take this year.
LG claims a 50% growth with LCD TV’s leading the pack. Samsung has had a 35% growth trajectory, here too LCD TVs is the driver. Refridgerators and Washing Machines are next in row. For Godrej, it was washing machines.
*Incidentally these Durable Mfrs have not used any discount schemes and most schemes offered were at the retail level. This probably explains why the primary sales to retailers is being slowed down this quarter. There is likely to be an inventory pile up with the retailer in the next two months!!!
THE BOTTOM LINE IS THAT THERE IS LIGHT AT THE END OF THE TUNNEL IN THE MEDIUM TERM.
*Swaminathan Aiyar’s column this Sunday in TOI is a worthwhile read as also Shashi Tharoor’s take on Obama’s chances. To complete the list , add Shoba De on “Fashion” the movie, very incisive, intelligent and insightful.