Better describing Rupee value

‘Fall, Freefall, Slide ….. all terms are from sports so what are these terms doing in the world of finance or economics? Is the economics dictionary economically small to add a few verbs to better describe value of a currency?’ asked my son in these days of currency freefall. I quickly grabbed my hot cup of tea and sipped it slowly trying to think how terms of para-trooping and car drifting were used to report fall in currency. Slide of cars causes squealing tyres and this was screeching in my head so I replied, ‘Why invent the tyre, sorry wheel again when there are terms from extreme sports which are coined after so much effort and can be implanted here.’ ‘But Dad’ he countered, the limits of the terms from sports are already set, or the features are implicit and there is clear understanding which is not adhered when implanted in economic’. ‘Huh?’ I went as I was not a sports buff.

He tried to explain, ‘In a free fall, the person opens his parachute at levels to permit safe landing while in a currency, where is the parachute? In a car slide, the moment traction is regained by the car, the slide stops and car continues in the straight direction. Where are the tyres here?’ Suddenly the onus was on me to justify the import of terms from arena of sports to arena of economic. ‘Maybe only some aspect of the action only is meant to be illustrated’ I meekly defended the use of terms.

Now he wanted to include new terms from sports as a better description of the fall in the value of the Rupee. He described them in the typical school format of using idioms. BELOW THE BELT: This is a foul in Boxing. But this is the impact on all of us as the food gets costlier and our stomachs are hit by the inflation which is the direct impact of fall in value of Rupee.

PILE DRIVER: A wrestling move where one wrestler picks up the other upside down and bangs his head on the floor of the ring. This is expected to knock him out. When the currency value falls so much all of us are knocked out and cannot think what reaction to take. So we just have to ‘give up’.

Example: The actions taken by USA to prop up their internal economy by withdrawal of investment is a pile driver move on India.

Pile up: This is a term from track racing where many cars hit each other and become immobilized. When many currencies take a hit in their respective values, all are in the same boat (track) and hence are in the same pile up!

Example: Currently, India, Indonesia, South Africa, Brazil are in a currency devaluation PILEUP.Dropped cylinder: This is a term from Drag Racing when a cylinder runs too rich (too much fuel in the air/fuel mixture) and prevents the spark plug(s) from firing.

Example: The market intervention by RBI over the past few days was a dropped cylinder as it could not stop the slide in the value of the Rupee. (even though the rich mixture of funds were thrown into the open market)

I had to agree that the new terms are better descriptive. Are the journalists and economists listening? 

end of blog

Chinese Checkers

‘It is easier to stand in the picket line than to be in the seat of responsibility to solve the issues of the picket line’ was a line that came to mind as I was excitedly voicing displeasure at the inability of my country to stave off the invasion by the Chinese forces.  When even my son so young in age had the rage to query what the Ministry was doing. While reading the news over the day, he noted that the jumps into our territory were akin to that of Chinese Checkers while the Indians were playing Western Chess. ‘If you have solved in the past complicated problems in the corporate arena, can you not do the same here?’ asked my son with such devotional eyes that I put down my financial paper and mused about the situation.  
   
I thought loudly, ‘The ministry does not want military confrontation, the people do not want diplomatic solution…mmm that puts me in quite a pickle.’ It is only now that I could appreciate not being in the front line to solve such issues. As I sipped on my tea (Indian not Chinese)  my brain began whirring. All the non military and non diplomatic solutions were just constraints and getting back our territory was the objective…. this was a basic LINEAR PROGRAMMING SOLUTION! All I had to do was to import ‘civilian success models’ into this issue and we had a home run! I starting working on a paper since I learnt to do it manually and not on computer and the solution was getting clearer by the second. The end solution was as follows:

Main objective: To get back the territory.
   
Sub objective1: Demolition of the Chinese tents. I really wonder why they were called tents when the material used looked solid and I would call them bunkers instead!

Solution to sub-objective1: Bring back Mr. Khairnar from retirement and send there a crack team of encroach demolition engineers who had worked with him. If he could demolish permanent structures in the


 








Sub objective2: Ensure that the Chinese do not come back build again. Here is where the Municipal corporation of Mumbai has faced a failing battle or is it a strategy I  am always confused. I just know that they cannot be part of solution of this sub-objective.
city, I am sure the ‘tents’ of the Chinese would be hot knife in butter. The Chinese would not know what hit them and how such a frail looking civilian could yield so much power!

Solution to sub-objective2: If the encroachers kept coming back in the city maybe I could use this to my advantage is what I thought. Commercial vendors have the habit like a bad penny – they come back. Their resilience amazes me though the result may not. Here is where I could use their strength by offer them vending space in the no-man’s land. Those vending clothes may cater to the likes of the female cadets in the Peoples Army of China and the pav Bhaji vendors may offer a hot meal satisfaction. Just like we have acquired a taste for Chinese food, the Chinese would find that spicy food also helps combat the cold in addition to the temperature of the food itself!
Additional advantage will be that the Indian soldiers and the Chinese would rub shoulders waiting in the rush to get the plate of ‘Pav Bhaji’ and this would increase comradeship thus pleasing the soul of our past PM who coined the phrase of ‘Hindi Chini bhai bhai’.

Sub objective3: To ensure we are using the right ‘sporting’ technique whether in the field of diplomacy or military strategy. Our Hon. Minister used a simile of Mohammed Ali who was the World heavy weight Champion on Boxing but that was ‘Western style’ boxing and not Chinese Boxing which is quite different. Before we finish dancing around to hit a left hook, the Chinese would have kicked our intestines and pulverized them to resemble mashed potatoes.  Just imagine two sparring guys with different category of Boxing. What is a penalty in one is permitted move in another. You will have chaos. Perhaps a more docile sport with full consent on rules of the game is better chosen.

Solution to sub-objective3: India has its own version of martial arts in Kerala. We can certainly pit our martial arts against Kung Fu and I have confidence in our sports persons and techniques. We can have matches like we have in cricket with Pakistan and let us enjoy them like war and yet no bullets be exchanged.
In the alternative, we also know the rules of the game of Chinese checkers! So a few strategist Indians can pit their wits against the Chinese wits.

I already had a three pronged strategy of a solution in just a few minutes by merely assuming this to be a commercial issue to be solved.

Virtual Factory

‘What is the difference between virtual business and e-business?’ quipped my son as I was reading the morning paper. Peering over my reading glasses I tried to doge a frontal incident by saying, ‘Isn’t this what you should know as a Computer student under the topic of E-commerce?’ ‘With the lay persons using the terms inter-changeably, now even I am getting confused’ he answered.  I mused, now the Banks on the Internet were called E-Banks weren’t they? Or were they called virtual Banks? Now even I was confused. So I sat up and tried to dissect the term along with satisfying my curiosity as to why my son brought up the topic in the first place.

Let me see, the games that one played where they had a lot of graphics and you wore specs/goggles so that you saw virtual worlds which you entered! AH ha, so fictitious worlds were virtual worlds. But wait a minute. In my last systems audit, the client had used less servers by balancing load between servers by a solution called ‘virtualisation’ and believe me that was very much real and not a fiction as I saw the benefits and what went into it. So I had two interpretations of virtual – real and not real. This put me very much back in square 1 of the game.

My son broke my chain of thoughts ‘Do virtual businesses deliver real solid cash or goods?’ I had an answer for this, ‘On your last birthday did we not shop in the virtual electronic market and order a digital camera for you?’

Now came the bomb based on the news of the day ‘If virtual shops deliver solid goods, then why can’t virtual factories deliver solid chocolates?’ he asked innocently. I had read the news so I could clear some points is what I wrongly thought. ‘It is a matter of tax holiday based on a real factory and not virtual’ I cleared the point. ‘But’ he pestered, ‘what difference does it make if new factory is running there or old? They did come earlier to the improvement of infrastructure’. While I paused, his younger brain clicked at a higher clock speed as it connected dots in the past to an event known as ‘Satyam’.  He recalled that in that case only the sales and whole lot of employees were imaginary which would be called as ‘virtual’ today. But in the present case, a whole factory was fictitious. That gave higher potential of whole gamut of capital and revenue expenses and even sales revenue to be just a figment of imagination.  ‘If the number of manipulated records becomes the criteria, is this case bigger than Satyam?’ he asked. I was not a record keeper of such sorts so I expressed ignorance. But I did remember a news item where the jailor wanted to run a business earning income for the Jail by involving the Satyam kingpin. So I could now explain that ‘Perhaps the same jailor made ex-chairman of Satyam give consultancy to Cadbury so the record if any still belongs to Satyam’.

Meanwhile, I mused, if there is a virtual company will they have to appoint a virtual auditor and if so, how will he be paid? Virtually?