Controlled Experiments: 2009

Thursday, December 10, 2009

The Pros and Cons of being a public company.

Pros:

Efficient Access to capital markets:

Cheaper then PE or VC (as they ask for decision-making positions), do not need to return stock capital, access to debt markets- bonds, notes, structured products and through various other securities.

Liquidity/exit strategy:

Liquidity to investors; promoters, employees so that they can exit.

Stock as currency:

Stock of a public company could be used as currency to make acquisitions, write options to incentivize employees, contractors and other stakeholders.

Stock as collateral:

Investors may use the stock as collateral to take out loans.

Stock provides diversification benefit at lower cost:

Investors receive diversification benefit at a lower cost, as the cost of trading public equity is very low due to better marketibility. Otherwise they may need the special expertise of an investment banker to help hedge their risk, which could certainly cost huge bps.

Valuations:

The public markets provide an irrefutable valuation for the company, the company may lever itself to improve valuations. Public traded equity is better priced than privately held equity.

Prestige & better monetary value of goodwill:

Public companies have a better image in the mind of the general public, creditors, suppliers, investors, etc. This enables buildup of goodwill, which has monetary value and generally gets reflected in the valuations. Prestigue also serves as a non-monetary employee motivation tool.

Transperancy:

Public release of financials, events, announcements etc ensures trasperancy which builds confidence in the minds of all stakeholders.

Cons:

Loss of freedom for management / slower response:

Management, in some cases, may require approval from board of directors, large shareholders, or group of shareholders. This may lead to delay in decision-making, which could delay the responsiveness of the company to changes in its external environment.

Myopic outlook:

As shareholders increasingly look for quarterly performance, the management may lose sight of the long-term objective and may get expensively focused on short-term goals

Expensive paper work:

A public company has to comply to various other additional regulations, by one estimate after sarbanes-oxley act the cost to a small business could be greater than $5m. Ongoing reporting and fulfilling regulatory disclosures.

Risk takeovers/ loss of control:

Management may loose control of the company if a group of investors obtain majority control.

Release of sensative information:

Financial disclosures and various other announcemets also lead to loss of secret competitative information, as compensation to top management, new forays, new ventures, business strategies, cost structure, etc.

Occupies management time:

Substantial management time is devoted meeting regulatory requirements, meeting investors, preparing for conference calls, earnings calls.

Cost of upgradation of management and accounting systems and increased auditing cost:

Increases the cost to the company on an ongoing basis, its not a one time charge!

Thursday, November 19, 2009

Book Summary : Thinking Strategically By Avinash Dixit and Barry Nalebuff

The best way that I think to summarize this book would be to restate the examples. This summarises are not meant to replace the book for those that have not read the book. I think this summary would be very helpful to those who have read the book in their freshman year and just need to revisit and recollect the most important lessons that the authors wanted their readers to get.

Part 1

1. Ten tales of strategy

1. Hot hands - basketball and tennis: Players do not have a hot hand. If it is played out over a very long series of events, its probability would be no better than the flip of a coin. But yes game theory does provide an explaination, this can be explained by the interactions of defensive and offensive strategies of the players, which is why it sometimes seems a player has a hot hand.

2. To lead or not lead - Sailboat racing and business: In sailboat racing it is generally seen that the leader will change course in the same direction with that of the follower, because in case the follower is right he is still going to with him in catching the wind and would reduce the chance of loosing due to not catching the wind. But in case the race involves more than 2 racers than his decisions would not just be based on that of the follower. The game becomes very different when there are more than 2 racers. Similarly in business there might be strategic advantage in moving second. Thus it is observed that the smaller companies engage in new innovative and risky ventures and the leaders in that business tends to then follow them.

3. Go directly to jail - prisoner's dilemma, nuclear dismembarment, union bargaining: In this situations when each choses his dominant strategy, would lead to sub-optimal jointly preferred outcome. The problem is interdependence of decisions. If individually sub-optimal strategy is chosen than jointly preferred outcome could be achieved. These games are different as they are not zero-sum games hence one player's gain is not necessary other players losses.

4. Here I stand - Martin Luther, Charles de Gaulle (France to keep England out of EEC), Ferdinand de lesseps ( Suez canal , failed in panama canal) - "An inflexible personaility is not something that can be turned on and off. Although being inflexible can sometimes wear down an opponent and force him to make concessions, it can equally well allow small losses to grow into major disasters" . There is advantage in such a position as it denies the other party to come with a counter offer.

5. Belling the cat - Hostage dilemma, Khrushcher & Stalin, taxi & dispatcher, NY eviction, United Auto Workers - "accordion effect" (where each fold pushes or pulls the other) - Communication and coordination become important in solving this issues.There is another point that must be noticed is that there is generally superiority of punishment over reward.

6. The thin edge of wedge - Import restrictions, Income tax reforms of 1985-86, social interest - When decisions are made one at time could lead to different conclusions, if instead all the cases are clubbed together. Decisions case by case basis vs. together, when done case by case it could lead to demands for various concessions and complications, instead though inflexible decisions taken together can have strategic advantage.

7. Look before you leap - Commitment to job in a particular city, operating system of your computer, frequent flyer program, marriage is expensive to escape. So one should look before one takes a leap.

8. Mix your plans - Randomized strategies, football pass/run, tennis backhand forehand, IRS audit, gillette promotion coupon.

9. Never give a sucker even bet - Guys and Dolls sky masterson & Nathan detroit, at what odds will you take the other bet; market maker must always mention both sides bid/ask before knowing your side. "The strategic insight is that other people's actions tell us something about what they know, and we should use such information to guide our own actions.

10. Game theory can be dangerous to your health - Two economics in Beruit, ignore irrationality and pride at your own perils.

11. Stuck wheel gets the grease - Of course sometimes even gets replaced. There could be stragetic advantage in being like a stuck wheel because it could mean concessions and favors and extra greasing but should be careful not to over kill since sometimes the wheel can get replaced as well.

For every action there is a reaction.

Our behaviour affects others behaviour. (Theory of reflexivity - George Soros)

Not always an advantage to seize the initiative and move first.

2. Anticipating your rivals response

"Just because an action lies in the future does not mean one (Charlie Brown) should regard it as uncertain."

Bargaining - An essential feature of negotiating is that time is money. When negotiations become protracted, the pie begins to shrink. Still parties may fail to agree, each hoping cost of negotiating will be outweighted by a more formidable settlement.

Look ahead and reason backward - reason may determine the outcome before it starts. The time for strategic maneuvering may be earlier, when the rules of negotiations are being decided.

War and peace - My enemy's enemy's enemy is not my friend

Games the British play: Marget Thacher & Kinnok Neil, second level thinking, third level thinking....

Rule 1 - Look ahead and reason backwards. Assumptions: The moves must be observable to others and strategies must not be reversible.

One of the lessons from the chapter, it is better to take risks earlier (assuming the same amount of risk) than later.

3. Seeing through your rivals strategy

Linear reasoning - I do he does i do he does

Simulataneous reasoning - Place himself simultaneously in both his own actions and the others guys' shoes then figure out the best move for both sides.

Dominant strategies : Time and newsweek , love is a dominant strategy. A strategy that dominates your other strategies not necessarily other players strategies.

Over- Cover warfare : If you have a dominant strategy then use it

Dominated strategies: Eliminate any dominated strategies from considerations and go on doing so successively.

Equilibrium strategies : Having exhausted the simple avenues of looking for dominated strategies or ruling out dominated strategies, the next things to do is to look for an equilibrium of the game.

Games with simultaneously moves : 1. Look and use dominant strategies

2. Next look for and avoid donimated strategies

3. Assuming similar behaviour on part of your rivals look for and use equilibrium

Part 2

4. Resolving the prisoners' dilemma

Opec, KGB, Reagan vs Waster Mandale, Yossarian's position in Joseph Heller's Catch -22

The underlying problem is the players' incentive to cheat in any agreement

1. How to achieve cooperation?

2. Detection of cheating? - Example "competition breaking out into new dimensions" - airline industry

The law increasing opaqueness - collusion focuses on the more transparent dimensions of choice and competition shift to the less observable ones.

Identifing cheating, identifing the cheater, even tougher is get the cheater to admits his faults

Cheating may consist of remaining passive and may be difficult to isolate: There are numerous excuse for inaction like greater urgency of other issues, time needed to consolidate forces and so on...

3. Punishment of cheaters: Within the structure of the game there should be punishment of the cheaters.

There is no solution that achieves reciprocal co-operation in a one-time game only in an ongoing relationship is there an ability to punish

Thus while each side is waiting to take advantage of the other both are benefiting from mutual deception. Argument of niceness - present vs future

4. Punishment is guaranteed- Crazy Eddie & Newmark & Lewis stero wars, beat the competition, most favoured customer

5. A choice of punishment - Most important are simplicity & clarity so that a player thinking of cheating can easily and accurately calculate its consequences.

Players should have confidence that defection will be punished and cooperation rewarded.

Since the punishment threats succeds in sustaining co-operation, it should not matter how dire it is. The fear keeps everyone from defecting, hence the breakdown never actually occur and its cost is irrelevant.

To reduce the cost of mistakes the punishment should be smallest size that suffices to deter cheating.

Few qualities of a good strategy: Clarity, niceness, provocability and forgiveness

Tit-for-tat Strategy: there is flaw in this strategy which is there is even with slight threat of misinterpretation can lead to break down in the strategy.

A better strategy would be to forgive to some extent and if you find your opponent taking advantage of you. Punish with tit-for-tat strategy.

5. Strategic moves

Scorched earth strategy - Joseph Stalin's scorch earth, Rupert Murdoch attack on a magazine. - For scorched earth strategy to be effective you must destroy what the invader wants, which may not coincide with what the present occupants want.

Leaving options open strategy: May not be always be a preferable strategy. Your lack of freedom has strategic value. It changes other players expectations about your future response and you can turn this to your advantage

"It takes a carpenter to turn a tree into a table, a clever strategist knows how to turn a table into a tree"

Preempt a move could have advantage (one may question the credibility of the preemptive move but once assured has strategic value) - example of the competition between USA and Japan on HDTV

One must establish a response rule to threat (2 types of threat - 1. Compellent threat - Plane hijacker kill passangers 2. Detterent threat- US will attack with nuclear missiles)

(2 types of promises - 1. Compellent promise - induce someone to take action 2. Detterent promise - induce someone from taking an unfavourable action)

Respond to a compellent threat with detterent promise

Respond to detterent threat with a compellent promise

Both differ only in status quo

Warning - when it is in your interest to carry out the threat

Assurance - when it is in your interest to carry out the promise

Warning and assurance do not change response but provide information

Unconditional move must be observable if it is to influence your rival, his actions must be observable if you are to influence them by threats and promise

- Democrats and Republicans - Regan Tax cuts - Use of combination of threats and promise to change ones strategies.

Sledge Hammer to crack a nut? - Promise the minimum amount necessary - A promise should not cost you a lot.

You shouldn't threaten somebody more than necessay. One should strive for the smallest and the most appropriate threat that will do the job. Make punishment that fit the crime.

6. Credible commitments

The eight fold part to credibility: to make a strategic move credible, you must take a supporting or collateral action. Such an action is called a commitment

1. Change the payoffs of the game: The idea is to make it in your interest to follow through on your commitment. Turn a threat into a warning, a promise into assurance

2. A second avenue is to change the game to limit your ability to backout of a commitment. Cut yourself from retreat. Remove yourself from decision making to leave to chance.

Establish and use reputation
Write contracts
Out of communication
Burn bridges behind you
Leave the outcome to chance
Move in small steps
Develop credibility through teamwork
Employ mandated negotiating agent

Reputations effect is two-edged sword for commitment. **Sometimes destroying your reputation can create the possibility for a commitment. Example a hijacker can break his promise of negotiations by attacking.

A weak bond of words can be strengthened in two ways, 1. Fear of consequences of breaking one's word or a glory/pride in not breaking one's word. 2. Contracts another way to make threats and promise credible.

3. But one life to lay down for your country - army, battle of agincourt

4. An offer you can't refuse: Interview and offer and ranking

A decision made by a committee is sufficiently dependent on chance that it cannot promise that given the same inputs it will reach the same verdict.

A committies inability to commititself to rational decision making makes the take it or leave it threat credible

7. Unpredictability

Don't have much - simple idea randomize

Part 3

8. Brikmanship

Strategy of taking your opponent to the brink of disaster and compelling him to pull back
Brink is not a sharp precipice, but a slippery slope, gently gradually getting steeper
The credibility of brinkmanship still needs a device of commitment only that device contains within it a coin toss or a die that governs what happens
Brinkmanship is not just the creation of risk, but careful control of the degree of that risk
Successful brinkmanship remains something of an art and an adventure

9. Cooperation and coordination

The invisible hand at best applies only to situations in which everything has a price

because many unpriced or non-marked activities matter, it is no wonder that individuals acting selfishly often do too much harm to others and too little good

The feature common to grading system is that success is determined by relative rather than absolute performance
Source of a problem: Why some students study too much, is that they do not have a price to pay, a price or compensation to the others. Each student studying is akin to factory polluting. Because there is no market in business and selling student study time, the result in a rat race.
When other peoples' perception of your ability matter, it might be better for you to do things that increase your chance of failing in order to reduce its consequences.

Phsycologist see this behaviour in other contexts, some individuals are afraid to recognize the limits of their own ability. In these cases they take actions that increase the chance of failure in order to avoid facing their ability.

example: A marginal student may not study for a test so that if he fails. The failure can be blamed on his lack of studying rather than intrinsic ability.

10. The strategy of voting

People have an incentive to tell the truth about direction but exaggerate when it comes to intensity.
If splitting the differnce is the way then one has an incentive to begin with an extereme position in the first place
Hence choosing the median position does not depend on the intensity of the voters preferencec only their preferred direction

11. Bargaining

-Don't have any notes

12. Incentives

-Don't have any notes

13. Case studies

- Don't have any notes

Saturday, November 14, 2009

Book Summary: The Return Of Depression Economics 2008 by Paul Krugman.

Table of Contents

1 "THE CENTRAL PROBLEM HAS BEEN SOLVED"

Krugman tries to make a point that the world believed that depression economics was over but as per him Latin American crisis, Japan's liquidity trap and Asian crisis were warning signals. Thus he says that this subject needs further study and more resources should be invested into it. For Krugman, Depression Economics is still not solved and should be pursued further studied.

2 WARNING IGNORED: LATIN AMERICAS CRISES 30

In my opinion, a better source would be Wikipedia

Tequila Crisis - http://en.wikipedia.org/wiki/1994_economic_crisis_in_Mexico

Economic History of Mexico - http://en.wikipedia.org/wiki/Economic_history_of_Mexico

Latin American Crisis - http://en.wikipedia.org/wiki/Latin_American_debt_crisis

3 JAPAN'S TRAP 56

Japan's liquidity trap is a good lesson. Japan is unlike Argentina and Mexico or other Latin American economies. Japan has a stable government, educated labor force, industrial base, research and development and the financial base that is required to maintain and grow the economy. Thus, Japan's problem warrants a much deeper study, as this could happen to other advanced economies as well.

Krugman attributes the causes of Japan's liquidity trap to a few reasons which are as follows, corruption in the government and banks; an implied assurance that depositors deposits are guaranteed by the government and thus the depositors need not worry, this made banks make bad loans which lead to the asset bubbles in real estate and stock markets; moral hazard as banks were not responsible for the risks and bad loans; and moralistic fatalistic view of the central bank that these are good crashes and asset values are now being correctly valued, which caused depressionary pressure. This fuelled the view among its people that correction was needed and warranted; which lead to a negative cycle of low expectations from people and it became a self-fulfilling prophecies. The Japanese central bank tried to attack this problem by reducing interest rates, but how low could they go? rates had reached zero but still no improvements. In 1995, after almost half a decade the central bank decided to recognize bad debts, this gave some breather to the banks, as they were done with it once and for all... recognized the losses and could move. New lending still failed, the cause speculated by author here is, that this could be because of aging population. Japan had baby boom followed by baby bust this made people save even more and more.

The author's policy recommendations for Japan to get out the typical Keynesian liquidity trap would be to create inflation expectations, not necessary actual inflation. That would reduce savings and increase consumption and investment expenditures.

4 ASIA'S CRASH 77

Baht Crisis, Thailand :- The causes as per Paul Krugman are as follow:- a expansionary monetary and fiscal policy followed by the western countries, which was done to get their economies out of mild recessions, this caused massive flow of money into Asian countries. International banks were generally on the sidelines as most of the money flew in through Wisdom and Luck and similar houses, coupled with this massive flow was fixed or targeted exchange rate that was pursued by the central bank of Thailand. Which lead to excessive monetary and credit expansion in Thailand, imports increased due to surge in spending by affluent customers, salary level increased, exports became uncompetitive leading to huge trade deficits. Instead of having domestic saving feeding loans, it was foreign currency loans that started paying for those deficits. Vola you have a perfect situation where Thailand became dependent on foreign influence. There is important factual point that is brought out here that these deficits were private, this was also the case in Mexican crisis and a lesson learnt here was not to trust private sector decisions. It wasn't the government spending on public projects with foreign money. These deficits made international investors wary. There was moral hazard within Thai finance companies, which investors perceived would be always bailed out by the government.

The warranted devaluation of the currency was to the tune of around 15% but the Baht depreciated over 50% which was mainly due to panic among investors.

The Asian crisis was mainly due to contagion effect. This crisis spread to Indonesia, Malaysia, and Korea, although there was little integration among these economies but just sheer panic caused contagion, as investors in their mind had not differentiated these countries.

5 POLICY PERVERSITY 101

Paul asserts that in the Brazilian 1998 crisis which had followed the Russian crisis, Brazil followed the Washington consensus and increased interest rates, rates were as high as 50% at one point in time; ran balanced budgets; everything extremely opposite to Keynesian compact. Why was such a policy advocated? the answers lies in, that Brazil was asked to do this since it needed to win the confidence of speculators & investors alike.

Brazil tried to maintain its fixed currency rates with dollar and that again was exasperating the problem. A problem compounded by fixed exchange rates. An example that Krugman cites to build his case for floating currency exchange is Australia where in the midst of the Asian crisis the currency depreciated pretty rapidly but also gained pretty quickly as investors and speculators started thinking that it is probably cheap and its a good buy, it went fell to 60 cents a dollar and rose again quickly back to 80 cents a dollar. The Australian central bank did not intervene at all. The problem as per Krugman is, the policy was being implemented to cater to the perceptions of investors and speculators, it became armature psychology class, instead of solving the real economic problems. This reverse Keynesian policy caused recessionary effects in these economies.

6 MASTERS OF THE UNIVERSE 119

This section talks about the stories of the George Soros, principal of Quantum Fund; Malaysian Prime Minister Mahathir, during an attack on its currency; the attack on Hong Kong dollar and how it was saved by limiting short selling and directly buying stocks; the Russian crisis where hedge funds believed that USA would help Russia as nuclear missiles were though as collateral but during the attack the west did not help and hedge funds lost a lot of money; the panic that was created in the markets due to Long Term Capital Management and the subsequent Fed bailout which created another moral hazard, as investors believed that the Fed will always bailout. During LMTC Fed lowered interest rates in two back to back meetings.

7 GREENSPAN'S BUBBLES 139

Krugman talks about the Alan Greenspan and the various moves that he made to handle the deflationary phase by reducing the interest rates. Which some claimed had led to the stock bubble of the 2000 which was replaced by the housing bubble. Greenspan himself said that he was worried about the possibility of 'corrosive deflation' due to which he kept the rates low. This chapter does not have a lot of economic content but just descriptions of events that happened during the 1970's to 2003, or Greenspan's time.

8 BANKING IN THE SHADOWS 153

Krugman brings out a very important point, that this crisis was different because the finance industry had become so different. There were so many financial institutions that were involved in the business of banking (maturity transformation)-borrowing short and lending long- but they were not banks, hence out of regulatory framework. An interesting example that is cited here is the use of the Agency...Securities, ABS,MBS, RMBS etc that allowed investors at investment banks to invest in long assets, the banks tried to provide with some kind of mechanism that involved that investors could sell those securities in secondary markets, one such secondary market was weekly auctions. Lots of the debt was originated in this manner. These institutions were practically out of the normal checks and balances that were put in place after 1930 to ensure investor confidence like capital requirements, FDIC, regulatory framework etc. This sudden panic led to run on this shadow banking.

9 THE SUM OF ALL FEARS 165

Here the Krugman narrates the unfolding of the financial crisis of 2008. He gives credit to Ben Bernanke the Fed chairman, for reducing the Fed funds target rate to historically low levels and also following quantitative easing which allowed the Fed to still lend directly into areas that it seemed fit. Due to the change in the nature of the financial industry itself the Fed followed and unconventional move and expanded the balance sheet by targeting various interest rates in various markets, CP, RMBS, CMBS, ABS, money markets, repo markets, tri-party repo, etc, thus somehow taking over the role of shadow banking.

10 THE RETURN OF DEPRESSION ECONOMICS 181

Krugman says as the world's economists started moving away from demand side economics to supply side, for which Krugman does not hold high regard, I quote "The specific set of foolish ideas that has laid claim to the same "supply side economics" is a crank doctrine that would have had little influence if it did not appeal to the prejudices of editors and wealthy men." As per Krugman, the world was not ready for the depression economics, which is basically reduction in the aggregate demand. The reasons that he cites for this shit to supply side economics was theoretical weakness in demand side economic theory, but demand side economics had practical application had been a success which was proved by actions taken in response to various previous recessions. In the end Krugman gives reasons for pro-regulations and gives few policy recommendation.

***I recommend people to buy Krugman's book to have a more detailed information, and enjoy his elegant style of writing, where he explains the most complex subject in simple lucid language***

Sunday, September 13, 2009

Relationship tidbits: SUCKED

You meet the girl, she meets you. Then now you feel physically attracted to her. You may just want to experiment, have an adventure or just out of curiosity or even lust. You see her once in two or three days. Then go home talk to each other for few minutes.

After sometime you see her more often. More you talk. Then you see even more often, you see her everyday really every day. By now both of you start talking. You even have to hear her out. She starts talking, and both have equal chance to talk. Now she starts talking more often, more and more. So to reciprocate and be fair you give more and more time and listen.

She starts occupying more and more of the limited brain space. You go out on dates with her which could last from a few hours to just a meal. Then you go home and talk on the phone doing the girly stuff of how beautiful it was and all the crap. Somewhere down with you know she is hot, that’s all that matters.

Now she takes a few hours of your brain time. She makes you want to be yourself and pumps your ego. Dates continue and start getting longer and even longer and even more intimate. Reach home and post-date phone conversations start getting longer and start running into late night and you have trouble keeping up with work in office or college the next day. Then this continues on and on for few weeks to few months.

The dates and phone calls start getting longer and more and more and even more intimate. You enjoy it! You love it! By now you realize that what started as meal-dates become evening-dates then went on to become day-out dates. Your calendar begins to looks like daylight: meet her, be with her and moonlight: talk to her on the phone. You check you dialed calls list and see only her number for all the phones memory capacity.

Without realizing that you have a dick and you had friends who too had dicks, when was the last time you called you male friends? Beware when you feel so proud that you are taking care of the person you like. By now your relationship has moved into the so called lure of physical attraction.

Where every time you meet you get lured into physical attraction and a small dose of kisses, passionate kisses, you get to hold her, touch her in different places (generally the breast, stop thinking any further). You have lost the match. You have LOST. Game Over.

This small doses of physical stuff unevenly spread out across time and your wants to have more and more of it, keeps you with her for longer and longer. There is this promise, a light at the end of the tunnel that you know if you be nice and good with her you can have more elixir of life. This makes you like dog wagging his tale in anticipation of more love and attention and more elixir.

You can’t see through. You can’t think. Because every time you try to think what is happening, you find it hard pressed to think. You realize your inability to think. Every time you force yourself to think you realize a drop in blood pressure, major changes, the blood gushes to the smaller head which is unable to perform the higher cognitive tasks. The larger head start experiencing something new and different chemical changes. A different kind of high. Basically your hormones screw things up. You have been addicted to this even more potent addiction than cocaine. In some way this is a turning point.

Now most likely she will ask you to join her when she meets her friends. She will introduce you to them. The social importance that you receive from her friends makes you really extra proud. But realize that you are getting sucked!!! Slowly and slowly her friends become your friends. You hang out with them. You are the only dick among an ocean of pussies. You still don’t realize.

You start losing touch with your friends (by which I mean in the distant past that you had friends with dicks). You feel so unconnected to your friends. You feel you have to restart building the relationship with dick friends. So much trouble and one faithful day you are in two minds whom should I call your dick friend or your beloved gf’s girl friend. You make a fatal mistake you call the later.

You are getting sucked into the quick sand of love and relationship. You realize every minute your brain is thinking is something related to your relationship, a fight, a date, a beautiful moment, her friends. There is misallocation of cognitive ability. What happened to your personal goals, your hobbies, your passions, your creative pursuits, your family, your friends? But you don’t realize it. You still get sucked deeper into it via elixir, fights, thinking how to make up, thinking how to make her happy which becomes seemly difficult and a battle uphill.

Now she asks you to come home for a cup of tea or coffee or even simple exchange of books, notes. You agree. Another big ‘sucked move’. Just another reason to get you home. You go to her home have coffee get acquainted with her home. A few more times it happens. And feel extremely comfortable with going over to her place. Then one day she introduces you to her parents. Then it continues. Life goes on pretty normally and the same continues. Then she finds her way to your home. She meets your parents and siblings. She becomes friends with your mom. Calls home and worst case scenario gossip away with your mom. Your parents talk about her and she is all around you, all over you, all in you.

That is all your brain can see, think, and feel. You have no friends, no family, no privacy, nothing. You want your life back, but you can’t, you want to spend those times when you could sit with other dick-guys and ogle, rate by-standers on a scale of 1 to 10, watch sports and curse, get involved in fights, do outrageous things, feel testosterone and adrenaline. You want your hobbies back; basically you want your life back the way it was.

This is how you feel: Heavy flow with painful cramps, monthly reminders of what you have become with pleasant dreams and never ending wait for menopause.

Moral of the story you are “SUCKED”.

- Dedicated to my friend Mithisha for all the encouragement to write my Suction Effect in relationships.

WARNING: DON'T FORM OPINIONS WITHOUT KNOWING FACTS. AND SEE THIS AS A CREATIVE PIECE OF SHIT

Friday, September 11, 2009

Relationship tidbits: Indian Perspective

Darwinian Indian Male:

The Indian male faces a lot of challenges in courting a woman. He not only combats the slow response systems of Indian girls but also has to fight the moral police, continuous surveillance of parents, the extremely conservative society, and the public mockery and demonization by friends and family for having a girl friend. It takes some real ‘Darwin theory’ of only the fittest would get to mate. Indian youth have recently been blessed with their internet connections and personal cell phones. Parents sponsor cell phones to add armor in their surveillance intelligence tools. In spite of the harsh environment Indian male youths venture out towards the fairer sex.

Diplomatic Indian Female:

Young Indian women are not under much different environment, maybe even worse. They are subject to ridiculous times to return home, no night outs, no girls night, no male friends in birthday celebrations, oh shit!!! NO male friends in the first place. I doubt they even understand their own sexual needs, they probably have even never heard of sex until they reach college. In society prevails a quixotic celebration when a male loses virginity but that female might be burnt alive for her frivolous character. Due this high stakes, for an Indian woman, if she was to date a guy, she better make sure she closes the deal that leads to a marriage. This is a high stakes game. Practically, zero margin for error. One mistake and you would be castigated. So she plays it extremely safe and does not venture out into the unknown and chooses her moves very cautiously.

Logical Fallacies: Gods Discourse

This discourse between the gods (Indian Mythology figures)

Disclosure: All characters are fictional. Any resembles to anything is purely fictional. Please don't castigate me! --- I know they might invoke strong emotions among some but try to see them lightly as humans living in the house next door. --

Ram: You know my wife, Sita is pregnant, and what should I do?

Ravan: Do you want the child?

Ram: No, it is not mine; she got pregnant when I was at war.

Ravan: 21st century solution, just get an abortion. No more fairy tale stuff of mother earth eating her. That's my opinion. Ask a few more and then make a decision.

Ram: Yeah, I will ask a few more people.

Ram: Yo, Yo Jesus, what u say, YO about my issue?

Jesus: Have an issue

Ram: Didn't you read my email? You should check with your secretary?

Jesus: Ya, I read it, and my solution is having an issue.

Ram: What? What? What?

Ram: Okay I get it, No No, (says to himself: to make it simple issue = child) I don't want this child and would like to use the technology of our creations called "Abortion". Even Ravan seconds my view. I am almost in for it.

Jesus: NO!!! NO!!!

Jesus: Abortion is Bad, NO ABORTION (Jesus shouts). I tell you not to have an abortion.

Ram: Chill out man! Just wanted your opinion not for you to make my decision.

Jesus: Ravan is bad person, and so what he says is wrong (one version of Indian mythology portrays him as bad person)

Ram: Hum, I see you point. Let me think about.

(Individual thinking: Jesus is attacking the person making the argument not the argument which is confusing Ram, this is a common logical fallacy called - "Ad hominen")

Jesus: That Ravan, Fu**er, what to screw your life, wants to see you widowed so he could marry off his daughter Jessica Simpson with you, you Ram, it’s a ploy.

Ram: I never thought of that possibility

Ram: But, how will Sita (Ram's wife) die, Jesus?

Jesus: Most women die after abortion. (Gals not true - abortion is safe)

Ram: Ya, I kind of agree Ravan is trying to convince me of killing my own wife.

(Ram is enraged, picks up is AK-57 and semi-automatic pistol with a army knife to go after Ravan)

(Individual thinking: A Possibility is projected as Certainty. Sita COULD die not WOULD die. Logical Fallacy - Appeal to Probability)

Jesus: Calm down, friend. Calm down!

Ram: So confused can't think, shit I should have more IQ. Ahh, maybe that not what I exactly need, but probably should have practiced individual thinking and learn't in school how to think but I rote learned to get better grades. Shit can't solve my personal life issues!!!!

Jesus: Don't worry, don't question your education, it was created by a very reputed committee of Brahmins. They know what they are doing; see because of this you have succeeded so much in life. King God of Sexland!

Ram: Oh ya, those Brahmins know what there are doing, they are best IT guys in town, they freaking can remember all those versus. Ya Ya those intelligent people know. They must be correct.

Jesus: Don't worry why don't you go and talk to Muhammad, say what, generally these days he's been singled out for most of things, he may be able to provide an unbiased opinion.

(Individual thinking: Two more f**kups - Jesus just shut Ram's mind by logical fallacy "Appeal to Authority" - As mentioned above Brahmins were good IT guys not necessarily good Education policy setters. Another screw-up here is "REPUTED" Committee, so a way to stop Ram from questioning the kind of his education by a logical fallacy of "Appeal to Popularity" - 'since the committee is reputed so it must be right' that the kind of argument. )

Ram heads of to Muhammad. Muhammad welcomes him with both arms and assures him that he would do everything in his capacity to help him. Ram explains the dilemma should Sita get an abortion.

Muhammad: Oh friend, so I see, humm, humm, (thinking, thinking)

Muhammad: So why do u want to have an abortion in the first place?

Ram: Actually, I think I am not yet ready for it, the war just got over and I’m broke, I am just not ready, even if I raise this kid, which is not mine, I don't think then I won't be able to raise a kid which is my own progeny.

Muhammad: That sounds impressive, well thought out reason to justify your position. Come on tell me the truth?

Muhammad: Due to this long war, I have not enough sex, and now during this hard won peace, I cannot have sex again for few more months completely not acceptable, I don't like the manual hold, I love the automatic hold, so gratifying...ah ah...

Muhammad: Ok OK stop getting more graphic about things, I see.

Muhammad: Let me help you.

Ram: Good that's the reason I am here, say now quick, I want to go back to Sita now quickly

Muhammad: You are a warrior, warrior would do the right thing even if required kill, so you must have the abortion.

Ram: But Muhammad, my conscience hurts isn't this argument to suit my convenience???

Muhammad: No, I don't think, this is Jihad for the right thing, you will be sent to Haven on the Judgment day.

(Individual thinking: Muhammad makes here a "fallacy of necessity", in simple English when he enforces it is necessary to kill to be a warrior which is not technically true he could give up his role as warrior. Also another 'fallacy of necessity' is ignoring other plausible solutions are thought of, if Ram was not ready he could offer the baby for adoption after birth and for his sexual pleasures for the mean time he could have a couple of mistresses.)

Fallacies covered in this post

1.Ad hominen

2. Appeal to Probability

3. Appeal to Authority

4. Appeal to Popularity

5. Fallacy of necessity

IF YOU ENJOYED IT PLEASE LEAVE ME A COMMENT- DO NOT STEAL THE CONTENT WITHOUT GIVING CREDIT.

There are many more logical fallacies, one can check the links below for more info.

http://www.logicalfallacies.info/

http://www.nizkor.org/features/fallacies/

http://en.wikipedia.org/wiki/List_of_fallacies

Check my next post plan to cover a few more in the same discourse style.

Saturday, September 5, 2009

Alcohol vs. Alcoholism

Yesterday after a long debate have been able to come up with a theory of Alcohol vs. Alcoholism.

Alcohol is bad?

- It is not poison, its abuse is bad. For example alcohol has medical uses many cold and cough medicines have it as an ingredient. But if one abuses its use it is bad - I agree abusing the use of alcohol is bad.

Religions have denied it? There must be some rational?

- Religions and people from ancient times have understood the addictive nature of alcohol that it has on people in general and hence have banned it. But one must understand religions have to recommend things that are good at society level in a simple black and white statement to avoid confusion. They not necessarily do a good task at individual level.

Alcohol is addictive?

- Limited usage of Alcohol is not addictive. Yes I must agree that when one gets used to alcohol and its pleasures they get addicted to it. But my point of argument is that so many things one could get addicted to biscuits, cleanliness, chocolates, cakes, sitcoms, movies, novels, news, etc.

Alcohol addiction is bad?

- Agreed. 100%

So why is it denied by so many cultures?

- Alcohol let me say has tempting properties to which a large proportion of the population will succumb. But again my point as in one of my previous post, it has a high probability that people will addicted but the probability is not one. This is where the individual factors of personality come into play. Thus many cultures saw this potential harm to its people and thus applied a blanket ban on alcohol.

Please distinguish between Alcohol and Alcoholism.

Un/Learn to play!!!

United States even in midst of the financial crisis is the only nation to be still labeled as the superpower. Also in the foreseeable future USA would continue to maintain this position. No doubt that this position would be challenged by emerging nations specially China. Some of my experiences show me that this country and its people make conscience investment to maintain that edge over the world. One area that I see this being done at the grass root level is in education.

We need to understand the world is rapidly changing in the last 300-400 years and continuous to do so. The rate of change or the first derivative is much higher in the modern times than it was in 1000 year back or even before. Why am I getting to this discussion? Because it is important for one to understand that human beings need to develop (be trained) certain skills that would enable them to earn for themselves and make money. (Wages are higher for the skills in demand)

Historically, with agriculture, industrialization one needed a slew or battery of workers who would follow a particular pattern of work and continue to do it for the entire day. Thus our schooling system was so designed. We were made to reach to school early in the morning, punctuality was paramount. We wore uniforms so our individualities were suppressed (as in factories) and we were all being told what to do what to read, how to do and how are behavior should be, combined with other rules and discipline that we needed to maintain. Our schools were the feeder system, a training ground, for the industries.

Economic value of the skills of being disciplined, following order, not thinking, mundane working, was high, hence higher monetary reward for it. Thus that is why you would find your grandparents, in some cases your own parents all about discipline, no questioning of the established order. But now the world is changing, going back to my previous point that the rate of change in the world is much higher. In simple words, the world is changing quickly.

Our economies have changed, we moved from Agriculture to Industrialization to Services and now as some predict we are about to move into an Experience economy. Those who perfected agriculture could command a premium from those who were still dependent on hunting and other primitive methods of survival like food gathering.

Then the world caught up so Europe moved into industrialization and they could command a premium for their goods and this is one of the reasons that they could colonize a large part of the world.

But then again in the recent past of 50-100 years the manufacturing industries started losing the battle and it was the Services sector that was commanding the premium and the western world was soon to adapt and prepared for it and were ready for the change. The activity of lower economic value was outsourced to the emerging nations like Japan, South Korea, China, Vietnam, Philippines and others. And the western world continued to reap large premium for the Services sector. I predict that as the world now moves the Experience sector would be the next big thing. Again these countries would be able to maintain their advantage as they have a better standard of living, law and order and general civil liberties. More people will want to experience these experiences.

The above thesis can be easily verified from how the composition of GDP changed over the years for these western countries. Today most of their GDP is largely from Services Sector.

So what happened, where am I going? What happened to my primary point of discussion? With all this we just forgot to reform our education system, they still produce for the manufacturing sector, producing a skill set which now does not hold that much economic value. My great respect for the people of the United States that they are working to revamp their education system that can produce kids with skills sets that are a better match for the current and the future economic environment. Thus the country is working hard to change the system, and thus be able to maintain its super power position for at least the next 30-40 years.

For all those reading this post, it is important to realize that to gain more economic wealth it is important that we realize that the rules of the game have changed and a new set of skills are required.

So what are those skills sets? I am not an authority or even qualified to claim the magic formula but for sure I can speculate. Today creative qualities, teamwork, initiative, openness, experimentation have a higher economic value. Creative qualities not just the stereotype advertising, marketing, but in all fields, new ways to manage a business, new ways to run a factory, new ways in education, new inventions, new leaderships, new ways to motivate etc.

I claim, although not in a scientific manner; looking at the salary scales today, those jobs where we are told what to do, are low paying jobs (clerical, blue collar, etc). But instead, high paying jobs require us to think from the moment we enter our offices and till the time we leave, nobody tells us what to do for the entire day. We need to think of solutions to problems, find for inefficiencies, fix them, and anticipate business needs, prepare plans, initiate new things, all by our own without somebody telling us what to do. We need to think of everything on our own. Sometimes we need to experiment, sometimes just initiate, acknowledging lack of complete information, try new technologies, sometimes innovate our way out in our daily work lives.

Thus what is this nation (USA) doing to face this fast paced changing reality? It is encouraging its children, its future generations to play and learn. Because playing is one activity that a child does without the fear of failure, learns by doings, trying, experimenting, and moreover is not stuck by inertia. Not concerned with what others think of him and just plays for fun.

Today science is not being taught just in the class room but out in the open. Experiments are not just memorized or visualized but in a playful manner performed. This training that American kids receive from their early ages remains with them forever. This would be a recipe for the nation to continue to lead the world in technology, new management ideas, Nobel prizes and economic wage premium over other nations of the world.

The advantages with this training are that kids grow into being more flexible individuals, open to changes, thinkers, and starters. Also they tend to think outside the box and challenge the established ways. They quickly realize that there could be more than one effective way to deal with the situation or one might have to make decisions, not one but many, sometimes, based on untested assumptions, or even lack of complete information. For example, in a game where a group of kids are asked to use the available tools in a garage and use them to build a miniature city or bridge in the open. This quickly teaches them the qualities of leadership, organization, teamwork, management etc.

My post is underweighting the skill to “unlearn" but it’s actually very important. I believe moreover important because with this rate of change, people might have to actually unlearn skills that have become obsolete or comes in way of the new required skills. For instance many jobs today are not about 9 to 5 (one needs to unlearn this expectation) but continuous all day all time, anywhere and everywhere. This is facilitated via blackberry, I phone, work from home culture.

This particular format of education is completely different from the existing school system in so many countries. It produces people more apt to face the new economy.

If anybody has other ideas, please leave a comment. Also open to discussions. Let’s discuss!!!

Dedicated to my niece and nephew.... Vriti and Heet.lso in the foreseeable future USA could continue to maintain this position. No doubt that this position would be challenged by emerging nations specially China. Some of my experiences show me that this country and its people make conscience investment to maintain that edge over the world. One area that I see this being done at the grass root level is in education.